BRINSON RELATIONSHIP FUNDS, POS AMI, 1997-04-30

BRINSON RELATIONSHIP FUNDS
POS AMI, 1997-04-30

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<PAGE>

Marked to Indicate Changes
Filed with Exhibits
File No. 811-9036
UNITED STATES ------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT
UNDER THE
INVESTMENT COMPANY ACT OF 1940

AMENDMENT NO. 6

Brinson Relationship Funds
==========================
(Exact name of Registrant as Specified in Charter)

209 South LaSalle Street
Chicago, Illinois 60604-1295
(Address of Principal Executive Offices)(Zip Code)

Registrant's Telephone Number, including Area Code 312-220-7940
------------

Carolyn M. Burke
Brinson Relationship Funds
209 South LaSalle Street
Chicago, Illinois 60604-1295
----------------------------
(Name and Address of Agent for Service)

COPIES TO:

Bruce G. Leto, Esq.
Stradley, Ronon, Stevens & Young, L.L.P.
2600 One Commerce Square
Philadelphia, PA 19103-7098

================================================================================

<PAGE>

EXPLANATORY NOTE

This Registration Statement has been filed by the Registrant pursuant to
Section 8(b) of the Investment Company Act of 1940, as amended. However, shares
of beneficial interest in the Registrant are not being registered under the
Securities Act of 1933, as amended (the "Securities Act"), because such shares
will be issued solely in private placement transactions that do not involve a
"public offering" within the meaning of Section 4(2) of the Securities Act. The
shares have not been registered under any state securities laws in reliance upon
various exemptions provided by those laws. Investments in the shares of the
Registrant may only be made by "accredited investors" within the meaning of
Regulation D under the Securities Act which include common or commingled trust
funds, investment companies, registered broker-dealers, investment banks,
commercial banks, corporations, group trusts or similar organizations or
entities. This Registration Statement does not constitute an offer to sell, or
the solicitation of an offer to buy, any shares of the Registrant.
<PAGE>

OFFEREE NO. ___
BRINSON RELATIONSHIP FUNDS

Brinson Global Securities Fund

PART A

APRIL 30, 1997

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

Item 1. Cover Page. Not applicable.

Item 2. Synopsis. Not applicable.

Item 3. Condensed Financial Information. Not applicable.

Item 4. General Description of Registrant.

Introduction

Brinson Relationship Funds (the "Trust"), a Delaware business trust
established on August 16, 1994, is a no-load, open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act"). The Trust currently offers six series of shares: the
Brinson Global Securities Fund, the Brinson Short-Term Fund, the Brinson Post-
Venture Fund, the Brinson High Yield Fund, the Brinson Emerging Markets Equity
Fund and the Brinson Emerging Markets Debt Fund. This Prospectus pertains only
to the Brinson Global Securities Fund (the "Fund").

Beneficial interests in the Fund ("shares") are issued solely in private
placement transactions that do not involve a "public offering" within the
meaning of Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act"). Investments in the Fund may only be made by "accredited
investors" within the meaning of Regulation D under the Securities Act which
include, but are not limited to, common or commingled trust funds, investment
companies, registered broker-dealers, investment banks, commercial banks,
corporations, group trusts or similar organizations or entities. Each such
accredited investor that holds shares of the Trust is referred to herein as an
"Investor" and collectively, the "Investors"). This Prospectus does not
constitute an offer to sell, or the solicitation of an offer to buy, any
"security" to the public within the meaning of the Securities Act.

A-1
<PAGE>

INVESTMENT OBJECTIVE, POLICIES AND RISK FACTORS

The Fund's investment objective is to maximize total U.S. dollar return,
consisting of capital appreciation and current income, while controlling risk.
The Fund will maintain a global portfolio and as such, under normal market
conditions, at least 65% of the Fund's assets will be invested in securities of
issuers in at least three countries, one of which may be the United States. The
Fund seeks to achieve its objective by pursuing active asset allocation
strategies across global equity, fixed income and money markets and active
security selection within each market. Asset allocation decisions are
undertaken relative to the Global Securities Index (the "Benchmark"), which is
compiled by the Fund's investment adviser, Brinson Partners, Inc. ("Brinson
Partners" or the "Adviser").

Investors should understand that all investments involve risk and there can
be no guarantee against loss resulting from an investment in the Fund, nor can
there be any assurance that the Fund's investment objective will be attained.

Investment Process

The Adviser's investment style is single focus: investment fundamentals
determine and describe future cash flows that define fundamental investment
value. The Adviser's investment perspective for the Fund is that periodically
there are exploitable discrepancies between market price and fundamental value.
Those price/value discrepancies then become the building blocks for portfolio
construction. The successful identification of price/value discrepancies should
result in enhanced total return performance.

The Benchmark consists of five distinct asset classes representing the
primary wealth-holding public securities markets. These asset classes are U.S.
equity, non-U.S. equity, U.S. bonds, non-U.S. bonds and cash equivalents. Each
asset class is represented in the Benchmark by an index compiled by an
independent data provider. The index relating to U.S. equity is the Wilshire
5000 Index; the index relating to non-U.S. equity is the Morgan Stanley Capital
International Non-U.S. Equity (Free) Index; the index relating to the U.S. bond
portion of the Benchmark is a composite of the Salomon Brothers Broad Investment
Grade Bond Index and the Merrill Lynch Euro-Bond Index; the index for the non-
U.S. bond portion of the Benchmark is the Salomon Brothers Non-U.S. Government
Bond Index; and the index relevant to the cash equivalents portion of the
Benchmark is the 30-day U.S. Treasury Bill rate (calculated from the average of
bid and ask). From time to time, the Adviser may substitute an equivalent index
within a given asset class when it believes that such index more accurately
reflects the relevant global market. In order to compile the Benchmark, the
Adviser determines current relative market capitalizations in the world markets
(U.S. equity, non-U.S. equity, U.S. bond, non-U.S. bond and cash) and then
weights each relevant index. Based on this weighting, the Adviser determines the
return of the relevant indices, applies the index weighting and then determines
the return of the Benchmark.

As a general matter, the Adviser will predominantly purchase for the Fund
securities contained in the underlying indices relevant to the Benchmark. The
Adviser will attempt to enhance the long-term return and risk performance of the
Fund relative to the Benchmark by deviating from the normal Benchmark mix of
asset classes and currencies in reaction to discrepancies between current

A-2
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market prices and fundamental values. Active asset allocation strategy for the
Fund will be defined relative to the Benchmark weights, which represent the
Fund's normal mix. Decisions to deviate from the normal mix are a blend of
rigorous quantitative analysis, an understanding of the fundamental
relationships among global markets and the expertise of investment
professionals. In the absence of views as to the relative attractiveness across
asset classes, the actual Fund weights will be equal to the Benchmark weights.
The active management process is intended, by the Adviser, to produce superior
performance relative to the Benchmark.

The Fund does not intend to concentrate its investments in a particular
industry. The Fund does not intend to issue senior securities except to the
extent consistent with its policies described below and only as permitted under
the Investment Company Act. The Fund's investment objective and its policies
concerning portfolio securities lending, borrowing, the issuance of senior
securities and concentration are "fundamental," which means that they may not be
changed without the affirmative vote of the holders of a majority of the Fund's
outstanding voting shares. As used in this Prospectus, a vote of "a majority of
the outstanding voting shares" of the Trust or a series of the Trust means the
affirmative vote of the lesser of (i) more than 50% of the outstanding shares of
the Trust or series, or (ii) 67% of the shares of the Trust or series present at
a meeting at which more than 50% of the outstanding shares of the Trust or
series are represented in person or by proxy.

The Fund is classified as "non-diversified," as defined in the Investment
Company Act so that it is not limited by the Investment Company Act as to the
proportion of its assets that it may invest in the obligations of a single
issuer. To the extent that the Fund's investment portfolio at times includes
the securities of a smaller number of issuers than permissible if the Fund were
"diversified" (as defined in the Investment Company Act), the Fund may be
subject to greater investment and credit risk than an investment company that
invests in a broader range of securities, because changes in the financial
condition or market assessment of a single issuer may cause greater fluctuations
in the net asset value of the Fund's shares.

Asset Allocation and Market Management

The Adviser believes that, over the long term, investing across global
equity and fixed income markets based upon discrepancies between market prices
and fundamental values may achieve enhanced return and risk characteristics
relative to the Benchmark.

Fundamental value is considered to be the current value of long-term,
sustainable future cash flows derived from a given asset class or security. In
determining fundamental value, the Adviser takes into consideration broadly
based indices representing asset classes or markets and various economic
variables such as productivity, inflation and global competitiveness. The
valuation of asset classes reflects an integrated, fundamental analysis of
global markets. Investment decisions are based on comparisons of current market
prices to fundamental values.

The Fund may invest in the more broadly defined asset classes identified by
the Benchmark. The "Normal Asset Allocation Mix," set forth below, represents
the asset allocation that the Fund would expect to maintain when, in the
judgment of the Adviser, global capital markets are fairly priced relative to
each other and relative to the associated risks.

A-3
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Global Securities Markets Index
Normal Asset Allocation Mix

<TABLE>
<CAPTION>
Normal Asset Class
Allocation Strategy
Asset Class Mix Ranges
- ----------- ---------- -----------
<S> <C> <C>

Global Equities 67%
U.S. 50% 15-80%
Non-U.S. 17% 5-30%
Global Bonds 28%
U.S. 20% 5-50%
Non-U.S. 8% 2-15%
Cash and Cash Equivalents 5% 0-45%
----
100%
</TABLE>

The "Asset Class Strategy Ranges" indicated above are the ranges within
which the Fund expects to make its active asset allocations to specific asset
classes. Under all but unusual market conditions, the Fund expects to adhere to
the strategy ranges set forth above. However, the Fund's strategy ranges may be
exceeded by the Fund under unusual market conditions. When unusual market
conditions warrant, the Fund can make substantial defensive investments in cash
equivalents as decribed below.

TYPES OF SECURITIES IN WHICH THE FUND MAY INVEST

U.S. and Non-U.S. Equity Securities

The Fund may invest in a broad range of equity securities of U.S. and non-
U.S. issuers, including common stock of companies or closed-end investment
companies, preferred stock, debt securities convertible into or exchangeable for
common stock, securities such as warrants or rights that are convertible into
common stock and sponsored or unsponsored American depositary receipts ("ADRs"),
European depositary receipts ("EDRs") or Global depositary receipts ("GDRs") for
those securities. ADRs are receipts issued by a U.S. bank or trust company
evidencing ownership of underlying securities issued by foreign issuers. ADRs
may be listed on a national securities exchange or may be traded in the
over-the-counter market. EDRs also represent securities of foreign issuers and
are designated for use in European markets. A GDR represents ownership in a non-
U.S. company's publicly traded securities that are traded on foreign stock
exchanges or foreign over-the-counter markets. Holders of unsponsored ADRs, EDRs
or GDRs generally bear all the costs of such facilities and the depositary of an
unsponsored facility frequently is under no obligation to distribute Investor
communications received from the issuer of the deposited security or to pass
through voting rights to the holders of such receipts in respect of the
deposited securities.

The Fund expects its U.S. equity investments to emphasize both large and
intermediate capitalization companies. In addition, the U.S. equity component
may invest in small capitalization

A-4

<PAGE>

issues. Please see the discussion below under "Special Risk Considerations of
Investing in Small Capitalization Issues" for a description of the risks of
investing in small capitalization issues. The equity markets in the non-U.S.
component of the Fund will typically include available shares of larger
capitalization companies. Capitalization levels are measured relative to
specific markets, thus large and intermediate capitalization ranges vary
country-by-country and may with respect to certain countries include
capitalization levels that would be included in the small capitalization range
in the U.S. market.

U.S. and Non-U.S. Fixed Income Securities

The Fund may invest in all types of debt securities of U.S. and non-U.S.
issuers, including governments and governmental entities and supranational
issuers as well as corporations and other business organizations. The Fund may
purchase U.S. dollar denominated securities that reflect a broad range of
investment maturities, qualities and sectors. Please see discussion below for a
description of the high yield/higher risk debt securities in which the Fund may
invest.

The non-U.S. fixed income component of the Fund will typically be invested
in government and supranational issues. A supranational entity is an entity
established or financially supported by the national governments of one or more
countries to promote reconstruction or development. Examples of supranational
entities include, among others, the World Bank, the European Economic Community,
the European Coal and Steel Community, the European Investment Bank, the Intra-
Development Bank, the Export-Import Bank and the Asian Development Bank.

Emerging Markets Equity and Debt Securities

The Fund may invest in a broad range of equity securities of emerging
market issuers, or securities with respect to which the return is derived
primarily from the equity securities of issuers in emerging markets, including
common and preferred stocks. The Fund considers a country to be an "emerging
market" if it is defined as an emerging or developing economy by any one of the
following: the International Bank for Reconstruction and Development (i.e. the
World Bank), the International Finance Corporation, or the United Nations or its
authorities. Common stocks include securities convertible into common stocks and
securities having common stock characteristics, such as rights and warrants. The
Fund may also invest in all debt securities of emerging market issuers,
including government and government-related entities (including participations
in loans between governments and financial institutions), corporations and
entities organized to restructure outstanding debt of issuers in emerging
markets, or debt securities on which the return is derived primarily from other
emerging markets instruments. The Fund may invest indirectly in emerging market
equity and debt securities by purchasing securities of open-end and closed-end
investment companies. Please see the discussion below under "Investment Company
Securities" for a further explanation of investments in investment companies and
under "Investing in Emerging Markets" for a description of the risks of
investing in emerging market securities.

A-5
<PAGE>

The Trust has received an exemptive order (the "Exemptive Order") from the
United States Securities and Exchange Commission (the "Commission") to permit,
among other things, the Fund to invest its assets in the Brinson Emerging
Markets Equity Fund (the "EM Equity Fund") and the Brinson Emerging Markets Debt
Fund (the "EM Debt Fund") series of the Trust. Pursuant to the Exemptive Order,
the Fund may invest that portion of its assets allocated to emerging markets
investments by purchasing shares of the funds listed above. The investment
objective of the EM Equity Fund and the EM Debt Fund is to maximize total U.S.
dollar return, consisting of capital appreciation and current income, while
controlling risk. Under normal circumstances, at least 65% of the total assets
of the EM Equity Fund is invested in the equity securities of issuers in
emerging markets or securities with respect to which the return is derived from
the equity securities of issuers in emerging markets. Under normal
circumstances, at least 65% of the total assets of the EM Debt Fund is invested
in the debt securities issued by governments, government-related entities
(including participations in loans between governments and financial
institutions), corporations and entities organized to restructure outstanding
debt of issuers in emerging markets, or debt securities the return of which is
derived primarily from other emerging markets instruments. The EM Equity Fund
and the EM Debt Fund are permitted to invest in the same types of securities as
the Fund may invest in directly and as further described herein.

The Fund may invest its assets directly or indirectly in emerging market
securities as described above. Pursuant to the Exemptive Order, any investment
by the Fund in the EM Equity Fund or the EM Debt Fund of the Trust would not be
subject to the limitations of the Investment Company Act concerning investments
by open-end investment companies in the securities issued by other investment
companies. Please see the discussion below under "Investment Company Securities"
for a description of these limitations.

Cash and Cash Equivalents

The Fund may invest a portion of its assets in short-term debt securities
of corporations, governments or agencies and banks and finance companies which
may be denominated in U.S. or non-U.S. currencies. When unusual market
conditions warrant, the Fund can make substantial temporary defensive
investments in cash equivalents up to a maximum exposure of 100% of the Fund's
total assets. The Fund's investment in temporary defensive investments may
affect the Fund's ability to attain its investment objective.

The short-term debt securities in which the Fund may invest include demand
notes, bank instruments, commercial paper and floating rate instruments. Demand
notes are securities issued with a maturity date but which can be called for
repayment by the lender or the borrower at a predetermined interval. Bank
instruments in which the Fund may invest include bank loan participations, bank
holding company commercial paper, deposits, bank notes and other bank related
securities. Bank loan participations are loans sold by lending banks to
investors. Bank holding company commercial paper is a form of short-term
promissory note which is a direct obligation of a bank holding company.
Deposits are obligations of a bank or its branches. Corporate commercial paper
is a form of short-term promissory note issued by corporations primarily to
finance short-term credit needs. Rates vary according to the credit standing of
the issuers and money market conditions. Floating rate instruments are
obligations with various final maturities and interest rates that are tied to
other assorted market indices. The Fund will not invest more than 15% of the
value of its net assets in

A-6
<PAGE>

floating or variable rate demand obligations as to which it cannot exercise the
demand feature on not more than seven days' notice if there is no secondary
market available for these obligations, and in other securities that are not
readily marketable.

Zero Coupon Securities

The Fund may invest in zero coupon securities, which are debt obligations
that do not entitle the holder to any periodic payments of interest prior to
maturity or a specified date when the securities begin paying current interest
(the "cash payment date") and therefore are issued at a discount from their face
amounts or par value. Such bonds carry an additional risk in that, unlike bonds
which pay interest throughout the period to maturity, the Fund will realize no
cash until the maturity date or the cash payment date and, if the issuer
defaults, the Fund may obtain no return at all on its investment. For federal
tax purposes, the Fund will be required to include in income daily portions of
original issue discount accrued, even if no payment is received before the
maturity date or cash payment date.

Pay-In-Kind Bonds

The Fund may invest in pay-in-kind bonds. Pay-in-kind bonds are securities
which pay interest through the issuance of additional bonds. The Fund will be
deemed to receive interest over the life of such bonds and be treated for
federal income tax purposes as if interest were paid on a current basis,
although no cash interest payments are received by the Fund until the cash
payment date or until the bonds mature.

Mortgage-Backed Securities

The Fund may invest in mortgage-backed securities, representing interests
in pools of mortgage loans. These securities provide investors with payments
consisting of both interest and principal as the mortgages in the underlying
mortgage pools are paid off. The Fund may invest in mortgage-backed securities
issued or guaranteed by an agency or instrumentality of the U.S. government. The
Fund may also invest in privately issued mortgage-backed securities issued by
certain private, non-government corporations, such as financial institutions.

A-7
<PAGE>

The Fund may also invest in Collateralized Mortgage Obligations ("CMOs")
and Real Estate Mortgage Investment Conduits ("REMICs"). CMOs are debt
securities issued by U.S. government agencies or by financial institutions and
other mortgage lenders and collateralized by a pool of mortgages held under an
indenture. CMOs are issued in a number of classes or series with different
maturities. The classes or series are retired in sequence as the underlying
mortgages are repaid. Prepayment may shorten the stated maturity of the
obligation and can result in a loss of premium, if any has been paid. Certain of
these securities may have variable or floating interest rates and others may be
stripped (securities which provide only the principal or interest feature of the
underlying security).

REMICs are private entities formed for the purpose of holding a fixed pool
of mortgages secured by an interest in real property. REMICs are similar to CMOs
in that they issue multiple classes of securities.

CMOs and REMICs issued by private entities are not government securities
and are not directly guaranteed by any government agency. They are secured by
the underlying collateral of the private issuer. Yields on privately-issued CMOs
have historically been higher than yields on CMOs issued or guaranteed by U.S.
government agencies. However, the risk of loss due to default on such
instruments is higher. For federal income tax purposes, the Fund will be
required to accrue income attributable to its investment in CMOs and regular
interests in REMICs using the "catch-up" method, with an aggregate prepayment
assumption. For further information concerning mortgage-backed securities, see
Part B of this Registration Statement.

Asset-Backed Securities

The Fund may invest in asset-backed securities. Asset-backed securities are
securities that represent a participation in, or are secured by and payable
from, a stream of payments generated by particular assets, most often a pool or
pools of similar assets (e.g., receivables on home equity and credit loans and
receivables regarding automobile, credit card, mobile home and recreational
vehicle loans, wholesale dealer floor plans and leases).

Such receivables are securitized in either a pass-through or pay-through
structure. Pass-through securities provide investors with an income stream
consisting of both principal and interest payments with respect to the
receivables in the underlying pool. Pay-through asset-backed securities are debt
obligations issued usually by a special purpose entity, are collateralized by
the various receivables and with respect to which the payments on the underlying
receivables provide the funds to pay the debt service on the debt obligations
issued. The Fund may invest in these securities and obligations and other types
of asset-backed securities that may be developed in the future.

The credit quality of these securities depends primarily upon the quality of
the underlying assets and the level of credit support and/or enhancement
provided. Such asset-backed securities may be subject to the same prepayment
risks as mortgage-backed securities. For further information concerning asset-
backed securities, see Part B of this Registration Statement.

A-8
<PAGE>

When-Issued Securities

The Fund may purchase securities on a "when-issued" basis for payment and
delivery at a later date. The price is generally fixed on the date of
commitment to purchase. The Fund does not earn interest on the securities it
has committed to purchase until they are paid for and delivered on the
settlement date. At the time of settlement, the market value of the security
may be more or less than the purchase price. For further information concerning
when-issued securities, see Part B of this Registration Statement.

Convertible Securities

The Fund may invest in convertible securities which generally offer lower
interest or dividend yields than nonconvertible debt securities of similar
quality. The value of convertible securities may reflect changes in the value
of the underlying common stock. Convertible securities entail less credit risk
than the issuer's common stock because they rank senior to common stock.

Eurodollar Securities

The Fund may invest in Eurodollar securities, which are fixed income
securities of a U.S. issuer or a foreign issuer that are issued outside the
United States. Interest and dividends on Eurodollar securities are payable in
U.S. dollars.

Repurchase Agreements

The Fund may enter into repurchase agreements with banks or broker-dealers.
Repurchase agreements are considered under the Investment Company Act to be
collateralized loans by the Fund to the seller, secured by the securities
transferred to the Fund. In accordance with requirements under the Investment
Company Act, repurchase agreements will be fully collateralized by securities
which the Fund may invest in directly. Such collateral will be marked-to-market
daily. If the seller of the underlying security under the repurchase agreement
should default on its obligation to repurchase the underlying security, the Fund
may experience delay or difficulty in recovering its cash. To the extent that,
in the meantime, the value of the security purchased has decreased, the Fund
could experience a loss. No more than 15% of the Fund's net assets will be
invested in illiquid securities, including repurchase agreements which have a
maturity of longer than seven days.

Reverse Repurchase Agreements

The Fund may enter into reverse repurchase agreements with banks and
broker-dealers. Reverse repurchase agreements involve sales by the Fund of
portfolio assets concurrently with an agreement by the Fund to repurchase the
same assets at a later date at a fixed price. During the reverse repurchase
agreement period, the Fund continues to receive principal and interest payments
on these securities.

The Fund will establish a segregated account with its custodian bank in
which it will maintain cash, U.S. government securities or other liquid assets
equal in value to its
A-9
<PAGE>

obligations with respect to reverse repurchase agreements. Reverse repurchase
agreements involve the risk that the market value of the securities retained by
the Fund may decline below the price of the securities the Fund has sold but is
obligated to repurchase under the agreement. In the event the buyer of
securities under a reverse repurchase agreement files for bankruptcy or becomes
insolvent, the Fund's use of the proceeds of the agreement may be restricted
pending a determination by the other party, or its trustee or receiver, whether
to enforce the Fund's obligation to repurchase the securities.

High Yield/Higher Risk Securities

The Fund's U.S. dollar investments in all types of fixed income securities
may include lower quality, higher yielding securities which are below investment
grade. Investment grade securities are securities rated BBB or better by
Standard & Poor's Ratings Group ("S&P") or Baa or better by Moody's Investors
Service, Inc. ("Moody's") or, if unrated, are determined to be of comparable
quality by the Adviser. While securities rated below BBB or Baa are regarded
as having an adequate capacity to pay principal and interest, such securities
lack outstanding investment characteristics and, in fact, have speculative
characteristics as well. In addition, changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to make principal
and interest payments than is the case with higher rated securities. Securities
rated lower than BBB by S&P and Baa by Moody's are classified as non-
investment grade securities and are commonly referred to as "junk bonds." These
securities are considered to be of poor standing and predominantly speculative
with respect to the issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligations and involve major risk exposure to
adverse conditions. Securities issued by foreign issuers rated below investment
grade entail greater risks than higher rated securities, including risk of
untimely interest and principal payment, default, price volatility and may
present problems of liquidity and valuation. Investors should carefully consider
these risks before investing. A description of various bond ratings appears in
Appendix A, p. A-31 - A-33. Ratings represent S&P's and Moody's respective
opinions as to the quality of the obligations they undertake to rate. However,
ratings are general and are not absolute standards of quality.

Pursuant to the Exemptive Order described above under "Emerging Markets Equity
and Debt Securities," in lieu of investing directly in certain high yield,
higher risk securities, the Fund may invest a portion of its assets in the
Brinson High Yield Fund (the "High Yield Fund") series of the Trust. The
investment objective of the High Yield Fund is to maximize total U.S. dollar
return, consisting of capital appreciation and current income, while controlling
risk. The High Yield Fund maintains a high yield portfolio and as such, at least
65% of its assets are invested in high yield securities of the type described
herein. Any investment by the Fund in the High Yield Fund would not be subject
to the limitations of the Investment Company Act concerning investments by open-
end investment companies in securities issued by other investment companies.
Please see the discussion below under "Investment Company Securities" for a
description of these limitations.

The Fund currently intends to limit its investment in non-investment grade,
U.S. dollar denominated fixed income securities to no more than 15% of its net
assets. Any investment in the High Yield Fund will be considered within this
limitation. The Fund currently intends to limit

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its investment in non-investment grade, non-U.S. dollar denominated fixed income
securities to no more than 15% of its net assets.

Brady Bonds

With regard to emerging market investments, the Fund may invest in Brady
Bonds, which are securities created through the exchange of existing commercial
bank loans to public and private entities in certain emerging markets for new
bonds in connection with debt restructurings under a debt restructuring plan
introduced by former U.S. Secretary of the Treasury, Nicholas F. Brady (the
"Brady Plan"). Brady Plan debt restructurings have been implemented to date in
Argentina, Bulgaria, Brazil, Costa Rica, Jordan, Mexico, Nigeria, the
Philippines, Poland, Uruguay, Panama, Peru and Venezuela. Brady Bonds have been
issued only during recent years, and for that reason do not have a very long
payment history. Brady Bonds may be collateralized or uncollateralized, are
issued in various currencies (but primarily the U.S. dollar) and are actively
traded in over-the-counter secondary markets. Dollar-denominated, collateralized
Brady Bonds, which may be fixed-rate bonds or floating-rate bonds, are generally
collateralized in full as to principal by U.S. Treasury zero coupon bonds having
the same maturity as the bonds.

Brady Bonds are often viewed as having three or four valuation components:
the collateralized repayment of principal at final maturity; the collateralized
interest payments; the uncollateralized interest payments; and any
uncollateralized repayment of principal at maturity (these uncollateralized
amounts constitute the "residual risk"). In light of the residual risk of Brady
Bonds and the history of defaults of countries issuing Brady Bonds with respect
to commercial bank loans by public and private entities, investments in Brady
Bonds may be viewed as speculative. There can be no assurance that the Brady
Bonds in which the Fund invests will not be subject to restructuring or to
requests for a new credit arrangement which may cause the Fund to suffer a loss
of interest or principal in any of its holdings.

Structured Securities

With regard to emerging market investments, the Fund may invest a portion
of its assets in entities organized and operated solely for the purpose of
restructuring the investment characteristics of sovereign debt obligations. This
type of restructuring involves the deposit with, or purchase by, an entity, such
as a corporation or trust, of specified instruments (such as commercial bank
loans or Brady Bonds) and the issuance by that entity of one or more classes of
securities ("Structured Securities") backed by, or representing interests in,
the underlying instruments. The cash flow of the underlying instruments may be
apportioned among the newly issued Structured Securities to create securities
with different investment characteristics, such as varying maturities, payment
priorities and interest rate provisions, and the extent of the payments made
with respect to Structured Securities is dependent on the extent of the cash
flow on the underlying instruments. Because Structured Securities of the type in
which the Fund anticipates investing typically involve no credit enhancement,
their credit risk generally will be equivalent to that of the underlying
instruments. The Fund is permitted to invest in a class of Structured Securities
that is either subordinated or unsubordinated to the right of payment of another
class. Subordinated Structured Securities typically have higher yields and
present greater risks than unsubordinated Structured Securities. Structured

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<PAGE>

Securities are typically sold in private placement transactions, and there
currently is no active trading market for Structured Securities. Thus, the
Fund's investments in Structured Securities will be limited by the Fund's
prohibition on investing more than 15% of its net assets in illiquid securities.

Loan Participations and Assignments

With regard to emerging market investments, the Fund may invest in fixed
rate and floating rate loans ("Loans") arranged through private negotiations
between an issuer of sovereign debt obligations and one or more financial
institutions ("Lenders"). The Fund's investment in Loans is expected in most
instances to be in the form of participation in loans ("Participations") and
assignments of all or a portion of Loans ("Assignments") from third parties.

The Fund will have the right to receive payments of principal, interest and
any fees to which it is entitled only from the Lender selling the Participation
and only upon receipt by the Lender of the payments from the borrower. In the
event of the insolvency of the Lender selling a Participation, the Fund may be
treated as a general creditor of the Lender and may not benefit from any set-off
between the Lender and the borrower. Certain Participations may be structured in
a manner designed to avoid purchasers of Participations being subject to the
credit risk of the Lender with respect to the Participation. Even under such a
structure, in the event of the Lender's insolvency, the Lender's servicing of
the Participation may be delayed and the assignability of the Participation may
be impaired. The Fund will acquire Participations only if the Lender
interpositioned between the Fund and the borrower is determined by the Adviser
to be creditworthy. When the Fund purchases Assignments from Lenders, it will
acquire direct rights against the borrower on the Loan. However, because
Assignments are arranged through private negotiations between potential
assignees and potential assignors, the rights and obligations acquired by the
Fund as the purchaser of an Assignment may differ from, and be more limited
than, those held by the assigning Lender.

Because there may be no liquid market for Participations and Assignments,
the Fund anticipates that such securities could be sold only to a limited number
of institutional investors. The lack of a liquid secondary market may have an
adverse impact on the value of such securities and the Fund's ability to dispose
of particular Assignments or Participations when necessary to meet the Fund's
liquidity needs or in response to a specific economic event such as a
deterioration in the creditworthiness of the borrower. The lack of a liquid
secondary market for Assignments and Participations also may make it more
difficult for the Fund to assign a value to these securities for purposes of
valuing the Fund's portfolio and calculating its net asset value. To the extent
that the Fund cannot dispose of a Participation or Assignment in the ordinary
course of business within seven days at approximately the value at which it has
valued the Participation or Assignment, it will treat the Participation or
Assignment as illiquid and subject to its overall limit on illiquid investments
of 15% of its net assets.

Non-Publicly Traded Securities, Private Placements and Restricted Securities

With regard to emerging market investments, the Fund may invest in
securities that are neither listed on a stock exchange nor traded over-the-
counter, including privately placed securities and limited partnerships.
Investing in such unlisted emerging market securities, including

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<PAGE>

investments in new and early stage companies, may involve a high degree of
business and financial risk that can result in substantial losses. As a result
of the absence of a public trading market for these securities, they may be less
liquid than publicly traded securities. Although these securities may be resold
in privately negotiated transactions, the prices realized from these sales could
be less than those originally paid by the Fund, or less than what may be
considered the fair value of such securities. Furthermore, companies whose
securities are not publicly traded may not be subject to the disclosure and
other investor protection requirements which would be applicable if their
securities were publicly traded. If such securities are required to be
registered under the securities laws of one or more jurisdictions before being
resold, the Fund may be required to bear the expense of registration. No more
than 15% of the Fund's net assets will be invested in illiquid securities,
including, but not limited to, non-publicly traded securities, private
placements and restricted securities.

Investment Company Securities

The Fund may invest in securities issued by open-end and closed-end
investment companies. Under the Investment Company Act, the Fund's investment in
such securities, subject to certain exceptions, currently is limited to: (i) 3%
of the total voting stock of any one such investment company, (ii) 5% of the
Fund's net assets with respect to any one such investment company and (iii) 10%
of the Fund's net assets in the aggregate. Investments in the securities of
other investment companies may involve duplication of certain fees and expenses.

As described above, the Trust has received an Exemptive Order, which
permits the Fund to invest its assets in securities of other series offered by
the Trust. The Fund will only invest in such series to the extent that the
Adviser determines that it is more efficient for the Fund to gain exposure to a
particular asset class through investment in a series of the Trust as opposed to
investment directly in individual securities. Investments by the Fund in another
series of the Trust may involve transaction costs.

The Fund's investments in any other series of the Trust will not be subject
to the percentage limitations described above. To the extent that the Fund
invests in open-end investment companies other than the Trust's other series,
the Fund will be subject to the percentage limitations described above and the
Fund's investments in such other investment companies will be aggregated with
its investments in the Trust's other series for purposes of these
limitations.

Rule 144A and Illiquid Securities

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<PAGE>

the security and the number of potential purchasers; (iii) whether at least two
dealers are making a market in the security; and (iv) the nature of the security
and the nature of the marketplace trades (e.g., the time needed to dispose of
the security, the method of soliciting offers and the mechanics of transfer).
Although it has delegated the day-to-day liquidity determination to the Adviser,
the Board of Trustees will continue to monitor and will periodically review the
Adviser's selection of Rule 144A securities, as well as the Adviser's
determination as to their liquidity.

If the Adviser determines that a security purchased in reliance on Rule
144A which was previously determined to be liquid is no longer liquid and, as a
result, the Fund's holdings of illiquid securities exceed the Fund's 15% limit
on investment in such securities, the Adviser will determine what action shall
be taken to ensure that the Fund continues to adhere to such limitation
including disposing of illiquid assets which may include such Rule 144A
securities.

Future Developments

From time to time, the Fund may also invest in certain equity or debt
securities which have features other than those that are typical for such
securities and which have in the past been offered or may be offered in the
future. In the past, for example, such securities have been issued to replicate
the performance of a certain component or components of a particular security or
combination of securities and/or to hedge or reduce the risks associated with
certain securities or market trends. The Fund may invest in these securities if
the Adviser believes that doing so would be consistent with the Fund's
investment objective and policies. Since the market for these securities may be
new, the Fund may have difficulty disposing of them at a suitable price and
time. In addition to limited liquidity, these instruments may present other
risks, such as high price volatility. The unavailability of such innovative
securities would not adversely affect the Fund's ability to achieve its
investment objective.

Foreign Securities and Currency Considerations

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<PAGE>

time the Fund accrues interest or other receivables or accrues expenses or
liabilities denominated in a foreign currency and the time the Fund actually
collects such receivables, or pays such liabilities, are generally treated as
ordinary income or loss. Similarly, a portion of the gains or losses realized on
disposition of debt securities denominated in a foreign currency, referred to
under the Internal Revenue Code of 1986, as amended ("the Code"), as "section
988" gains or losses, may also be treated as ordinary gain or loss rather than
as capital gain or loss.

The U.S. dollar market value of the Fund's investments and of dividends and
interest earned by the Fund may be significantly affected by changes in currency
exchange rates. Some currency prices may be volatile, and there is the
possibility of governmental controls on currency exchange or governmental
intervention in currency markets, which could adversely affect the Fund.
Although the Fund may attempt to manage currency exchange rate risk, there is no
assurance that the Fund will do so at an appropriate time or that it will be
able to predict exchange rates accurately. The Fund will manage currency
exposures relative to the normal currency allocation and will consider return
and risk of currency exposures relative to the Benchmark.

Investing in Emerging Markets

Compared to the United States and other developed countries, emerging
countries may have relatively unstable governments, economies based on only a
few industries, and securities markets that trade only a small number of
securities and employ settlement procedures different from those used in the
United States. Prices in these markets tend to be volatile and, in the past,
securities in these countries have offered greater potential for gain (as well
as loss) than securities of companies located in developed countries.
Furthermore, investments by investors foreign to the emerging countries are
subject to a variety of restrictions in many emerging countries. These
restrictions may take the form of prior governmental approval, limits on the
amount or type of securities held by foreigners, and limits on the types of
companies in which foreigners may invest. Additional restrictions may be imposed
at any time by these or other countries in which the Fund invests. In addition,
the repatriation of both investment income and capital from several foreign
countries is restricted and controlled under certain regulations, including, in
some cases, the need for certain governmental consents. Although these
restrictions may in the future make it undesirable to invest in emerging
countries, the Adviser does not believe that any current repatriation
restrictions would affect its decision to invest in such countries. Countries
such as those in which the Fund may invest have historically experienced and may
continue to experience, high rates of inflation, high interest rates, exchange
rate fluctuations or currency depreciation, large amounts of external debt,
balance of payments and trade difficulties and extreme poverty and unemployment.
Additional factors which may influence the ability or willingness to service
debt include, but are not limited to, a country's cash flow situation, the
availability of sufficient foreign exchange on the date a payment is due, the
relative size of its debt service burden to the economy as a whole, its
government's policy towards the International Monetary Fund, the World Bank and
other international agencies and the political constraints to which a government
debtor may be subject.

The issuers of the foreign government and government-related debt
securities in which the Fund expects to invest have in the past experienced
substantial difficulties in servicing their external debt obligations, which has
led to defaults on certain obligations and the restructuring of certain

A-15
<PAGE>

indebtedness. Restructuring arrangements have included, among other things,
reducing and rescheduling interest and principal payments by negotiating new or
amended credit agreements or converting outstanding principal and unpaid
interest to Brady Bonds, and obtaining new credit to finance interest payments.
Holders of certain foreign government and government-related debt securities may
be requested to participate in the restructuring of such securities and to
extend further loans to the issuers of such securities. There can be no
assurance that the Brady Bonds and other foreign government and government-
related debt securities in which the Fund may invest will not be subject to
similar defaults or restructuring arrangements which may adversely affect the
value of such investments. Furthermore, certain participants in the secondary
market for such debt securities may be directly involved in negotiating the
terms of these arrangements and may therefore have access to information not
available to other market participants.

Payments to holders of the high yield, higher risk foreign debt securities
in which the Fund may invest may be subject to foreign withholding and other
taxes. Although the holders of foreign government and government-related debt
securities may be entitled to tax gross-up payments from the issuers of such
securities, there is no assurance that such payments will be made.

Russian Securities Transactions

The Fund may invest in securities of Russian companies. The registration,
clearing and settlement of securities transactions in Russia are subject to
significant risks not normally associated with securities transactions in the
United States and other more developed markets. Ownership of shares in Russian
companies is evidenced by entries in a company's share register (except where
shares are held through depositories that meet the requirements of the
Investment Company Act) and the issuance of extracts from the register or, in
certain limited cases, by formal share certificates. However, Russian share
registers are frequently unreliable and the Fund could possibly lose its
registration through oversight, negligence or fraud. Moreover, Russia lacks a
centralized registry to record securities transactions and registrars located
throughout Russia or the companies themselves maintain share registers.
Registrars are under no obligation to provide extracts to potential purchasers
in a timely manner or at all and are not necessarily subject to state
supervision. In addition, while registrars are liable under law for losses
resulting from their errors, it may be difficult for the Fund to enforce any
rights it may have against the registrar or issuer of the securities in the
event of loss of share registration. Although Russian companies with more than
1,000 shareholders are required by law to employ an independent company to
maintain share registers, in practice, such companies have not always followed
this law. Because of this lack of independence of registrars, management of a
Russian company may be able to exert considerable influence over who can
purchase and sell the company's shares by illegally instructing the registrar to
refuse to record transactions on the share register. Furthermore, these
practices may prevent the Fund from investing in the securities of certain
Russian companies deemed suitable by the Adviser and could cause a delay in the
sale of Russian securities by the Fund if the company deems a purchaser
unsuitable, which may expose the Fund to potential loss on its investment.

In light of the risks described above, the Board of Trustees of the Fund
has approved certain procedures concerning the Fund's investments in Russian
securities. Among these procedures is a requirement that the Fund will not
invest in the securities of a Russian company unless that issuer's registrar has
entered into a contract with the Fund's sub-custodian containing certain
protective conditions including, among other things, the sub-custodian's right
to conduct regular share confirmations on behalf of the Fund. This requirement
will likely have the effect of precluding investments in certain Russian
companies that the Fund would otherwise make.

Special Risk Considerations of Investing in Small Capitalization Issues

The Fund may invest in relatively new or unseasoned companies which are in
their early stages of development (sometimes referred to as "post-venture
companies"), or small companies positioned in new and emerging industries where
the opportunity for rapid growth is expected to be above average. Securities of
unseasoned companies present greater risks than securities of larger, more
established companies. The companies in which the Fund may invest may have
relatively small revenues, limited product lines, and may have a small share of
the market for their products or services. Post-venture companies may lack depth
of management, may be unable to internally generate funds necessary for growth
or potential development or to generate such funds through external financing or
favorable terms, or may be developing or marketing new products or services for
which markets are not yet established and may never become established. Due to
these and other factors, such companies may suffer significant losses as well as
realize substantial growth. Investments in such companies tend to be volatile
and are therefore speculative.

Historically, the small capitalization stocks have been more volatile in
price than the larger capitalization stocks. Among the reasons for the greater
price volatility of these securities are the less certain growth prospects of
smaller firms, the lower degree of liquidity in the markets for such stocks, and
the greater sensitivity of small companies to changing economic conditions.
Besides exhibiting greater volatility, post-venture company stocks may, to a
degree, fluctuate independently of larger company stocks. Investors should
therefore expect that the value of the Fund's shares may be more volatile than
the shares of a fund that invests in larger capitalization stocks.

Pursuant to the Exemptive Order described above under "Emerging Markets Equity
and Debt Securities," in lieu of investing directly in small capitalization
issues, the Fund may invest a portion of its assets in the Brinson Post-Venture
Fund (the "Post-Venture Fund") series of the Trust. The investment objective of
the Post-Venture Fund is to maximize total U.S. dollar return, consisting of
capital appreciation and current income, while controlling risk. The Post-
Venture Fund invests primarily in equity securities of

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<PAGE>

publicly traded companies representing the lower 5% of the Wilshire 5000 Index,
and, as such, at least 65% of its assets are invested in small capitalization
equity securities. Any investment by the Fund in the Post-Venture Fund would not
be subject to the limitations of the Investment Company Act concerning
investments by open-end investment companies in the securities issued by other
investment companies. Please see the discussion above under "Investment Company
Securities" for a description of these limitations.

OTHER INVESTMENT TECHNIQUES

Currency Management

The normal currency allocation of the Fund is identical to the currency mix
of the Benchmark. The Fund expects to maintain this normal currency exposure
when, in the judgment of the Adviser, global currency markets are fairly priced
relative to each other and relative to the associated risks. The Fund may
actively deviate from such normal currency allocations to take advantage of, or
to protect its portfolio from risk and return characteristics of, the currencies
and short-term interest rates when those prices deviate significantly from
fundamental value. Deviations from the Benchmark are determined by the Adviser
based upon its research.

To manage exposure to currency fluctuations, the Fund may alter fixed
income or money market exposures (in its normal asset allocation mix as
previously described), enter into forward currency exchange contracts, buy or
sell options, futures or options on futures relating to foreign currencies and
purchase securities indexed to currency baskets. The Fund will also use these
currency exchange techniques in the normal course of business to hedge against
adverse changes in exchange rates in connection with purchases and sales of
securities. Some of these strategies may require the Fund to set aside liquid
assets in a segregated custodial account to cover its obligations. These
techniques are further described below.

Forward Foreign Currency Transactions

The Fund may conduct its foreign currency exchange transactions on a spot
(i.e., cash) basis at the spot rate prevailing in the foreign currency exchange
market or through entering into contracts to purchase or sell foreign currencies
at a future date (i.e., a "forward foreign currency contract" or "forward
contract"). A forward contract involves an obligation to purchase or sell a
specific currency amount at a future date, which may be any fixed number of days
from the date of the contract agreed upon by the parties and at a price set at
the time of the contract. The Fund will convert currency on a spot basis from
time to time and investors should be aware of the potential costs of currency
conversion.

The Fund may enter into forward contracts for hedging purposes as well as
for non-hedging purposes. For hedging purposes, the Fund may enter into
contracts to deliver or receive foreign currency it will receive from or require
for its normal investment activities. It may also use contracts in a manner
intended to protect foreign currency-denominated securities from declines in
value due to unfavorable exchange rate movements. The Fund may also enter into
contracts with the

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<PAGE>

intent of changing the relative exposure of the Fund's portfolio of securities
to different currencies to take advantage of anticipated changes in exchange
rates.

When the Fund enters into forward contracts for non-hedging purposes, it
will establish a segregated account with its custodian bank in which it will
maintain cash, U.S. government securities or other liquid assets equal in value
to its obligations with respect to its forward contracts for non-hedging
purposes.

At the maturity of a forward contract, the Fund may either sell a portfolio
security and make delivery of the foreign currency, or it may retain the
security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. The Fund may realize a gain or loss from currency
transactions.

Options

The Fund may purchase and write put and call options on foreign or U.S.
securities and indices and enter into related closing transactions. The Fund
may also purchase and write put and call options on foreign currencies to manage
the Fund's exposure to changes in currency exchange rates. In addition, the
Fund may purchase and write options to buy or sell futures contracts.

A call option enables the purchaser, in return for the premium paid, to
purchase securities from the writer of the option at an agreed price at any time
during a period ending on an agreed date. The advantage is that the purchaser
may hedge against an increase in the price of securities it ultimately wishes to
buy or may take advantage of a rise in a particular index. The Fund may purchase
call options only to the extent premiums paid on all outstanding call options do
not exceed 20% of the Fund's total assets. The Fund will write call options only
on a covered basis. A call option is "covered" if the Fund owns the underlying
securities or the Fund maintains in a segregated account with its custodian,
cash, U.S. government securities or other liquid assets with a value sufficient
to meet its obligations under the call option, or if the Fund owns an offsetting
call option. The Fund will receive premium income from writing call options,
which may offset the cost of purchasing put options and may also contribute to
the Fund's total return.

A put option enables the purchaser of the option, in return for the premium
paid, to sell the security underlying the option to the writer at the exercise
price during the option period ending on an agreed date and the writer of the
option has the obligation to purchase the security from the purchaser of the
option upon exercise during such period. The Fund may purchase put options only
to the extent that the premiums on all outstanding put options do not exceed 20%
of the Fund's total assets. The advantage is that the purchaser can be protected
should the market value of the security decline or should a particular index
decline. The Fund will, at all times during which it holds a put option, own the
security underlying such option. The Fund will receive premium income from
writing put options, although it may be required, when the put is exercised, to
purchase securities at higher prices than the current market price.

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<PAGE>

An option on a securities index gives the purchaser of the option, in
return for the premium paid, the right to receive from the seller cash equal to
the difference between the closing price of the index and the exercise price of
the option.

Closing transactions permit the Fund to offset put options or call options
prior to exercise or expiration. If the Fund cannot effect closing transactions,
it may have to hold a security it would otherwise sell or deliver a security it
might want to hold.

Call options on foreign currency written by the Fund will be "covered,"
which means that the Fund will own an equal amount of the underlying foreign
currency, maintain in a segregated account with its custodian, cash, U.S.
government securities or other liquid assets with a value sufficient to meet its
obligations under the call option, or own an offsetting call option. With
respect to put options on foreign currency written by the Fund, the Fund will
establish a segregated account with its custodian bank consisting of cash, U.S.
government securities or other liquid assets in an amount equal to the amount
the Fund would be required to pay upon exercise of the put.

The Fund will not purchase or sell options if, immediately thereafter, more
than 40% of its net assets would be hedged by options. The Fund may use options
traded on U.S. exchanges and to the extent permitted by law, options traded
over-the-counter and on recognized foreign exchanges. It is the position of the
Commission that over-the-counter options are illiquid. Accordingly, the Fund
will invest in such options only to the extent consistent with its 15% limit on
investment in illiquid securities.

Futures Contracts

The Fund may enter into contracts for the purchase or sale of securities,
including index contracts or foreign currencies, for hedging purposes. The
purchase of a futures contract by the Fund represents the acquisition of a
contractual right to obtain delivery of the securities or foreign currency
called for by the contract at a specified price on a specified future date.
When a futures contract is sold, the Fund incurs a contractual obligation to
deliver the securities or foreign currency underlying the contract at a
specified price on a specified future date. The Fund may enter into futures
contracts and engage in options transactions related thereto for hedging
purposes and for non-hedging purposes, to the extent that not more than 5% of
the Fund's assets are required as futures contract margin deposits and premiums
on options on futures.

When the Fund enters into a futures transaction, it must deliver to the
futures commission merchant selected by the Fund an amount referred to as
"initial margin." This amount is maintained by the futures commission merchant
in a segregated account at the custodian bank. Thereafter, a "variation margin"
may be paid by the Fund to, or drawn by the Fund from, such account in
accordance with controls set for such accounts, depending upon changes in the
price of the underlying securities subject to the futures contract.

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<PAGE>

fluctuating market value of such futures contracts and the aggregate value of
the initial and variation margin payments made by the Fund with respect to such
futures contracts.

The Fund will enter into futures transactions on domestic exchanges and, to
the extent such transactions have been approved by the United States Commodity
Futures Trading Commission, for sale to customers in the United States, on
foreign exchanges.

Risks and Special Considerations of Options and Futures

Options and futures can be volatile investments and may not perform as
expected. If the Adviser applies a hedge at an inappropriate time or price
trends are judged incorrectly, options, futures and similar strategies may lower
the Fund's return. Options and futures traded on foreign exchanges generally are
not regulated by U.S. authorities and may offer less liquidity and less
protection to the Fund in the event of default by the other party to the
contract. The Fund could also experience losses if the prices of its options or
futures positions are poorly correlated with its other investments, or if it
cannot close out its positions because of an illiquid secondary market. The loss
from investing in futures transactions is potentially unlimited. For further
information concerning the risks of options and futures, see Part B of this
Registration Statement.

Swaps

The Fund may engage in swaps, including but not limited to interest rate,
currency and index swaps and the purchase or sale of related caps, floors and
collars and other derivative instruments. The Fund expects to enter into these
transactions primarily to preserve a return or spread on a particular investment
or portion of its portfolio, to protect against currency fluctuations, as a
technique for managing the portfolio's duration (i.e., the price sensitivity to
changes in interest rates), to protect against any increase in the price of
securities the Fund anticipates purchasing at a later date or to gain exposure
to certain markets.

Interest rate swaps involve the exchange by the Fund with another party of
their respective commitments to receive or pay interest (e.g., an exchange of
fixed rate payments for floating rate payments) with respect to a notional
amount of principal. Currency swaps involve the exchange of cash flows on a
notional amount based on changes in the values of referenced currencies.

The purchase of a cap entitles the purchaser to receive payments on a
notional principal amount from the party selling the cap to the extent that a
specified index exceeds a predetermined interest rate or amount. The purchase of
an interest rate floor entitles the purchaser to receive payments on a notional
principal amount from the party selling the floor to the extent that a specified
index falls below a predetermined interest rate or amount. A collar is a
combination of a cap and a floor that preserves a certain return within a
predetermined range of interest rates or values.

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<PAGE>

involve the delivery of securities or other underlying assets or principal.
Thus, if the other party to a swap defaults, the Fund's risk of loss consists of
the net amount of payments that the Fund is contractually entitled to receive.
Under Internal Revenue Service rules, any lump sum payment received or due under
the notional principal contract must be amortized over the life of the contract
using the appropriate methodology prescribed by the Internal Revenue Service.

The equity swaps in which the Fund intends to invest involve agreements
with a counterparty. The return to the Fund on any equity swap contract will be
the total return on the notional amount of the contract as if it were invested
in the stocks comprising the contract index in exchange for an interest
component based on the notional amount of the agreement. The Fund will only
enter into an equity swap contract on a net basis, i.e., the two parties'
obligations are netted out, with the Fund paying or receiving, as the case may
be, only the net amount of the payments. Payments under the equity swap
contracts may be made at the conclusion of the contract or periodically during
its term.

If there is a default by the counterparty to an equity swap contract, the
Fund will be limited to contractual remedies pursuant to the agreements related
to the transaction. There is no assurance that an equity swap contract
counterparty will be able to meet its obligations pursuant to an equity swap
contract or that, in the event of default, the Fund will succeed in pursuing
contractual remedies. The Fund thus assumes the risk that it may be delayed in
or prevented from obtaining payments owed to it pursuant to an equity swap
contract. However, the amount at risk is only the net unrealized gain, if any,
on the swap, not the entire notional amount. The Adviser will closely monitor,
subject to the oversight of the Board of Trustees, the creditworthiness of
equity swap counterparties in order to minimize the risk of equity swaps.

The Adviser and the Trust do not believe that the Fund's obligations under
equity swap contracts are senior securities and, accordingly, the Fund will not
treat them as being subject to its borrowing or senior securities restrictions.
However, the net amount of the excess, if any, of the Fund's obligations over
its entitlements with respect to each equity swap contract will be accrued on a
daily basis and an amount of cash, U.S. government securities or other liquid
assets having an aggregate market value at least equal to the accrued excess
will be maintained in a segregated account by the Fund's custodian. To the
extent that the Fund cannot dispose of a swap in the ordinary course of business
within seven days at approximately the value at which the Fund has valued the
swap, it will treat the swap as illiquid and subject to its overall limit on
illiquid investments of 15% of net assets.

Borrowing

The Fund may borrow money as a temporary measure for extraordinary purposes
or to facilitate redemptions. The Fund will not borrow money in excess of
33 1/3% of the value of its total assets. The Fund has no intention of
increasing its net income through borrowing. Any borrowing will be from a bank
with the required asset coverage of at least 300%. In the event that such asset
coverage falls below 300%, the Fund shall, within three days thereafter (not
including Sunday or holidays) or such longer period as the Commission may
prescribe by rules and regulations, reduce the amount of its borrowings to such
an extent that the asset coverage of such borrowings shall be at least 300%. The
Fund will not pledge more than 10% of its net assets, or issue senior securities
as defined in the Investment Company Act, or as described herein, except for
notes to banks and reverse repurchase

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<PAGE>

agreements. Investment securities will not be purchased while the Fund has
outstanding borrowings that exceed 5% of the Fund's total net assets.

Loans of Portfolio Securities

The Fund may loan up to 33 1/3% of its assets securities to qualified
broker-dealers or institutional investors for their use relating to short sales
or other security transactions. Such loans must be secured by collateral,
consisting of any combination of cash and U.S. government securities in an
amount at least equal (on each business day) to the current market value of the
securities loaned. During the terms of these loans, the Fund will continue to
receive any dividends or interest paid on the loaned securities as well as the
interest on the investment of the collateral minus a fee paid to the borrower or
a fee directly deducted by the borrower. The Fund must have a right to reacquire
the loaned securities on five business days' notice. The principal risk to which
the Fund will be exposed on a loan transaction is the risk that the borrower
would become bankrupt at a time when the value of the loaned security increases.
However, pursuant to the Fund's securities lending agreement, the lending agent
is obligated to replace the loaned securities with a like amount of the loaned
securities of the same issuer, class and denomination in the event the loaned
securities are not returned by a borrower in accordance with the arrangements
between the borrower and the lending agent. The Fund will only lend securities
after a review of all pertinent facts by the Adviser and the lending agent,
subject to overall supervision by the Board of Trustees. Creditworthiness of the
borrowing broker-dealer or institution will be monitored on an ongoing basis by
the Adviser and any lending agent pursuant to procedures reviewed and adopted by
the Board of Trustees. Cash received through loan transactions may be invested
in any security in which the Fund is authorized to invest. Investing cash
subjects that investment to market risk (i.e., capital appreciation or
depreciation).

Investment Restrictions

The Fund is subject to certain investment restrictions which have been
adopted by the Trust on behalf of the Fund as fundamental policies that cannot
be changed without the approval of a majority of the outstanding shares of the
Fund. A list of these restrictions and more information concerning the
investment policies are included in Part B of this Registration Statement.

Portfolio Turnover

The Fund is free to dispose of its portfolio securities at any time,
subject to complying with the Code and the Investment Company Act, when changes
in circumstances or conditions make such turnover desirable in light of the
Fund's investment objective. The Fund will not attempt to achieve or be limited
to a predetermined rate of portfolio turnover, such a turnover always being
incidental to transactions undertaken with a view to achieving the Fund's
investment objective. While it is the policy of the Fund generally not to engage
in trading for short-term gains, the Fund will effect portfolio transactions
without regard to the holding period if, in the judgment of the Adviser, such
transactions are advisable in light of a change in circumstances of a particular
company, within a particular industry or country, or in general market, economic
or political conditions. Although the portfolio turnover rate for the Fund may
vary greatly from year to year, the Fund expects that under normal
circumstances, the portfolio turnover rate will not exceed 250%. A higher
portfolio turnover

A-22
<PAGE>

rate will increase aggregate brokerage commission expenses which must be borne
directly by the Fund and ultimately by the Fund's Investors and the incidence of
short-term capital gains (which are taxable to Investors as ordinary income).
See "Item 5 - Brokerage Allocation" and "Item 6- Federal Taxes."

Item 5. Management of the Fund.

The Board of Trustees

Under Delaware law and the Amended and Restated Agreement and Declaration
of Trust of the Trust, the Board of Trustees has overall responsibility for
managing the business and affairs of the Trust and the Fund. The Trustees
elect the officers of the Trust, who are responsible for administering the
day-to-day operations of the Fund.

The Adviser

Brinson Partners, a Delaware corporation, is an investment management firm
managing, as of December 31, 1996, approximately $119 billion, primarily for
institutional pension and profit sharing funds. Brinson Partners was organized
in 1989 when it acquired the institutional asset management business of The
First National Bank of Chicago and First Chicago Investment Advisors, N.A.
Brinson Partners and its predecessor entities have managed domestic and
international investment assets since 1974 and global investment assets since
1982. Brinson Partners has offices in London, Melbourne, New York, Paris,
Singapore, Sydney and Tokyo, in addition to its principal office at 209 South
LaSalle Street, Chicago, IL 60604-1295. Brinson Partners is controlled by Swiss
Bank Corporation ("Swiss Bank"). Swiss Bank, with headquarters in Basel,
Switzerland, is an internationally diversified organization with operations in
many aspects of the financial services industry. Brinson Partners also serves as
the investment adviser to nine other investment companies: The Brinson Funds,
Enterprise Accumulation Trust - International Growth Portfolio, Enterprise Group
of Funds, Inc. - International Growth Portfolio, Fort Dearborn Income
Securities, Inc., Managed Account Services Portfolio Trust - Pace Large Company
Value Equity Investments, The Hirtle Callaghan Trust - International Equity
Portfolio, John Hancock Variable Series Trust I - International Balanced Fund,
AON Funds - International Equity Fund and The Republic Funds - Republic Equity
Fund.

Pursuant to its investment advisory agreement with the Trust (the "Advisory
Agreement"), the Adviser is authorized, at its own expense, to obtain
statistical and other factual information and advice regarding economic factors
and trends from its foreign subsidiaries, but it does not generally receive
advice or recommendations regarding the purchase or sale of securities from such
subsidiaries. The Adviser does not receive any compensation under the
Advisory Agreement.

A-23
<PAGE>

Appendix B to the Prospectus sets forth the investment performance of the
Fund, including the performance of the Brinson Trust Company Collective
Investment Trust's Global Securities Fund until April 28, 1995, the commencement
of the Fund's operations. Brinson Trust Company is a wholly-owned subsidiary of
Brinson Partners.

Investment decisions for the Fund are made by an investment management team
of the Adviser. No member of the investment management team is primarily
responsible for making recommendations for portfolio purchases or sales.

Administrative, Accounting, Transfer Agency and Custodian Services

The Trust, on behalf of the Fund, has entered into a Multiple Services
Agreement (the "Services Agreement") with Morgan Stanley Trust Company, One
Pierrepont Plaza, Brooklyn, New York 11201 ("MSTC" or the "Administrator"),
pursuant to which MSTC is required to provide general administrative,
accounting, portfolio valuation, transfer agency and custodian services to the
Fund, including the coordination and monitoring of any third party service
providers.

Custody Services. MSTC provides custodian services for the securities and
cash of the Fund. The custody fee schedule is based primarily on the net amount
of assets held during the period for which payment is being made plus a per
transaction fee for transactions during the period and out-out-pocket expenses.

As authorized under the Services Agreement, MSTC has entered into a Mutual
Funds Service Agreement (the "CGFSC Agreement") with Chase Global Funds
Services Company ("CGFSC"), a corporate affiliate of The Chase Manhattan Bank,
under which CGFSC provides administrative, accounting, portfolio valuation and
transfer agency services to the Fund. CGFSC's business address is 73 Tremont
Street, Boston, Massachusetts 02108-3913. Subject to the supervision of the
Board of Trustees of the Trust, MSTC supervises and monitors such service
provided by CGFSC.

Pursuant to the CGFSC Agreement, CGFSC provides:

(1) administrative services, including providing the necessary office
space, equipment and personnel to perform administrative and clerical services;
preparing, filing and distributing proxy materials, periodic reports to
Investors, registration statements and other documents; and responding to
Investor inquiries;

(2) accounting and portfolio valuation services, including the daily
calculation of the Fund's net asset value and the preparation of certain
financial statements; and

(3) transfer agency services, including the maintenance of each Investor's
account records, responding to Investors' inquiries concerning accounts,
processing purchases and redemptions of the Fund's shares, acting as dividend
and distribution disbursing agent and performing other service functions.

For its administrative, accounting, transfer agency and custodian services,
MSTC receives the following as compensation from the Trust on an annual basis:
0.25% of the average daily U.S. assets of the Trust; 0.525% of the average daily
non-U.S. assets of the Trust; 0.3250% of the average daily emerging markets
equity assets of the Trust; and 0.19% of the average daily emerging markets debt
assets of the Trust. In addition, MSTC receives an annual fee of $25 for each
shareholder account of the Trust and an additional fee of 0.75% of the average
daily net assets of the Trust for administrative duties, the latter subject to
the expense limitation applicable to the Trust. No fee (asset based or
otherwise) is charged on any investments made by any fund into any other fund
sponsored or managed by the Advisor and assets of a fund that are invested in
another investment company or series thereof sponsored or managed by the Advisor
will not be counted in determining the 0.75% administrative duties fee or the
applicability of the expense limitation on such fee. The foregoing fees include
all out-of-pocket expenses or transaction charges incurred by MSTC and any third
party service provider in providing such services, with the exception of certain
out-of-pocket expenses charged directly by CGFSC to the Trust. Pursuant to the
CGFSC Agreement, MSTC pays CGFSC for the services CGFSC provides to MSTC in
fullfilling its obligations under the Services Agreement.

Independent Auditors

Ernst & Young LLP, Chicago, Illinois, is the independent accounting and
auditing firm which services the Trust.

A-24
<PAGE>

Expenses

The Fund will be responsible for all of its own expenses other than those
borne by the Adviser pursuant to the Advisory Agreement and organizational
expenses. Such expenses may include, but are not limited to, legal expenses,
audit fees, printing costs (e.g., cost of printing annual reports, semi-annual
reports and Prospectuses which are distributed to existing Investors), brokerage
commissions, the expenses of registering the Fund's shares for sale with the
Commission and of noticing the Fund's shares for sale with various state
securities commissions, fees and expenses of the Administrator and the expenses
of obtaining quotations of portfolio securities and of pricing the Fund's
shares. General expenses which are not associated directly with any particular
portfolio within the Trust (e.g., insurance premiums, Trustees' fees, expenses
of maintaining the Trust's legal existence and of Investors' meetings and fees
and expenses of industry organizations) are allocated between the various series
based upon their relative net assets.

The Adviser has agreed to pay the amount, if any, by which the total
operating expenses of the Fund for any fiscal year exceed 0.05% of the Fund's
average net assets. The Adviser, however, may discontinue this expense
limitation at any time in its sole discretion.

Brokerage Allocation

In determining the brokers through whom, and commission rates and other
transaction costs at which, securities transactions for the Fund are to be
executed, except as discussed below, the Adviser seeks to negotiate a
combination of the most favorable execution and the best price obtainable on
each transaction. Consequently, the Adviser selects brokers primarily on the
basis of their execution capability and trading expertise. The Fund normally
trades non-U.S. securities in foreign countries, since the best available market
for non-U.S. securities is often in non-U.S. markets. In transactions on non-
U.S. stock exchanges, brokers' commissions are generally fixed and are often
higher than in the United States where commissions are negotiated. Pursuant to
the Advisory Agreement, the Adviser is authorized to utilize the trading
department of its foreign subsidiaries to execute foreign securities
transactions but monitors selection by such subsidiaries of brokers and dealers
used to execute such transactions.

While the selection of brokers is made primarily on the basis of their
execution capabilities, the direction of transactions to such brokers may also
be based on the quality and amount of the research and research-related services
which they provide to the Adviser and indirectly to its clients. These services
are of the type described in Section 28(e) of the Securities Exchange Act of
1934, as amended, and are designed to augment the Adviser's own internal
research and investment

A-25
<PAGE>

strategy capabilities. The Adviser may use this research information in managing
the Fund's assets, as well as the assets of other clients.

When buying or selling securities, the Fund may pay commissions to brokers
who are affiliated with the Adviser or the Fund. The Fund may also purchase
securities in certain underwritten offerings for which an affiliate of the Fund
or the Adviser may act as an underwriter. The Fund may effect futures
transactions through, and pay commissions to, futures commission merchants who
are affiliated with the Adviser or the Fund in accordance with procedures
adopted by the Board of Trustees of the Trust.

Item 5A. Management's Discussion of Fund Performance. Not applicable.

Item 6. Capital Stock and Other Securities.

The Trust was organized as a Delaware business trust on August 16, 1994.
The Trust's Agreement and Declaration of Trust permits the Board of Trustees to
issue an unlimited number of shares of beneficial interest with no par value.
The Board of Trustees has the power to designate one or more series or sub-
series/classes of shares of beneficial interest and to classify or reclassify
any unissued shares with respect to such series. Currently, the Trust is
offering shares of six series: Brinson Global Securities Fund, Brinson Short-
Term Fund, Brinson Post-Venture Fund, Brinson High Yield Fund, Brinson Emerging
Markets Equity Fund and Brinson Emerging Markets Debt Fund.

The shares of the Trust, when issued, will be fully paid and non-
assessable, and within each series, have no preference as to conversion,
exchange, dividends, retirement or other features. Any shares the issuance of
which the Board of Trustees may, from time to time, authorize, shall have no
preemptive rights. The shares are not transferable except to the Trust.

Pursuant to the Investment Company Act, a control person possesses the
ability to control the outcome of matters submitted for shareholder vote. As of
April 1, 1997, Brinson Trust Company Collective Investment Trust for Pension
and Profit Sharing Trust's Global Securities Fund of Chicago, Illinois was a
control person of the Fund and of the Trust by nature of its shareholdings.

Voting Rights and Investor Meetings. The shares of the Trust have non-
cumulative voting rights, which means that the holders of more than 50% of the
shares voting for the election of members of the Board of Trustees can elect
100% of the Trustees if they choose to do so. An Investor is entitled to vote
based on the ratio the shares of such Investor bear to the shares of all
Investors entitled to vote. On any matter submitted to a vote of Investors, all
shares of the Trust then issued and outstanding and entitled to vote on a matter
shall vote by individual series except that, if required by the Investment
Company Act, the shares shall be voted in the aggregate. If the Board of
Trustees determines that a matter to be voted on does not affect the interests
of all series, only the Investors of the affected series shall be entitled to
vote on the matter. The Trust's Amended and Restated Agreement and Declaration
of Trust gives Investors certain voting powers only with respect to (i) the
election and removal of Trustees; (ii) a termination of the Trust; (iii)
amendments reducing payments upon liquidation or diminishing voting rights; (iv)
mergers, consolidations or sales of assets; (v) with respect to the
incorporation of the Trust; (vi)

A-26
<PAGE>

additional matters relating to the Trust as required by the Investment
Company Act; and (vii) such other matters as the Board of Trustees considers
necessary or desirable.

The Trust does not presently intend to hold annual or special meetings of
Investors except when required to elect members of the Board of Trustees, or
with respect to additional matters relating to the Trust, as required under the
Investment Company Act. Pursuant to the Trust's Amended and Restated Agreement
and Declaration of Trust, Investor meetings will also be called upon request of
Investors holding in the aggregate 10% or more of the outstanding shares.
Subject to certain conditions, Investors may apply to the Fund to communicate
with other Investors to request an Investor meeting.

As with any mutual fund, certain Investors of the Fund could control the
results of voting in certain instances. For example, a vote by certain Investors
holding a majority of shares in the Fund to change the Fund's investment
objective could result in an Investor's withdrawal of its investment in the
Fund, and in increased costs and expenses for the remaining Investors.
Additionally, the failure by Investors to approve a change in their investment
objectives and policies parallel to a change that has been approved for the Fund
(thus requiring such Investors to redeem their shares of the Fund) could lead to
a number of adverse consequences, such as the inability of such Investors to
find another investment company in which to invest their assets or an equivalent
investment adviser to manage the assets.

Dividends and Distributions. The Fund does not currently intend to declare
and pay dividends and pay distributions to Investors except as may be determined
by the Board of Trustees of the Trust.

Federal Taxes. The Fund has received a ruling from the Internal Revenue
Service that the Fund will be treated as a partnership for federal income tax
purposes rather than as an association taxable as a corporation. By being
treated as a partnership, the Fund will not be subject to U.S. federal income
tax. Instead, each Investor will be required to report separately on its own
income tax return its distributive share of items of Fund income, gains, losses,
deductions and credits (including foreign tax credits for creditable foreign
taxes imposed on the Fund). Each Investor will be required to report its
distributive share of such tax items regardless of whether it has received or
will receive corresponding distributions of cash or property from the Fund. An
allocable share of a tax-exempt Investor's income will be "unrelated business
taxable income" ("UBTI") to the extent that the Fund borrows money to acquire
property or invests in assets that produce UBTI. The Fund will not be a
"regulated investment company" for federal income tax purposes. For a more
complete discussion of the federal income tax consequences of investing in the
Fund, see "Tax Status" in Part B of this Registration Statement.

Redemptions of Fund shares and the exchange of shares between two series,
are taxable events and, accordingly, Investors may realize capital gains or
losses on these transactions.

Investor Inquiries. Investor inquiries should be addressed to the Trust,
c/o Carolyn M. Burke, 209 South LaSalle Street, Chicago, Illinois 60604-1295, or
an Investor may call 312-220-7940.

Item 7. Purchase of Securities Being Offered

The registration statement of which this Prospectus is a part does not
constitute an offer to sell, or the solicitation of an offer to buy, any
"security" to the public within the meaning of the Securities Act. Shares of the
Fund may be purchased directly by eligible Investors from the Fund at the net
asset value next determined after receipt of the order in proper form by the
Trust. The minimum initial purchase amount is $25,000,000. In the sole
discretion of the Adviser, the minimum purchase amount may be waived or
modified. There is no sales load in connection with the purchase of shares. The
Trust reserves the right to reject any purchase order and to suspend the
offering of shares of the Fund.

At the discretion of the Fund, Investors may be permitted to purchase Fund
shares by transferring securities to the Fund that meet the Fund's investment
objective and policies. Securities transferred to the Fund will be valued in
accordance with the same procedures used to determine the Fund's net asset value
at the time of the next determination of net asset value after such receipt.
Shares issued by the Fund in exchange for securities will be issued at net asset
value determined as of the same time. All dividends, interest, subscription, or
other rights pertaining to such securities after such transfers to the Fund
shall become the property of the Fund and must be delivered to the Fund by the
Investor upon receipt from the issuer. Investors that are permitted to transfer
such securities will be required to recognize a gain or loss on such transfer
and pay tax thereon, if applicable, measured by the difference between the fair
market value of the securities and the Investors' basis therein. The Trust will
not accept securities in exchange for shares of the Fund unless: (1) such
securities are, at the time of the exchange, eligible to be included in the
Fund's investment portfolio and current market quotations are readily available
for such securities; and (2) the Investor represents and warrants that all
securities offered to be exchanged are not subject to any restrictions upon
their sale by the Fund under the Securities Act or under the laws of the country
in which the principal market for such securities exists, or otherwise.

Net Asset Value. The net asset value is computed as of the close of regular
trading on the New York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern
time) on days when such exchange is open. The net asset value per share is
computed by adding the value of all securities and other assets in the
portfolio, deducting any liabilities (expenses and fees are accrued daily) and
dividing by the number of shares outstanding. Fund securities for which market
quotations are available are priced at market value. Debt securities are priced
at fair value by an independent pricing service using methods approved by the
Trust's Board of Trustees. Short-term investments having a maturity of less than
60 days are valued at amortized cost, which approximates market value.
Redeemable securities issued by open-end investment companies are valued using
their respective net asset values for purchase orders placed at the close of the
NYSE. All other securities are valued at their fair value as determined in good
faith and pursuant to a method approved by the Trust's Board of Trustees. For a
detailed description, see Item 19 in Part B.

Exchanges of Shares. Shares of the Fund may be exchanged for shares of the
other series of the Trust on the basis of current net asset values per share at
the time of exchange. Fund shares may be exchanged by written request or by
telephone if the Investor has previously signed a telephone authorization. The
telephone exchange privilege may be difficult to implement during times of
drastic economic or market changes. The Fund reserves the right to restrict the
frequency of, or otherwise

A-28
<PAGE>

modify, condition, terminate or impose charges upon the exchange privilege
and/or telephone transfer privileges upon 60 days' prior written notice to
Investors.

By exercising the telephone exchange privilege the Investor agrees that the
Fund will not be liable for following instructions communicated by telephone
that the Fund reasonably believes to be genuine. The Fund provides written
confirmation of transactions initiated by telephone as a procedure designed to
confirm that telephone transactions are genuine. As a result of this policy, the
Investor may bear the risk of any financial loss resulting from such
transaction; provided, however, if the Fund or the Administrator fails to employ
this and other appropriate procedures, the Fund or the Administrator may be
liable for any losses incurred.

Exchanges may be made only for shares of a series of the Trust then
offering its shares for sale in the Investor's state of residence and are
subject to the minimum initial investment requirement and the payment of any
transaction charges that may be due to such series of the Trust. For federal
income tax purposes, an exchange of shares would be treated as if the Investor
had redeemed shares of the Fund and reinvested in shares of another series of
the Trust. Gains or losses on the shares exchanged are realized by the Investor
at the time of the exchange. Any Investor wishing to make an exchange should
first obtain and review the Prospectus of the series of the Trust into which the
Investor wishes to exchange. Requests for telephone exchanges must be received
by the transfer agent, CGFSC, by the close of regular trading hours (currently
4:00 p.m. Eastern time) on the NYSE on any day that the NYSE is open for regular
trading.

Item 8. Redemption of Shares or Repurchase.

As stated above in Item 7, "Purchase of Securities Being Offered," the
Fund's shares are restricted securities which may not be sold to investors other
than "accredited investors" within the meaning of Regulation D under the
Securities Act unless registered under, or pursuant to another available
exemption from, the Securities Act.

An Investor may redeem its shares of the Fund without charge on any
business day the NYSE is open by furnishing a request to the Trust. The Fund
normally sends redemption proceeds on the next business day, but, in any event,
redemption proceeds, except as set forth below, are sent within seven calendar
days of receipt of a redemption request in proper form. There is no charge for
redemptions by wire. Please note, however, that the Investor's bank may impose a
fee for wire service. The right of any Investor to receive payment with respect
to any redemption may be suspended or the payment of the redemption proceeds
postponed during any period in which the NYSE is closed (other than weekends or
holidays) or trading on the NYSE is restricted, or, to the extent otherwise
permitted by the Investment Company Act, if an emergency exists.

If the Fund determines that it would be detrimental to the best interests
of the remaining Investors of the Fund to make payment wholly or partly in cash,
the Fund may pay the redemption price, in lieu of cash, in whole or in part by a
distribution in kind of securities of the Fund.

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<PAGE>

Item 9. Pending Legal Proceedings.

Not applicable.

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<PAGE>

APPENDIX A

CORPORATE DEBT RATINGS

Moody's Investors Service, Inc. describes classifications of corporate bonds as
follows:

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

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

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

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

Ba - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well-assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.

B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.

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

Ca - Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.

A-31
<PAGE>

C - Bonds which are rated C are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

Standard & Poor's Ratings Group describes classifications of corporate bonds as
follows:

AAA - This is the highest rating assigned by Standard & Poor's Rating Group
to a debt obligation and indicates an extremely strong capacity to pay
principal and interest.

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

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

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

BB - Debt rated BB has less near-term vulnerability to default than other
speculative grade debt. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could
lend to inadequate capacity to meet timely interest and principal payments.

B - Debt rated B has a greater vulnerability to default but presently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.

CCC - Debt rated CCC has a current identifiable vulnerability to default,
and is dependent upon favorable business, financial and economic conditions
to meet timely payments of interest and repayment of principal. In the
event of adverse business, financial or economic conditions, it is not
likely to have the capacity to pay interest or repay principal.

CC - The rating CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC rating.

C - The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC rating.

CI - The rating CI is reserved for income bonds on which no interest is
being paid.

D - Debt rated D is in default, or is expected to default upon maturity or
payment date.

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<PAGE>

Plus (+) or minus (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

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<PAGE>

A-34
<PAGE>

A-35
<PAGE>

APPENDIX B

Below is the performance of the Brinson Trust Company Collective Investment
Trust's Global Securities Portfolio (the "BTC Global Securities Portfolio") for
periods ended April 28, 1995 linked with the Brinson Relationship Funds' Global
Securities Fund (the "Brinson Global Securities Fund") for periods ending
December 31,1996. The Brinson Global Securities Fund assumed the assets of the
BTC Global Securities Portfolio on April 28, 1995. Brinson Trust Company is a
wholly owned subsidiary of Brinson Partners, Inc., Adviser to the Trust.

Performance is calculated net of administrative expenses. All returns quoted
are time weighted, total rates of return and include the impact of capital
appreciation as well as the reinvestment of interest and dividends. All
performance data was supplied by Brinson Partners, Inc. and has not been
verified or audited. The BTC Global Securities Portfiolo was not registered
under the Investment Company Act and therefore was not subject to certain
investment restrictions imposed by the Investment Company Act which may have
adversely affected its performance. Investors should not consider this
performance data as an indication of the future performance of Brinson Global
Securities Fund.

<TABLE>

<CAPTION>
For Periods Ending 12/31/96

Annualized
-------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Since
1 year 2 years 3 years 5 years 10 years Inception
------ ------- ------- ------- -------- ---------
Brinson Global 16.21% 20.88% 13.21% 12.11% 13.68% 15.45%
Securities Fund
Global Securities 12.53 18.46 12.49 11.22 11.97 14.42
Index (1)
</TABLE>

Inception date 12/31/81

(1) The Global Securities Index is calculated gross of fees.

The Global Securities Index is the benchmark for both the BTC Global Securities
Portfolio and the Brinson Global Securities Fund. For a further description of
the benchmark, please review the section titled "Investment Process."

A-36

<PAGE>

OFFEREE NO. _____

BRINSON RELATIONSHIP FUNDS

Brinson Short-Term Fund

PART A

April 30, 1997

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

Item 1. Cover Page. Not applicable.

Item 2. Synopsis. Not applicable.

Item 3. Condensed Financial Information. Not applicable.

Item 4. General Description of Registrant.

Introduction

Brinson Relationship Funds (the "Trust"), a Delaware business
trust established on August 16, 1994, is a no-load, open-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act"). The Trust currently offers six series
of shares: the Brinson Global Securities Fund, the Brinson Short-Term Fund, the
Brinson Post-Venture Fund, the Brinson High Yield Fund, the Brinson Emerging
Markets Equity Fund and the Brinson Emerging Markets Debt Fund. This Prospectus
pertains only to the Brinson Short-Term Fund (the "Fund").

Beneficial interests in the Fund ("shares") are issued solely in
private placement transactions that do not involve a "public offering" within
the meaning of Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act"). Investments in the Fund may only be made by "accredited
investors" within the meaning of Regulation D under the Securities Act which
include, but are not limited to, common or commingled trust funds, investment
companies, registered broker-dealers, investment banks, commercial banks,
corporations, group trusts or similar organizations or entities. Each such
accredited investor that holds shares of the Trust is referred to herein as an
"Investor" and collectively, the "Investors"). This Prospectus does not
constitute an offer to sell, or the solicitation of an offer to buy, any
"security" to the public within the meaning of the Securities Act.

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INVESTMENT OBJECTIVE, POLICIES AND RISK FACTORS

The Fund's investment objective is to maximize total U.S. dollar
return, consisting of capital appreciation and current income, while controlling
risk. The Fund seeks to achieve this objective by investing in U.S. dollar and
non-dollar denominated fixed income securities and money market instruments,
with an average weighted maturity not to exceed three years, that may also
provide the potential for capital appreciation. Under normal market conditions,
the Fund will invest at least 65% of its assets in short-term securities having
an average weighted maturity of not more than three years.

Investors should understand that all investments involve risk and
there can be no guarantee against loss resulting from an investment in the Fund,
nor can there be any assurance that the Fund's investment objective will be
attained.

Investment Process

Brinson Partners, Inc., the Fund's investment adviser ("Brinson
Partners" or the "Adviser") is an active manager of non-U.S. and U.S. short-term
fixed income securities. The Adviser believes that markets do not always
efficiently price fixed income securities and that a fundamental value-based
investment process can increase portfolio returns. Brinson Partners' fixed
income strategies consider many factors in addition to maturity and current
yield in the evaluation of securities. These factors include interest rate
sensitivity, quality, yield curve analysis and individual issue selection.
Accordingly, Brinson Partners will pursue the Fund's objective by investing its
assets in debt securities which are believed to be undervalued. The Adviser's
proprietary valuation model determines which securities are potential candidates
for inclusion in the Fund.

The benchmark for the Fund will be calculated based on the British
Bankers' Association (the "BBA") 30-day LIBOR (the "Benchmark"). BBA Interest
Settlement Rates are based on rates quoted by 16 BBA designated banks as being,
in their view, the offered rate at which deposits are being quoted to prime
banks in the London Interbank market at 11:00 a.m. London time. The Adviser will
attempt to enhance the return and risk performance of the Fund relative to the
Benchmark by implementing an investment process which manages portfolio maturity
structure, while emphasizing careful security selection, credit risk management
and efficiency in the execution of securities transactions. The scale of the
Adviser's short-term fixed income operation allows it to execute trades on terms
which are often more favorable than those available to smaller investors.

Brinson Partners will attempt to enhance the long-term return and risk
performance of the Fund relative to the Benchmark by identifying exploitable
discrepancies between market price and fundamental value. The active management
process is intended, by the Adviser, to produce superior performance relative to
the Benchmark.

The Fund does not intend to concentrate its investments in a
particular industry, nor does the Fund intend to issue senior securities except
to the extent consistent with its policies described below and only as permitted
under the Investment Company Act. The Fund's investment objective and its
policies concerning portfolio securities lending, borrowing, the issuance of
senior

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securities and concentration, are "fundamental," which means that they may not
be changed without the affirmative vote of the holders of a majority of the
Fund's outstanding voting shares. As used in this Prospectus, a vote of "a
majority of the outstanding voting shares" of the Trust or a series of the Trust
means the affirmative vote of the lesser of (i) more than 50% of the outstanding
shares of the Trust or series, or (ii) 67% of the shares of the Trust or series
present at a meeting at which more than 50% of the outstanding shares of the
Trust or series are represented in person or by proxy.

The Fund is classified as "non-diversified," as defined in the
Investment Company Act so that it is not limited by the Investment Company Act
as to the proportion of its assets that it may invest in the obligations of a
single issuer. To the extent that the Fund's investment portfolio at times may
include the securities of a smaller number of issuers than permissible if the
Fund were "diversified" (as defined in the Investment Company Act), the Fund may
be subject to greater investment and credit risk than an investment company that
invests in a broader range of securities, because changes in the financial
condition or market assessment of a single issuer may cause greater fluctuations
in the net asset value of the Fund's shares.

TYPES OF SECURITIES IN WHICH THE FUND MAY INVEST

U.S. and Non-U.S. Fixed Income Securities

The Fund may invest in all types of debt securities of U.S. and non-
U.S. issuers, including governments and governmental entities and supranational
issuers as well as corporations and other business organizations. The Fund may
purchase U.S. dollar denominated securities that reflect a broad range of
investment maturities (with no limitation on maturities except to the extent
provided herein), qualities and sectors. Please see discussion below for a
description of the high yield/higher risk debt securities in which the Fund may
invest.

The non-U.S. fixed income component of the Fund may be invested in
government and supranational issues. A supranational entity is an entity
established or financially supported by the national governments of one or more
countries to promote reconstruction or development. Examples of supranational
entities include, among others, the World Bank, the European Economic Community,
the European Coal and Steel Community, the European Investment Bank, the Intra-
Development Bank, the Export-Import Bank and the Asian Development Bank.

Demand Notes

The Fund may invest in demand notes. Demand notes are securities
issued with a maturity date but which can be called for repayment by the lender
or the borrower at a predetermined interval.

Bank Instruments

Bank instruments in which the Fund may invest include bank loan
participations, bank holding company commercial paper, deposits, bank notes and
other bank related securities. Bank loan participations are loans sold by
lending banks to investors. Bank holding company

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commercial paper is a form of short-term promissory note which is a direct
obligation of a bank holding company. Deposits are obligations of a bank or its
branches.

Commercial Paper

The Fund may invest in commercial paper. Corporate commercial paper
is a form of short-term promissory note issued by corporations primarily to
finance short-term credit needs. Rates vary according to the credit standing of
the issuers and money market conditions.

Floating Rate Instruments

Floating rate instruments are obligations with various final
maturities and interest rates that are tied to other assorted market indices.
The Fund will not invest more than 15% of the value of its net assets in
floating or variable rate demand obligations as to which it cannot exercise the
demand feature on not more than seven days' notice if there is no secondary
market available for these obligations, and in other securities that are not
readily marketable.

Zero Coupon Securities

The Fund may invest in zero coupon securities. Zero coupon securities
are debt obligations that do not entitle the holder to any periodic payments of
interest prior to maturity or a specified date when the securities begin paying
current interest (the "cash payment date") and therefore are issued at a
discount from their face amounts or par value. Such bonds carry an additional
risk in that, unlike bonds which pay interest throughout the period to maturity,
the Fund will realize no cash until the maturity date or the cash payment date
and, if the issuer defaults, the Fund may obtain no return at all on its
investment. For federal tax purposes, the Fund will be required to include in
income daily portions of original issue discount accrued, even if no payment is
received before the maturity date or cash payment date.

Mortgage-Backed Securities

The Fund may invest in mortgage-backed securities, representing
interests in pools of mortgage loans. These securities provide investors with
payments consisting of both interest and principal as the mortgages in the
underlying mortgage pools are paid off. The Fund may invest in mortgage-backed
securities issued or guaranteed by an agency or instrumentality of the U.S.
government. The Fund may also invest in privately issued mortgage-backed
securities issued by certain private, non-government corporations, such as
financial institutions.

The Fund may also invest in Collateralized Mortgage Obligations
("CMOs") and Real Estate Mortgage Investment Conduits ("REMICs"). CMOs are debt
securities issued by U.S. government agencies or by financial institutions and
other mortgage lenders and collateralized by a pool of mortgages held under an
indenture. CMOs are issued in a number of classes or series with different
maturities. The classes or series are retired in sequence as the underlying
mortgages are repaid. Prepayment may shorten the stated maturity of the
obligation and can result in a loss of premium, if any has been paid. Certain
of these securities may have variable or floating interest rates and others may
be stripped (securities which provide only the principal or interest feature of
the underlying security).

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REMICs are private entities formed for the purpose of holding a fixed
pool of mortgages secured by an interest in real property. REMICs are similar
to CMOs in that they issue multiple classes of securities.

CMOs and REMICs issued by private entities are not government
securities and are not directly guaranteed by any government agency. They are
secured by the underlying collateral of the private issuer. Yields on
privately-issued CMOs have historically been higher than yields on CMOs issued
or guaranteed by U.S. government agencies. However, the risk of loss due to
default on such instruments is higher. For federal income tax purposes, the
Fund will be required to accrue income attributable to its investment in CMOs
and regular interests in REMICs using the "catch-up" method, with an aggregate
prepayment assumption. For further information concerning mortgage-backed
securities, see Part B of this Registration Statement.

Asset-Backed Securities

The Fund may invest in asset-backed securities. Asset-backed
securities are securities that represent a participation in, or are secured by
and payable from, a stream of payments generated by particular assets, most
often a pool or pools of similar assets (e.g., receivables on home equity and
credit loans and receivables regarding automobile, credit card, mobile home and
recreational vehicle loans, wholesale dealer floor plans and leases).

Such receivables are securitized in either a pass-through or pay-
through structure. Pass-through securities provide investors with an income
stream consisting of both principal and interest payments in respect of the
receivables in the underlying pool. Pay-through asset-backed securities are debt
obligations issued usually by a special purpose entity, are collateralized by
the various receivables and with respect to which the payments on the underlying
receivables provide the funds to pay the debt service on the debt obligations
issued. The Fund may invest in these securities and obligations and other types
of asset-backed securities that may be developed in the future.

The credit quality of these securities depends primarily upon the
quality of the underlying assets and the level of credit support and/or
enhancement provided. Such asset-backed securities may be subject to the same
prepayment risks as mortgaged-backed securities. For further information
concerning asset-backed securities, see Part B of this Registration Statement.

When-Issued Securities

The Fund may purchase securities on a "when-issued" basis for payment
and delivery at a later date. The price is generally fixed on the date of
commitment to purchase. The Fund does not earn interest on the securities it
has committed to purchase until they are paid for and delivered on the
settlement date. At the time of settlement, the market value of the security
may be more or less than the purchase price. For further information concerning
when-issued securities, see Part B of this Registration Statement.

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Convertible Securities

The Fund may invest in convertible securities which generally offer
lower interest or dividend yields than nonconvertible debt securities of similar
quality. The value of convertible securities may reflect changes in the value
of the underlying common stock. Convertible securities entail less credit risk
than the issuer's common stock because they rank senior to common stock.

Eurodollar Securities

Repurchase Agreements

The Fund may enter into repurchase agreements with banks or broker-
dealers. Repurchase agreements are considered under the Investment Company Act
to be collateralized loans by the Fund to the seller secured by the securities
transferred to the Fund. In accordance with requirements under the Investment
Company Act, repurchase agreements will be fully collateralized by securities
which the Fund may invest in directly. Such collateral will be marked-to-market
daily. If the seller of the underlying security under the repurchase agreement
should default on its obligation to repurchase the underlying security, the Fund
may experience delay or difficulty in recovering its cash. To the extent that,
in the meantime, the value of the security purchased has decreased, the Fund
could experience a loss. No more than 15% of the Fund's net assets will be
invested in illiquid securities, including repurchase agreements which have a
maturity of longer than seven days.

Reverse Repurchase Agreements

The Fund will establish a segregated account with its custodian bank
in which it will maintain cash, U.S. government securities or other liquid
assets equal in value to its obligations with respect to reverse repurchase
agreements. Reverse repurchase agreements involve the risk that the market value
of the securities retained by the Fund may decline below the price of the
securities the Fund has sold but is obligated to repurchase under the agreement.
In the event the buyer of securities under a reverse repurchase agreement files
for bankruptcy or becomes insolvent, the Fund's use of the proceeds of the
agreement may be restricted pending a determination by the other party, or its
trustee or receiver, whether to enforce the Fund's obligation to repurchase the
securities.

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High Yield/Higher Risk Securities

The Fund's U.S. dollar investments may include lower quality, higher
yielding securities which are below investment grade. Investment grade
securities are securities rated BBB or better by Standard & Poor's Ratings Group
("S&P") or Baa or better by Moody's Investors Service, Inc. ("Moody's") or, if
unrated, are determined to be of comparable quality by the Adviser. While
securities rated below BBB or Baa are regarded as having an adequate capacity to
pay principal and interest, such securities lack outstanding investment
characteristics and, in fact, have speculative characteristics as well. In
addition, changes in economic conditions or other circumstances are more likely
to lead to a weakened capacity to make principal and interest payments than is
the case with higher rated securities. Securities rated lower than BBB by S&P
and Baa by Moody's are classified as non-investment grade securities and are
commonly referred to as "junk bonds." These securities are considered to be of
poor standing and predominantly speculative with respect to the issuer's
capacity to pay interest and repay principal in accordance with the terms of the
obligations and involve major risk exposure to adverse conditions. Securities
issued by foreign issuers rated below investment grade entail greater risks than
higher rated securities, including risk of untimely interest and principal
payment, default, price volatility and may present problems of liquidity and
valuation. Investors should carefully consider these risks before investing. A
description of the various bond ratings appears in Appendix A, p. A-58 -A-60.
Ratings represent S&P's and Moody's respective opinions as to the quality of the
obligations they undertake to rate. However, ratings are general and are not
absolute standards of quality. The Fund currently intends to limit its
investment in non-investment grade debt securities of U.S. dollar denominated
fixed income assets to no more than 50% of its net assets. The Fund currently
intends to limit its investment in non-investment grade debt securities of the
non-U.S. dollar denominated fixed income assets to no more than 50% of its net
assets.

Low-grade securities generally offer a higher current yield than that
available from higher grade issues, but involve greater risk. In the past, the
high yields from low-grade securities have more than compensated for the higher
default rates on such securities. However, there can be no assurance that the
Fund will be protected from widespread bond defaults brought about by a
sustained economic downturn, or that yields will continue to offset default
rates on low-grade securities in the future. Issuers of these securities are
often highly leveraged, so that their ability to service their debt obligations
during an economic downturn or during sustained periods of rising interest rates
may be impaired. In addition, such issuers may not have more traditional methods
of financing available to them and may be unable to repay debt at maturity by
refinancing. The risk of loss due to default by the issuer is significantly
greater for the holders of low-grade securities because such securities may be
unsecured and may be subordinated to other creditors of the issuer. Past
economic recessions have resulted in default levels with respect to such
securities in excess of historic averages.

The value of low-grade securities will be influenced not only by
changing interest rates, but also by the bond market's perception of credit
quality and the outlook for economic growth. When economic conditions appear to
be deteriorating, low and medium-rated bonds may decline in market value due to
investors' heightened concern over credit quality, regardless of prevailing
interest rates.

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<PAGE>

Especially at such times, trading in the secondary market for low-
grade securities may become thin and market liquidity may be significantly
reduced. Even under normal conditions, the market for low-grade securities may
be less liquid than the market for investment grade corporate bonds. There are
fewer securities dealers in the high yield market and purchasers of low-grade
securities are concentrated among a smaller group of securities dealers and
institutional investors. In periods of reduced secondary market liquidity, high
yield bond prices may become more volatile and the Fund's ability to dispose of
particular issues when necessary to meet the Fund's liquidity needs or in
response to a specific economic event such as a deterioration in the
creditworthiness of the issuer may be adversely affected.

Low-grade securities frequently have call or redemption features which
would permit an issuer to repurchase the security from the Fund. If a call
were exercised by the issuer during a period of declining interest rates, the
Fund likely would have to replace such called security with a lower yielding
security, thus decreasing the net investment income to the Fund.

Besides credit and liquidity concerns, prices for low-grade securities
may be affected by legislative and regulatory developments. For example, from
time to time, Congress has considered legislation to restrict or eliminate the
corporate tax deduction for interest payments or to regulate corporate
restructurings such as takeovers or mergers. Such legislation may significantly
depress the prices of outstanding low-grade securities. A description of various
bond ratings appears in Appendix A of this Prospectus.

Investment Company Securities

The Fund may invest in securities issued by open-end and closed-end
investment companies. Under Section 12(d)(1) of the Investment Company Act, the
Fund's investment in such securities, subject to certain exceptions, currently
is limited to: (i) 3% of the total voting stock of any one such investment
company, (ii) 5% of the Fund's net assets with respect to any one such
investment company and (iii) 10% of the Fund's net assets in the aggregate.
Investments in the securities of other investment companies may involve
duplication of certain fees and expenses. Investments by the Fund in another
series of the Trust may involve transaction costs.

The Trust has received an Exemptive Order from the United States
Securities and Exchange Commission (the "Commission"), which permits the Fund to
invest its assets in securities of other series offered by the Trust. The Fund
will only invest in such series to the extent that the Adviser determines that
it is more efficient for the Fund to gain exposure to a particular asset class
through investment in a series of the Trust as opposed to investment directly in
individual securities.

Pursuant to an exemptive order received by The Brinson Funds, series
of The Brinson Funds may invest in the Fund and other series of the Trust, in
excess of the Investment Company Act Section 12(d)(i) limitations described
above. Also, other series of the Trust may invest in the Fund, in certain cases
in excess of such limitations. Normally, shares of the Fund will be owned by
other series of the Trust or a series of The Brinson Funds, and the Fund,
itself, will be subject to such limitations as to its own investments and, for
purposes of calculating the amount of investments under such limitations, the
Fund's investments in other series of the Trust and in other investment
companies will be aggregated.

Rule 144A and Illiquid Securities

Generally, an illiquid security is any security that cannot be
disposed of within seven days in the ordinary course of business at
approximately the amount at which the Fund has valued the security. Examples of
illiquid securities are over-the-counter options and certain interest rate
swaps. While maintaining oversight, the Board of Trustees has delegated to the
Adviser the day-to-day function of determining whether or not individual
securities purchased under Rule 144A of the Securities Act, are liquid for
purposes of the Fund's 15% limitation on investments in illiquid assets. The
Board of Trustees has instructed the Adviser to consider the following factors
in determining the liquidity of a security purchased under Rule 144A: (i) the
frequency of trades and trading volume for the security; (ii) whether at least
three dealers are willing to purchase or sell the security and the number of
potential purchasers; (iii) whether at least two dealers are making a market in
the security; and (iv) the nature of the security and the nature of the
marketplace trades (e.g., the time needed to dispose of the security, the method
of soliciting offers and the mechanics of transfer). Although it has delegated
the day-to-day liquidity determination

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to the Adviser, the Board of Trustees will continue to monitor and will
periodically review the Adviser's selection of Rule 144A securities, as well as
the Adviser's determination as to their liquidity.

If the Adviser determines that a security purchased in reliance on
Rule 144A which was previously determined to be liquid is no longer liquid and,
as a result, the Fund's holdings of illiquid securities exceed the Fund's 15%
limit on investment in such securities, the Adviser will determine what action
shall be taken to ensure that the Fund continues to adhere to such limitation
including disposing of illiquid assets which may include such Rule 144A
securities.

Future Developments

From time to time, the Fund may also invest in certain equity or debt
securities which have features other than those that are typical for such
securities and which have in the past been offered or may be offered in the
future. In the past, for example, such securities have been issued to replicate
the performance of a certain component or components of a particular security or
combination of securities and/or to hedge or reduce the risks associated with
certain securities or market trends. The Fund may invest in these securities if
the Adviser believes that doing so would be consistent with the Fund's
investment objective and policies. Since the market for these securities may
be new, the Fund may have difficulty disposing of them at a suitable price and
time. In addition to limited liquidity, these instruments may present other
risks, such as high price volatility. The unavailability of such innovative
securities would not adversely affect the Fund's ability to achieve its
investment objective.

Foreign Securities and Currency Considerations

Investments in securities of foreign issuers may involve greater risks
than those of U.S. issuers. There is generally less information available to
the public about non-U.S. issuers and less government regulation and supervision
of non-U.S. stock exchanges, brokers and listed companies. Non-U.S. companies
are not subject to uniform global accounting, auditing and financial reporting
standards, practices and requirements. Securities of some non-U.S. companies
are less liquid and their prices more volatile than securities of comparable
U.S. companies. Securities trading practices abroad may offer less protection to
investors. Settlement of transactions in some non-U.S. markets may be delayed
or may be less frequent than in the United States, which could affect the
liquidity of the Fund. Additionally, in some countries, there is the
possibility of expropriation or confiscatory taxation, limitations on the
removal of securities, property or other assets of the Fund, political or social
instability, or diplomatic developments which could affect U.S. investments in
those countries. The Adviser will take these factors into consideration in
managing the Fund's investments. Investments will be made primarily in the
securities of issuers in developed countries. The Fund intends to diversify
broadly among countries but reserves the right to invest a substantial portion
of its assets in one or more countries if economic and business conditions
warrant such investments. Gains or losses attributable to fluctuations in
exchange rates which occur between the time the Fund accrues interest or other
receivables or accrues expenses or liabilities denominated in a foreign currency
and the time the Fund actually collects such receivables, or pays such
liabilities, are generally treated as ordinary income or loss. Similarly, a
portion of the gains or losses realized on disposition of debt securities
denominated in a foreign currency, referred to under the Internal Revenue Code
of

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1986, as amended (the "Code"), as "section 988" gains or losses, may also be
treated as ordinary gain or loss rather than as capital gain or loss.

The U.S. dollar market value of the Fund's investments and of
dividends and interest earned by the Fund may be significantly affected by
changes in currency exchange rates. Some currency prices may be volatile, and
there is the possibility of governmental controls on currency exchange or
governmental intervention in currency markets, which could adversely affect the
Fund. Although the Fund may attempt to manage currency exchange rate risk,
there is no assurance that the Fund will do so at an appropriate time or that it
will be able to predict exchange rates accurately.

OTHER INVESTMENT TECHNIQUES

Currency Management

To manage exposure to currency fluctuations, the Fund may alter fixed
income or money market exposures, enter into forward currency exchange
contracts, buy or sell options, futures or options on futures relating to
foreign currencies and purchase securities indexed to currency baskets. The
Fund will also use these currency exchange techniques in the normal course of
business to hedge against adverse changes in exchange rates in connection with
purchases and sales of securities. Some of these strategies may require the
Fund to set aside liquid assets in a segregated custodial account to cover its
obligations. These techniques are further described below.

Forward Foreign Currency Transactions

The Fund may conduct its foreign currency exchange transactions on a
spot (i.e., cash) basis at the spot rate prevailing in the foreign currency
exchange market or through entering into contracts to purchase or sell foreign
currencies at a future date (i.e., a "forward foreign currency contract" or
"forward contract"). A forward contract involves an obligation to purchase or
sell a specific currency amount at a future date, which may be any fixed number
of days from the date of the contract agreed upon by the parties and at a price
set at the time of the contract. The Fund will convert currency on a spot basis
from time to time and investors should be aware of the potential costs of
currency conversion.

The Fund may enter into forward contracts for hedging purposes as well
as for non-hedging purposes. For hedging purposes, the Fund may enter into
contracts to deliver or receive foreign currency it will receive from or require
for its normal investment activities. It may also use contracts in a manner
intended to protect foreign currency-denominated securities from declines in
value due to unfavorable exchange rate movements. The Fund may also enter into
contracts with the intent of changing the relative exposure of the Fund's
portfolio of securities to different currencies to take advantage of anticipated
changes in exchange rates.

When the Fund enters into forward contracts for non-hedging purposes,
it will establish a segregated account with its custodian bank in which it will
maintain cash, U.S. government

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securities or other liquid assets equal in value to its obligations with respect
to its forward contracts for non-hedging purposes.

At the maturity of a forward contract, the Fund may either sell a
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. The Fund may realize a gain or loss from currency
transactions.

Options

The Fund may purchase and write put and call options on foreign and
U.S. securities and indices and enter into related closing transactions. The
Fund may also purchase and write put and call options on foreign currencies to
manage the Fund's exposure to change in currency exchange rates. In addition,
the Fund may purchase and write options to buy or sell futures contracts.

A call option enables the purchaser, in return for the premium paid,
to purchase securities from the writer of the option at an agreed price at any
time during a period ending on an agreed date. The advantage is that the
purchaser may hedge against an increase in the price of securities it ultimately
wishes to buy or may take advantage of a rise in a particular index. The Fund
will purchase call options only to the extent premiums paid on all outstanding
call options do not exceed 20% of the Fund's total assets. The Fund may write
call options only on a covered basis. A call option is "covered" if the Fund
owns the underlying securities or the Fund maintains in a segregated account
with its custodian, cash, U.S. government securities or other liquid assets with
a value sufficient to meet its obligations under the call option, or if the Fund
owns an offsetting call option. The Fund will receive premium income from
writing call options, which may offset the cost of purchasing put options and
may also contribute to the Fund's total return.

A put option enables the purchaser of the option, in return for the
premium paid, to sell the security underlying the option to the writer at the
exercise price during the option period ending on an agreed date and the writer
of the option has the obligation to purchase the security from the purchaser of
the option upon exercise during such period. The Fund may purchase put options
only to the extent that the premiums on all outstanding put options do not
exceed 20% of the Fund's total assets. The advantage is that the purchaser can
be protected should the market value of the security decline or should a
particular index decline. The Fund will, at all times during which it holds a
put option, own the security underlying such option. The Fund will receive
premium income from writing put options, although it may be required, when the
put is exercised, to purchase securities at higher prices than the current
market price.

Closing transactions permit the Fund to offset put options or call
options prior to exercise or expiration. If the Fund cannot effect closing
transactions, it may have to hold a security it would otherwise sell or deliver
a security it might want to hold.

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Call options on foreign currency written by the Fund will be
"covered," which means that the Fund will own an equal amount of the underlying
foreign currency, or maintain in a segregated account with its custodian, cash,
U.S. government securities or other liquid assets with a value sufficient to
meet its obligations under the call option, or own an offsetting call option.
With respect to put options on foreign currency written by the Fund, the Fund
will establish a segregated account with its custodian bank consisting of cash,
U.S. government securities or other liquid assets in an amount equal to the
amount the Fund would be required to pay upon exercise of the put.

The Fund will not purchase or sell options if, immediately thereafter,
more than 40% of its net assets would be hedged by options. The Fund may use
options traded on U.S. exchanges and to the extent permitted by law, options
traded over-the-counter and on recognized foreign exchanges. It is the position
of the Commission that over-the-counter options are illiquid. Accordingly, the
Fund will invest in such options only to the extent consistent with its 15%
limit on investment in illiquid securities.

Futures Contracts

The Fund may enter into contracts for the purchase or sale of
securities, including index contracts or foreign currencies, for hedging
purposes. The purchase of a futures contract by the Fund represents the
acquisition of a contractual right to obtain delivery of the securities or
foreign currency called for by the contract at a specified price on a specified
future date. When a futures contract is sold, the Fund incurs a contractual
obligation to deliver the securities or foreign currency underlying the contract
at a specified price on a specified future date. The Fund may enter into futures
contracts and engage in options transactions related thereto for hedging
purposes and for non-hedging purposes, to the extent that not more than 5% of
the Fund's assets are required as futures contract margin deposits and premiums
on options on futures.

When the Fund enters into a futures transaction, it must deliver to
the futures commission merchant selected by the Fund an amount referred to as
"initial margin." This amount is maintained by the futures commission merchant
in a segregated account at the custodian bank. Thereafter, a "variation margin"
may be paid by the Fund to, or drawn by the Fund from, such account in
accordance with controls set for such accounts, depending upon changes in the
price of the underlying securities subject to the futures contract.

In addition, when the Fund engages in futures transactions, to the
extent required by the Commission, the Fund will maintain with its custodian,
assets in a segregated account to cover its obligations with respect to such
contracts, which assets will consist of cash, cash equivalents or other liquid
assets from its portfolio in an amount equal to the difference between the
fluctuating market value of such futures contracts and the aggregate value of
the initial and variation margin payments made by the Fund with respect to such
futures contracts.

The Fund will enter into futures transactions on domestic exchanges
and, to the extent such transactions have been approved by the United States
Commodity Futures Trading Commission, for sale to customers in the United
States, on foreign exchanges.

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Risks and Special Considerations of Options and Futures

Options and futures can be volatile investments and may not perform as
expected. If the Adviser applies a hedge at an inappropriate time or price
trends are judged incorrectly, options, futures and similar strategies may lower
the Fund's return. Options and futures traded on foreign exchanges generally
are not regulated by U.S. authorities and may offer less liquidity and less
protection to the Fund in the event of default by the other party to the
contract. The Fund could also experience losses if the prices of its options
or futures positions are poorly correlated with its other investments, or if it
cannot close out its positions because of an illiquid secondary market. The
loss from investing in futures transactions is potentially unlimited. For
further information concerning the risks of options and futures, see Part B of
this Registration Statement.

Swaps

The Fund may engage in swaps, including but not limited to interest
rate, currency and index swaps and the purchase or sale of related caps, floors
and collars and other derivative instruments. The Fund expects to enter into
these transactions primarily to preserve a return or spread on a particular
investment or portion of its portfolio, to protect against currency fluctuations
as a technique for managing the portfolio's duration (i.e., the price
sensitivity to changes in interest rates), to protect against any increase in
the price of securities the Fund anticipates purchasing at a later date or to
gain exposure to certain markets.

Interest rate swaps involve the exchange by the Fund with another
party of their respective commitments to receive or pay interest (e.g., an
exchange of fixed rate payments for floating rate payments) with respect to a
notional amount of principal. Currency swaps involve the exchange of cash flows
on a notional amount based on changes in the values of referenced currencies.

The use of swaps involves investment techniques and risks different
from those associated with ordinary portfolio security transactions. If the
Adviser is incorrect in its forecasts of market values, interest rates or other
applicable factors, the investment performance of the Fund will be less
favorable than it would have been if this investment technique were not used.
Swaps do not involve the delivery of securities or other underlying assets or
principal. Thus, if the other party to a swap defaults, the Fund's risk of loss
consists of the net amount of payments that the Fund is contractually
entitled to receive. Under Internal Revenue Service rules, any lump sum payment
received or due under the notional principal contract must be amortized over the
life of the contract using the appropriate methodology prescribed by the
Internal Revenue Service.

To the extent that the Fund cannot dispose of a swap in the ordinary
course of business within seven days at approximately the value at which the
Fund has valued the swap, it will treat the swap as illiquid and subject to its
overall limit on illiquid investments of 15% of net assets. The

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Adviser will closely monitor, subject to the oversight of the Board of Trustees,
the creditworthiness of equity swap counterparties in order to minimize their
risk.

Borrowing

The Fund may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund will not borrow money in excess
of 33 1/3% of the value of its total assets. The Fund has no intention of
increasing its net income through borrowing. Any borrowing will be from a bank
with the required asset coverage of at least 300%. In the event that such asset
coverage falls below 300%, the Fund shall, within three days thereafter (not
including Sunday or holidays) or such longer period as the Commission may
prescribe by rules and regulations, reduce the amount of its borrowings to such
an extent that the asset coverage of such borrowings shall be at least 300%.
The Fund will not pledge more than 10% of its net assets, or issue senior
securities as defined in the Investment Company Act, or as described herein,
except for notes to banks and reverse repurchase agreements. Investment
securities will not be purchased while the Fund has outstanding borrowings that
exceed 5% of the Fund's net assets.

Loans of Portfolio Securities

The Fund may loan up to 33 1/3% of its assets to qualified broker-
dealers or institutional investors for their use relating to short sales or
other security transactions. Such loans must be secured by collateral,
consisting of any combination of cash and U.S. government securities in an
amount at least equal (on each business day) to the current market value of the
securities loaned. During the terms of these loans, the Fund will continue to
receive any dividends or interest paid on the loaned securities as well as the
interest on the investment of the collateral minus a fee paid to the borrower or
a fee directly deducted by the borrower. The Fund must have a right to reacquire
the loaned securities on five business days' notice. The principal risk to which
the Fund will be exposed on a loan transaction is the risk that the borrower
would become bankrupt at a time when the value of the loaned security increases.
However, pursuant to the Fund's securities lending agreement, the lending agent
is obligated to replace the loaned securities with a like amount of the loaned
securities of the same issuer, class and denomination in the event the loaned
securities are not returned by a borrower in accordance with the arrangements
between the borrower and the lending agent. The Fund will only lend securities
after a review of all pertinent facts by the Adviser and the lending agent,
subject to overall supervision by the Board of Trustees. Creditworthiness of the
borrowing broker-dealer or institution will be monitored on an ongoing basis by
the Adviser and any lending agent pursuant to procedures reviewed and adopted by
the Board of Trustees. Cash received through loan transactions may be invested
in any security in which the Fund is authorized to invest. Investing cash
subjects that investment to market risk (i.e., capital appreciation or
depreciation).

Investment Restrictions

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information concerning the investment policies are included in Part B of this
Registration Statement.

Portfolio Turnover

The Fund is free to dispose of its portfolio securities at any time,
subject to complying with the Code and the Investment Company Act, when changes
in circumstances or conditions make such turnover desirable in light of the
Fund's investment objective. The Fund will not attempt to achieve or be limited
to a predetermined rate of portfolio turnover, such a turnover always being
incidental to transactions undertaken with a view to achieving the Fund's
investment objective. While it is the policy of the Fund generally not to
engage in trading for short-term gains, the Fund will effect portfolio
transactions without regard to the holding period if, in the judgment of the
Adviser, such transactions are advisable in light of a change in circumstances
of a particular company, within a particular industry or country, or in general
market, economic or political conditions. Although the portfolio turnover rate
for the Fund may vary greatly from year to year, the Fund expects that under
normal circumstances, the portfolio turnover rate will not exceed 100%. Higher
portfolio turnover rates will increase aggregate brokerage commission expenses
which must be borne directly by the Fund and ultimately by the Fund's Investors
and the incidence of short-term capital gains (which are taxable to Investors
as ordinary income). See "Item 5 - Brokerage Allocation" and "Item 6 - Federal
Taxes."

Item 5. Management of the Fund.

The Board of Trustees

Under Delaware law and the Amended and Restated Agreement and
Declaration of Trust of the Trust, the Board of Trustees has overall
responsibility for managing the business and affairs of the Trust and the Fund.
The Trustees elect the officers of the Trust, who are responsible for
administering the day-to-day operations of the Fund.

The Adviser

Brinson Partners, a Delaware corporation, is an investment management
firm managing, as of December 31, 1996, approximately $119 billion, primarily
for institutional pension and profit sharing funds. Brinson Partners was
organized in 1989 when it acquired the institutional asset management business
of The First National Bank of Chicago and First Chicago Investment Advisors,
N.A. Brinson Partners and its predecessor entities have managed domestic and
international investment assets since 1974 and global investment assets since
1982. Brinson Partners has offices in London, Melbourne, New York, Paris,
Singapore, Sydney and Tokyo, in addition to its principal office at 209 South
LaSalle Street, Chicago, IL 60604-1295. Brinson Partners is controlled by Swiss
Bank Corporation ("Swiss Bank"). Swiss Bank, with headquarters in Basel,
Switzerland, is an internationally diversified organization with operations in
many aspects of the financial services industry. Brinson Partners also serves as
the investment adviser to nine other investment companies: The Brinson Funds,
Enterprise Accumulation Trust - International Growth Portfolio, Enterprise Group
of Funds, Inc. - International Growth Portfolio, Fort Dearborn Income
Securities, Inc., Managed Account Services Portfolio Trust - Pace Large Company
Value

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Equity Investments, The Hirtle Callaghan Trust - International Equity Portfolio,
John Hancock Variable Series Trust I - International Balanced Fund, AON
Funds--International Equity Fund and The Republic Funds--Republic Equity Fund.

Pursuant to its investment advisory agreement with the Trust (the
"Advisory Agreement"), the Adviser is authorized, at its own expense, to obtain
statistical and other factual information and advice regarding economic factors
and trends from its foreign subsidiaries, but it does not generally receive
advice or recommendations regarding the purchase or sale of securities from such
subsidiaries. The Adviser does not receive any compensation under the Advisory
Agreement.

Investment decisions for the Fund are made by an investment management
team of the Adviser. No member of the investment management team is primarily
responsible for making recommendations for portfolio purchases or sales.

Administrative, Accounting, Transfer Agency and Custodian Services

Custody Services. MSTC provides custodian services for the securities
and cash of the Fund. The custody fee schedule is based primarily on the net
amount of assets held during the period for which payment is being made plus a
per transaction fee for transactions during the period and out-of-pocket
expenses.

As authorized under the Services Agreement, MSTC has entered into a
Mutual Funds Service Agreement (the "CGFSC Agreement") with Chase Global Funds
Services Company ("CGFSC"), a corporate affiliate of The Chase Manhattan Bank,
under which CGFSC provides administrative, accounting, portfolio valuation and
transfer agency services to the Fund. CGFSC's business address is 73 Tremont
Street, Boston, Massachusetts 02108-3913.

Pursuant to the CGFSC Agreement, CGFSC provides:

(2) accounting and portfolio valuation services, including the daily
calculation of the Fund's net asset value and the preparation of certain
financial statements; and

(3) transfer agency services, including the maintenance of each
Investor's account records, responding to Investors' inquiries concerning
accounts, processing purchases and redemptions of the Fund's shares, acting as
dividend and distribution disbursing agent and performing other service
functions.

For its administrative, accounting, transfer agency and custodian
services, MSTC receives the following as compensation from the Trust on an
annual basis: 0.0025% of the average daily U.S. assets of the Trust; 0.0525% of
the average daily non-U.S. assets of the Trust; 0.3250% of the average daily
emerging markets equity assets of the Trust; and 0.019% of the average daily
emerging markets debt assets of the Trust. MSTC receives an additional fee of
0.075% of the average daily net assets of the Trust for administrative duties,
the latter subject to the expense limitation applicable to the Trust. No fee
(asset based or otherwise) is charged on any investments made by any fund into
any other fund sponsored or managed by the Advisor and assets of a fund that are
invested in another investment company or series thereof sponsored or managed by
the Advisor will not be counted in determining the 0.075% administrative duties
fee or the applicability of the expense limitation on such fee. The foregoing
fees include all out-of-pocket expenses or transaction charges incurred by MSTC
and any third party service provider in providing such services. Pursuant to the
CGFSC Agreement, MSTC pays CGFSC for the services CGFSC provides to MSTC in
fulfilling its obligations under the Services Agreement.

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Independent Auditors

Ernst & Young LLP, Chicago, Illinois, is the independent accounting
and auditing firm which services the Trust.

Expenses

The Fund will be responsible for all of its own expenses other than
those borne by the Adviser pursuant to the Advisory Agreement and organizational
expenses. Such expenses may include, but are not limited to, legal expenses,
audit fees, printing costs (e.g., cost of printing annual reports, semi-annual
reports and Prospectuses which are distributed to existing Investors), brokerage
commissions, the expenses of registering the Fund's shares for sale with the
Commission and of noticing the Fund's shares for sale with various state
securities commissions, fees and expenses of the Administrator and the expenses
of obtaining quotations of portfolio securities and of pricing the Fund's
shares. General expenses which are not associated directly with any particular
portfolio within the Trust (e.g., insurance premiums, Trustees' fees, expenses
of maintaining the Trust's legal existence and of Investors' meetings and fees
and expenses of industry organizations) are allocated between the various series
based upon their relative net assets.

Brokerage Allocation

Because the Fund is exclusively composed of debt (rather than equity)
securities, most of the Fund's investment portfolio transactions are effected
with dealers without the payment of brokerage commissions, but at net prices
which usually include a spread or a markup. In determining the brokers through
whom, and other transaction costs at which, securities transactions for the Fund
are to be executed, except as discussed below, the Adviser seeks to negotiate a
combination of the most favorable execution and the best price obtainable on
each transaction. Consequently, the Adviser selects brokers primarily on the
basis of their execution capability and trading expertise. However, the
direction of transactions to brokers may also be based on the quality and amount
of the research and research-related services which they provide to the Adviser
and indirectly to its clients. These services are of the type described in
Section 28(e) of the Securities Exchange Act of 1934, as amended, and are
designed to augment the Adviser's own internal research and investment strategy
capabilities. The Adviser may use this research information in managing the
Fund's assets, as well as the assets of other clients.

In the event that the Fund does purchase or sell certain equity
securities, the Fund may pay commissions to brokers who are affiliated with the
Adviser or the Fund. The Fund may also purchase securities in certain
underwritten offerings for which an affiliate of the Adviser may act as an
underwriter. The Fund may also effect futures transactions through, and pay
commissions to, futures commission merchants who are affiliated with the Adviser
or the Fund in accordance with procedures adopted by the Board of Trustees of
the Trust.
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Item 5A. Management's Discussion of Fund Performance. Not applicable.

Item 6. Capital Stock and Other Securities.

The Trust was organized as a Delaware business trust on August 16,
1994. The Trust's Agreement and Declaration of Trust permits the Board of
Trustees to issue an unlimited number of shares of beneficial interest with no
par value. The Board of Trustees has the power to designate one or more series
or sub-series/classes of shares of beneficial interest and to classify or
reclassify any unissued shares with respect to such series. Currently, the
Trust is offering shares of six series: Brinson Global Securities Fund, Brinson
Short-Term Fund, Brinson Post-Venture Fund, Brinson High Yield Fund, Brinson
Emerging Markets Equity Fund and Brinson Emerging Markets Debt Fund.

Pursuant to the Investment Company Act, a control person possesses the
ability to control the outcome of matters submitted for shareholder vote. As of
April 1, 1997, Ameritech Pension Trust of North Quincy, Massachusetts was a
control person of the Fund by nature of its shareholdings.

Voting Rights and Investor Meetings. The shares of the Trust have non-
cumulative voting rights, which means that the holders of more than 50% of the
shares voting for the election of members of the Board of Trustees can elect
100% of the Trustees if they choose to do so. An Investor is entitled to vote
based on the ratio the shares of such Investor bear to the shares of all
Investors entitled to vote. On any matter submitted to a vote of Investors, all
shares of the Trust then issued and outstanding and entitled to vote on a matter
shall vote by individual series except that, if required by the Investment
Company Act, the shares shall be voted in the aggregate. If the Board of
Trustees determines that a matter to be voted on does not affect the interests
of all series, only the Investors of the affected series shall be entitled to
vote on the matter. The Trust's Amended and Restated Agreement and Declaration
of Trust gives Investors certain voting powers only with respect to (i) the
election and removal of Trustees; (ii) a termination of the Trust; (iii)
amendments reducing payments upon liquidation or diminishing voting rights; (iv)
mergers, consolidations or sales of assets; (v) the incorporation of the Trust;
(vi) additional matters relating to the Trust as required by the Investment
Company Act; and (vii) such other matters as the Board of Trustees considers
necessary or desirable.

The Trust does not presently intend to hold annual or special meetings
of Investors except when required to elect members of the Board of Trustees, or
with respect to additional matters relating to the Trust, as required under the
Investment Company Act. Pursuant to the Trust's Amended and Restated Agreement
and Declaration of Trust, Investor meetings will also be called upon request of
Investors holding in the aggregate 10% or more of the outstanding shares.
Subject to certain conditions, Investors may apply to the Fund to communicate
with other Investors to request an Investor meeting.

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Additionally, the failure by Investors to approve a change in their investment
objectives and policies parallel to a change that has been approved for the Fund
(thus requiring such Investors to redeem their shares of the Fund) could lead to
a number of adverse consequences, such as the inability of such Investors to
find another investment company in which to invest their assets or an equivalent
investment adviser to manage the assets.

Dividends and Distributions. The Fund does not currently intend to
declare and pay dividends and pay distributions to Investors except as may be
determined by the Board of Trustees of the Trust.

Federal Taxes. The Fund has received a ruling from the Internal
Revenue Service that the Fund will be treated as a partnership for federal
income tax purposes rather than as an association taxable as a corporation. By
being treated as a partnership, the Fund will not be subject to U.S. federal
income tax. Instead, each Investor will be required to report separately on its
own income tax return its distributive share of items of Fund income, gains,
losses, deductions and credits (including foreign tax credits for creditable
foreign taxes imposed on the Fund). Each Investor will be required to report its
distributive share of such tax items regardless of whether it has received or
will receive corresponding distributions of cash or property from the Fund. An
allocable share of a tax-exempt Investor's income will be "unrelated business
taxable income" ("UBTI") to the extent that the Fund borrows money to acquire
property or invests in assets that produce UBTI. The Fund will not be a
"regulated investment company" for federal income tax purposes. For a more
complete discussion of the federal income tax consequences of investing in the
Fund, see "Tax Status" in Part B.

Redemptions of Fund shares and the exchange of shares between two
series, are taxable events and, accordingly, Investors may realize capital gains
or losses on these transactions.

Investor Inquiries. Investor inquiries should be addressed to the
Trust, c/o Carolyn M. Burke, 209 South LaSalle Street, Chicago, Illinois
60604-1295, or an Investor may call 312-220-7940.

Item 7. Purchase of Securities Being Offered.

Shares of the Fund are restricted securities and are issued solely in
private placement transactions that do not involve a "public offering" within
the meaning of Section 4(2) of the Securities Act. Investments in the Fund may
be made only by "accredited investors" within the meaning of Regulation D under
the Securities Act, which include, but are not limited to, common or commingled
trust funds, investment companies, registered broker-dealers, investment banks,
commercial banks, corporations, group trusts or similar organizations or
entities. The registration statement of which this Prospectus is a part does not
constitute an offer to sell, or the solicitation of an offer to buy, any
"security" to the public within the meaning of the Securities Act. Shares of the
Fund may be purchased directly by eligible Investors from the Fund at the net
asset value next determined after receipt of the order in proper form by the
Trust. The minimum initial purchase amount is $25,000,000. In the sole
discretion of the Adviser, the minimum purchase amount may be waived or
modified. There is no sales load in

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connection with the purchase of shares. The Trust reserves the right to reject
any purchase order and to suspend the offering of shares of the Fund.

At the discretion of the Fund, Investors may be permitted to purchase
Fund shares by transferring securities to the Fund that meet the Fund's
investment objective and policies. Securities transferred to the Fund will be
valued in accordance with the same procedures used to determine the Fund's net
asset value at the time of the next determination of net asset value after such
receipt. Shares issued by the Fund in exchange for securities will be issued at
net asset value determined as of the same time. All dividends, interest,
subscription, or other rights pertaining to such securities after such transfers
to the Fund shall become the property of the Fund and must be delivered to the
Fund by the Investor upon receipt from the issuer. Investors that are permitted
to transfer such securities will be required to recognize a gain or loss on such
transfer and pay tax thereon, if applicable, measured by the difference between
the fair market value of the securities and the Investors' basis therein. The
Trust will not accept securities in exchange for shares of the Fund unless: (1)
such securities are, at the time of the exchange, eligible to be included in the
Fund's investment portfolio and current market quotations are readily available
for such securities; and (2) the Investor represents and warrants that all
securities offered to be exchanged are not subject to any restrictions upon
their sale by the Fund under the Securities Act or under the laws of the country
in which the principal market for such securities exists, or otherwise.

Net Asset Value. The net asset value is computed as of the close of
regular trading on the New York Stock Exchange ("NYSE") (generally 4:00 p.m.
Eastern time) on days when such exchange is open. The net asset value per share
is computed by adding the value of all securities and other assets in the
portfolio, deducting any liabilities (expenses and fees are accrued daily) and
dividing by the number of shares outstanding. Fund securities for which market
quotations are available are priced at market value. Debt securities are priced
at fair value by an independent pricing service using methods approved by the
Trust's Board of Trustees. Short-term investments having a maturity of less
than 60 days are valued at amortized cost, which approximates market value.
Redeemable securities issued by open-end investment companies are valued using
their respective net asset values for purchase orders placed at the close of the
NYSE. All other securities are valued at their fair value as determined in good
faith and pursuant to a method approved by the Trust's Board of Trustees. For a
detailed description, see Item 19 in Part B of this Registration Statement.

Exchanges of Shares. Shares of the Fund may be exchanged for shares
of the other series of the Trust on the basis of current net asset values per
share at the time of exchange. Fund shares may be exchanged by written request
or by telephone if the Investor has previously signed a telephone authorization.
The telephone exchange privilege may be difficult to implement during times of
drastic economic or market changes. The Fund reserves the right to restrict the
frequency of, or otherwise modify, condition, terminate or impose charges upon
the exchange privilege and/or telephone transfer privileges upon 60 days' prior
written notice to Investors.

By exercising the telephone exchange privilege, the Investor agrees
that the Fund will not be liable for following instructions communicated by
telephone that the Fund reasonably believes to be genuine. The Fund provides
written confirmation of transactions initiated by telephone as a procedure
designed to confirm that telephone transactions are genuine. As a result of this
policy, the Investor may bear the risk of any financial loss resulting from such
transaction; provided,

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however, if the Fund or the Administrator fails to employ this and other
appropriate procedures, the Fund or the Administrator may be liable for any
losses incurred.

Exchanges may be made only for shares of a series of the Trust then
offering its shares for sale in the Investor's state of residence and are
subject to the minimum initial investment requirement and the payment of any
transaction charges that may be due to such series of the Trust. For federal
income tax purposes, an exchange of shares would be treated as if the Investor
had redeemed shares of the Fund and reinvested in shares of another series of
the Trust. Gains or losses on the shares exchanged are realized by the Investor
at the time of the exchange. Any Investor wishing to make an exchange should
first obtain and review a Prospectus of the series of the Trust into which the
Investor wishes to exchange. Requests for telephone exchanges must be received
by the transfer agent, CGFSC, by the close of regular trading hours (currently
4:00 p.m. Eastern time) on the NYSE on any day that the NYSE is open for regular
trading.

Item 8. Redemption of Shares or Repurchase.

An Investor may redeem its shares of the Fund without charge on any
business day the NYSE is open by furnishing a request to the Trust. The Fund
normally sends redemption proceeds on the next business day, but, in any event,
redemption proceeds, except as set forth below, are sent within seven calendar
days of receipt of a redemption request in proper form. There is no charge for
redemptions by wire. Please note, however, that the Investor's bank may impose
a fee for wire service. The right of any Investor to receive payment with
respect to any redemption may be suspended or the payment of the redemption
proceeds postponed during any period in which the NYSE is closed (other than
weekends or holidays) or trading on the NYSE is restricted, or, to the extent
otherwise permitted by the Investment Company Act, if an emergency exists.

If the Fund determines that it would be detrimental to the best
interests of the remaining Investors of the Fund to make payment wholly or
partly in cash, the Fund may pay the redemption price, in lieu of cash, in whole
or in part by a distribution in kind of securities of the Fund.

Item 9. Pending Legal Proceedings.

Not applicable.

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APPENDIX A

CORPORATE DEBT RATINGS

Moody's Investors Service, Inc. describes classifications of corporate bonds as
follows:

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

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

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

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

Ba -- Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well-assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.

B -- Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small.

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

Ca -- Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.

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C -- Bonds which are rated C are the lowest rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing .

Standard & Poor's Ratings Group describes classifications of corporate bonds as
follows:

AAA -- This is the highest rating assigned by Standard & Poor's Rating
Group to a debt obligation and indicates an extremely strong capacity to
pay principal and interest.

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

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

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

BB - Debt rated BB has less near-term vulnerability to default than
other speculative grade debt. However, it faces major ongoing
uncertainties or exposure to adverse business, financial or economic
conditions which could lend to inadequate capacity to meet timely
interest and principal payments.

B - Debt rated B has a greater vulnerability to default but presently
has the capacity to meet interest payments and principal repayments.
Adverse business, financial or economic conditions would likely impair
capacity or willingness to pay interest and repay principal.

CCC - Debt rated CCC has a current identifiable vulnerability to
default, and is dependent upon favorable business, financial and
economic conditions to meet timely payments of interest and repayment of
principal. In the event of adverse business, financial or economic
conditions, it is not likely to have the capacity to pay interest or
repay principal.

CC - The rating CC is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC rating.

C - The rating C is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC- rating.

CI - The rating CI is reserved for income bonds on which no interest is
being paid.

D - Debt rated D is in default, or is expected to default upon maturity
or payment date.

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Plus (+) or minus (-): The ratings from AA to CCC may be modified by
the addition of a plus or minus sign to show relative standing within
the major rating categories.

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OFFEREE NO. ___

BRINSON RELATIONSHIP FUNDS

Brinson Post-Venture Fund

PART A

APRIL 30, 1997

Responses to Items 1 through 3 and Item 5A have been omitted pursuant to
paragraph 4 of Instruction F of the General Instructions to Form N-1A.
<TABLE>
<S> <C> <C>
Item 1. Cover Page. Not applicable.

Item 2. Synopsis. Not applicable.

Item 3. Condensed Financial Information. Not applicable.

Item 4. General Description of Registrant.
</TABLE>

Introduction

Brinson Relationship Funds (the "Trust"), a Delaware business trust
established on August 16, 1994, is a no-load, open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act"). The Trust currently offers six series of shares:
the Brinson Global Securities Fund, the Brinson Short-Term Fund, the Brinson
Post-Venture Fund, the Brinson High Yield Fund, the Brinson Emerging Markets
Equity Fund and the Brinson Emerging Markets Debt Fund. This Prospectus
pertains only to the Brinson Post-Venture Fund (the "Fund").

Beneficial interests in the Fund ("shares") are issued solely in private
placement transactions that do not involve a "public offering" within the
meaning of Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act"). Investments in the Fund may only be made by "accredited
investors" within the meaning of Regulation D under the Securities Act which
include, but are not limited to, common or commingled trust funds, investment
companies, registered broker-dealers, investment banks, commercial banks,
corporations, group trusts or similar organizations or entities. Each such
accredited investor that holds shares of the Trust is referred to herein as an
"Investor" and collectively, the "Investors". This Prospectus does not
constitute an offer to sell, or the solicitation of an offer to buy, any
"security" to the public within the meaning of the Securities Act.

<PAGE>

INVESTMENT OBJECTIVE, POLICIES AND RISK FACTORS

The Fund's investment objective is to maximize total U.S. dollar return,
consisting of capital appreciation and current income, while controlling risk.
The Fund will invest primarily in publicly traded companies representing the
lower 5% of the Wilshire 5000 Index with respect to the size of capitalization.
Under normal circumstances, at least 65% of the Fund's total assets will be
invested in small capitalization equity securities.

Investment Process

Brinson Partners, Inc.'s ("Brinson Partners" or the "Adviser") approach to
investing for the Fund is to invest in the equity securities of U.S. companies
believed to be undervalued based upon internal research and proprietary
valuation systems. Investment decisions are based on fundamental research,
internally developed valuation systems and seasoned judgment. The Adviser's
research focuses on several levels of analysis: first, on understanding wealth
shifts that occur within the equity market, and second, on individual company
research. At the company level, the Adviser quantifies expectations of a
company's ability to generate profit and to grow business into the future.

For each stock under analysis, the Adviser calculates an expected rate of
return from the investment in order to estimate intrinsic value. This value
estimate generated by the Adviser's proprietary valuation model is compared to
observed market price and ranked against other stocks accordingly. The rankings,
in combination with the Adviser's investment judgment, determine which
securities may be included in the portfolio.

The strategy of the Fund is to invest in companies with strong management
teams, significant competitive strengths in growing markets, and strong
financial positions. This entails identifying target companies that exhibit,
among other attributes, innovative management; low price-earnings multiples with
good long-term earnings prospects; strong balance sheets, often with little or
no debt and high cash positions; low ratios of market capitalization to sales;
and previous venture capital backing. Each company selected for inclusion in
the Fund's portfolio is scrutinized through on-site visits, discussions with
investment banking firms and venture capitalists, and intensive valuation
techniques.

The Benchmark for the Fund is the Wilshire Small Stock Index (the
"Benchmark"). The Benchmark represents roughly the lower 5% of the Wilshire 5000
Index with respect to the size of capitalization. As a general matter, the
Adviser will purchase for the Fund only securities contained in the Benchmark.
Brinson Partners will attempt to enhance the long-term return and risk
performance of the Fund relative to the Benchmark by deviating from the normal
Benchmark mix in reaction to discrepancies between current market prices and
fundamental values. The active management process is intended by the Adviser to
produce a superior performance relative to the Benchmark index.

The Fund's emphasis is on companies that were developed with the assistance
of professional venture capitalists. The Fund may also invest up to 20% of its
assets in small market capitalization equity securities of publicly traded
foreign corporations which were financed by venture capital partnerships, and,
in addition, may invest up to 10% of its net assets in the equity securities or

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interests in non-public companies for which it is anticipated that the company
will have an initial public security offering within an eighteen-month period.

The Adviser monitors and assesses the degree to which the Fund's portfolio
emphasizes industries or common types of stocks, and adjusts the portfolio to
balance the price/value opportunities with such industries. The Adviser imposes
limits on the degree of investment in specific industries, although the Fund
does not intend to concentrate its investments in a particular industry. The
Fund does not intend to issue senior securities except to the extent consistent
with its policies concerning options and futures as described below. The Fund's
investment objective, and its policies concerning percentage limitations with
respect to portfolio securities lending and borrowing, the issuance of senior
securities and concentration, are "fundamental," which means that they may not
be changed without the affirmative vote of the holders of a majority of the
Fund's outstanding voting shares. As used in this Prospectus, a vote of "a
majority of the outstanding voting shares" of the Trust or a series of the Trust
means the affirmative vote of the lesser of (i) more than 50% of the outstanding
shares of the Trust or series, or (ii) 67% of the shares of the Trust or series
present at a meeting at which more than 50% of the outstanding shares of the
Trust or series are represented in person or by proxy.

The Fund and the Adviser believe that, over the long term, investing in
equity markets, based upon discrepancies between market prices and fundamental
values, may achieve a positive enhancement for the Fund's investment performance
relative to the returns from the Benchmark. When unusual market conditions
warrant, the Fund can make substantial defensive investments in cash
equivalents.

The Fund is classified as "non-diversified," as defined in the Investment
Company Act so that it is not limited by the Investment Company Act as to the
proportion of its assets that it may invest in the obligations of a single
issuer. To the extent that the Fund's investment portfolio at times includes the
securities of a smaller number of issuers than permissible if the Fund were
"diversified" (as defined in the Investment Company Act), the Fund may be
subject to greater investment and credit risk than an investment company that
invests in a broader range of securities, because changes in the financial
condition or market assessment of a single issuer may cause greater fluctuations
in the net asset value of the Fund's shares.

TYPES OF SECURITIES IN WHICH THE FUND MAY INVEST

U.S. Equity Securities

The Fund may invest in a broad range of equity securities of U.S. issuers,
including common stock of companies or investment companies, preferred stock,
debt securities convertible into or exchangeable for common stock, and
securities such as warrants or rights that are convertible into

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<PAGE>

common stock. The Fund expects its equity investments to emphasize U.S. small
capitalization companies.

Cash and Cash Equivalents

The Fund may invest a portion of its assets in short-term debt securities
of corporations, governments or agencies and banks and finance companies which
may be denominated in U.S. dollars. When unusual market conditions warrant, the
Fund can make substantial temporary defensive investments in cash equivalents up
to a maximum exposure of 100% of the Fund's total assets. The Fund's investment
in temporary defensive investments may affect the Fund's ability to attain its
investment objective.

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<PAGE>

Convertible Securities

Repurchase Agreements

Reverse Repurchase Agreements

The Fund will establish a segregated account with its custodian bank in
which it will maintain cash, U.S. government securities or other liquid assets
equal in value to its obligations with respect to reverse repurchase agreements.
Reverse repurchase agreements involve the risk that the market value of the
securities retained by the Fund may decline below the price of the securities
the Fund has sold but is obligated to repurchase under the agreement. In the
event the buyer of securities under a reverse repurchase agreement files for
bankruptcy or becomes insolvent, the Fund's use of the proceeds of the agreement
may be restricted pending a determination by the other party, or its trustee or
receiver, whether to enforce the Fund's obligation to repurchase the securities.

Non-Publicly Traded Securities, Private Placements and Restricted Securities

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<PAGE>

The Fund may invest in securities that are neither listed on a stock
exchange nor traded over-the-counter, including privately placed securities and
limited partnerships. Investing in such unlisted securities, including
investments in new and early stage companies, may involve a high degree of
business and financial risk that can result in substantial losses. As a result
of the absence of a public trading market for these securities, they may be less
liquid than publicly traded securities. Although these securities may be resold
in privately negotiated transactions, the prices realized from these sales could
be less than those originally paid by the Fund, or less than what may be
considered the fair value of such securities. Furthermore, companies whose
securities are not publicly traded may not be subject to the disclosure and
other investor protection requirements which would be applicable if their
securities were publicly traded. If such securities are required to be
registered under the securities laws of one or more jurisdictions before being
resold, the Fund may be required to bear the expense of registration. No more
than 15% of the Fund's net assets will be invested in illiquid securities,
including, but not limited to, non-publicly traded securities, private
placements and restricted securities.

Investment Company Securities

The Trust has received an Exemptive Order from the United States Securities
and Exchange Commission (the "Commission"), which permits the Fund to invest its
assets in securities of other series offered by the Trust. The Fund will only
invest in such series to the extent that the Adviser determines that it is more
efficient for the Fund to gain exposure to a particular asset class through
investment in a series of the Trust as opposed to investment directly in
individual securities.

Pursuant to an exemptive order received by The Brinson Funds, series of The
Brinson Funds may invest in the Fund and other series of the Trust, in excess of
the Investment Company Act Section 12(d)(1) limitations described above. Also,
other series of the Trust may invest in the Fund, in certain cases in excess of
such limitations. Normally, shares of the Fund will be owned by other series of
the Trust or a series of The Brinson Funds, and the Fund, itself, will be
subject to such limitations as to its own investments and, for purposes of
calculating the amount of the investments under such limitations, the Fund's
investments in other series of the Trust and in other investment companies will
be aggregated.

Rule 144A and Illiquid Securities

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<PAGE>

Securities Act, are liquid for purposes of the Fund's 15% limitation on
investments in illiquid assets. The Board of Trustees has instructed the Adviser
to consider the following factors in determining the liquidity of a security
purchased under Rule 144A: (i) the frequency of trades and trading volume for
the security; (ii) whether at least three dealers are willing to purchase or
sell the security and the number of potential purchasers; (iii) whether at
least two dealers are making a market in the security; and (iv) the nature of
the security and the nature of the marketplace trades (e.g., the time needed to
dispose of the security, the method of soliciting offers and the mechanics of
transfer). Although it has delegated the day-to-day liquidity determination to
the Adviser, the Board of Trustees will continue to monitor and will
periodically review the Adviser's selection of Rule 144A securities, as well as
the Adviser's determination as to their liquidity.

Foreign Securities

Investments in securities of foreign issuers may involve greater risks than
those of U.S. issuers. There is generally less information available to the
public about non-U.S. issuers and less government regulation and supervision of
non-U.S. stock exchanges, brokers and listed companies. Non-U.S. companies are
not subject to uniform global accounting, auditing and financial reporting
standards, practices and requirements. Securities of some non-U.S. companies are
less liquid and their prices more volatile than securities of comparable U.S.
companies. Securities trading practices abroad may offer less protection to
investors. The value of foreign securities relative to U.S. currency may be
favorably or unfavorably affected by changes in foreign exchange rates or
foreign currency control regulations regardless of the particular
characteristics of the foreign company that issued the securities. Settlement of
transactions in some non-U.S. markets may be delayed or may be less frequent
than in the United States, which could affect the liquidity of the Fund.
Additionally, in some countries, there is the possibility of expropriation or
confiscatory taxation, limitations on the removal of securities, property or
other assets of the Fund, political or social instability, or diplomatic
developments which could affect U.S. investments in those countries. The Adviser
will take these factors into consideration in managing the Fund's investments.
Investments will be made primarily in the equity securities of companies
domiciled in developed countries. The Fund intends to diversify broadly among
countries but reserves the right to invest a substantial portion of its assets
in one or more countries if economic and business conditions warrant such
investments. Gains or losses attributable to fluctuations in exchange rates
which occur between the time the Fund accrues interest or other receivables or
accrues expenses or liabilities denominated in a foreign currency and the time
the Fund actually collects such receivables, or pays such liabilities, are
generally treated as ordinary income or loss. Similarly, a portion of the gains
or losses realized on disposition of debt securities denominated in a foreign
currency, referred to under the Internal Revenue Code of 1986, as amended (the
"Code"), as "section 988" gains or losses, may also be treated as ordinary gain
or loss rather than as capital gain or loss.

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<PAGE>

Future Developments

From time to time, the Fund may also invest in certain equity or debt
securities which have features other than those that are typical for such
securities and which have in the past been offered or may be offered in the
future. In the past, for example, such securities have been issued to replicate
the performance of a certain component or components of a particular security or
combination of securities and/or to hedge or reduce the risks associated with
certain securities or market trends. The Fund may invest in these securities if
the Adviser believes that doing so would be consistent with the Fund's
investment objective and policies. Since the market for these securities may
be new, the Fund may have difficulty disposing of them at a suitable price and
time. In addition to limited liquidity, these instruments may present other
risks, such as high price volatility. The unavailability of such innovative
securities would not adversely affect the Fund's ability to achieve its
investment objective.

Special Risk Considerations of Investing in Post-Venture Securities

OTHER INVESTMENT TECHNIQUES

Options

The Fund may purchase and write put and call options on U.S. securities and
indices and enter into related closing transactions. In addition, the Fund may
purchase and write options to buy or sell futures contracts.

A-68
<PAGE>

A call option enables the purchaser, in return for the premium paid, to
purchase securities from the writer of the option at an agreed price at any time
during a period ending on an agreed date. The advantage is that the purchaser
may hedge against an increase in the price of securities it ultimately wishes to
buy or may take advantage of a rise in a particular index. The Fund will
purchase call options only to the extent premiums paid on all outstanding call
options do not exceed 20% of the Fund's total assets. The Fund may write call
options only on a covered basis. A call option is "covered" if the Fund owns the
underlying securities or the Fund maintains in a segregated account with its
custodian, cash, U.S. government securities or other liquid assets with a value
sufficient to meet its obligations under the call option, or if the Fund owns an
offsetting call option. The Fund will receive premium income from writing call
options, which may offset the cost of purchasing put options and may also
contribute to the Fund's total return.

Closing transactions permit the Fund to offset put options or call options
prior to exercise or expiration. If the Fund cannot effect closing
transactions, it may have to hold a security it would otherwise sell or deliver
a security it might want to hold.

The Fund will not purchase or sell options if, immediately thereafter, more
than 40% of its net assets would be hedged by options. The Fund may use options
traded on U.S. exchanges. It is the position of the Commission that over-the-
counter options are illiquid. Accordingly, the Fund will invest in such options
only to the extent consistent with its 15% limit on investment in illiquid
securities.

Futures Contracts

The Fund may enter into contracts for the purchase or sale of securities,
including index contracts for hedging purposes. The purchase of a futures
contract by the Fund represents the acquisition of a contractual right to obtain
delivery of the securities called for by the contract at a specified price on a
specified future date. When a future month contract is sold, the Fund incurs a
contractual obligation to deliver the securities underlying the contract at a
specified price on a specified future date. The Fund may enter into futures
contracts and engage in options transactions related thereto for hedging
purposes and for non-hedging

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<PAGE>

purposes, to the extent that not more than 5% of the Fund's assets are required
as futures contract margin deposits and premiums on options on futures.

In addition, when the Fund engages in futures transactions, to the extent
required by the Commission, the Fund will maintain with its custodian, assets in
a segregated account to cover its obligations with respect to such contracts,
which assets will consist of cash, cash equivalents or other liquid assets
from its portfolio in an amount equal to the difference between the fluctuating
market value of such futures contracts and the aggregate value of the initial
and variation margin payments made by the Fund with respect to such futures
contracts.

Risks and Special Considerations of Options and Futures

Options and futures can be volatile investments and may not perform as
expected. If the Adviser applies a hedge at an inappropriate time or price
trends are judged incorrectly, options, futures and similar strategies may lower
the Fund's return. The Fund could also experience losses if the prices of its
options or futures positions are poorly correlated with its other investments,
or if it cannot close out its positions because of an illiquid secondary market.
The loss from investing in futures transactions is potentially unlimited. For
further information concerning the risks of options and futures, see Part B of
this Registration Statement.

Swaps

The Fund may engage in swaps, including but not limited to interest rate,
currency and index swaps and the purchase or sale of related caps, floors and
collars and other derivative instruments. The Fund expects to enter into these
transactions primarily to preserve a return or spread on a particular investment
or portion of its portfolio and as a technique for managing the portfolio's
duration (i.e., the price sensitivity to changes in interest rates), to protect
against any increase in the price of securities the Fund anticipates purchasing
at a later date or to gain exposure to certain markets.

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<PAGE>

The use of swaps involves investment techniques and risks different from
those associated with ordinary portfolio security transactions. If the Adviser
is incorrect in its forecasts of market values, interest rates or other
applicable factors, the investment performance of the Fund will be less
favorable than it would have been if this investment technique were not used.
Swaps do not involve the delivery of securities or other underlying assets or
principal. Thus, if the other party to a swap defaults, the Fund's risk of loss
consists of the net amount of payments that the Fund is contractually entitled
to receive. Under Internal Revenue Service rules, any lump sum payment received
or due under the notional principal contract must be amortized over the life of
the contract using the appropriate methodology prescribed by the Internal
Revenue Service.

To the extent that the Fund cannot dispose of a swap in the ordinary course
of business within seven days at approximately the value at which it has valued
the swap, it will treat the swap as illiquid and subject to its overall limit on
illiquid investments of 15% of net assets. The Adviser will closely monitor,
subject to the oversight of the Board of Trustees, the creditworthiness of
equity swap counterparties in order to minimize the risk.

Borrowing

Loans of Portfolio Securities

the loaned securities as well as the interest on the investment of the
collateral minus a fee paid to the borrower or a fee directly deducted by the
borrower. The Fund must have a right to reacquire the loaned securities on
five business days' notice. The principal risk to which the Fund will be exposed
on a loan transaction is the risk that the borrower would become bankrupt at a
time when the value of the loaned security increases. However, pursuant to the
Fund's securities lending agreement, the lending agent is obligated to replace
the loaned securities with a like amount of the loaned securities of the same
issuer, class and denomination in the event the loaned securities are not
returned by a borrower in accordance with the arrangements between the borrower
and the lending agent. The Fund will only lend securities after a review of all
pertinent facts by the Adviser and the lending agent, subject to overall
supervision by the Board of Trustees. Creditworthiness of the borrowing broker-
dealer or institution will be monitored on an ongoing basis by the Adviser and
any lending agent pursuant to procedures reviewed and adopted by the Board of
Trustees. Cash received through loan transactions may be invested in any
security in which the Fund is authorized to invest. Investing cash subjects that
investment to market risk (i.e., capital appreciation or depreciation).
Investment Restrictions

Portfolio Turnover

The Fund is free to dispose of its portfolio securities at any time,
subject to complying with the Code and the Investment Company Act, when changes
in circumstances or conditions make such turnover desirable in light of the
Fund's investment objective. The Fund will not attempt to achieve or be limited
to a predetermined rate of portfolio turnover, such a turnover always being
incidental to transactions undertaken with a view to achieving the Fund's
investment objective. While it is the policy of the Fund generally not to
engage in trading for short-term gains, the Fund will effect portfolio
transactions without regard to the holding period if, in the judgment of the
Adviser, such transactions are advisable in light of a change in circumstances
of a particular company, within a particular industry or country, or in general
market, economic or political conditions. Although the portfolio turnover rate
for the Fund may vary greatly from year to year, the Fund expects that under
normal circumstances, the portfolio turnover rate will not exceed 100%. A
higher portfolio turnover rate will increase aggregate brokerage commission
expenses which must be borne directly by the Fund and ultimately by the Fund's
shareholders and the incidence of short-term capital gains (which are taxable
to Investors as ordinary income). See "Item 5 - Brokerage Allocation" and "Item
6 - Federal Taxes."

Item 5. Management of the Fund.

The Board of Trustees

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Under Delaware law and the Amended and Restated Agreement and Declaration
of Trust of the Trust, the Board of Trustees has overall responsibility for
managing the business and affairs of the Trust and the Fund. The Trustees elect
the officers of the Trust, who are responsible for administering the day-to-day
operations of the Fund.
The Adviser

Pursuant to its investment advisory agreement with the Trust (the
"Advisory Agreement"), the Adviser is authorized, at its own expense, to obtain
statistical and other factual information and advice regarding economic factors
and trends from its foreign subsidiaries, but it does not generally receive
advice or recommendations regarding the purchase or sale of securities from such
subsidiaries. The Adviser does not receive any compensation under the Advisory
Agreement.

Appendix A to this Prospectus sets forth the investment performance of the
Fund, including the performance of the Brinson Trust Company Collective
Investment Trust's Post-Venture Fund until April 28, 1995, the commencement of
the Fund's operations. Brinson Trust Company is a wholly-owned subsidiary of
Brinson Partners.

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<PAGE>

Administrative, Accounting, Transfer Agency and Custodian Services

As authorized under the Services Agreement, MSTC has entered into a Mutual
Funds Service Agreement (the "CGFSC Agreement") with Chase Global Funds Services
Company ("CGFSC"), a corporate affiliate of The Chase Manhattan Bank, under
which CGFSC provides administrative, accounting, portfolio valuation and
transfer agency services to the Fund. CGFSC's business address is 73
Tremont Street, Boston, Massachusetts 02108-3913.

Pursuant to the CGFSC Agreement, CGFSC provides:

(2) accounting and portfolio valuation services, including the daily
calculation of the Fund's net asset value and the preparation of certain
financial statements; and

For its administrative, accounting, transfer agency and custodian services,
MSTC receives the following as compensation from the Trust on an annual basis:
0.0025% of the average daily U.S. assets of the Trust; 0.0525% of the average
daily non-U.S. assets of the Trust; 0.3250% of the average daily emerging
markets equity assets of the Trust; and 0.019% of the average daily emerging
markets debt assets of the Trust. MSTC receives an additional fee of 0.075% of
the average daily net assets of the Trust for administrative duties, the latter
subject to the expense limitation applicable to the Trust. No fee (asset based
or otherwise) is charged on any investments made by any fund into any other fund
sponsored or managed by the Adviser and assets of a fund that are invested in
another investment company or series thereof sponsored or managed by the Adviser
will not be counted in determining the 0.075% administrative duties fee or the
applicability of the expense limitation on such fee. The foregoing fees include
all out-of-pocket expenses or transaction charges incurred by MSTC and any third
party service provider in providing such services. Pursuant to the CGFSC
Agreement, MSTC pays CGFSC for the services CGFSC provides to MSTC in fulfilling
its obligations under the Services Agreement.

Independent Auditors

Ernst & Young LLP, Chicago, Illinois, is the independent accounting and
auditing firm which services the Trust.

Expenses

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annual reports, semi-annual reports and Prospectuses which are distributed to
existing Investors), brokerage commissions, the expenses of registering the
Fund's shares for sale with the Commission and of noticing the Fund's shares for
sale with various state securities commissions, fees and expenses of the
Administrator and the expenses of obtaining quotations of portfolio securities
and of pricing the Fund's shares. General expenses which are not associated
directly with any particular portfolio within the Trust (e.g., insurance
premiums, Trustees' fees, expenses of maintaining the Trust's legal existence
and of Investors' meetings and fees and expenses of industry organizations) are
allocated between the various series based upon their relative net assets.

The Adviser has undertaken to pay the Fund's total operating expenses and
may, in its sole discretion, discontinue or modify the extent of such payments.

Brokerage Allocation

When buying or selling securities, the Fund may pay commissions to brokers
who are affiliated with the Adviser of the Fund. The Fund may also purchase
securities in certain underwritten offerings for which an affiliate of the Fund
or the Adviser may act as an underwriter. The Fund may effect futures
transactions through, and pay commissions to, futures commission merchants who
are affiliated with the Adviser or the Fund in accordance with procedures
adopted by the Board of Trustees of the Trust.

Item 5A. Management's Discussion of Fund Performance. Not applicable.

Item 6. Capital Stock and Other Securities.

The Trust was organized as a Delaware business trust on August 16, 1994.
The Trust's Amended and Restated Agreement and Declaration of Trust permits the
Board of Trustees to issue an unlimited number of shares of beneficial interest
with no par value. The Board of Trustees has the power to designate one or more
series or sub-series/classes of shares of beneficial interest and to classify or
reclassify any unissued shares with respect to such series. Currently, the Trust
is offering shares of six series: Brinson Global Securities Fund, Brinson Short-
Term Fund, Brinson Post-Venture Fund, Brinson

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High Yield Fund, Brinson Emerging Markets Equity Fund and Brinson Emerging
Markets Debt Fund.

Pursuant to the Investment Company Act, a control person possesses the
ability to control the outcome of matters submitted for shareholder vote. As of
April 1, 1997, Brinson Trust Company U.S. International Cap Equity Fund of
Chicago, Illinois was a control person of the Fund by nature of its
shareholdings.

Voting Rights and Investor Meetings. The shares of the Trust have non-
cumulative voting rights, which means that the holders of more than 50% of the
shares voting for the election of members of the Board of Trustees can elect
100% of the Trustees if they choose to do so. An Investor is entitled to vote
based on the ratio the shares of such Investor bear to the shares of all
Investors entitled to vote. On any matter submitted to a vote of Investors, all
shares of the Trust then issued and outstanding and entitled to vote on a matter
shall vote by individual series except that, if required by the Investment
Company Act, the shares shall be voted in the aggregate. If the Board of
Trustees determines that a matter to be voted on does not affect the interests
of all series, only the Investors of the affected series shall be entitled to
vote on the matter. The Trust's Amended and Restated Agreement and Declaration
of Trust gives Investors certain voting powers only with respect to (i) the
election and removal of Trustees; (ii) a termination of the Trust; (iii)
amendments reducing payments upon liquidation or diminishing voting rights; (iv)
mergers, consolidations or sales of assets; (v) the incorporation of the Trust;
(vi) additional matters relating to the Trust as required by the Investment
Company Act; and (vii) such other matters as the Board of Trustees considers
necessary or desirable.

The Trust does not presently intend to hold annual or special meetings of
Investors except when required to elect members of the Board of Trustees, or
with respect to additional matters relating to the Trust, as required under the
Investment Company Act. Pursuant to the Trust's Amended and Restated Agreement
and Declaration of Trust, shareholder meetings will also be called upon request
of Investors holding in the aggregate 10% or more of the outstanding shares.
Subject to certain conditions, Investors may apply to the Fund to communicate
with other Investors to request an Investor meeting.

As with any mutual fund, certain Investors of the Fund could control the
results of voting in certain instances. For example, a vote by certain
Investors holding a majority of shares in the Fund to change the Fund's
investment objective could result in an Investor's withdrawal of its investment
in the Fund, and in increased costs and expenses for the remaining Investors.
Additionally, the failure by Investors to approve a change in their investment
objectives and policies parallel to a change that has been approved for the Fund
(thus requiring such Investors to redeem their shares of the Fund) could lead to
a number of adverse consequences, such as the inability of such Investors to
find another investment company in which to invest their assets or an equivalent
investment adviser to manage the assets.

A-76
<PAGE>

Dividends and Distributions. The Fund does not currently intend to declare
and pay dividends and pay distributions to Investors except as may be determined
by the Board of Trustees of the Trust.

Federal Taxes. The Fund has received a ruling from the Internal Revenue
Service that the Fund will be treated as a partnership for federal income tax
purposes rather than as an association taxable as a corporation. By being
treated as a partnership, the Fund will not be subject to U.S. federal income
tax. Instead, each Investor will be required to report separately on its own
income tax return its distributive share of items of Fund income, gains, losses,
deductions and credits (including foreign tax credits for creditable foreign
taxes imposed on the Fund). Each Investor will be required to report its
distributive share of such tax items regardless of whether it has received or
will receive corresponding distributions of cash or property from the Fund. An
allocable share of a tax-exempt Investor's income will be "unrelated business
taxable income" ("UBTI") only to the extent that the Fund borrows money to
acquire property or invests in assets that produce UBTI. The Fund will not be a
"regulated investment company" for federal income tax purposes. For a more
complete discussion of the federal income tax consequences of investing in the
Fund, see "Tax Status" in Part B of this Registration Statement.

Redemptions of Fund shares and the exchange of shares between two series,
are taxable events and, accordingly, Investors may realize capital gains or
losses on these transactions.

Investor Inquiries. Investor inquiries should be addressed to the Trust,
c/o Carolyn M. Burke, 209 South LaSalle Street, Chicago, Illinois 60604-1295,
or an Investor may call 312-220-7940.

Item 7. Purchase of Securities Being Offered

A-77
<PAGE>

Fund's net asset value at the time of the next determination of net asset value
after such receipt. Shares issued by the Fund in exchange for securities will be
issued at net asset value determined as of the same time. All dividends,
interest, subscription, or other rights pertaining to such securities after such
transfers to the Fund shall become the property of the Fund and must be
delivered to the Fund by the Investor upon receipt from the issuer. Investors
that are permitted to transfer such securities will be required to recognize a
gain or loss on such transfer and pay tax thereon, if applicable, measured by
the difference between the fair market value of the securities and the
Investors' basis therein. The Trust will not accept securities in exchange for
shares of the Fund unless: (1) such securities are, at the time of the exchange,
eligible to be included in the Fund's investment portfolio and current market
quotations are readily available for such securities; and (2) the Investor
represents and warrants that all securities offered to be exchanged are not
subject to any restrictions upon their sale by the Fund under the Securities Act
or under the laws of the country in which the principal market for such
securities exists, or otherwise.

Exchanges of Shares. Shares of the Fund may be exchanged for shares of
other series of the Trust on the basis of current net asset values per share at
the time of exchange. Fund shares may be exchanged by written request or by
telephone if the Investor has previously signed a telephone authorization. The
telephone exchange privilege may be difficult to implement during times of
drastic economic or market changes. The Fund reserves the right to restrict the
frequency of, or otherwise modify, condition, terminate or impose charges upon
the exchange privilege and/or telephone transfer privileges upon 60 days' prior
written notice to Investors.

By exercising the telephone exchange privilege, the Investor agrees that
the Fund will not be liable for following instructions communicated by telephone
that the Fund reasonably believes to be genuine. The Fund provides written
confirmation of transactions initiated by telephone as a procedure designed to
confirm that telephone transactions are genuine. As a result of this policy,
the Investor may bear the risk of any financial loss resulting from such
transaction; provided, however, if the Fund or the Administrator fails to employ
this and other appropriate procedures, the Fund or the Administrator may be
liable for any losses incurred.

A-78
<PAGE>

Item 8. Redemption of Shares or Repurchase.

If the Fund determines that it would be detrimental to the best
interests of the remaining Investors of the Fund to make payment wholly or
partly in cash, the Fund may pay the redemption price, in lieu of cash, in whole
or in part by a distribution in kind of securities of the Fund.

Item 9. Pending Legal Proceedings.

Not applicable.

A-79

<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK.]

A-80

<PAGE>

APPENDIX A

Set forth below is the performance of the Brinson Trust Company
Collective Investment Trust's Post-Venture Fund (the "BTC Post-Venture Fund")
for periods ended April 28, 1995 linked with the Brinson Relationship Funds'
Brinson Post-Venture Fund (the "Brinson Post-Venture Fund") for periods ending
December 31, 1996. The Brinson Post-Venture Fund assumed the assets of the BTC
Post-

A-81

<PAGE>

Venture Fund on April 28, 1995. Brinson Trust Company is a wholly owned
subsidiary of Brinson Partners, Inc., Adviser to the Trust.

Performance is calculated net of administrative expenses. All returns quoted are
time weighted, total rates of return and include the impact of capital
appreciation as well as the reinvestment of interest and dividends. All
performance data was supplied by Brinson Partners, Inc. and has not been
verified or audited. The BTC Post-Venture Portfolio was not registered under the
Investment Company Act and therefore was not subject to certain investment
restrictions imposed by the Investment Company Act which may have adversely
affected its performance. Investors should not consider this performance data as
an indication of the future performance of the Brinson Post-Venture Fund.
<TABLE>
<CAPTION>

For Periods Ending 12/31/96

Annualized
-------------------------------------
Since
1 year 2 years 3 years 5 years Inception
<S> <C> <C> <C> <C> <C>
Brinson Post-Venture Fund 27.19% 29.56% 19.07% 18.67% 20.35%
Wilshire Small Stock Index (1) 18.46 24.36 14.40 15.98 10.54
</TABLE>

Inception date is 12/31/86

(1) The Wilshire Small Stock Index is calculated gross of fees.

The Wilshire Small Stock Index is the benchmark for both the BTC Post-Venture
Fund and the Brinson Post-Venture Fund. For a further description of the
benchmark, please review the section titled "Investment Process".

A-82

<PAGE>

OFFEREE NO. ____

BRINSON RELATIONSHIP FUNDS

Brinson High Yield Fund

PART A

April 30, 1997

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

<TABLE>
<S> <C> <C>
Item 1. Cover Page. Not applicable.

Item 2. Synopsis. Not applicable.

Item 3. Condensed Financial Information. Not applicable.

Item 4. General Description of Registrant.
</TABLE>

Introduction

Beneficial interests in the Fund ("shares") are issued solely in
private placement transactions that do not involve a "public offering" within
the meaning of Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act"). Investments in the Fund may only be made by "accredited
investors" within the meaning of Regulation D under the Securities Act which
include, but are not limited to, common or commingled trust funds, investment
companies, registered broker-dealers, investment banks, commercial banks,
corporations, group trusts or similar organizations or entities. Each such
accredited investor that holds shares of the Trust is referred to herein as an
"Investor" and collectively, the "Investors". This Prospectus does not
constitute an offer to sell, or the solicitation of an offer to buy, any
"security" to the public within the meaning of the Securities Act.

Shares of the Fund are not deposits or obligations of, or guaranteed
or endorsed by, any bank; further, such shares are not federally insured by the
Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other
agency. The Fund may invest up to 100% of its assets in lower rated fixed income
securities, commonly known as "junk bonds," which involve greater risks,
including default risks, then higher rated fixed income securities. Investors
should carefully assess these risks before investing in the Fund. See
"Investment Objective, Policies and Risk Factors," "High Yield/Higher Risk
- ------------------------------------------------------------------------------
Securities" and Appendix A - Corporate Debt Ratings.
- ---------------------------------------------------

<PAGE>

INVESTMENT OBJECTIVE, POLICIES AND RISK FACTORS

Investors should understand that all investments involve risk and
there can be no guarantee against loss resulting from an investment in the Fund,
nor can there be any assurance that the Fund's investment objective will be
attained.

Investment Process

Brinson Partners, Inc., the Fund's investment adviser ("Brinson
Partners" or the "Adviser"), is an active manager of high yield fixed income
securities. The Adviser maintains a long-term fundamental value investment
approach. The Adviser's investment philosophy is premised on the belief that
discrepancies often exist between observed market prices and fundamental value.
Exploiting these discrepancies then becomes the building block for portfolio
construction. The successful identification of price/value discrepancies
through intensive credit analysis should lead to enhanced total return
performance.

The Adviser believes that inefficiencies exist within the high yield
bond market that a fundamental value-based investment process can exploit. The
Adviser's portfolio is constructed using both top-down and bottom-up investment
processes. The Adviser considers macroeconomic variables and industry outlooks
in its top-down analysis. The bottom-up approach is the most integral to
portfolio construction and forms the basis for credit selection. The Adviser
engages in extensive due diligence of individual credits that includes
assessments of management, market position, competitive environment, financial
flexibility, ability to deliver and review of historical operating results.
The Adviser compiles this data into a form which lends itself to forecasting
future cash flows. The Adviser will identify those securities which are
believed to have market prices that differ from their fundamental value and
invest accordingly. By following a disciplined investment approach, the Adviser
expects to pursue the Fund's investment objective.

The Adviser will diversify the Fund's portfolio by security type,
industry, quality and maturity. The Adviser will focus on cash payment, zero
coupon and pay-in-kind bonds, but may invest in convertibles, preferred stocks
and common stock equivalents. The Adviser will consider investments across a
wide spectrum of industries. The Adviser will focus on the middle tier quality
segment of the market, but will invest across all quality tiers, including the
not-rated segment. Various maturities and durations will allow for further
diversification. The Adviser believes that diversification is one of the most
important components in the construction of a high yield portfolio.

A-84
<PAGE>

The Benchmark is a broad-based index comprised of high yield
securities, including split-rated bonds. The Benchmark has been designed to
provide a representative indication of the performance of the high yield market
in the United States. The Benchmark was created in 1981 and represents over $100
billion of securities. The Adviser will deviate from the normal Benchmark mix in
an effort to enhance the long-term returns while controlling risk. The Adviser
may invest in issues which are not included in the Benchmark. The active
management process is intended, by the Adviser, to identify discrepancies
between market prices and fundamental value that will produce superior
investment performance relative to the Benchmark. When unusual market conditions
warrant, the Fund can make substantial temporary defensive investments in cash
equivalents.

The Fund does not intend to concentrate its investments in a
particular industry. The Fund also does not intend to issue senior securities
except to the extent consistent with its policies described below and only as
permitted under the Investment Company Act. The Fund's investment objective and
its policies concerning portfolio lending, borrowing, the issuance of senior
securities and concentration, are "fundamental," which means that they may not
be changed without the affirmative vote of the holders of a majority of the
Fund's outstanding voting shares. As used in this Prospectus, a vote of "a
majority of the outstanding voting shares" of the Trust or a series of the Trust
means the affirmative vote of the lesser of (i) more than 50% of the outstanding
shares of the Trust or series, or (ii) 67% of the shares of the Trust or series
present at a meeting at which more than 50% of the outstanding shares of the
Trust or series are represented in person or by proxy.

The Fund is classified as "non-diversified," as defined in the
Investment Company Act so that it is not limited by the Investment Company Act
as to the proportion of its assets that it may invest in the obligations of a
single issuer. To the extent that the Fund's investment portfolio at times
includes the securities of a smaller number of issuers than permissible if the
Fund were "diversified" (as defined in the Investment Company Act), the Fund may
be subject to greater investment and credit risk than an investment company that
invests in a broader range of securities, because changes in the financial
condition or market assessment of a single issuer may cause greater fluctuations
in the net asset value of the Fund's shares.

TYPES OF SECURITIES IN WHICH THE FUND MAY INVEST

U.S. and Non-U.S. Fixed Income Securities

The Fund may invest in all types of U.S. dollar denominated fixed
income securities of U.S. and non-U.S. issuers, including governments and
governmental entities, supranational issuers as well as corporations and other
business organizations. The Fund may purchase U.S. dollar denominated securities
that reflect a broad range of investment maturities, qualities and sectors. A
supranational entity is an entity established or financially supported by the
national governments of one or more countries to promote reconstruction or
development. Examples of supranational entities include, among others, the World
Bank, the European Economic Community, the European Coal and Steel Community,
the European Investment Bank, the Intra-Development Bank, the Export-Import Bank
and the Asian Development Bank.

A-85

<PAGE>

High Yield/Higher Risk Securities

The Fund will invest predominantly in U.S. dollar investments which
are below investment grade. Investment grade securities are securities rated BBB
or better by Standard & Poor's Ratings Group ("S&P") or Baa or better by Moody's
Investors Service, Inc. ("Moody's") or, if unrated, are determined to be of
comparable quality by the Adviser (referred to herein as "low-grade
securities"). While securities rated below BBB or Baa are regarded as having an
adequate capacity to pay principal and interest, such securities lack
outstanding investment characteristics and, in fact, have speculative
characteristics as well. In addition, changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to make principal
and interest payments than is the case with higher rated securities. Securities
rated lower than BBB by S&P and Baa by Moody's are classified as non-investment
grade securities and are commonly referred to as "junk bonds." These securities
are considered to be of poor standing and predominantly speculative with respect
to the issuer's capacity to pay interest and repay principal in accordance with
the terms of the obligations and involve major risk exposure to adverse
conditions. The table below shows the weighted average ratings of the bonds in
the Fund's portfolio for the period ended December 31, 1996. The credit rating
categories are those provided by S&P and Moody's, both nationally recognized
statistical rating organizations. Ratings represent S&P's and Moody's respective
opinions as to the quality of the obligations they rate. Ratings are general and
are not absolute standards of quality. A description of various bond ratings
appears in Appendix A, p. A-106-A-108.

<TABLE>
<CAPTION>
Credit Rating % of Bonds
- ------------- ----------
<S> <C>
BB 11.51%
Split BB 9.70
B 61.01
Split B 6.75
CCC 0.00
D 0.04
Not Rated 10.99
------

Total 100.00
</TABLE>

Note; Those securities categorized as "Not Rated" have not received a rating
from either S&P or Moody's. Split BB and Split B securities reflect
differing opinions by the rating agencies as to an issuer's credit
quality.

Investors should carefully consider these risks before investing. The Fund
currently does not intend to limit its investment in low-grade securities of
U.S. dollar denominated fixed income securities.

A-86
<PAGE>

assurance that the Fund will be protected from widespread bond defaults brought
about by a sustained economic downturn, or that yields will continue to offset
default rates on high yield bonds in the future. Issuers of these securities are
often highly leveraged, so that their ability to service their debt obligations
during an economic downturn or during sustained periods of rising interest rates
may be impaired. In addition, such issuers may not have more traditional methods
of financing available to them and may be unable to repay debt at maturity by
refinancing. The risk of loss due to default by the issuer is significantly
greater for the holders of low-grade securities because such securities may be
unsecured and may be subordinated to other creditors of the issuer. Past
economic recessions have resulted in default levels with respect to such
securities in excess of historic averages.

The value of lower-rated debt securities will be influenced not only by
changing interest rates, but also by the bond market's perception of credit
quality and the outlook for economic growth. When economic conditions appear to
be deteriorating, low-grade securities may decline in market value due to
investors' heightened concern over credit quality, regardless of prevailing
interest rates.

Especially at such times, trading in the secondary market for low-grade
securities may become thin and market liquidity may be significantly reduced.
Even under normal conditions, the market for low-grade securities may be less
liquid than the market for investment grade corporate bonds. There are fewer
securities dealers in the high yield market and purchasers of low-grade
securities are concentrated among a smaller group of securities dealers and
institutional investors. In periods of reduced secondary market liquidity, low-
grade securities prices may become more volatile and the Fund's ability to
dispose of particular issues when necessary to meet the Fund's liquidity needs
or in response to a specific economic event such as a deterioration in the
creditworthiness of the issuer may be adversely affected.

Low-grade securities frequently have call or redemption features which would
permit an issuer to repurchase the security from the Funds. If a call were
exercised by the issuer during a period of declining interest rates, the Fund
likely would have to replace such called security with a lower yielding
security, thus decreasing the net investment income to the Fund.

Besides credit and liquidity concerns, prices for low-grade securities may be
affected by legislative and regulatory developments. For example, from time to
time, Congress has considered legislation to restrict or eliminate the corporate
tax deduction for interest payments or to regulate corporate restructurings such
as takeovers or mergers. Such legislation may significantly depress the prices
of outstanding low-grade securities. A description of various bond ratings
appears in Appendix A.

For federal income tax purposes, the Fund will accrue interest income on
bonds and debt securities without giving effect to delays and reductions in
receipt of such interest income, except possibly to the extent that the Fund can
establish that any accrual of interest on a bond or security is uncollectible.
Moreover, in a recent technical advice memorandum, the Internal Revenue Service
ruled that a holder (such as the Fund) of a debt instrument having original
issue discount (i.e., in general, the difference between the stated redemption
price at maturity of a debt security and its issue price) ("OID") must continue
to accrue OID, as distinguished from the accrual of interest, even when the
issuer's financial condition is such that there is no reasonable expectation
that the instrument will be redeemed according to its terms. As a result, the
amount of interest income (including OID) reportable by the Fund and, in turn,
its investors could significantly exceed the amount of interest income actually
received by the Fund.

U.S. and Non-U.S. Equity Securities

A-87
<PAGE>

as a result of the purchase of unit offerings of fixed income securities which
include equity components.

Cash and Cash Equivalents

The Fund may invest a portion of its assets in short-term debt securities of
corporations, governments or agencies and banks and finance companies
denominated in U.S. dollars. When unusual market conditions warrant, the Fund
can make substantial temporary defensive investments in cash equivalents up to a
maximum exposure of 100% of the Fund's total assets. The Fund's investment in
temporary defensive investments may affect the Fund's ability to attain its
investment objective.

A-88
<PAGE>

Zero Coupon Securities

Pay-In-Kind Bonds

Mortgage-Backed Securities

The Fund may invest in mortgage-backed securities, representing interests in
pools of mortgage loans. These securities provide investors with payments
consisting of both interest and principal as the mortgages in the underlying
mortgage pools are paid off. The Fund may invest in mortgage-backed securities
issued or guaranteed by an agency or instrumentality of the U.S. government.
The Fund may also invest in privately issued mortgage-backed securities issued
by certain private, non-government corporations, such as financial institutions.

The Fund may also invest in Collateralized Mortgage Obligations ("CMOs") and
Real Estate Mortgage Investment Conduits ("REMICs"). CMOs are debt securities
issued by U.S. government agencies or by financial institutions and other
mortgage lenders and collateralized by a pool of mortgages held under an
indenture. CMOs are issued in a number of classes or series with different
maturities. The classes or series are retired in sequence as the underlying
mortgages are repaid. Prepayment may shorten the stated maturity of the
obligation and can result in a loss of premium, if any has been paid. Certain
of these securities may have variable or floating interest rates and others may
be stripped (securities which provide only the principal or interest feature of
the underlying security).

REMICs are private entities formed for the purpose of holding a fixed pool of
mortgages secured by an interest in real property. REMICs are similar to CMOs
in that they issue multiple classes of securities.

CMOs and REMICs issued by private entities are not government securities and
are not directly guaranteed by any government agency. They are secured by the
underlying collateral of

A-89
<PAGE>

the private issuer. Yields on privately-issued CMOs have historically been
higher than yields on CMOs issued or guaranteed by U.S. government agencies.
However, the risk of loss due to default on such instruments is higher. For
federal income tax purposes, the Fund will be required to accrue income
attributable to its investment in CMOs and regular interests in REMICs using the
"catch-up" method, with an aggregate prepayment assumption. For further
information concerning mortgage-backed securities, see Part B of this
Registration Statement.

Asset-Backed Securities

When-Issued Securities

Convertible Securities

A-90
<PAGE>

Eurodollar Securities

The Fund may invest in Eurodollar securities, which are fixed income
securities for a U.S. issuer or a foreign issuer that are issued outside the
United States. Interest and dividends on Eurodollar securities are payable in
U.S. dollars.

Repurchase Agreements

Reverse Repurchase Agreements

The Fund may enter into reverse repurchase agreements with banks and broker-
dealers. Reverse repurchase agreements involve sales by the Fund of portfolio
assets concurrently with an agreement by the Fund to repurchase the same assets
at a later date at a fixed price. During the reverse repurchase agreement
period, the Fund continues to receive principal and interest payments on these
securities.

The Fund will establish a segregated account with its custodian bank in which
it will maintain cash, U.S. government securities or other liquid assets equal
in value to its obligations with respect to reverse repurchase agreements.
Reverse repurchase agreements involve the risk that the market value of the
securities retained by the Fund may decline below the price of the securities
the Fund has sold but is obligated to repurchase under the agreement. In the
event the buyer of securities under a reverse repurchase agreement files for
bankruptcy or becomes insolvent, the Fund's use of the proceeds of the agreement
may be restricted pending a determination by the other party, or its trustee or
receiver, whether to enforce the Fund's obligation to repurchase the
securities.

Brady Bonds

The Fund may invest in Brady Bonds, which are securities created through the
exchange of existing commercial bank loans to public and private entities in
certain emerging markets for new bonds in connection with debt restructurings
under a debt restructuring plan introduced by

A-91
<PAGE>

former U.S. Secretary of the Treasury, Nicholas F. Brady (the "Brady Plan").
Brady Plan debt restructurings have been implemented to date in Argentina,
Bulgaria, Brazil, Costa Rica, Jordan, Mexico, Nigeria, the Philippines, Poland,
Uruguay, Panama, Peru and Venezuela. Brady Bonds have been issued only during
recent years, and for that reason do not have a very long payment history. Brady
Bonds may be collateralized or uncollateralized, are issued in various
currencies (but primarily the U.S. dollar) and are actively traded in over-the-
counter secondary markets. The Fund will only invest in U.S. dollar-denominated,
collateralized Brady Bonds, which may be fixed-rate bonds or floating-rate bonds
and are generally collateralized in full as to principal by U.S. Treasury zero
coupon bonds having the same maturity as the bonds.

Brady Bonds are often viewed as having three or four valuation components:
the collateralized repayment of principal at final maturity; the collateralized
interest payments; the uncollateralized interest payments; and any
uncollateralized repayment of principal at maturity (these uncollateralized
amounts constitute the "residual risk"). In light of the residual risk of Brady
Bonds and the history of defaults of countries issuing Brady Bonds with respect
to commercial bank loans by public and private entities, investments in Brady
Bonds may be viewed as speculative. There can be no assurance that the Brady
Bonds in which the Fund invests will not be subject to restructuring
arrangements or to requests for a new credit agreement which may cause the Fund
to suffer a loss of interest or principal in any of its holdings.

Non-Publicly Traded Securities, Private Placements and Restricted Securities

The Fund may invest in securities that are neither listed on a stock exchange
nor traded over-the-counter, including privately placed securities and limited
partnerships. Investing in such securities, including investments in new and
early stage companies, may involve a high degree of business and financial risk
that can result in substantial losses. As a result of the absence of a public
trading market for these securities, they may be less liquid than publicly
traded securities. Although these securities may be resold in privately
negotiated transactions, the prices realized from these sales could be less than
those originally paid by the Fund, or less than what may be considered the fair
value of such securities. Furthermore, companies whose securities are not
publicly traded may not be subject to the disclosure and other investor
protection requirements which would be applicable if their securities were
publicly traded. If such securities are required to be registered under the
securities laws of one or more jurisdictions before being resold, the Fund may
be required to bear the expense of registration. No more than 15% of the Fund's
net assets will be invested in illiquid securities, including, but not limited
to, non-publicly traded securities, private placements and restricted
securities.

Investment Company Securities

The Fund may invest in securities issued by open-end and closed-end
investment companies. Under Section 12(d)(1) of the Investment Company Act, the
Fund's investment in such securities, subject to certain exceptions, currently
is limited to: (i) 3% of the total voting stock of any one investment company,
(ii) 5% of the Fund's net assets with respect to any one such investment company
and (iii) 10% of the Fund's net assets in the aggregate. Investments in the
securities of other investment companies may involve duplication of certain fees
and expenses.
A-92
<PAGE>

The Trust has received an Exemptive Order from the United States Securities
and Exchange Commission (the "Commission"), which permits the Fund to invest its
assets in securities of other series offered by the Trust. The Fund will only
invest in such series to the extent that the Adviser determines that it is more
efficient for the Fund to gain exposure to a particular asset class through
investment in a series of the Trust as opposed to investment directly in
individual securities. Investments by the Fund in another Series of the Trust
may involve transaction costs.

Pursuant to an exemptive order received by The Brinson Funds, series of The
Brinson Funds may invest in the Fund and other series of the Trust, in excess of
the Investment Company Act Section 12(d)(1) limitations described above. Also,
other series of the Trust may invest in the Fund, in certain cases in excess of
such limitations. Normally, shares of the Fund will be owned by other series of
the Trust or a series of The Brinson Funds, and the Fund, itself, will be
subject to such limitations as to its own investments and, for purposes of
calculating the amount of the investments under such limitations, the Fund's
investments in other series of the Trust and in other investment companies will
be aggregated.

Rule 144A and Illiquid Securities

Generally, an illiquid security is any security that cannot be disposed of
within seven days in the ordinary course of business at approximately the amount
at which the Fund has valued the security. Examples of illiquid securities are
over-the-counter options and certain interest rate swaps. While maintaining
oversight, the Board of Trustees has delegated to the Adviser the day-to-day
function of determining whether or not individual securities purchased under
Rule 144A of the Securities Act, are liquid for purposes of the Fund's 15%
limitation on investments in illiquid assets. The Board of Trustees has
instructed the Adviser to consider the following factors in determining the
liquidity of a security purchased under Rule 144A: (i) the frequency of trades
and trading volume for the security; (ii) whether at least three dealers are
willing to purchase or sell the security and the number of potential purchasers;
(iii) whether at least two dealers are making a market in the security; and (iv)
the nature of the security and the nature of the marketplace trades (e.g., the
time needed to dispose of the security, the method of soliciting offers and the
mechanics of transfer). Although it has delegated the day-to-day liquidity
determination to the Adviser, the Board of Trustees will continue to monitor and
will periodically review the Adviser's selection of Rule 144A securities, as
well as the Adviser's determination as to their liquidity.

If the Adviser determines that a security purchased in reliance on Rule 144A
which was previously determined to be liquid is no longer liquid and, as a
result, the Fund's holdings of illiquid securities exceed the Fund's 15% limit
on investment in such securities, the Adviser will determine what action shall
be taken to ensure that the Fund continues to adhere to such limitation
including disposing of illiquid assets which may include such Rule 144A
securities.

Future Developments

A-93
<PAGE>

to replicate the performance of a certain component or components of a
particular security or combination of securities and/or to hedge or reduce the
risks associated with certain securities or market trends. The Fund may invest
in these securities if the Adviser believes that doing so would be consistent
with the Fund's investment objective and policies. Since the market for these
securities may be new, the Fund may have difficulty disposing of them at a
suitable price and time. In addition to limited liquidity, these instruments
may present other risks, such as high price volatility. The unavailability of
such innovative securities would not adversely affect the Fund's ability to
achieve its investment objective.

Non-U.S. Issuers

Investments may be made in U.S. dollar-denominated equity and debt securities
of non-U.S. Issuers, including investments in Brady Bonds. Investments in
securities of foreign issuers may involve greater risks than those of U.S.
issuers. There is generally less information available to the public about non-
U.S. issuers and less government regulation and supervision of non-U.S. stock
exchanges, brokers and listed companies. Non-U.S. issuers are not subject to
uniform global accounting, auditing and financial reporting standards, practices
and requirements. Securities of some non-U.S. companies are less liquid and
their prices more volatile than securities of comparable U.S. companies.
Securities trading practices abroad may offer less protection to investors.

OTHER INVESTMENT TECHNIQUES

Options

The Fund may purchase and write put and call options on U.S. securities and
indices and enter into related closing transactions. The Fund may also purchase
and write options to buy or sell futures contracts.

A call option enables the purchaser, in return for the premium paid, to
purchase securities from the writer of the option at an agreed price at any time
during a period ending on an agreed date. The advantage is that the purchaser
may hedge against an increase in the price of securities it ultimately wishes to
buy or may take advantage of a rise in a particular index. The Fund will
purchase call options only to the extent premiums paid on all outstanding call
options do not exceed 20% of the Fund's total assets. The Fund may write call
options only on a covered basis. A call option is "covered" if the Fund owns the
underlying securities or the Fund maintains in a segregated account with its
custodian, cash, U.S. government securities or other liquid assets with a value
sufficient to meet its obligations under the call option, or if the Fund owns an
offsetting call option. The Fund will receive premium income from writing call
options, which may offset the cost of purchasing put options and may also
contribute to the Fund's total return.

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outstanding put options do not exceed 20% of the Fund's total assets. The
advantage is that the purchaser can be protected should the market value of the
security decline or should a particular index decline. The Fund will, at all
times during which it holds a put option, own the security underlying such
option. The Fund will receive premium income from writing put options, although
it may be required, when the put is exercised, to purchase securities at higher
prices than the current market price.

An option on a securities index gives the purchaser of the option, in return
for the premium paid, the right to receive from the seller cash equal to the
difference between the closing price of the index and the exercise price of the
option.

Closing transactions permit the Fund to offset put options or call options
prior to exercise or expiration. If the Fund cannot effect closing
transactions, it may have to hold a security it would otherwise sell or deliver
a security it might want to hold.

Futures Contracts

The Fund may enter into contracts for the purchase or sale of securities,
including index contracts or foreign currencies, for hedging purposes. The
purchase of a futures contract by the Fund represents the acquisition of a
contractual right to obtain delivery of the securities called for by the
contract at a specified price on a specified future date. When a futures
contract is sold, the Fund incurs a contractual obligation to deliver the
securities underlying the contract at a specified price on a specified future
date. The Fund may enter into futures contracts and engage in options
transactions related thereto for hedging purposes and for non-hedging purposes,
to the extent that not more than 5% of the Fund's assets are required as futures
contract margin deposits and premiums on options on futures.

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fluctuating market value of such futures contracts and the aggregate value of
the initial and variation margin payments made by the Fund with respect to such
futures contracts.

Risks and Special Considerations of Options and Futures

Options and futures can be volatile investments and may not perform as
expected. If the Adviser applies a hedge at an inappropriate time or price
trends are judged incorrectly, options, futures and similar strategies may lower
the Fund's return. The Fund could also experience losses if the prices of its
options or futures positions are poorly correlated with its other investments,
or if it cannot close out its positions because of an illiquid secondary market.
The loss from investing in futures transactions is potentially unlimited. For
further information concerning the risks of options and futures, see Part B of
this Registration Statement.

Swaps

The Fund may engage in swaps, including but not limited to interest rate,
currency and index swaps and the purchase or sale of related caps, floors and
collars and other derivative instruments. The Fund expects to enter into these
transactions primarily to preserve a return or spread on a particular investment
or portion of its portfolio and as a technique for managing the portfolio's
duration (i.e., the price sensitivity to changes in interest rates), to protect
against any increase in the price of securities the Fund anticipates purchasing
at a later date or to gain exposure to certain markets.

The use of swaps involves investment techniques and risks different from
those associated with ordinary portfolio security transactions. If the Adviser
is incorrect in its forecasts of market values, interest rates or other
applicable factors, the investment performance of the Fund will be less
favorable than it would have been if this investment technique were not used.
Swaps do not involve the delivery of securities or other underlying assets or
principal. Thus, if the other party to a swap defaults, the Fund's risk of loss
consists of the net amount of payments that the Fund is contractually entitled
to receive. Under Internal Revenue Service rules, any lump sum

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payment received or due under the notional principal contract must be amortized
over the life of the contract using the appropriate methodology prescribed by
the Internal Revenue Service.

Borrowing

The Fund may borrow money as a temporary measure for extraordinary purposes
or to facilitate redemptions. The Fund will not borrow money in excess of 33
1/3% of the value of its total assets. The Fund has no intention of increasing
its net income through borrowing. Any borrowing will be from a bank with the
required asset coverage of at least 300%. In the event that such asset coverage
falls below 300%, the Fund shall, within three days thereafter (not including
Sunday or holidays) or such longer period as the Commission may prescribe by
rules and regulations, reduce the amount of its borrowings to such an extent
that the asset coverage of such borrowings shall be at least 300%. The Fund will
not pledge more than 10% of its net assets, or issue senior securities as
defined in the Investment Company Act, or as described herein, except for notes
to banks and reverse repurchase agreements. Investment securities will not be
purchased while the Fund has outstanding borrowings that exceed 5% of the Fund's
total net assets.

Loans of Portfolio Securities

The Fund may loan up to 33 1/3% of its assets to qualified broker-dealers or
institutional investors for their use relating to short sales or other security
transactions. Such loans must be secured by collateral, consisting of any
combination of cash and U.S. government securities in an amount at least equal
(on each business day) to the current market value of the securities loaned.
During the terms of these loans, the Fund will continue to receive any dividends
or interest paid on the loaned securities as well as the interest on the
investment of the collateral minus a fee paid to the borrower or a fee directly
deducted by borrower. The Fund must have a right to reacquire the loaned
securities on five business days' notice. The principal risk to which the Fund
will be exposed on a loan transaction is the risk that the borrower would become
bankrupt at a time when the value of the security increases. However, pursuant
to the Fund's securities lending agreement, the lending agent is obligated to
replace the loaned securities with a like amount of the loaned securities of the
same issuer, class and denomination in the event the loaned securities are not
returned by a borrower in accordance with the applicable securities lending
agreement. The Fund will only enter into loan agreements after a review of all
pertinent facts by the Adviser and the lending agent, subject to overall
supervision by the Board of Trustees. Creditworthiness of the borrowing broker-
dealer or institution will be monitored on an ongoing

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basis by the Adviser and any lending agent pursuant to procedures reviewed and
adopted by the Board of Trustees. Cash received through loan transactions may
be invested in any security in which the Fund is authorized to invest.
Investing cash subjects that investment to market risk (i.e., capital
appreciation or depreciation).

Investment Restrictions

Portfolio Turnover

The Fund is free to dispose of its portfolio securities at any time, subject
to complying with the Code and the Investment Company Act, when changes in
circumstances or conditions make such turnover desirable in light of the Fund's
investment objective. The Fund will not attempt to achieve or be limited to a
predetermined rate of portfolio turnover, such a turnover always being
incidental to transactions undertaken with a view to achieving the Fund's
investment objective. While it is the policy of the Fund generally not to
engage in trading for short-term gains, the Fund will effect portfolio
transactions without regard to the holding period if, in the judgment of the
Adviser, such transactions are advisable in light of a change in circumstances
of a particular company, within a particular industry or country, or in general
market, economic or political conditions. Although the portfolio turnover rate
for the Fund may vary greatly from year to year, the Fund expects that under
normal circumstances, the portfolio turnover rate will not exceed 100%. A
higher portfolio turnover rate will increase aggregate brokerage commission
expenses which must be borne directly by the Fund and ultimately by the Fund's
Investors and the incidence of short-term capital gains (which are taxable to
Investors as ordinary income). See "Item 5 - Brokerage Allocation" and "Item 6 -
Federal Taxes."

Item 5. Management of the Fund.

The Board of Trustees

Under Delaware law and the Amended and Restated Agreement and Declaration of
Trust of the Trust, the Board of Trustees has overall responsibility for
managing the business and affairs of the Trust and the Fund. The Trustees elect
the officers of the Trust, who are responsible for administering the day-to-day
operations of the Fund.

The Adviser

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First Chicago Investment Advisors, N.A. Brinson Partners and its predecessor
entities have managed domestic and international investment assets since 1974
and global investment assets since 1982. Brinson Partners has offices in
London, Melbourne, New York, Paris, Singapore, Sydney and Tokyo, in addition to
its principal office at 209 South LaSalle Street, Chicago, IL 60604-1295.
Brinson Partners is controlled by Swiss Bank Corporation ("Swiss Bank"). Swiss
Bank, with headquarters in Basel, Switzerland, is an internationally diversified
organization with operations in many aspects of the financial services industry.
Brinson Partners also serves as the investment adviser to nine other investment
companies: The Brinson Funds, Enterprise Accumulation Trust - International
Growth Portfolio, Enterprise Group of Funds, Inc. - International Growth
Portfolio, Fort Dearborn Income Securities, Inc., Managed Account Services
Portfolio Trust - Pace Large Company Value Equity Investments, The Hirtle
Callaghan Trust - International Equity Portfolio, John Hancock Variable Series
Trust I - International Balanced Fund, AON Funds - International Equity Fund and
The Republic Funds - Republic Equity Fund.

Appendix B to this Prospectus sets forth the investment performance of the
Fund, including the performance of the Brinson Trust Company Collective
Investment Trust's U.S. High Yield Fund until April 28, 1995, the commencement
of the Fund's operations. Brinson Trust Company is a wholly-owned subsidiary of
Brinson Partners.

Administrative, Accounting, Transfer Agency and Custodian Services

As authorized under the Services Agreement, MSTC has entered into a Mutual
Funds Service Agreement (the "CGFSC Agreement") with Chase Global Funds Services
Company ("CGFSC"), a corporate affiliate of The Chase Manhattan Bank, under
which CGFSC provides administrative, accounting, portfolio valuation and
transfer agency services to the Fund. CGFSC's business address is 73 Tremont
Street, Boston, Massachusetts 02108-3913.

Pursuant to the CGFSC Agreement, CGFSC provides:

(2) accounting and portfolio valuation services, including the daily
calculation of the Fund's net asset value and the preparation of certain
financial statements; and

For its administrative, accounting, transfer agency and custodian services,
MSTC receives the following as compensation from the Trust on an annual basis:
0.0025% of the average daily U.S. assets of the Trust; 0.0525% of the average
daily non-U.S. assets of the Trust; 0.3250% of the average daily emerging
markets equity assets of the Trust; and 0.019% of the average daily emerging
markets debt assets of the Trust. MSTC receives an additional fee of 0.075% of
the average daily net assets of the Trust for administrative duties, the latter
subject to the expense limitation applicable to the Trust. No fee (asset based
or otherwise) is charged on any investments made by any fund into any other fund
sponsored or managed by the Advisor and assets of a fund that are invested in
another investment company or series thereof sponsored or managed by the Advisor
will not be counted in determining the 0.075% administrative duties fee or the
applicability of the expense limitation on such fee. The foregoing fees include
all out-of-pocket expenses or transaction charges incurred by MSTC and any third
party service provider in providing such services. Pursuant to the CGFSC
Agreement, MSTC pays CGFSC for the services CGFSC provides to MSTC in fulfilling
its obligations under the Services Agreement.

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Independent Auditors

Ernst & Young LLP, Chicago, Illinois, is the independent accounting and
auditing firm which services the Trust.

Expenses

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of maintaining the Trust's legal existence and of Investors' meetings and fees
and expenses of industry organizations) are allocated between the various series
based upon their relative net assets.

The Adviser has undertaken to pay the Fund's total operating expenses and
may, in its sole discretion, discontinue or modify the extent of such payments.

Brokerage Allocation

Because the Fund is primarily composed of debt (rather than equity)
securities, most of the Fund's investment portfolio transactions are effected
with dealers without the payment of brokerage commissions, but at net prices
which usually include a spread or a markup. In determining the brokers through
whom, and other transaction costs at which, securities transactions for the Fund
are to be executed, except as discussed below, the Adviser seeks to negotiate a
combination of the most favorable execution and the best price obtainable on
each transaction. Consequently, the Adviser selects brokers primarily on the
basis of their execution capability and trading expertise. However, the
direction of transactions to brokers may also be based on the quality and amount
of the research and research-related services which they provide to the Adviser
and indirectly to its clients. These services are of the type described in
Section 28(e) of the Securities Exchange Act of 1934, as amended, and are
designed to augment the Adviser's own internal research and investment strategy
capabilities. The Adviser may use this research information in managing the
Fund's assets, as well as the assets of other clients.

Item 5A. Management's Discussion of Fund Performance. Not applicable.

Item 6. Capital Stock and Other Securities.

The Trust was organized as a Delaware business trust on August 16, 1994. The
Trust's Amended and Restated Agreement and Declaration of Trust permits the
Board of Trustees to issue an unlimited number of shares of beneficial interest
with no par value. The Board of Trustees has the power to designate one or more
series or sub-series/classes of shares of beneficial interest and to classify or
reclassify any unissued shares with respect to such series. Currently, the Trust
is offering shares of six series: Brinson Global Securities Fund, Brinson Short-
Term Fund, Brinson Post-Venture Fund, Brinson High Yield Fund, Brinson Emerging
Markets Equity Fund and Brinson Emerging Markets Debt Fund.

The shares of the Trust, when issued, will be fully paid and non-assessable,
and within each series, have no preference as to conversion, exchange,
dividends, retirement or other features. Any shares the issuance of which the
Board of Trustees may, from time to time, authorize, shall have no preemptive
rights. The shares are not transferable except to the Trust.

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U.S. High Yield Fund of Chicago, Illinois and Bankers Trust Company, Custodian
for Brinson Global Securities Fund, Chicago, Illinois were control persons of
the Fund by nature of their shareholdings.

Voting Rights and Investor Meetings. The shares of the Trust have non-
cumulative voting rights, which means that the holders of more than 50% of the
shares voting for the election of members of the Board of Trustees can elect
100% of the Trustees if they choose to do so. An Investor is entitled to vote
based on the ratio the shares of such Investor bear to the shares of all
Investors entitled to vote. On any matter submitted to a vote of Investors, all
shares of the Trust then issued and outstanding and entitled to vote on a matter
shall vote by individual series except that, if required by the Investment
Company Act, the shares shall be voted in the aggregate. If the Board of
Trustees determines that a matter to be voted on does not affect the interests
of all series, only the Investors of the affected series shall be entitled to
vote on the matter. The Trust's Amended and Restated Agreement and Declaration
of Trust gives Investors certain voting powers only with respect to (i) the
election and removal of Trustees; (ii) a termination of the Trust; (iii)
amendments reducing payments upon liquidation or diminishing voting rights; (iv)
mergers, consolidations or sales of assets; (v) the incorporation of the Trust;
(vi) additional matters relating to the Trust as required by the Investment
Company Act; and (vii) such other matters as the Board of Trustees considers
necessary or desirable.

As with any mutual fund, certain Investors of the Fund could control the
results of voting in certain instances. For example, a vote by certain
Investors holding a majority of shares in the Fund to change the Fund's
investment objective could result in an Investor's withdrawal of its investment
in the Fund, and in increased costs and expenses for the remaining Investors.
Additionally, the failure by Investors to approve a change in their investment
objectives and policies parallel to a change that has been approved for the Fund
(thus requiring such Investors to redeem their shares of the Fund) could lead to
a number of adverse consequences, such as the inability of such Investors to
find another investment company in which to invest their assets or an equivalent
investment adviser to manage the assets.

Dividends and Distributions. The Fund does not currently intend to declare
and pay dividends and pay distributions to Investors except as may be determined
by the Board of Trustees of the Trust.

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being treated as a partnership, the Fund will not be subject to U.S. federal
income tax. Instead, each Investor will be required to report separately on its
own income tax return its distributive share of items of Fund income, gains,
losses, deductions and credits (including foreign tax credits for creditable
foreign taxes imposed on the Fund). Each Investor will be required to report
its distributive share of such tax items regardless of whether it has received
or will receive corresponding distributions of cash or property from the Fund.
An allocable share of a tax-exempt Investor's income will be "unrelated business
taxable income" ("UBTI") to the extent that the Fund borrows money to acquire
property or invests in assets that produce UBTI. The Fund will not be a
"regulated investment company" for federal income tax purposes. For a more
complete discussion of the federal income tax consequences of investing in the
Fund, see "Tax Status" in Part B of this Registration Statement.

Redemptions of Fund shares and the exchange of shares between two series, are
taxable events and, accordingly, Investors may realize capital gains or losses
on these transactions.

Investor Inquiries. Investor inquiries should be addressed to the Trust, c/o
Carolyn M. Burke, 209 South LaSalle Street, Chicago, Illinois 60604-1295, or an
Investor may call 312-220-7940.

Item 7. Purchase of Securities Being Offered

Shares of the Fund are restricted securities and are issued solely in private
placement transactions that do not involve a "public offering" within the
meaning of Section 4(2) of the Securities Act. Investments in the Fund may be
made only by "accredited investors" within the meaning of Regulation D under the
Securities Act which include, but are not limited to, common or commingled trust
funds, investment companies, registered broker-dealers, investment banks,
commercial banks, corporations, group trusts or similar organizations or
entities. The registration statement of which this Prospectus is a part does not
constitute an offer to sell, or the solicitation of an offer to buy, any
"security" to the public within the meaning of the Securities Act. Shares of the
Fund may be purchased directly by eligible Investors from the Fund at the net
asset value next determined after receipt of the order in proper form by the
Trust. The minimum initial purchase amount is $25,000,000. In the sole
discretion of the Adviser, the minimum purchase amount may be waived or
modified. There is no sales load in connection with the purchase of shares. The
Trust reserves the right to reject any purchase order and to suspend the
offering of shares of the Fund.

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Investors' basis therein. The Trust will not accept securities in exchange for
shares of the Fund unless: (1) such securities are, at the time of the exchange,
eligible to be included in the Fund's investment portfolio and current market
quotations are readily available for such securities; and (2) the Investor
represents and warrants that all securities offered to be exchanged are not
subject to any restrictions upon their sale by the Fund under the Securities Act
or under the laws of the country in which the principal market for such
securities exists, or otherwise.

Net Asset Value. The net asset value is computed as of one hour prior to
the close of the New York Stock Exchange ("NYSE"), which currently is 3:00 p.m.
(Eastern time), on each day the NYSE is open for regular trading. The net asset
value per share is computed by adding the value of all securities and other
assets in the portfolio, deducting any liabilities (expenses and fees are
accrued daily) and dividing by the number of shares outstanding. Fund securities
for which market quotations are available are priced at market value. Debt
securities are priced at fair value by an independent pricing service using
methods approved by the Trust's Board of Trustees. Short-term investments having
a maturity of less than 60 days are valued at amortized cost, which approximates
market value. Redeemable securities issued by open-end investment companies are
valued using their respective net asset value for purchase orders placed at the
close of the NYSE. All other securities are valued at their fair value as
determined in good faith and pursuant to a method approved by the Trust's Board
of Trustees. For a detailed description, see Item 19 in Part B.

By exercising the telephone exchange privilege, the Investor agrees that
the Fund will not be liable for following instructions communicated by telephone
that the Fund reasonably believes to be genuine. The Fund provides written
confirmation of transactions initiated by telephone as a procedure designed to
confirm that telephone transactions are genuine. As a result of this policy, the
Investor may bear the risk of any financial loss resulting from such
transaction; provided, however, if the Fund or the Administrator fails to employ
this and other appropriate procedures, the Fund or the Administrator may be
liable for any losses incurred.

Exchanges may be made only for shares of another series of the Trust then
offering its shares for sale in the Investor's state of residence and are
subject to the minimum initial investment requirement and the payment of any
transaction charges that may be due to such series of the Trust. For federal
income tax purposes, an exchange of shares would be treated as if the Investor
had redeemed shares of the Fund and reinvested in shares of another series of
the Trust. Gains or losses on the shares exchanged are realized by the Investor
at the time of the exchange. Any Investor wishing to make an exchange should
first obtain and review the Prospectus of the series of the Trust into which the
Investor wishes to exchange. Requests for telephone exchanges must be received
by the transfer agent, CGFSC, by

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the close of regular trading hours (currently 4:00 p.m. Eastern time) on the
NYSE on any day that the NYSE is open for regular trading.

Item 8. Redemption of Shares or Repurchase.

As stated above in Item 7, "Purchase of Securities Being Offered," the Fund's
shares are restricted securities which may not be sold to investors other than
"accredited investors" within the meaning of Regulation D under the Securities
Act unless registered under, or pursuant to another available exemption from,
the Securities Act.

An Investor may redeem its shares of the Fund without charge on any business
day the NYSE is open by furnishing a request to the Trust. The Fund normally
sends redemption proceeds on the next business day, but, in any event,
redemption proceeds, except as set forth below, are sent within seven calendar
days of receipt of a redemption request in proper form. There is no charge for
redemptions by wire. Please note, however, that the Investor's bank may impose
a fee for wire service. The right of any Investor to receive payment with
respect to any redemption may be suspended or the payment of the redemption
proceeds postponed during any period in which the NYSE is closed (other than
weekends or holidays) or trading on the NYSE is restricted, or, to the extent
otherwise permitted by the Investment Company Act, if an emergency exists.

If the Fund determines that it would be detrimental to the best interests of
the remaining Investors of the Fund to make payment wholly or partly in cash,
the Fund may pay the redemption price, in lieu of cash, in whole or in part by a
distribution in kind of securities of the Fund.

Item 9. Pending Legal Proceedings.

Not applicable.

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APPENDIX A

CORPORATE DEBT RATINGS

Moody's Investors Service, Inc. describes classifications of corporate bonds as
follows:

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

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

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

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

Ba -- Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B -- Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

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

Ca -- Bonds which are rated Ca represent obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.

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C -- Bonds which are rated C are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.

Standard & Poor's Ratings Group describes classifications of corporate bonds as
follows:

AAA -- This is the highest rating assigned by Standard & Poor's Ratings Group to
a debt obligation and indicates an extremely strong capacity to pay principal
and interest.

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

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

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

BB - Debt rated BB has less near-term vulnerability to default than other
speculative grade debt. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could lend
to inadequate capacity to meet timely interest and principal payments.

B - Debt rated B has a greater vulnerability to default but presently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial or economic conditions would likely impair capacity or willingness to
pay interest and repay principal.

CCC - Debt rated CCC has a current identifiable vulnerability to default, and is
dependent upon favorable business, financial and economic conditions to meet
timely payments of interest and repayment of principal. In the event of adverse
business, financial or economic conditions, it is not likely to have the
capacity to pay interest or repay principal.

CC - The rating CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC rating.

C - The rating C is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC rating.

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CI - The rating CI is reserved for income bonds on which no interest is being
paid.

D - Debt rated D is in default, or is expected to default upon maturity or
payment date.

Plus (+) or minus (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

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APPENDIX B

Set forth below is the performance of the Brinson Trust Company Collective
Investment Trust's High Yield Fund ("BTC High Yield Fund") for periods ended
April 28, 1995 linked with the Brinson Relationship Funds' High Yield Fund
("Brinson High Yield Fund") for periods ending December 31, 1996. The Brinson
High Yield Fund assumed the assets of the BTC High Yield Portfolio on April 28,
1995. Brinson Trust Company is a wholly owned subsidiary of Brinson Partners,
Inc., Adviser to the Trust.

Performance is calculated net of administrative expenses. All returns quoted
are time weighted, total rates of return and include the impact of capital
appreciation as well as the reinvestment of interest and dividends. All
performance data was supplies by Brinson Partners, Inc. and has not been
verified or audited. The BTC High Yield Fund is not registered under the
Investment Company Act and therefore is not subject to certain investment
restrictions imposed by the Investment Company Act which may have adversely
affected its performance. Investors should not consider this performance data
as an indication of the future performance of the Brinson High Yield Fund.

For Periods Ending 12/31/96

Annualized

<S> <C> <C> <C> <C> <C>
Since
1 year 2 years 3 years 5 years Inception
------ ------- ------- ------- ---------
Brinson High Yield Fund 14.71% 14.46% 8.75% 13.73% 11.30%

First Boston High Yield 12.42 14.88 9.33 12.63 11.48
Index (1)
</TABLE>

Inception date is 12/31/86

(1) The First Boston High Yield Index is calculated gross of fees.

The First Boston High Yield Index is the benchmark for both the BTC High Yield
Fund and the Brinson High Yield Fund. For the further description of the
benchmark, please review the section titled "Investment Process".
A-111
<PAGE>

OFFEREE NO. ___

BRINSON RELATIONSHIP FUNDS

Brinson Emerging Markets Equity Fund
Brinson Emerging Markets Debt Fund

PART A

April 30, 1997

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

Item 1. Cover Page. Not applicable.

Item 2. Synopsis. Not applicable.

Item 3. Condensed Financial Information. Not applicable.

Item 4. General Description of Registrant.

Introduction

Brinson Relationship Funds (the "Trust"), a Delaware business trust
established on August 16, 1994, is a no-load, open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act"). The Trust currently offers six series of shares: the
Brinson Global Securities Fund, the Brinson Short-Term Fund, the Brinson Post-
Venture Fund, the Brinson High Yield Fund, the Brinson Emerging Markets Equity
Fund and the Brinson Emerging Markets Debt Fund. This Prospectus pertains to
both the Brinson Emerging Markets Equity Fund and the Brinson Emerging Markets
Debt Fund (each, a "Fund" and collectively, the "Funds").

Beneficial interests in the Funds ("shares") are issued solely in private
placement transactions that do not involve a "public offering" within the
meaning of Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act"). Investments in the Funds may only be made by "accredited
investors" within the meaning of Regulation D under the Securities Act which
include, but are not limited to, common or commingled trust funds, investment
companies, registered broker-dealers, investment banks, commercial banks,
corporations, group trusts or similar organizations or entities. Each such
accredited investor that holds shares of the Trust is referred to herein as
"Investor" and collectively, the "Investors"). This Prospectus does not
constitute an offer to sell, or the solicitation of an offer to buy, any
"security" to the public within the meaning of the Securities Act.

Shares of the Funds are not deposits or obligations of, or guaranteed or
endorsed by, any bank; further, such shares are not federally insured by the
Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other
agency.
<PAGE>

INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS

The Brinson Emerging Markets Equity Fund's investment objective is to
maximize total U.S. dollar return, consisting of capital appreciation and
current income, while controlling risk. Under normal circumstances, at least
65% of the Fund's total assets will be invested in the equity securities of
issuers in emerging markets, or securities with respect to which the return is
derived from the equity securities of issuers in emerging markets, such as
equity swaps and equity index swaps, as further described below. The Fund's
performance is measured relative to its benchmark, the Brinson Emerging Markets
Normal Index (the "Equity Benchmark"). The index is constructed to minimize
country specific risk while providing regional exposure similar to the
International Finance Corporation's Investable Index (IFCI), a market
capitalization weighted benchmark.

The Brinson Emerging Markets Debt Fund's investment objective is to
maximize total U.S. dollar return, consisting of capital appreciation and
current income, while controlling risk. Under normal circumstances, at least
65% of the Fund's total assets will be invested in debt securities issued by
governments, government-related entities (including participations in loans
between governments and financial institutions), corporations and entities
organized to restructure outstanding debt of issuers in emerging markets, or
debt securities on which the return is derived primarily from other emerging
market instruments, such as interest rate swaps and currency swaps, as further
described below. The Fund's performance is measured relative to its benchmark,
the J.P. Morgan Emerging Markets Bond Index Plus (the "Debt Benchmark").

The Funds consider a country to be an "emerging market" if it is
defined as an emerging or developing economy by any one of the following: the
International Bank for Reconstruction and Development (i.e., the World Bank),
the International Finance Corporation, or the United Nations or its authorities.
The Funds intend to invest primarily in securities of issuers located in at
least three emerging market countries which may be located in Asia, Europe,
Latin America, Africa or the Middle East. As these markets change and other
countries' markets develop, the Funds expect the countries in which they invest
to change.

An emerging market security is a security issued by a government or
other issuer that, in the opinion of the Adviser, has one or more of the
following characteristics:

1. The principal trading market of the security is an emerging
market;

2. The primary revenue of the issuer (at least 50%) is generated from
goods produced or sold, investments made, or services performed in
an emerging market country; or

3. At least 50% of the assets of the issuer are situated in emerging
market countries.

Investors should understand that all investments involve risk and that
there can be no guarantee against loss resulting from an investment in the
Funds, nor can there be any assurance that the Funds' respective investment
objectives will be attained.

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<PAGE>

Investment Process

The Adviser's investment style is single focus: investment
fundamentals determine and describe future cash flows that define fundamental
investment value. The Adviser's investment perspective for the Funds is that
periodically there are exploitable discrepancies between market price and
fundamental value. Those price/value discrepancies then become the building
blocks for portfolio construction. The successful identification of price/value
discrepancies should result in enhanced total return performance.

As a general matter, the Adviser will predominantly purchase for the
Funds only securities contained in the underlying indices relevant to the
respective Benchmarks. The Adviser will attempt to enhance the long-term return
and risk performance of the Funds relative to the respective Benchmarks by
identifying discrepancies between current market prices and fundamental values.
The Adviser believes that the active management process will produce superior
performance relative to the respective Benchmark. When unusual market
conditions warrant, the Funds can make substantial temporary defensive
investments in cash equivalents.

The Funds do not intend to concentrate their investments in a
particular industry. The Funds do not intend to issue senior securities except
to the extent consistent with their policies described below and only as
permitted under the Investment Company Act. Each Fund's investment objective
and policies concerning portfolio lending, borrowing, the issuance of senior
securities and concentration, are "fundamental," which means that they may not
be changed without the affirmative vote of the holders of a majority of each
Fund's outstanding voting shares. As used in this Prospectus, a vote of "a
majority of the outstanding voting shares" of the Trust or a series of the Trust
means the affirmative vote of the lesser of (i) more than 50% of the outstanding
shares of the Trust or series or (ii) 67% of the shares of the Trust or series
present at a meeting at which more than 50% of the outstanding shares of the
Trust or series are represented in person or by proxy.

The Funds are classified as "non-diversified," as defined in the
Investment Company Act so that they are not limited by the Investment Company
Act as to the proportion of their assets that they may invest in the obligations
of a single issuer. To the extent that each of the Fund's investment portfolios
at times include the securities of a smaller number of issuers than permissible
if the Funds were "diversified" (as defined in the Investment Company Act), the
Funds may be subject to greater investment and credit risk than an investment
company that invests in a broader range of securities, because changes in the
financial condition or market assessment of a single issuer may cause greater
fluctuations in the net asset value of the Funds' shares.

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<PAGE>

TYPES OF SECURITIES IN WHICH THE FUNDS MAY INVEST

INVESTMENTS AVAILABLE TO THE BRINSON EMERGING MARKETS EQUITY FUND ONLY

Non-U.S. Equity Securities

The Brinson Emerging Markets Equity Fund will invest at least 65% of
its total assets in a broad range of equity securities of emerging market
issuers, including common and preferred stocks. Common stocks include securities
convertible into common stocks and securities having common stock
characteristics, such as rights and warrants. The Fund may also invest
indirectly in securities of emerging country issuers through sponsored or
unsponsored American depositary receipts ("ADRs"), European depositary receipts
("EDRs") or Global depositary receipts ("GDRs"). ADRs are receipts issued by a
U.S. bank or trust company evidencing ownership of underlying securities issued
by foreign issuers. ADRs may be listed on a national securities exchange or may
be traded in the over-the-counter market. EDRs also represent securities of
foreign issuers and are designed for use in European markets. A GDR represents
ownership in a non-U.S. company's publicly traded securities that are traded on
foreign stock exchanges or foreign over-the-counter markets. Holders of
unsponsored ADRs, EDRs or GDRs generally bear all the costs of such facilities
and the depository of an unsponsored facility frequently is under no obligation
to distribute Investor communications received from the issuer of the deposited
security or to pass through voting rights to the holders of such receipts in
respect of the deposited securities. The issuers of unsponsored ADRs, EDRs and
GDRs are not obligated to disclose material information in the United States
and, therefore, there may not be a correlation between such information and the
market value of the ADRs, EDRs and GDRs. To the extent that the Fund's assets
are not invested in emerging markets equities, the remainder of the assets may
be invested in debt securities issued by governments, government-related
entities (including participations in loans between governments and financial
institutions), corporations or entities organized to restructure outstanding
debt of issuers in emerging markets or debt securities with respect to which the
return is derived primarily from other emerging market instruments.

INVESTMENTS AVAILABLE TO BOTH FUNDS

Non-U.S. Fixed Income Securities

Both Funds may invest in all types of debt securities of emerging
market issuers, including government and governmental-related entities
(including participations in loans between governments and financial
institutions), and of entities organized to restructure outstanding debt of such
issuers. The Brinson Emerging Markets Equity Fund may invest up to 35% of its
total assets in debt securities. The Funds may also invest in debt securities of
emerging market countries' corporate issuers. The Funds may invest a portion of
their assets in short-term and/or long-term debt securities (including
repurchase agreements) of corporations, governments or agencies, banks and
finance companies which may be denominated in non-U.S. or U.S. currencies.

The Funds' investment in emerging market government and government-
related securities may consist of (i) debt securities or obligations issued or
guaranteed by governments, governmental agencies or instrumentalities and
political subdivisions located in emerging market countries (including
participations in loans between governments and financial institutions), (ii)
debt securities or obligations issued by government owned, controlled or
sponsored entities located in emerging market

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<PAGE>

countries and (iii) interests in issuers organized and operated for the purpose
of restructuring the investment characteristics of instruments issued by any of
the entities described above.

The Adviser intends to invest the Funds' assets in emerging country
debt securities that provide a high level of current income, while at the same
time hold the potential for capital appreciation if the perceived
creditworthiness of the issuer improves due to improving economic, financial,
political, social or other conditions in the country in which the issuer is
located.

The Funds' assets may also be invested in government and supranational
issues. A supranational entity is an entity established or financially
supported by the national governments of one or more countries to promote
reconstruction or development. Examples of supranational entities include,
among others, the World Bank, the European Economic Community, the European Coal
and Steel Community, the European Investment Bank, the Intra-Development Bank,
the Export-Import Bank and the Asian Development Bank.

When unusual market conditions warrant, the Funds can make substantial
temporary defensive investments in U.S. cash equivalents.

Cash and Cash Equivalents

Each Fund may invest a portion of its assets in short-term debt
securities of corporations, governments or agencies and banks and finance
companies which may be denominated in U.S. or non-U.S. currencies. When unusual
market conditions warrant, the Funds can make substantial temporary defensive
investments in cash equivalents up to a maximum exposure of 100% of the Funds'
total assets. The Funds' investment in temporary defensive investments may
affect the Funds' ability to attain their exposure objectives.

Short-term debt securities in which the Funds may invest include
demand notes, bank instruments, commercial paper and floating rate instruments.
Both Funds may invest in demand notes, which are securities issued with a
maturity date but which can be called for repayment by the lender or the
borrower at a predetermined interval. Bank instruments in which the Funds may
invest include bank loan participations, bank holding company commercial paper,
deposits, bank notes and other bank related securities. Bank loan
participations are loans sold by lending banks to investors. Bank holding
company commercial paper is a form of short-term promissory note which is a
direct obligation of a bank holding company. Deposits are obligations of a bank
or its branches. Corporate commercial paper is a form of short-term promissory
note issued by corporations primarily to finance short-term credit needs. Rates
vary according to the credit standing of the issuers and money market
conditions. Floating rate instruments are obligations with various final
maturities and interest rates that are tied to other assorted market indices.
Each Fund will not invest more than 15% of the value of its net assets in
floating or variable rate demand obligations as to which it cannot exercise the
demand feature on not more than seven days' notice if there is no secondary
market available for these obligations, and in other securities that are not
readily marketable.

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<PAGE>

Zero Coupon Securities

The Funds may invest in zero coupon securities. Zero coupon securities
are debt obligations that do not entitle the holder to any periodic payments of
interest prior to maturity or a specified date when the securities begin paying
current interest (the "cash payment date") and therefore are issued at a
discount from their face amounts or par value. Such bonds carry an additional
risk in that, unlike bonds which pay interest throughout the period to maturity,
the Funds will realize no cash until the maturity date or the cash payment date
and, if the issuer defaults, the Funds may obtain no return at all on its
investment. For federal tax purposes, the Funds will be required to include in
income daily portions of original issue discount accrued, even if no payment is
received before the maturity date or cash payment date.

Pay-In-Kind Bonds

The Funds may invest in pay-in-kind bonds. Pay-in-kind bonds are
securities which pay interest through the issuance of additional bonds. The
Funds will be deemed to receive interest over the life of such bonds and may be
treated for federal income tax purposes as if interest were paid on a current
basis, although no cash interest payments are received by the Funds until the
cash payment date or until the bonds mature.

Mortgage-Backed Securities

The Funds may invest in mortgage-backed securities, representing
interests in pools of mortgage loans. These securities provide investors with
payments consisting of both interest and principal as the mortgages in the
underlying mortgage pools are paid off. The Funds may invest in mortgage-backed
securities issued or guaranteed by an agency or instrumentality of the U.S.
government. The Funds may also invest in privately issued mortgage-backed
securities issued by certain private, non-government corporations, such as
financial institutions.

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<PAGE>

The Funds may also invest in Collateralized Mortgage Obligations
("CMOs") and Real Estate Mortgage Investment Conduits ("REMICs"). CMOs are debt
securities issued by U.S. government agencies or by financial institutions and
other mortgage lenders and collateralized by a pool of mortgages held under an
indenture. CMOs are issued in a number of classes or series with different
maturities. The classes or series are retired in sequence as the underlying
mortgages are repaid. Prepayment may shorten the stated maturity of the
obligation and can result in a loss of premium, if any has been paid. Certain
of these securities may have variable or floating interest rates and others may
be stripped (securities which provide only the principal or interest feature of
the underlying security).

REMICs are private entities formed for the purpose of holding a fixed
pool of mortgages secured by an interest in real property. REMICs are similar
to CMOs in that they issue multiple classes of securities.

CMOs and REMICs issued by private entities are not government
securities and are not directly guaranteed by any government agency. They are
secured by the underlying collateral of the private issuer. Yields on privately-
issued CMOs have historically been higher than yields on CMOs issued or
guaranteed by U.S. government agencies. However, the risk of loss due to default
on such instruments is higher. For federal income tax purposes, the Funds will
be required to accrue income attributable to their investment in CMOs and
regular interests in REMICs using the "catch-up" method, with an aggregate
prepayment assumption. For further information concerning mortgage-backed
securities, see Part B of this Registration Statement.

Asset-Backed Securities

The Funds may invest in asset-backed securities. Asset-backed
securities are securities that represent a participation in, or are secured by
and payable from, a stream of payments generated by particular assets, most
often a pool or pools of similar assets (e.g., receivables on home equity and
credit loans and receivables regarding automobile, credit card, mobile home and
recreational vehicle loans, wholesale dealer floor plans and leases).

Such receivables are securitized in either a pass-through or pay-
through structure. Pass-through securities provide investors with an income
stream consisting of both principal and interest payments with respect to the
receivables in the underlying pool. Pay-through asset-backed securities are debt
obligations issued usually by a special purpose entity, are collateralized by
the various receivables and with respect to which the payments on the underlying
receivables provide the funds to pay the debt service on the debt obligations
issued. The Funds may invest in these securities and obligations and other types
of asset-backed securities that may be developed in the future.

The credit quality of these securities depends primarily upon the
quality of the underlying assets and the level of credit support and/or
enhancement provided. Such asset-backed securities may be subject to the same
prepayment risks as mortgage-backed securities. For further information
concerning asset-backed securities, see Part B of this Registration Statement.

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<PAGE>

When-Issued Securities

The Funds may purchase securities on a "when-issued" basis for payment
and delivery at a later date. The price is generally fixed on the date of
commitment to purchase. A Fund does not earn interest on the securities it has
committed to purchase until they are paid for and delivered on the settlement
date. At the time of settlement, the market value of the security may be more
or less than the purchase price. For further information concerning when-issued
securities, see Part B of this Registration Statement.

Convertible Securities

The Funds may invest in convertible securities which generally offer
lower interest or dividend yields than nonconvertible debt securities of similar
quality. The value of convertible securities may reflect changes in the value
of the underlying common stock. Convertible securities entail less credit risk
than the issuer's common stock because they rank senior to common stock.

Eurodollar Securities

The Funds may invest in Eurodollar securities, which are fixed income
securities of a U.S. issuer or a foreign issuer that are issued outside the
United States. Interest and dividends on Eurodollar securities are payable in
U.S. dollars.

Repurchase Agreements

The Funds may enter into repurchase agreements with banks or broker-
dealers. Repurchase agreements are considered under the Investment Company Act
to be collateralized loans by a Fund to the seller, secured by the securities
transferred to the Fund. In accordance with requirements under the Investment
Company Act, repurchase agreements will be fully collateralized by securities
which the Funds may invest in directly. Such collateral will be marked-to-
market daily. If the seller of the underlying security under the repurchase
agreement should default on its obligation to repurchase the underlying
security, a Fund may experience delay or difficulty in recovering its cash.
To the extent that, in the meantime, the value of the security purchased has
decreased, the Fund could experience a loss. No more than 15% of the Fund's
net assets will be invested in illiquid securities, including repurchase
agreements which have a maturity of longer than seven days.

Reverse Repurchase Agreements

The Funds may enter into reverse repurchase agreements with banks and
broker-dealers. Reverse repurchase agreements involve sales by the Funds of
portfolio assets concurrently with an agreement by the Funds to repurchase the
same assets at a later date at a fixed price. During the reverse repurchase
agreement period, the Funds continue to receive principal and interest payments
on these securities.

The Funds will establish a segregated account with their custodian
bank in which they will maintain cash, U.S. government securities or other
liquid assets equal in value

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<PAGE>

to its obligations with respect to reverse repurchase agreements. Reverse
repurchase agreements involve the risk that the market value of the securities
retained by a Fund may decline below the price of the securities the Fund has
sold but is obligated to repurchase under the agreement. In the event the buyer
of securities under a reverse repurchase agreement files for bankruptcy or
becomes insolvent, a Fund's use of the proceeds of the agreement may be
restricted pending a determination by the other party, or its trustee or
receiver, whether to enforce the Fund's obligation to repurchase the securities.

High Yield/Higher Risk Securities

At any one time substantially all of the assets of the Brinson
Emerging Markets Debt Fund and up to 35% of the assets of the Brinson Emerging
Markets Equity Fund may be invested in investments which are lower quality,
higher yielding securities and which are below investment grade, or if unrated,
are determined to be of comparable quality by the Adviser (referred to herein as
"low-grade securities"). Investment grade securities are securities rated BBB or
better by Standard & Poor's Ratings Group ("S&P") or Baa or better by Moody's
Investors Service, Inc. ("Moody's") or, if unrated, are determined to be of
comparable quality by the Adviser (referred to herein as "low-grade
securities"). While securities rated below BBB or Baa are regarded as having an
adequate capacity to pay principal and interest, such securities lack
outstanding investment characteristics and, in fact, have speculative
characteristics as well. In addition, changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to make principal
and interest payments than is the case with higher rated securities. Securities
rated lower than BBB by S&P and Baa by Moody's are classified as non-investment
grade securities and are commonly referred to as "junk bonds." These securities
are considered to be of poor standing and predominantly speculative with respect
to the issuer's capacity to pay interest and repay principal in accordance with
the terms of the obligations and involve major risk exposure to adverse
conditions. Securities issued by foreign issuers rated below investment grade
entail greater risks than higher rated securities, including risk of untimely
interest and principal payment, default, price volatility and may present
problems of liquidity and valuation. Investors should carefully consider these
risks before investing. A description of various bond ratings appears in
Appendix A, p. A-142 - A-144. Ratings represent S&P's and Moody's respective
opinions as to the quality of the obligations they undertake to rate. However,
ratings are general and are not absolute standards of quality. The Funds
currently do not intend to limit investments in low-grade securities.

Low-grade securities generally offer a higher current yield than that
available from higher grade securities, but involve greater risk. In the past,
the high yields from low-grade securities have more than compensated for the
higher default rates on such securities. However, there can be no assurance that
the Funds will be protected from widespread bond defaults brought about by a
sustained economic downturn, or that yields will continue to offset default
rates on low-grade securities in the future. Issuers of these securities are
often highly leveraged, so that their ability to service their debt obligations
during an economic downturn or during sustained periods of rising interest rates
may be impaired. In addition, such issuers may not have more traditional methods
of financing available to them and may be unable to repay debt at maturity by
refinancing. The risk of loss due to default by the issuer is significantly
greater for the holders of low-grade securities because such securities may

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be unsecured and may be subordinated to other creditors of the issuer. Past
economic recessions have resulted in default levels with respect to such
securities in excess of historic averages.

The value of low-grade securities will be influenced not only by
changing interest rates, but also by the bond market's perception of credit
quality and the outlook for economic growth. When economic conditions appear to
be deteriorating, low-grade securities may decline in market value due to
investors' heightened concern over credit quality, regardless of prevailing
interest rates.

Especially at such times, trading in the secondary market for low-
grade securities may become thin and market liquidity may be significantly
reduced. Even under normal conditions, the market for low-grade securities may
be less liquid than the market for investment grade corporate bonds. There are
fewer securities dealers in the high yield market and purchasers of low-grade
securities are concentrated among a smaller group of securities dealers and
institutional investors. In periods of reduced secondary market liquidity, low
grade securities prices may become more volatile and the Funds' ability to
dispose of particular issues when necessary to meet the Funds' liquidity needs
or in response to a specific economic event such as a deterioration in the
creditworthiness of the issuer may be adversely affected.

Low-grade securities frequently have call or redemption features which
would permit an issuer to repurchase the security from the Funds. If a call
were exercised by the issuer during a period of declining interest rates, the
Funds likely would have to replace such called security with a lower yielding
security, thus decreasing the net investment income to the Funds and any
dividends to Investors.

Brady Bonds

The Funds may invest in Brady Bonds, which are securities created
through the exchange of existing commercial bank loans to public and private
entities in certain emerging markets for new bonds in connection with debt
restructurings under a debt restructuring plan introduced by former U.S.
Secretary of the Treasury, Nicholas F. Brady (the "Brady Plan"). Brady Plan debt
restructurings have been implemented to date in Argentina, Bulgaria, Brazil,
Costa Rica, Jordan, Mexico, Nigeria, the Philippines, Poland, Uruguay, Panama,
Peru and Venezuela. Brady Bonds have been issued only during recent years, and
for that reason do not have a very long payment history. Brady Bonds may be
collateralized or uncollateralized, are issued in various currencies (but
primarily the U.S. dollar), and are actively traded in over-the-counter
secondary markets. Dollar-denominated, collateralized Brady Bonds, which may be
fixed-rate bonds or floating-rate bonds, are generally collateralized in full as
to principal by U.S. Treasury zero coupon bonds having the same maturity as the
bonds.

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Brady Bonds are often viewed as having three or four valuation
components: the collateralized repayment of principal at final maturity; the
collateralized interest payments; the uncollateralized interest payments; and
any uncollateralized repayment of principal at maturity, (these uncollateralized
amounts constitute the "residual risk"). In light of the residual risk of Brady
Bonds and the history of defaults of countries issuing Brady Bonds with respect
to commercial bank loans by public and private entities, investments in Brady
Bonds may be viewed as speculative. There can be no assurance that the Brady
Bonds in which the Funds invest will not be subject to restructuring
arrangements or to requests for a new credit which may cause the Funds to suffer
a loss of interest or principal in any of their holdings.

Structured Securities

Each Fund may invest a portion of its assets in entities organized and
operated solely for the purpose of restructuring the investment characteristics
of sovereign debt obligations. This type of restructuring involves the deposit
with, or purchase by, an entity, such as a corporation or trust, of specified
instruments (such as commercial bank loans or Brady Bonds) and the issuance by
that entity of one or more classes of securities ("Structured Securities")
backed by, or representing interests in, the underlying instruments. The cash
flow of the underlying instruments may be apportioned among the newly issued
Structured Securities to create securities with different investment
characteristics, such as varying maturities, payment priorities and interest
rate provisions, and the extent of the payments made with respect to Structured
Securities is dependent on the extent of the cash flow on the underlying
instruments. Because Structured Securities of the type in which the Funds
anticipate investing typically involve no credit enhancement, their credit risk
generally will be equivalent to that of the underlying instruments. The Funds
are permitted to invest in a class of Structured Securities that is either
subordinated or unsubordinated to the right of payment of another class.
Subordinated Structured Securities typically have higher yields and present
greater risks than unsubordinated Structured Securities. Structured Securities
are typically sold in private placement transactions, and there currently is no
active trading market for Structured Securities. Thus, investments by a Fund in
Structured Securities will be limited by the Fund's prohibition on investing
more than 15% of its net assets in illiquid securities.

Loan Participations and Assignments

The Funds may invest in fixed rate and floating rate loans ("Loans")
arranged through private negotiations between an issuer of sovereign debt
obligations and one or more financial institutions ("Lenders"). The Funds'
investments in Loans are expected in most instances to be in the form of
participations in loans ("Participations") and assignments of all or a portion
of Loans ("Assignments") from third parties.

The Funds will have the right to receive payments of principal,
interest and any fees to which they are entitled only from the Lender selling
the Participation and only upon receipt by the Lender of the payments from the
borrower. In the event of the insolvency of the Lender selling a Participation,
the Funds may be treated as general creditors of the Lender and may not benefit
from any set-off between the Lender and the borrower. Certain Participations may
be structured in a manner designed to avoid purchasers of Participations being
subject to the credit risk of the Lender with respect to the Participation. Even
under such a structure, in the event of the Lender's insolvency, the Lender's
servicing of the Participation may be delayed and the assignability

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of the Participation may be impaired. The Funds will acquire Participations
only if the Lender interpositioned between the Fund and the borrower is
determined by the Adviser to be creditworthy. When a Fund purchases
Assignments from Lenders, it will acquire direct rights against the borrower on
the Loan. However, because Assignments are arranged through private negotiations
between potential assignees and potential assignors, the rights and obligations
acquired by the Funds as the purchaser of an Assignment may differ from, and be
more limited than, those held by the assigning Lender.

Because there may be no liquid market for Participations and
Assignments, the Funds anticipate that such securities could be sold only to a
limited number of institutional investors. The lack of a liquid secondary market
may have an adverse impact on the value of such securities and the Funds'
ability to dispose of particular Assignments or Participations when necessary to
meet the Funds' liquidity needs or in response to a specific economic event such
as a deterioration in the creditworthiness of the borrower. The lack of a liquid
secondary market for Assignments and Participation also may make it more
difficult for the Funds to assign a value to these securities for purposes of
valuing the Funds' portfolios and calculating their net asset values. To the
extent that a Fund cannot dispose of a Participation or Assignment in the
ordinary course of business within seven days at approximately the value at
which it has valued the Loan Participation or Assignment, it will treat the
Participation or Assignment as illiquid and subject to its overall limit on
illiquid investments of 15% of its net assets.

Non-Publicly Traded Securities, Private Placements and Restricted Securities

The Funds may invest in securities that are neither listed on a stock
exchange nor traded over-the-counter, including privately placed securities and
limited partnerships. Investing in such unlisted emerging country securities,
including investments in new and early stage companies, may involve a high
degree of business and financial risk that can result in substantial losses. As
a result of the absence of a public trading market for these securities, they
may be less liquid than publicly traded securities. Although these securities
may be resold in privately negotiated transactions, the prices realized from
these sales could be less than those originally paid by the Funds, or less than
what may be considered the fair value of such securities. Furthermore, companies
whose securities are not publicly traded may not be subject to the disclosure
and other investor protection requirements which would be applicable if their
securities were publicly traded. If such securities are required to be
registered under the securities laws of one or more jurisdictions before being
resold, the Funds may be required to bear the expense of registration. No more
than 15% of the Funds' net assets will be invested in illiquid securities,
including, but not limited to, non-publicly traded securities, private
placements and restricted securities.

Investment Company Securities

The Funds may invest in securities issued by open-end and closed-end
investment companies. Under Section 12(d)(1) of the Investment Company Act, the
Funds' investment in such securities, subject to certain exceptions, currently
is limited to: (i) 3% of the total voting stock of any one such investment
company, (ii) 5% of the Funds' net assets with respect to any one such
investment company and (iii) 10% of the Funds' net assets in the aggregate.
Investments in the securities of other investment companies may involve
duplication of certain fees and expenses.

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The Trust has received an Exemptive Order from the United States
Securities and Exchange Commission, which permits the Funds to invest their
assets in securities of other series offered by the Trust. The Funds will only
invest in such series to the extent that the Adviser determines that it is more
efficient for the Funds to gain exposure to a particular asset class through
investment in a series of the Trust as opposed to investment directly in
individual securities. Investments by the Fund in another series of the Trust
may involve transaction costs.

Pursuant to an exemptive order received by The Brinson Funds, series
of The Brinson Funds may invest in the Fund and other series of the Trust, in
excess of the Investment Company Act Section 12(d)(1) limitations described
above. Also, other series of the Trust may invest in the Fund, in certain cases
in excess of such limitations. Normally, shares of the Fund will be owned by
other series of the Trust or a series of The Brinson Funds, and the Fund,
itself, will be subject to such limitations as to its own investments and, for
purposes of calculating the amount of investments under such limitations, the
Fund's investments in other series of the Trust and in other investment
companies will be aggregated.

Rule 144A and Illiquid Securities

Generally, an illiquid security is any security that cannot be
disposed of within seven days in the ordinary course of business at
approximately the amount at which the Funds have valued the security. Examples
of illiquid securities are over-the-counter options and certain interest rate
swaps. While maintaining oversight, the Board of Trustees has delegated to the
Adviser the day-to-day function of determining whether or not individual
securities purchased under Rule 144A of the Securities Act, are liquid for
purposes of the Funds' 15% limitation on investments in illiquid assets. The
Board of Trustees has instructed the Adviser to consider the following factors
in determining the liquidity of a security purchased under Rule 144A: (i) the
frequency of trades and trading volume for the security; (ii) whether at least
three dealers are willing to purchase or sell the security and the number of
potential purchasers; (iii) whether at least two dealers are making a market in
the security; and (iv) the nature of the security and the nature of the
marketplace trades (e.g., the time needed to dispose of the security, the method
of soliciting offers and the mechanics of transfer). Although it has delegated
the day-to-day liquidity determination to the Adviser, the Board of Trustees
will continue to monitor and will periodically review the Adviser's selection of
Rule 144A securities, as well as the Adviser's determination as to their
liquidity.

If the Adviser determines that a security purchased in reliance on
Rule 144A which was previously determined to be liquid is no longer liquid and,
as a result, a Fund's holdings of illiquid securities exceed the Funds' 15%
limit on investment in such securities, the Adviser will determine what action
shall be taken to ensure that the Fund continues to adhere to such limitation
including disposing of illiquid assets which may include such Rule 144A
securities.

Future Developments

From time to time, the Funds may also invest in certain equity or debt
securities which have features other than those that are typical for such
securities and which have in the past been offered or may be offered in the
future. In the past, for example, such securities have been issued to replicate
the performance of a certain component or components of a particular security or
combination of securities and/or to hedge or reduce the risks associated with
certain securities or market trends. The

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Funds may invest in these securities if the Adviser believes that doing so would
be consistent with the Funds' investment objectives and policies. Since the
market for these securities may be new, the Funds may have difficulty disposing
of them at a suitable price and time. In addition to limited liquidity, these
instruments may present other risks, such as high price volatility. The
unavailability of such innovative securities would not adversely affect the
Funds' ability to achieve their investment objectives.

Foreign Securities and Currency Considerations

Investments in securities of foreign issuers may involve greater risks
than those of U.S. issuers. There is generally less information available to
the public about non-U.S. companies and less government regulation and
supervision of non-U.S. stock exchanges, brokers and listed companies. Non-U.S.
companies are not subject to uniform global accounting, auditing and financial
reporting standards, practices and requirements. Securities of some non-U.S.
companies are less liquid and their prices more volatile than securities of
comparable U.S. companies. Securities trading practices abroad may offer less
protection to investors. Settlement of transactions in some non-U.S. markets may
be delayed or may be less frequent than in the United States, which could affect
the liquidity of the Funds. Additionally, in some countries, there is the
possibility of expropriation or confiscatory taxation, limitations on the
removal of securities, property or other assets of the Funds, political or
social instability, or diplomatic developments which could affect U.S.
investments in those countries. The Adviser will take these factors into
consideration in managing the Funds' investments. The Funds intend to diversify
broadly among countries but reserve the right to invest a substantial portion of
their assets in one or more countries if economic and business conditions
warrant such investments. Gains or losses attributable to fluctuations in
exchange rates which occur between the time the Funds accrue interest or other
receivables or accrue expenses or liabilities denominated in a foreign currency
and the time the Funds actually collect such receivables, or pay such
liabilities, are generally treated as ordinary income or loss. Similarly, a
portion of the gains or losses realized on disposition of debt securities
denominated in a foreign currency, referred to under the Internal Revenue Code
of 1986, as amended ("the Code"), as "section 988" gains or losses, may also be
treated as ordinary gain or loss rather than as capital gain or loss.

The U.S. dollar market value of the Funds' investments and of
dividends and interest earned by the Funds may be significantly affected by
changes in currency exchange rates. Some currency prices may be volatile, and
there is the possibility of governmental controls on currency exchange or
governmental intervention in currency markets, which could adversely affect the
Funds. Although the Funds may attempt to manage currency exchange rate risk,
there is no assurance that the Funds will do so at an appropriate time or that
they will be able to predict exchange rates accurately. The Funds will manage
currency exposures relative to the normal currency allocation and will consider
return and risk of currency exposures relative to the respective Benchmark.

Investing in Emerging Markets

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used in the United States. Prices on these exchanges tend to be volatile and,
in the past, securities in these countries have offered greater potential for
gain (as well as loss) than securities of companies located in developed
countries. Furthermore, investments by investors foreign to the emerging
countries are subject to a variety of restrictions in many emerging countries.
These restrictions may take the form of prior governmental approval, limits on
the amount or type of securities held by foreigners, and limits on the types of
companies in which foreigners may invest. Additional restrictions may be imposed
at any time by these or other countries in which the Funds invest. In addition,
the repatriation of both investment income and capital from several foreign
countries is restricted and controlled under certain regulations, including, in
some cases, the need for certain governmental consents. Although these
restrictions may in the future make it undesirable to invest in emerging
countries, the Adviser does not believe that any current repatriation
restrictions would affect its decision to invest in such countries. Countries
such as those in which the Funds may invest have historically experienced and
may continue to experience, high rates of inflation, high interest rates,
exchange rate fluctuations or currency depreciation, large amounts of external
debt, balance of payments and trade difficulties and extreme poverty and
unemployment. Additional factors which may influence the ability or willingness
to service debt include, but are not limited to, a country's cash flow
situation, the availability of sufficient foreign exchange on the date a payment
is due, the relative size of its debt service burden to the economy as a whole,
its government's policy towards the International Monetary Fund, the World Bank
and other international agencies and the political constraints to which a
government debtor may be subject.

The ability of a foreign government or government-related issuer to
make timely and ultimate payments on its external debt obligations will be
strongly influenced by the issuer's balance of payments, including export
performance, its access to international credits and investments, fluctuations
in interest rates and the extent of its foreign reserves. A country whose
exports are concentrated in a few commodities or whose economy depends on
certain strategic imports could be vulnerable to fluctuations in international
prices of these commodities or imports. To the extent that a country receives
payment for its exports in currencies other than dollars, its ability to make
debt payments denominated in dollars could be adversely affected. If a foreign
government or government-related issuer cannot generate sufficient earnings from
foreign trade to service its external debt, it may need to depend on continuing
loans and aid from foreign governments, commercial banks, and multilateral
organizations, and inflows of foreign investment. The commitment on the part of
these foreign governments, multilateral organizations and others to make such
disbursements may be conditioned on the government's implementation of economic
reforms and/or economic performance and the timely service of its obligations.
Failure to implement such reforms, achieve such levels of economic performance
or repay principal or interest when due may curtail the willingness of such
third parties to lend funds, which may further impair the issuer's ability or
willingness to service its debts in a timely manner. The cost of servicing
external debt will also generally be adversely affected by rising international
interest rates, because many external debt obligations bear interest at rates
which are adjusted based upon international interest rates. The ability to
service external debt will also depend on the level of the relevant government's
international currency reserves and its access to foreign exchange. Currency
devaluations may affect the ability of a government issuer to obtain sufficient
foreign exchange to service its external debt.

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As a result of the foregoing, a governmental issuer may default on its
obligations. If such a default occurs, the Funds may have limited effective
legal recourse against the issuer and/or guarantor. Remedies must, in some
cases, be pursued in the courts of the defaulting party itself, and the ability
of the holder of foreign government and government-related debt securities to
obtain recourse may be subject to the political climate in the relevant country.
In addition, no assurance can be given that the holders of commercial bank debt
will not contest payments to the holders of other foreign government and
government-related debt obligations in the event of default under their
commercial bank loan agreements.

The issuers of the government and government-related debt securities
in which the Funds expect to invest have in the past experienced substantial
difficulties in servicing their external debt obligations, which has led to
defaults on certain obligations and the restructuring of certain indebtedness.
Restructuring arrangements have included, among other things, reducing and
rescheduling interest and principal payments by negotiating new or amended
credit agreements or converting outstanding principal and unpaid interest to
Brady Bonds, and obtaining new credit to finance interest payments. Holders of
certain foreign government and government-related debt securities may be
requested to participate in the restructuring of such securities and to extend
further loans to the issuers of such securities. There can be no assurance that
the Brady Bonds and other foreign government and government-related debt
securities in which the Funds may invest will not be subject to similar defaults
or restructuring arrangements which may adversely affect the value of such
investments. Furthermore, certain participants in the secondary market for such
debt securities may be directly involved in negotiating the terms of these
arrangements and may therefore have access to information not available to other
market participants.

Payments to holders of the high yield, high risk, foreign debt
securities in which the Funds may invest may be subject to foreign withholding
and other taxes. Although the holders of foreign government and government-
related debt securities may be entitled to tax gross-up payments from the
issuers of such securities, there is no assurance that such payments will be
made.

Russian Securities Transactions

The Funds may invest in securities of Russian companies. The
registration, clearing and settlement of securities transactions in Russia are
subject to significant risks not normally associated with securities
transactions in the United States and other more developed markets. Ownership of
shares in Russian companies is evidenced by entries in a company's share
register (except where shares are held through depositories that meet the
requirements of the Investment Company Act) and the issuance of extracts from
the register or, in certain limited cases, by formal share certificates.
However, Russian share registers are frequently unreliable and the Funds could
possibly lose their registration through oversight, negligence or fraud.
Moreover, Russia lacks a centralized registry to record securities transactions
and registrars located throughout Russia or the companies themselves maintain
share registers. Registrars are under no obligation to provide extracts to
potential purchasers in a timely manner or at all and are not necessarily
subject to state supervision. In addition, while registrars are liable under law
from losses resulting from their errors, it may be difficult for the Funds to
enforce any rights they may have against the registrar or issuer of the
securities in the event of loss of share registration. Although Russian
companies with more than 1,000 shareholders are required by law to employ an
independent company to maintain share registers, in practice, such companies
have not always followed this law. Because of this lack of independence of
registrars, management of a Russian company may be able to exert considerable
influence over who can purchase and sell the company's shares by illegally
instructing the registrar to refuse to record transactions on the share
register. Furthermore, these practices may prevent the Funds from investing in
the securities of certain Russian companies deemed suitable by the Adviser and
could cause a delay in the sale of Russian securities by the Funds if the
company deems a purchaser unsuitable, which may expose the Funds to potential
loss in their investment.

In light of the risks described above, the Board of Trustees of the
Funds has approved certain procedures concerning the Funds' investments in
Russian securities. Among these procedures is a requirement that the Funds will
not invest in the securities of a Russian company unless that issuer's registrar
has entered into a contract with the Funds' sub-custodian containing certain
protective conditions including, among other things, the sub-custodian's right
to conduct regular share confirmations on behalf of the Funds. This requirement
will likely have the effect of precluding investments in certain Russian
companies that the Funds would otherwise make.

OTHER INVESTMENT TECHNIQUES

Currency Management

The normal currency allocation of the Funds is identical to the
currency mix of the respective Benchmark. The Funds expect to maintain this
normal currency exposure when, in the judgment of the Adviser, global currency
markets are fairly priced relative to each other and relative to the associated
risks. The Funds may actively deviate from such normal currency allocations to
take advantage of, or to protect its portfolio from risk and return
characteristics of, the currencies and short-term interest rates when those
prices deviate significantly from fundamental value. Deviations from the
Benchmarks are determined by the Adviser based upon its research.

To manage exposure to currency fluctuations, the Funds may alter fixed
income or money market exposures, enter into forward currency exchange
contracts, buy or sell options, futures or options on futures relating to
foreign currencies and purchase securities indexed to currency baskets. The
Funds may also use these currency exchange techniques in the normal course of
business to

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hedge against adverse changes in exchange rates in connection with purchases and
sales of securities. However, the ability to manage foreign exchange risk
through the use of these strategies may be limited in certain emerging markets
because of a lack of appropriate financial instruments. Some of these
strategies may require the Funds to set aside liquid assets in a segregated
custodial account to cover their obligations. These techniques are further
described below.

Forward Foreign Currency Transactions

The Funds may conduct their foreign currency exchange transactions on
a spot (i.e., cash) basis at the spot rate prevailing in the foreign currency
exchange market or through entering into contracts to purchase or sell foreign
currencies at a future date (i.e., a "forward foreign currency contract" or
"forward contract"). A forward contract involves an obligation to purchase or
sell a specific currency amount at a future date, which may be any fixed number
of days from the date of the contract agreed upon by the parties and at a price
set at the time of the contract. The Funds will convert currency on a spot
basis from time to time and Investors should be aware of the potential costs of
currency conversion.

The Funds may enter into forward contracts for hedging purposes as
well as for non-hedging purposes. For hedging purposes, the Funds may enter
into contracts to deliver or receive foreign currency they will receive from or
require for their normal investment activities. They may also use contracts in
a manner intended to protect foreign currency-denominated securities from
declines in value due to unfavorable exchange rate movements. The Funds may
also enter into contracts with the intent of changing the relative exposure of
the Funds' portfolio of securities to different currencies to take advantage of
anticipated changes in exchange rates.

When the Funds enter into forward contracts for non-hedging purposes,
they will establish a segregated account with their custodian bank in which they
will maintain cash, U.S. government securities or other liquid assets equal in
value to their obligations with respect to their forward contracts for non-
hedging purposes.

At the maturity of a forward contract, the Funds may either sell a
portfolio security and make delivery of the foreign currency, or they may retain
the security and terminate their contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. The Funds may realize a gain or loss from currency
transactions.

Options

The Funds may purchase and write put and call options on foreign or
U.S. securities and indices and enter into related closing transactions. The
Funds may also purchase and write put and call options on foreign currencies to
manage the Funds' exposure to changes in currency exchange rates. In addition,
the Funds may purchase and write options to buy or sell futures contracts.

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purchaser may hedge against an increase in the price of securities it ultimately
wishes to buy or may take advantage of a rise in a particular index. The Funds
may purchase call options only to the extent premiums paid on all outstanding
call options do not exceed 20% of each Fund's total assets. The Funds will write
call options only on a covered basis. A call option is "covered" if the Funds
own the underlying securities or the Funds maintain in a segregated account with
their custodian, cash, U.S. government securities or other liquid assets with a
value sufficient to meet their obligations under the call option, or if the
Funds own an offsetting call option. The Funds will receive premium income from
writing call options, which may offset the cost of purchasing put options and
may also contribute to the Funds' total return.

A put option enables the purchaser of the option, in return for the
premium paid, to sell the security underlying the option to the writer at the
exercise price during the option period ending on an agreed date and the writer
of the option has the obligation to purchase the security from the purchaser of
the option upon exercise during such period. The Funds may purchase put options
only to the extent that the premiums on all outstanding put options do not
exceed 20% of each Fund's total assets. The advantage is that the purchaser can
be protected should the market value of the security decline or should a
particular index decline. The Funds will, at all times during which they hold a
put option, own the security underlying such option. The Funds will receive
premium income from writing put options, although they may be required, when the
put is exercised, to purchase securities at higher prices than the current
market price.

Closing transactions permit the Funds to offset put options or call
options prior to exercise or expiration. If the Funds cannot effect closing
transactions, they may have to hold a security they would otherwise sell or
deliver a security they might want to hold.

Call options on foreign currency written by the Funds will be
"covered," which means that the Funds will own an equal amount of the underlying
foreign currency or maintain in a segregated account with their custodian, cash,
U.S. government securities or other liquid assets with a value sufficient to
meet their obligations under the call option, or own an offsetting call option.
With respect to put options on foreign currency written by the Funds, the Funds
will establish a segregated account with their custodian bank consisting of
cash, U.S. government securities or other liquid assets in an amount equal to
the amount the Funds would be required to pay upon exercise of the put.

The Funds will not purchase or sell options if, immediately thereafter,
more than 40% of their net assets would be hedged by options. The Funds may use
options traded on U.S. exchanges and to the extent permitted by law, options
traded over-the-counter and on recognized foreign exchanges. It is the position
of the Commission that over-the-counter options are illiquid. Accordingly, the
Funds will invest in such options only to the extent consistent with their 15%
limit on investment in illiquid securities.

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Futures Contracts

The Funds may enter into contracts for the purchase or sale of
securities, including index contracts or foreign currencies, for hedging
purposes. The purchase of a futures contract by the Funds represents the
acquisition of a contractual right to obtain delivery of the securities or
foreign currency called for by the contract at a specified price on a specified
future date. When a futures contract is sold, a Fund incurs a contractual
obligation to deliver the securities or foreign currency underlying the contract
at a specified price on a specified future date. The Funds may enter into
futures contracts and engage in options transactions related thereto for hedging
purposes and for non-hedging purposes, to the extent that not more than 5% of
each Fund's assets are required as futures contract margin deposits and premiums
on options on futures.

When a Fund enters into a futures transaction, it must deliver to the
futures commission merchant selected by the Fund an amount referred to as
"initial margin." This amount is maintained by the futures commission merchant
in a segregated account at the custodian bank. Thereafter, a "variation margin"
may be paid by the Fund to, or drawn by the Fund from, such account in
accordance with controls set for such accounts, depending upon changes in the
price of the underlying securities subject to the futures contract.

In addition, when the Funds engage in futures transactions, to the
extent required by the Commission, the Funds will maintain with their custodian,
assets in a segregated account to cover their obligations with respect to such
contracts, which assets will consist of cash, cash equivalents or other liquid
assets from their portfolios in an amount equal to the difference between the
fluctuating market value of such futures contracts and the aggregate value of
the initial and variation margin payments made by the Funds with respect to such
futures contracts.

The Funds will enter into futures transactions on domestic exchanges
and, to the extent such transactions have been approved by the United States
Commodity Futures Trading Commission, for sale to customers in the United
States, on foreign exchanges.

Risks and Special Considerations of Options and Futures

Options and futures can be volatile investments and may not perform as
expected. If the Adviser applies a hedge at an inappropriate time or price
trends are judged incorrectly, options, futures and similar strategies may lower
a Fund's return. Options and futures traded on foreign exchanges generally are
not regulated by U.S. authorities and may offer less liquidity and less
protection to the Funds in the event of default by the other party to the
contract. The Funds could also experience losses if the prices of their options
or futures positions are poorly correlated with their other investments, or if
they cannot close out their positions because of an illiquid secondary market.
The loss from investing in futures transactions is potentially unlimited.

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Swaps

The Funds may engage in swaps, including but not limited to interest
rate, currency and index swaps and the purchase or sale of related caps, floors
and collars and other derivative instruments. The Funds expect to enter into
these transactions primarily to preserve a return or spread on a particular
investment or portion of their portfolio, to protect against currency
fluctuations, as a technique for managing the portfolio's duration (i.e., the
price sensitivity to changes in interest rates), to protect against any increase
in the price of securities the Funds anticipate purchasing at a later date or to
gain exposure to certain markets.

Interest rate swaps involve the exchange by the Funds with another
party of their respective commitments to receive or pay interest (e.g., an
exchange of fixed rate payments for floating rate payments) with respect to a
notional amount of principal. Currency swaps involve the exchange of cash flows
on a notional amount based on changes in the values of referenced currencies.

The use of swaps involves investment techniques and risks different
from those associated with ordinary portfolio security transactions. If the
Adviser is incorrect in its forecasts of market values, interest rates or other
applicable factors, the investment performance of the Funds will be less
favorable than it would have been if this investment technique were not used.
Swaps do not involve the delivery of securities or other underlying assets or
principal. Thus, if the other party to a swap defaults, the Funds' risk of loss
consists of the net amount of payments that the Fund is contractually entitled
to receive. Under Internal Revenue Service rules, any lump sum payment received
or due under the notional principal contract must be amortized over the life of
the contract using the appropriate methodology prescribed by the Internal
Revenue Service.

The equity swaps in which the Funds intend to invest involve
agreements with a counterparty. The return to a Fund on any equity swap
contract will be the total return on the notional amount of the contract as if
it were invested in the stocks comprising the contract index in exchange for an
interest component based on the notional amount of the agreement. A Fund will
only enter into an equity swap contract on a net basis, i.e., the two parties'
obligations are netted out, with the Fund paying or receiving, as the case may
be, only the net amount of the payments. Payments under the equity swap
contracts may be made at the conclusion of the contract or periodically during
its term.

If there is a default by the counterparty to an equity swap contract,
a Fund will be limited to contractual remedies pursuant to the agreements
related to the transaction. There is no assurance that an equity swap contract
counterparty will be able to meet its obligations pursuant to an equity swap
contract or that, in the event of default, a Fund will succeed in pursuing
contractual remedies. A

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Fund thus assumes the risk that it may be delayed in or prevented from obtaining
payments owed to it pursuant to an equity swap contract. However, the amount at
risk is only the net unrealized gain, if any, on the swap, not the entire
notional amount. The Adviser will closely monitor, subject to the oversight of
the Board of Trustees, the creditworthiness of equity swap counterparties in
order to minimize the risk of equity swaps.

The Adviser and the Trust do not believe that the Funds' obligations
under equity swap contracts are senior securities and, accordingly, the Funds
will not treat them as being subject to their borrowing or senior securities
restrictions. However, the net amount of the excess, if any, of a Fund's
obligations over its entitlements with respect to each equity swap contract will
be accrued on a daily basis and an amount of cash, U.S. government securities or
other liquid assets having an aggregate market value at least equal to the
accrued excess will be maintained in a segregated account by the Funds'
custodian. To the extent that a Fund cannot dispose of a swap in the ordinary
course of business within seven days at approximately the value at which the
Fund has valued the swap, it will treat the swap as illiquid and subject to its
overall limit on illiquid investments of 15% of the Fund's total net assets.

Borrowing

The Funds may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Funds will not borrow money in
excess of 33 1/3% of the value of their respective total assets. The Funds have
no intention of increasing their net income through borrowing. Any borrowing
will be from a bank with the required asset coverage of at least 300%. In the
event that such asset coverage falls below 300%, the Funds shall, within three
days thereafter (not including Sunday or holidays) or such longer period as the
Commission may prescribe by rules and regulations, reduce the amount of their
borrowings to such an extent that the asset coverage of such borrowings shall be
at least 300%. The Funds will not pledge more than 10% of their respective net
assets, or issue senior securities as defined in the Investment Company Act, or
as described herein, except for notes to banks and reverse repurchase
agreements. Investment securities will not be purchased while a Fund has
outstanding borrowings that exceed 5% of the Fund's net assets.

Loans of Portfolio Securities

Each Fund may loan up to 33 1/3% of its assets to qualified broker-
dealers or institutional investors for their use relating to short sales or
other security transactions. Such loans must be secured by collateral,
consisting of any combination of cash and U.S. government securities in an
amount at least equal (on each business day) to the current market value of the
securities loaned. During the terms of these loans, the Funds will continue to
receive any dividends or interest paid on the loaned securities as well as the
interest on the investment of the collateral minus a fee paid to the borrower or
a fee directly deducted by the borrower. The Funds must have a right to
reacquire the loaned securities on five business days' notice. The principal
risk to which the Funds will be exposed on a loan transaction is the risk that
the borrower would become bankrupt at a time when the value of the security
increases. However, pursuant to the Funds' securities lending agreement, the
lending agent is obligated to replace the loaned securities with a like amount
of the loaned securities of the

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same issuer, class and denomination in the event the loaned securities are not
returned by a borrower in accordance with the applicable securities lending
agreement. The Funds will only enter into loan agreements after a review of all
pertinent facts by the Adviser and the lending agent, subject to overall
supervision by the Board of Trustees. Creditworthiness of the borrowing broker-
dealer or institution will be monitored on an ongoing basis by the Adviser and
the lending agent, pursuant to procedures reviewed and adopted by the Board of
Trustees. Cash received through loan transactions may be invested in any
security in which the Funds are authorized to invest. Investing cash subjects
that investment to market risk (i.e., capital appreciation or depreciation).

Investment Restrictions

The Funds are subject to certain investment restrictions which have
been adopted by the Trust on behalf of the Funds as fundamental policies that
cannot be changed without the approval of a majority of the outstanding shares
of the Funds. A list of these restrictions and more information concerning the
investment policies are included in Part B of this Registration Statement.

Portfolio Turnover

The Funds are free to dispose of their portfolio securities at any
time, subject to complying with the Code and the Investment Company Act, when
changes in circumstances or conditions make such turnover desirable in light of
the Funds' respective investment objectives. The Funds will not attempt to
achieve or be limited to a predetermined rate of portfolio turnover, such a
turnover always being incidental to transactions undertaken with a view to
achieving the Funds' respective investment objectives. While it is the policy
of the Funds generally not to engage in trading for short-term gains, the Funds
will effect portfolio transactions without regard to the holding period if, in
the judgment of the Adviser, such transactions are advisable in light of a
change in circumstances of a particular company, within a particular industry or
country, or in general market, economic or political conditions. Although the
portfolio turnover rate for the Funds may vary greatly from year to year, each
Fund expects that under normal circumstances, its portfolio turnover rate will
not exceed 100%. A higher portfolio turnover rate will increase aggregate
brokerage commission expenses which must be borne directly by the Funds and
ultimately by the Funds' Investors and the incidence of short-term capital gains
(which are taxable to Investors as ordinary income. See "Item 5 - Brokerage
Allocation" and "Item 6 - Federal Taxes."

Item 5. Management of the Funds.

The Board of Trustees

Under Delaware law and the Amended and Restated Agreement and
Declaration of Trust of the Trust, the Board of Trustees has overall
responsibility for managing the business and affairs of the Trust and the Funds.
The Trustees elect the officers of the Trust, who are responsible for
administering the day-to-day operations of the Funds.

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The Adviser

Brinson Partners, a Delaware corporation, is an investment management
firm managing, as of December 31, 1996, approximately $119 billion, primarily
for institutional pension and profit sharing funds. Brinson Partners was
organized in 1989 when it acquired the institutional asset management business
of The First National Bank of Chicago and First Chicago Investment Advisors,
N.A. Brinson Partners and its predecessor entities have managed domestic and
international investment assets since 1974 and global investment assets since
1982. Brinson Partners has offices in London, Melbourne, New York, Paris,
Singapore, Sydney and Tokyo, in addition to its principal office at 209 South
LaSalle Street, Chicago, IL 60604-1295. Brinson Partners is controlled by Swiss
Bank Corporation ("Swiss Bank"). Swiss Bank, with headquarters in Basel,
Switzerland, is an internationally diversified organization with operations in
many aspects of the financial services industry. Brinson Partners also serves as
the investment adviser to nine other investment companies: The Brinson Funds,
Enterprise Accumulation Trust - International Growth Portfolio, Enterprise Group
of Funds, Inc. - International Growth Portfolio, Fort Dearborn Income
Securities, Inc., Managed Account Services Portfolio Trust - Pace Large Company
Value Equity Investments, The Hirtle Callaghan Trust - International Equity
Portfolio, John Hancock Variable Series Trust I - International Balanced Fund,
AON Funds - International Equity Fund and The Republic Funds - Republic Equity
Fund.

Pursuant to its investment advisory agreement with the Trust (the
"Advisory Agreement"), the Adviser is authorized, at its own expense, to obtain
statistical and other factual information and advice regarding economic factors
and trends from its foreign subsidiaries, but it does not generally receive
advice or recommendations regarding the purchase or sale of securities from such
subsidiaries. The Adviser does not receive any compensation under the Advisory
Agreement.

Investment decisions for the Funds are made by an investment
management team of the Adviser. No member of the investment management team is
primarily responsible for making recommendations for portfolio purchases or
sales.

Administrative, Accounting, Transfer Agency and Custodian Services

The Trust, on behalf of the Funds, has entered into a Multiple
Services Agreement (the "Services Agreement") with Morgan Stanley Trust Company,
One Pierrepont Plaza, Brooklyn, New York 11201 ("MSTC" or the "Administrator"),
pursuant to which MSTC is required to provide general administrative,
accounting, portfolio valuation, transfer agency and custodian services to the
Funds, including the coordination and monitoring of any third party service
providers.

Custody Services. MSTC provides custodian services for the securities
and cash of the Funds. The custody fee schedule is based primarily on the net
amount of assets held during the period for which payment is being made plus a
per transaction fee for transactions during the period and out-of-pocket
expenses.

As authorized under the Services Agreement, MSTC has entered into a
Mutual Funds Service Agreement (the "CGFSC Agreement") with Chase Global Funds
Services Company ("CGFSC"), a corporate affiliate of The Chase Manhattan Bank,
under which CGFSC provides administrative, accounting, portfolio valuation and
transfer agency services to the Funds. CGFSC's business address is 73 Tremont
Street, Boston, Massachusetts 02108-3913.

Pursuant to the CGFSC Agreement, CGFSC provides:

(1) administrative services, including providing the necessary office
space, equipment and personnel to perform administrative and clerical
services; preparing, filing and distributing proxy materials, periodic
reports to Investors, registration statements and other documents; and
responding to Investor inquiries;

(2) accounting and portfolio valuation services, including the daily
calculation of each Fund's net asset value and the preparation of certain
financial statements; and

(3) transfer agency services, including the maintenance of each
Investor's account records, responding to Investors' inquiries concerning
accounts, processing purchases and redemptions of the Funds' shares, acting
as dividend and distribution disbursing agent and performing other service
functions.

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Independent Auditors

Ernst & Young LLP, Chicago, Illinois, is the independent accounting
and auditing firm which services the Trust.

Expenses

The Funds will be responsible for all of their own expenses other than
those borne by the Adviser pursuant to the Advisory Agreement and organizational
expenses. Such expenses may include, but are not limited to, legal expenses,
audit fees, printing costs (e.g., cost of printing annual reports, semi-annual
reports and Prospectuses which are distributed to existing Investors), brokerage
commissions, the expenses of registering the Funds' shares for sale with the
Commission and of noticing the Funds' shares for sale with various state
securities commissions, fees and expenses of the Administrator and the expenses
of obtaining quotations of portfolio securities and of pricing the Funds'
shares. General expenses which are not associated directly with any particular
portfolio within the Trust (e.g., insurance premiums, Trustees' fees, expenses
of maintaining the Trust's legal existence and of Investors' meetings and fees
and expenses of industry organizations) are allocated between the various series
based upon their relative net assets.

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The Adviser has agreed to pay the amount, if any, by which the total
operating expenses of the Funds for any fiscal year exceed 0.50% of each Fund's
average net assets. The Adviser, however, may discontinue this expense
limitation at any time in its sole discretion.

Brokerage Allocation

In determining the brokers through whom, and commission rates and
other transaction costs at which, securities transactions for the Funds are to
be executed, except as discussed below, the Adviser seeks to negotiate a
combination of the most favorable execution and the best price obtainable on
each transaction. Consequently, the Adviser selects brokers primarily on the
basis of their execution capability and trading expertise. The Funds normally
trade non-U.S. securities in foreign countries, since the best available market
for non-U.S. securities is often on non-U.S. markets. In transactions on non-
U.S. stock exchanges, brokers' commissions are generally fixed and are often
higher than in the United States where commissions are negotiated. Pursuant to
the Advisory Agreement, the Adviser is authorized to utilize the trading
department of its foreign subsidiaries to execute foreign securities
transactions but monitors selection by such subsidiaries of brokers and dealers
used to execute such transactions.

In executing trades of debt (rather than equity) securities, most of
the Funds' investment portfolio transactions are effected with dealers without
the payment of brokerage commissions, but at net prices which usually include a
spread or a markup.

When buying or selling securities, the Funds may pay commissions to
brokers who are affiliated with the Adviser or the Funds. The Funds may also
purchase securities in certain underwritten offerings for which an affiliate of
the Funds or the Adviser may act as an underwriter. The Funds may effect futures
transactions through, and pay commissions to, futures commission merchants who
are affiliated with the Adviser or the Funds in accordance with procedures
adopted by the Board of Trustees of the Trust.

Item 5A. Management's Discussion of Fund Performance. Not applicable.

Item 6. Capital Stock and Other Securities.

The Trust was organized as a Delaware business trust on August 16,
1994. The Trust's Agreement and Declaration of Trust permits the Board of
Trustees to issue an unlimited number of shares of beneficial interest with no
par value. The Board of Trustees has the power to designate one or more series
or sub-series/classes of shares of beneficial interest and to classify or
reclassify any unissued shares with respect to such series. Currently, the
Trust is offering shares of six series: Brinson Global Securities Fund, Brinson
Short-Term Fund, Brinson Post-Venture Fund, Brinson High Yield Fund, Brinson
Emerging Markets Equity Fund and Brinson Emerging Markets Debt Fund.

The shares of the Trust, when issued, will be fully paid and non-
assessable, and within each series, have no preference as to conversion,
exchange, dividends, retirement or other features. Any

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shares the issuance of which the Board of Trustees may, from time to time,
authorize, shall have no preemptive rights. The shares are not transferable
except to the Trust.

Voting Rights and Investor Meetings. The shares of the Trust have non-
cumulative voting rights, which means that the holders of more than 50% of the
shares voting for the election of members of the Board of Trustees can elect
100% of the Trustees if they choose to do so. An Investor is entitled to vote
based on the ratio the shares of such Investor bear to the shares of all
Investors entitled to vote. On any matter submitted to a vote of Investors, all
shares of the Trust then issued and outstanding and entitled to vote on a matter
shall vote by individual series except that, if required by the Investment
Company Act, the shares shall be voted in the aggregate. If the Board of
Trustees determines that a matter to be voted on does not affect the interests
of all series, only the Investors of the affected series shall be entitled to
vote on the matter. The Trust's Amended and Restated Agreement and Declaration
of Trust gives Investors certain voting powers only with respect to (i) the
election and removal of Trustees; (ii) a termination of the Trust; (iii)
amendments reducing payments upon liquidation or diminishing voting rights; (iv)
mergers, consolidations or sales of assets; (v) the incorporation of the Trust;
(vi) additional matters relating to the Trust as required by the Investment
Company Act; and (vii) such other matters as the Board of Trustees considers
necessary or desirable.

The Trust does not presently intend to hold annual or special meetings
of Investors except when required to elect members of the Board of Trustees, or
with respect to additional matters relating to the Trust, as required under the
Investment Company Act. Pursuant to the Trust's Amended and Restated Agreement
and Declaration of Trust, Investor meetings will also be called upon request of
Investors holding in the aggregate 10% or more of the outstanding shares.
Subject to certain conditions, Investors may apply to the Funds to communicate
with other Investors to request an Investors' meeting.

As with any mutual fund, certain Investors of a Fund could control the
results of voting in certain instances. For example, a vote by certain
Investors holding a majority of shares in a Fund to change the Fund's investment
objective could result in an Investor's withdrawal of its investment in the
Fund, and in increased costs and expenses for the remaining Investors.
Additionally, the failure by Investors to approve a change in their investment
objectives and policies parallel to a change that has been approved for a Fund
(thus requiring such Investors to redeem their shares of the Fund) could lead to
a number of adverse consequences, such as the inability of such Investors to
find another investment company in which to invest their assets or an equivalent
investment adviser to manage the assets.

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Dividends and Distributions. The Funds do not currently intend to
declare and pay dividends and pay distributions to Investors except as may be
determined by the Board of Trustees of the Trust.

Federal Taxes. The Funds have received a ruling from the Internal
Revenue Service that the Funds will be treated as a partnership for federal
income tax purposes rather than as an association taxable as a corporation. By
being treated as partnerships, the Funds will not be subject to U.S. federal
income tax. Instead, each Investor will be required to report separately on its
own income tax return its distributive share of items of Fund income, gains,
losses, deductions and credits (including foreign tax credits for creditable
foreign taxes imposed on the Funds). Each Investor will be required to report
its distributive share of such tax items regardless of whether it has received
or will receive corresponding distributions of cash or property from the Funds.
An allocable share of a tax-exempt Investor's income will be "unrelated business
taxable income" ("UBTI") to the extent that the Funds borrow money to acquire
property or invest in assets that produce UBTI. The Funds will not be "regulated
investment companies" for federal income tax purposes. For a more complete
discussion of the federal income tax consequences of investing in the Funds, see
"Tax Status" in Part B.

Redemptions of Fund shares and the exchange of shares between two
series, are taxable events and, accordingly, Investors may realize capital gains
or losses on these transactions.

Investor Inquiries. Investor inquiries should be addressed to the
Trust, c/o Carolyn M. Burke, 209 South LaSalle Street, Chicago, Illinois
60604-1295, or an Investor may call 312-220-7940.

Item 7. Purchase of Securities Being Offered

Shares of the Funds are restricted securities and are issued solely in
private placement transactions that do not involve a "public offering" within
the meaning of Section 4(2) of the Securities Act. Investments in the Funds may
be made only by "accredited investors" within the meaning of Regulation D under
the Securities Act which include, but are not limited to, common or commingled
trust funds, investment companies, registered broker-dealers, investment banks,
commercial banks, corporations, group trusts or similar organizations or
entities. The registration statement of which this Prospectus is a part does not
constitute an offer to sell, or the solicitation of an offer to buy, any
"security" to the public within the meaning of the Securities Act. Shares of the
Funds may be purchased directly by eligible Investors from the Funds at the net
asset value next determined after receipt of the order in proper form by the
Trust. The minimum initial purchase amount is $25,000,000. In the sole
discretion of the Adviser, the minimum purchase amount may be waived or
modified. There is no sales load in connection with the purchase of shares. The
Trust reserves the right to reject any purchase order and to suspend the
offering of shares of the Funds.

At the discretion of the Funds, Investors may be permitted to purchase
Fund shares by transferring securities to the Funds that meet the specific
Fund's investment objective and policies. Securities transferred to a Fund will
be valued in accordance with the same procedures used to

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determine the Fund's net asset value at the time of the next determination of
net asset value after such receipt. Shares issued by a Fund in exchange for
securities will be issued at net asset value determined as of the same time. All
dividends, interest, subscription, or other rights pertaining to such securities
after such transfers to the Fund shall become the property of the Fund and must
be delivered to the Fund by the Investor upon receipt from the issuer. Investors
that are permitted to transfer such securities will be required to recognize a
gain or loss on such transfer and pay tax thereon, if applicable, measured by
the difference between the fair market value of the securities and the
Investors' basis therein. The Trust will not accept securities in exchange for
shares of a Fund unless: (1) such securities are, at the time of the exchange,
eligible to be included in the Fund's investment portfolio and current market
quotations are readily available for such securities; and (2) the Investor
represents and warrants that all securities offered to be exchanged are not
subject to any restrictions upon their sale by the Fund under the Securities Act
or under the laws of the country in which the principal market for such
securities exists, or otherwise.

Transaction Charges. Effective December 20, 1995, investors in the
Brinson Emerging Markets Equity Fund are subject to a transaction charge equal
to 1.50% on purchases of the Fund's shares. Effective February 20, 1996,
Investors in the Brinson Emerging Markets Equity Fund are subject to a
transaction charge equal to 1.50% on redemptions of the Fund's shares.
Investors in the Brinson Emerging Markets Debt Fund are subject to a transaction
charge equal to 0.50% on purchases of the Fund's shares effective December 20,
1995. Therefore, the shares of the Funds are sold at a price which is equal to
the net asset value of such shares, plus the transaction charge. Redemption
requests for the Brinson Emerging Markets Equity Fund are paid at the net asset
value less the transaction charge.

The transaction charges are paid to the Funds and used by them to
defray transaction costs associated with the purchase and sale of securities
within the Funds. The amount of the transaction charge on purchases and
redemptions represents the estimate of the costs reasonably anticipated to be
associated with the purchase of securities with cash received from Investors and
the sale of securities to obtain cash to redeem Investors. Therefore, the
transaction charges offset the dilutive effect such costs would otherwise have
on the net asset value of the Funds' shares. Purchases and redemptions which
are made in kind with securities are not subject to the transaction charges.
Redemptions by the Funds investing in the Brinson Emerging Markets Equity Fund
will not be subject to the transaction charge.

Net Asset Value. The net asset value of each Fund is computed as of
the close of regular trading on the New York Stock Exchange ("NYSE") (generally
4:00 p.m. Eastern time) on days when such exchange is open. The net asset value
per share is computed by adding the value of all securities and other assets in
the portfolio, deducting any liabilities (expenses and fees are accrued daily)
and dividing by the number of shares outstanding. Fund securities for which
market quotations are available are priced at market value. Debt securities are
priced at fair value by an independent pricing service using methods approved by
the Trust's Board of Trustees. Short-term investments having a maturity of less
than 60 days are valued at amortized cost, which approximates market value.
Redeemable securities issued by open-end investment companies are valued using
their respective net asset values for purchase orders placed at the close of the
NYSE. All other securities are valued at their fair value as determined in good
faith and

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pursuant to a method approved by the Trust's Board of Trustees. For a detailed
description, see Item 19 in Part B.

Exchanges of Shares. Shares of a Fund may be exchanged for shares of
the other series of the Trust on the basis of current net asset values per share
at the time of exchange. Fund shares may be exchanged by written request or by
telephone if the Investor has previously signed a telephone authorization. The
telephone exchange privilege may be difficult to implement during times of
drastic economic or market changes. The Funds reserve the right to restrict the
frequency of, or otherwise modify, condition, terminate or impose charges upon
the exchange privilege and/or telephone transfer privileges upon 60 days' prior
written notice to Investors.

By exercising the telephone exchange privilege, an Investor agrees
that the Funds will not be liable for following instructions communicated by
telephone that the Funds reasonably believe to be genuine. The Funds provide
written confirmation of transactions initiated by telephone as a procedure
designed to confirm that telephone transactions are genuine. As a result of this
policy, the Investor may bear the risk of any financial loss resulting from such
transaction; provided, however, if the Funds or the Administrator fail to employ
this and other appropriate procedures, the Funds or the Administrator may be
liable for any losses incurred.

Exchanges may be made only for shares of a series of the Trust then
offering its shares for sale in the Investor's state of residence and are
subject to the minimum initial investment requirement and the payment of any
transaction charges that may be due to such series of the Trust. For federal
income tax purposes, an exchange of shares would be treated as if the Investor
had redeemed shares of a Fund and reinvested in shares of another series of the
Trust. Gains or losses on the shares exchanged are realized by the Investor at
the time of the exchange. Any Investor wishing to make an exchange should first
obtain and review a Prospectus of the series of the Trust into which the
Investor wishes to exchange. Requests for telephone exchanges must be received
by the transfer agent, CGFSC, by the close of regular trading hours (currently
4:00 p.m. Eastern time) on the NYSE on any day that the NYSE is open for regular
trading.

Item 8. Redemption of Shares or Repurchase.

As stated above in Item 7, "Purchase of Securities Being
Offered," the Funds' shares are restricted securities which may not be sold to
investors other than "accredited investors" within the meaning of Regulation D
under the Securities Act unless registered under, or pursuant to another
available exemption from, the Securities Act.

An Investor may redeem its shares of the Fund without charge on any
business day that the NYSE is open by furnishing a request to the Trust. The
Funds normally send redemption proceeds on the next business day, but, in any
event, redemption proceeds, except as set forth below, are sent within seven
calendar days of receipt of a redemption request in proper form. There is no
charge for redemptions by wire. Please note, however, that the Investor's bank
may impose a fee for wire service. The right of any Investor to receive payment
with respect to any redemption may be suspended or the payment of the redemption
proceeds postponed during any period in which the NYSE is closed (other than
weekends or holidays) or trading on the NYSE is restricted, or, to the extent
otherwise permitted by the Investment Company Act, if an emergency exists.

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If a Fund determines that it would be detrimental to the best
interests of the remaining Investors of a Fund to make payment wholly or partly
in cash, the Fund may pay the redemption price, in lieu of cash, in whole or in
part by a distribution in kind of securities of the Fund.

Effective February 20, 1996, shares of the Brinson Emerging Markets
Equity Fund are subject to a transaction charge equal to 1.50% on redemptions
of the Fund's shares. The charge is paid to the Fund and used by it to defray
transaction costs. This charge is further discussed above under "Purchase of
Securities Being Offered." Purchases and redemptions which are made in kind
with securities are not subject to the transaction charges.

Item 9. Pending Legal Proceedings.

Not applicable.

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APPENDIX A

CORPORATE DEBT RATINGS

Moody's Investors Service, Inc. describes classifications of corporate bonds as
follows:

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

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

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

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

Ca -- Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.

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C -- Bonds which are rated C are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

Standard & Poor's Ratings Group describes classifications of corporate bonds as
follows:

AAA -- This is the highest rating assigned by Standard & Poor's Rating
Group to a debt obligation and indicates an extremely strong capacity to
pay principal and interest.

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

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

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

CC - The rating CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC rating.

C - The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- rating.

CI - The rating CI is reserved for income bonds on which no interest is
being paid.

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D - Debt rated D is in default, or is expected to default upon maturity or
payment date.

Plus (+) or minus (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

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BRINSON RELATIONSHIP FUNDS

PART B

STATEMENT OF ADDITIONAL INFORMATION

April 30, 1997

Item 10. Cover Page.

Brinson Relationship Funds (the "Trust"), a Delaware business trust
established on August 16, 1994, is a no-load, open-end management investment
company which currently offers shares of six separate and distinct series
representing separate portfolios of investments, each with its own investment
objective (individually referred to as a "Fund" and collectively referred to as
the "Funds") and each of which is non-diversified. The six current Funds are:
Brinson Global Securities Fund, Brinson Short-Term Fund, Brinson Post-Venture
Fund, Brinson High Yield Fund, Brinson Emerging Markets Equity Fund and Brinson
Emerging Markets Debt Fund. Information concerning the Funds is included in
separate Prospectuses dated April 30, 1997.

This Statement of Additional Information is not a prospectus and
should be read in conjunction with the Trust's current Prospectuses relating to
the Funds dated April 30, 1997. Much of the information contained herein expands
upon subjects discussed in the Prospectuses. No investment in shares should be
made without first reading the applicable Prospectus. A copy of each Prospectus
may be obtained without charge from the Trust at 209 South LaSalle Street,
Chicago, IL 60604-1295, or by calling the Trust at: 312-220-7940.

All terms used in this Part B and not otherwise defined herein have the
meanings assigned to them in Part A.

Item 11. Table of Contents.

Item 12. General Information and History.....................................
Item 13. Investment Objective and Policies...................................
Item 14. Management of the Trust.............................................
Item 15. Control Persons and Principal Holders of Securities.................
Item 16. Investment Advisory and Other Services..............................
Item 17. Brokerage Allocation and Other Practices............................
Item 18. Capital Stock and Other Securities..................................
Item 19. Purchase, Redemption and Pricing of Securities Being Offered........
Item 20. Tax Status..........................................................
Item 21. Underwriters........................................................
Item 22. Calculation of Performance Data.....................................
Item 23. Financial Statements................................................
<PAGE>

Item 12. General Information and History.

Not applicable.

Item 13. Investment Objective and Policies.

INVESTMENT VEHICLES AVAILABLE TO THE FUNDS

The following disclosure supplements disclosure contained in the
applicable Prospectuses relating to the Funds:

High Yield/Higher Risk securities

As set forth in Part A, all Funds, except the Brinson Post-Venture
Fund may invest, to varying extents, a portion of their net assets in
convertible and other debt securities rated below "Baa" by Moody's Investors
Service, Inc. ("Moody's") or "BBB" by Standard & Poor's Ratings Group ("S&P")
or, if unrated, securities that are deemed to be of comparable quality by the
Adviser (referred to herein as "low-grade securities"). Ratings represent S&P's
and Moody's respective opinions as to the quality of the obligations they
undertake to rate. However, the ratings are general and are not absolute
standards of quality. Low-grade securities are classified as non-investment-
grade securities and are commonly referred to as "junk bonds." These securities
are considered to be of poor standing and predominantly speculative with respect
to the issuer's capacity to pay interest and repay principal in accordance with
the terms of the obligations and involve major risk exposure to adverse
conditions. Such securities are subject to a substantial degree of credit risk.
Low-grade securities held by the Funds may be issued as a consequence of
corporate restructurings, such as leveraged buy-outs, mergers, acquisitions,
debt recapitalizations or similar events. Also, such high yield, higher risk
securities are often issued by smaller, less creditworthy companies or by highly
leveraged (indebted) firms, which are generally less able than more financially
stable firms to make scheduled payments of interest and principal. The risks
posed by securities issued under such circumstances are substantial.

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<PAGE>

The value of low-grade securities will be influenced not only by
changing interest rates, but also by the bond market's perception of credit
quality and the outlook for economic growth. When economic conditions appear to
be deteriorating, low-grade securities may decline in market value due to
investors' heightened concern over credit quality, regardless of prevailing
interest rates.

In periods of reduced secondary market liquidity, low-grade securities
prices may become more volatile and the Funds' ability to dispose of particular
issues when necessary to meet the Funds' liquidity needs or in response to a
specific economic event such as a deterioration in the creditworthiness of the
issuer may be adversely affected.

Low-grade securities frequently have call or redemption features which
would permit an issuer to repurchase the security from the Funds. If a call were
exercised by the issuer during a period of declining interest rates, the Funds
likely would have to replace such called security with a lower yielding
security, thus decreasing the net investment income to the Funds.

Bank Instruments

Bank instruments in which the Funds may invest include bank loan
participations, bank holding company commercial paper, deposits, bank notes and
other bank related securities. Bank loan participations are loans sold by
lending banks to investors. Bank holding company commercial paper is a form of
short-term promissory note which is a direct obligation of a bank holding
company. Deposits are obligations of a bank or branches of a bank.

Zero Coupon and Delayed Interest Securities

All Funds, with the exception of the Brinson Post-Venture Fund, may
invest in zero coupon or delayed interest securities which pay no cash income
until maturity or a specified date when the securities begin paying current
interest (the "cash payment date") and are sold at substantial discounts from
their value at maturity. When held to maturity, their entire income, which
consists of accretion of discount, comes

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from the difference between the purchase price and value at maturity. The
discount varies depending on the time remaining until maturity or cash payment
date, prevailing interest rates, liquidity of the security and the perceived
credit quality of the issuer. The discount, in the absence of financial
difficulties of the issuer, decreases as the final maturity or cash payment date
of the security approaches. The market prices of zero coupon and delayed
interest securities are generally more volatile and more likely to respond to
changes in interest rates than the market prices of securities having similar
maturities and credit quality that pay interest periodically. Current federal
income tax law requires that a holder of a zero coupon security report as income
each year the portion of the original issue discount on such security (other
than tax-exempt original issue discount from a zero coupon security) that
accrues that year, even though the holder receives no cash payments of interest
during the year.

Zero coupon convertible securities offer the opportunity for capital
appreciation as increases (or decreases) in market value of such securities
closely follow the movements in the market value of the underlying common stock.
Zero coupon convertible securities generally are expected to be less volatile
than the underlying common stocks as they usually are issued with short
maturities (15 years or less) and are issued with options and/or redemption
features exercisable by the holder of the obligation entitling the holder to
redeem the obligation and receive a defined cash payment.

Zero coupon securities include securities issued directly by the U.S.
Treasury, and unmatured interest coupons and receipts for underlying principal
("coupons") of U.S. Treasury securities, which have been separated by their
holder, typically a custodian bank or investment brokerage firm. A holder will
separate the interest coupons from the underlying principal (the "corpus") of
the U.S. Treasury security. A number of securities firms and banks have stripped
the interest coupons and receipts and then resold them in custodial receipt
programs with a number of different names, including "Treasury Income Growth
Receipts" ("TIGRs") and Certificate of Accrual on Treasuries ("CATs"). The
underlying U.S. Treasury bonds and notes themselves are held in book-entry form
at the Federal Reserve Bank or, in the case of bearer securities (i.e.,
unregistered securities which are owned ostensibly by the bearer or holder
thereof), in trust on behalf of the owners thereof. The staff of the United
States Securities and Exchange Commission (the "Commission") does not consider
such privately stripped obligations to be U.S. Government securities, as defined
in the Investment Company Act of 1940, as amended (the "Investment Company
Act").

The U.S. Treasury has facilitated transfers of ownership of zero
coupon securities by accounting separately for the beneficial ownership of
particular interest coupon and corpus payments on Treasury securities through
the Federal Reserve book-entry record-keeping system. The Federal Reserve
program as established by the Treasury Department is known as "Separate Trading
of Registered Interest and Principal of Securities" or "STRIPS." Under the
STRIPS program, a Fund will be able to have its beneficial ownership of zero
coupon securities recorded directly in the book-entry record-keeping system in
lieu of having to hold certificates or other evidences of ownership of the
underlying U.S. Treasury securities.

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When U.S. Treasury obligations have been stripped of their unmatured
interest coupons by the holder, the principal or corpus is sold at a deep
discount because the buyer receives only the right to receive a future fixed
payment on the security and does not receive any rights to periodic interest
(cash) payments. Once stripped or separated, the corpus and coupons may be sold
separately. Typically, the coupons are sold separately or grouped with other
coupons with like maturity dates and sold in such bundled form. Purchasers of
stripped obligations acquire, in effect, discount obligations that are
economically identical to the zero coupon securities that the U.S. Treasury
sells itself. These stripped securities are also treated as zero coupon
securities with original issue discount for federal tax purposes.

Mortgage-Backed Securities and Mortgage Pass-Through Securities

All Funds, with the exception of the Brinson Post-Venture Fund, may
invest in mortgage-backed securities, which are interests in pools of mortgage
loans, including mortgage loans made by savings and loan institutions, mortgage
bankers, commercial banks and others. Pools of mortgage loans are assembled as
securities for sale to investors by various governmental, government-related and
private organizations as further described below. The Funds may also invest in
debt securities which are secured with collateral consisting of mortgage-backed
securities (see "Collateralized Mortgage Obligations") and in other types of
mortgage-related securities.

The timely payment of principal and interest on mortgage-backed
securities issued or guaranteed by the Government National Mortgage Association
("GNMA") is backed by GNMA and the full faith and credit of the U.S. Government.
These guarantees, however, do not apply to the market value of the Funds'
shares. Also, securities issued by GNMA and other mortgage-backed securities may
be purchased at a premium over the maturity value of the underlying mortgages.
This premium is not guaranteed and would be lost if prepayment occurs.

Mortgage-backed securities issued by U.S. Government agencies or
instrumentalities other than GNMA are not "full faith and credit" obligations.
Certain obligations, such as those issued by the Federal Home Loan Mortgage
Corporation ("FHLMC") are supported by the issuer's right to borrow from the
U.S. Treasury; while others such as those issued by the Federal National
Mortgage Association ("FNMA"), are supported only by the credit of the issuer.
Pools created by such non-governmental issuers generally offer a higher rate of
interest than government and government-related pools because there are no
direct or indirect government or agency guarantees of payments.

Unscheduled or early payments on the underlying mortgage may shorten
the securities' effective maturities and reduce returns. The Funds may agree to
purchase or sell these securities with payment and delivery taking place at a
future date. A decline in interest rates may lead to a faster rate of repayment
of the underlying mortgages and expose the Funds to a lower rate of return upon
reinvestment. To the extent that such mortgage-backed securities are held by the
Funds, the prepayment right of mortgagors may limit the increase in net asset
value of a Fund, because the value of the mortgage-backed securities held by the
Fund may not appreciate as rapidly as the price of noncallable debt securities.

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Collateralized Mortgage Obligations ("CMOs") and Real Estate Mortgage
Investment Conduits ("REMICs"). All Funds, with the exception of the Brinson
Post-Venture Fund, may invest in CMOs and REMICs. A CMO is a debt security on
which interest and prepaid principal are paid, in most cases, semiannually. CMOs
may be collateralized by whole mortgage loans but are more typically
collateralized by portfolios of mortgage pass-through securities guaranteed by
GNMA, FHLMC, or FNMA, and their income streams.

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

REMICs are similar to CMOs in that they issue multiple classes of
securities. Most, if not all, newly issued debt securities backed by pools of
real estate mortgages will be issued as regular and residual interests in REMICs
because as of January 1, 1992, new CMOs which do not make REMIC elections will
be treated as "taxable mortgage pools," a wholly undesirable tax result. Under
certain transition rules, CMOs in existence on December 31, 1991 are unaffected
by this change. The Funds will purchase only regular interests in REMICs. REMIC
regular interests are treated as debt of the REMIC and income/discount thereon
must be accounted for on the "catch-up method," using a reasonable prepayment
assumption under the original issue discount rules of the Internal Revenue Code
of 1986, as amended (the "Code").

Other Mortgage-Backed Securities. All Funds, with the exception of the
Brinson Post-Venture Fund, may invest in other mortgage securities. The Adviser
expects that governmental, government-related or private entities may create
mortgage loan pools and other mortgage-related securities offering mortgage
pass-through and mortgage-collateralized investments in addition to those
described above. The mortgages underlying these securities may include
alternative mortgage instruments, that is, mortgage instruments whose principal
or interest payments may vary or whose terms to maturity may differ from
customary long-term fixed rate mortgages. As new types of mortgage-related
securities are developed and offered to investors, the Adviser will, consistent
with each Fund's investment objective, policies and quality standards, consider
making investments in such new types of mortgage-related securities. The Adviser
will not purchase any such other mortgage-backed securities until the applicable
Fund's Prospectus and this Part B have been supplemented.

Asset-Backed Securities

All Funds, with the exception of the Brinson Post-Venture Fund, may
invest a portion of their assets in debt obligations known as "asset-backed
securities." The credit quality of most asset-

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backed securities depends primarily on the credit quality of the assets
underlying such securities, how well the entity issuing the security is
insulated from the credit risk of the originator or any other affiliated
entities, and the amount and quality of any credit support provided to the
securities. The rate of principal payment on asset-backed securities generally
depends on the rate of principal payments received on the underlying assets
which in turn may be affected by a variety of economic and other factors. As a
result, the yield on any asset-backed security is difficult to predict with
precision and actual yield to maturity may be more or less than the anticipated
yield to maturity. Asset-backed securities may be classified as "pass through
certificates" or "collateralized obligations." Asset-backed securities are often
backed by a pool of assets representing the obligations of a number of different
parties.

Due to the shorter maturity of the collateral backing such securities,
there is less of a risk of substantial prepayment than with mortgage-backed
securities. Such asset-backed securities do, however, involve certain risks not
associated with mortgage-backed securities, including the risk that security
interests cannot adequately or in many cases, ever, be established.

Examples of credit support arising out of the structure of the transaction
include "senior-subordinated securities" (multiple class securities with one or
more classes subordinate to other classes as to the payment of principal thereof
and interest thereon, with the result that defaults on the underlying assets are
borne first by the holders of the subordinated class), creation of "reserve
funds" (where cash or investments, sometimes funded from a portion of the
payments on the underlying assets, are held in reserve against future losses)
and "over collateralization" (where the scheduled payments on, or the principal
amount of, the underlying assets exceeds that required to make payments of the
securities and pay any servicing or other fees). The degree of credit support
provided for each issue is generally based on historical information with
respect to the level of credit information about the degree of credit risk
associated with the underlying assets. Delinquencies or losses in excess of
those anticipated could adversely affect the return on an investment in such
issue.

When-Issued Securities

The Funds, with the exception of the Brinson Post-Venture Fund, may
purchase securities offered on a "when-issued" or "forward delivery" basis.
When so offered, the price, which is generally expressed in yield terms, is
fixed at the time the commitment to purchase is made, but delivery and payment
for the when-issued or forward delivery securities take place at a later date. A
Fund does not earn interest on the securities it has committed to purchase until
they are paid for and delivered on the settlement date. While when-issued or
forward delivery securities may be sold prior to the settlement date, it is
intended that the Funds will purchase such securities with the purpose of
actually acquiring them unless a sale appears desirable for investment reasons.
At the time a Fund makes the commitment to purchase a security on a when-issued
or forward delivery basis, it will record the transaction and reflect the value
of the security in determining its net asset value. The market value of when-
issued or forward delivery securities may be more or less than the purchase

will be adversely affected by its purchase of securities on a when-issued or
forward delivery basis. Each

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Fund will establish a segregated account in which it will maintain cash, U.S.
Government securities or other liquid assets equal in value to commitments for
when-issued or forward delivery securities.

Convertible Securities

All of the Funds may, to varying degrees, invest in convertible
securities. Convertible securities are fixed income securities (a bond or
preferred stock) which may be exchanged for a specified number of shares of
common stock, usually of the same company, at specified prices within a certain
period of time. The provisions of any convertible security determine its ranking
in a company's capital structure. In the case of subordinated convertible
debentures, the holder's claims on assets and earnings are subordinated to the
claims of other creditors and are senior to the claims of preferred and common
shareholders. In the case of preferred stock and convertible preferred stock,
the holder's claim on assets and earnings are subordinated to the claims of all
creditors but are senior to the claims of common shareholders. While providing a
fixed income (generally higher in yield than the income derivable from common
stock but lower than the income afforded by a similar non-convertible security)
a convertible security enables the investor to also participate in capital
appreciation upon a market price rise of the underlying common stock.

Repurchase Agreements

Each Fund may enter into repurchase agreements. When a Fund enters
into a repurchase agreement, it purchases securities from a bank or broker-
dealer which simultaneously agrees to repurchase the securities at a mutually
agreed upon time and price, thereby determining the yield during the term of the
agreement.

As a result, a repurchase agreement provides a fixed rate of return
insulated from market fluctuations during the term of the agreement. The term of
a repurchase agreement generally is short, possibly overnight or for a few days,
although it may extend over a number of months (up to one year) from the date of
delivery. Repurchase agreements will be fully collateralized and the collateral
will be marked-to-market daily. A Fund may not enter into a repurchase agreement
having more than seven days remaining to maturity if, as a result, such
agreement, together with any other securities which are not readily marketable
(illiquid securities), would exceed 15% of the value of the net assets of such
Fund.

In the event of bankruptcy or other default by the seller of the
security under a repurchase agreement, a Fund may suffer time delays and incur
costs or possible losses in connection with the disposition of the collateral.
In such event, instead of the contractual fixed rate of return, the rate of
return to a Fund would be dependent upon intervening fluctuations of the market
value of the underlying security and the accrued interest on the security.
Although a Fund would have rights against the seller for breach of contract with
respect to any losses arising from market fluctuations following the failure of
the seller to perform, the ability of a Fund to recover damages from a seller in
bankruptcy or otherwise in default would be reduced.

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Reverse Repurchase Agreements

Each Fund may enter into reverse repurchase agreements. Reverse repurchase
agreements involve sales of portfolio securities of a Fund to member banks of
the Federal Reserve System or securities dealers believed creditworthy,
concurrently with an agreement by the Fund to repurchase the same securities at
a later date at a fixed price which is generally equal to the original sales
price plus interest. The Funds retain record ownership and the right to receive
interest and principal payments on the portfolio security involved. In
connection with each reverse repurchase transaction, a Fund will direct its
custodian bank to place cash or U.S. Government securities or other liquid
assets in a segregated account of the Fund in an amount equal to the repurchase
price. Reverse repurchase agreements have the same risk characteristics as
borrowing transactions by a Fund.

Foreign and Emerging Market Investments

All Funds, with the exception of the Brinson Post-Venture Fund, may invest
in securities of foreign issuers that are not publicly traded in the United
States, and of government and supranational entities (entities established or
financially supported by national governments of one or more countries to
promote reconstruction or development).

Risks of Investing in Foreign Securities. Investors should recognize that
investing in foreign issuers involves certain considerations, including those
set forth in the Funds' Prospectuses, which are not typically associated with
investing in U.S. issuers. Since the securities of foreign issuers are
frequently denominated in foreign currencies, and since the Funds may
temporarily hold uninvested reserves in bank deposits in foreign currencies, the
Funds will be affected favorably or unfavorably by changes in currency rates and
in exchange control regulations and may incur costs in connection with
conversions between various currencies. The investment policies of the Funds,
permit them to enter into forward foreign currency exchange contracts, futures,
options and swaps in order to hedge or enhance portfolio holdings and
commitments against changes in the level of future currency rates.

In the past, there has been and there may be again, an interest
equalization tax levied by the United States in connection with the purchase of
foreign securities such as those purchased by the Funds. Payment of such
interest equalization tax, if imposed, would reduce the Funds' rates of return
on investment. Dividends paid by foreign issuers may be subject to withholding
and other foreign taxes which may decrease the net return on such investments as
compared to dividends paid to the Funds by U.S. corporations. Special rules
govern the federal income tax treatment of certain transactions denominated in
terms of a currency other than the U.S. dollar or determined by reference to the
value of one or more currencies other than the U.S. dollar. The types of
transactions covered by the special rules generally include the following: (i)
the acquisition of, or becoming the obligor under, a bond or other debt
instrument (including, to the extent provided in Treasury Regulations, preferred
stock); (ii) the accruing of certain trade receivables and payables; and (iii)
the entering into or acquisition of any forward contract, futures contract and
similar financial

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instruments other than any "regulated futures contract" or "non-equity option"
which would be marked-to-market under the rules of Section 1256 of the Code if
held at the end of the tax year.

The disposition of a currency other than the U.S. dollar by a U.S. taxpayer
is also treated as a transaction subject to the special currency rules.

However, foreign currency-related regulated futures contracts and non-
equity options are generally not subject to these special currency rules.

If subject to such rules, the non-U.S. dollar denominated investments and
foreign currency contracts are or would be treated as sold for their fair market
value at year-end under the marked-to-market rules applicable to other futures
contracts, unless an election is made to have such currency rules apply. With
respect to transactions covered by the special rules, foreign currency gain or
loss is calculated separately from any gain or loss on the underlying
transaction and is normally taxable gain or loss. A taxpayer may elect to treat
as capital gain or loss foreign currency gain or loss arising from certain
identified forward contracts, futures contracts and options that are capital
assets in the hands of the taxpayer and which are not part of a straddle.
Certain transactions subject to the special currency rules that are part of a
"section 988 hedging transaction" (as defined in the Code and the Treasury
Regulations) will be integrated and treated as a single transaction or otherwise
treated consistently for purposes of the Code. The income tax effects of
integrating and treating a transaction as a single transaction are generally to
create a synthetic debt instrument that is subject to the original discount
provisions. It is anticipated that some of the non-U.S. dollar denominated
investments and foreign currency contracts the Funds may make or enter into will
be subject to the special currency rules described above.

Risks of Investing in Emerging Markets. The ability of a foreign
government or government-related issuer to make timely and ultimate payments on
its external debt obligations will be strongly influenced by the issuer's
balance of payments, including export performance, its access to international
credits and investments, fluctuations in interest rates and the extent of its
foreign reserves. A country whose exports are concentrated in a few commodities
or whose economy depends on certain strategic imports could be vulnerable to
fluctuations in international prices of these commodities or imports. To the
extent that a country receives payment for its exports in currencies other than
dollars, its ability to make debt payments denominated in dollars could be
adversely affected. If a foreign government or government-related issuer cannot
generate sufficient earnings from foreign trade to service its external debt, it
may need to depend on continuing loans and aid from foreign governments,
commercial banks, and multilateral organizations, and inflows of foreign
investment. The commitment on the part of these foreign governments,
multilateral organizations and others to make such disbursements may be
conditioned on the government's implementation of economic reforms and/or
economic performance and the timely service of its obligations. Failure to
implement such reforms, achieve such levels of economic performance or repay
principal or interest when due may curtail the willingness of such third parties
to lend funds, which may further impair the issuer's ability or willingness to
service its debts in a timely manner. The cost of servicing external debt will
also generally be adversely affected by rising international interest rates,
because many external debt obligations bear interest at rates which are adjusted
based

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upon international interest rates. The ability to service external debt will
also depend on the level of the relevant government's international currency
reserves and its access to foreign exchange. Currency devaluations may affect
the ability of a governmental issuer to obtain sufficient foreign exchange to
service its external debt.

As a result of the foregoing, a governmental issuer may default on its
obligations. If such a default occurs, a Fund may have limited effective legal
recourse against the issuer and/or guarantor. Remedies must, in some cases, be
pursued in the courts of the defaulting country itself, and the ability of the
holder of foreign government and government-related debt securities to obtain
recourse may be subject to the political climate in the relevant country. In
addition, no assurance can be given that the holders of commercial bank debt
will not contest payments to the holders of other foreign government and
government-related debt obligations in the event of default under their
commercial bank loan agreements.

Borrowing

All Funds are authorized to borrow money from time to time as a temporary
measure for extraordinary purposes or to facilitate redemptions in amounts up to
33 1/3% of the value of each Fund's total assets. The use of borrowing by a Fund
involves special risk considerations that may not be associated with other
portfolios having similar objectives. Since substantially all the assets of the
Funds fluctuate in value while the interest obligations remain fixed, an
increase or decrease of the asset value per share of a Fund will be greater than
would be the case if the Fund did not borrow funds. In addition, interest costs
on borrowings may fluctuate with changing market rates of interest and may
partially offset or exceed the return earned on borrowed funds. Under adverse
market conditions, a Fund might have to sell portfolio securities in order to
meet interest or principal payments, or to satisfy restrictions on borrowings,
at a time when investment considerations would otherwise not favor such
sales.

Loans of Portfolio Securities

All Funds may lend portfolio securities to broker-dealers and financial
institutions provided the following conditions are satisfied: (1) the loan is
secured continuously by collateral in the form of cash or U.S. Government
securities marked-to-market daily and maintained in an amount at least equal to
the current market value of the securities; (2) after giving notice the
applicable Fund may call the loan and receive the securities loaned; (3) the
applicable Fund will receive any interest or dividends paid on the loaned
securities; (4) the aggregate market value of securities loaned by the
applicable Fund will not at any time exceed 33 1/3% of the total assets of such
Fund; and (5) the Fund must pay only reasonable custodian fees in connection
with the loan.

Collateral will consist of cash and U.S. Government securities. Loans of
securities involve a risk that the borrower may fail to return the securities or
may fail to maintain the proper amount of collateral. Therefore, a Fund will
enter into portfolio loans only after a review of all pertinent facts by the
Adviser and the lending agent, subject to the overall supervision by the Board
of

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Trustees. Such reviews will be monitored on an ongoing basis. In addition, the
lending agent is obligated to replace the loaned securities with a like amount
of the loaned securities of the same issuer, class and denomination in the event
the loaned securities are not returned by a borrower in accordance with the
arrangements between the borrower and the lending agent. Creditworthiness of
the borrower will be monitored on an ongoing basis by the Adviser or the lending
agent, as discussed in Part A.

Illiquid Securities

The Funds may invest in securities that are exempt under Rule 144A under
the Securities Act from the registration requirements of the Securities Act.
Securities purchased under Rule 144A are traded among qualified institutional
buyers.

Investing in securities under Rule 144A could have the effect of increasing
the levels of the Funds' illiquidity to the extent that qualified institutional
buyers become, for a time, uninterested in purchasing these securities. After
the purchase of a security under Rule 144A, however, the Board of Trustees and
the Adviser will continue to monitor the liquidity of that security to ensure
that the Funds have no more than 15% of their net assets invested in illiquid
securities.

The Funds will limit investments in securities of issuers which the Funds
are restricted from selling to the public without registration under the
Securities Act to no more than 15% of each Fund's net assets, excluding
restricted securities eligible for resale pursuant to Rule 144A that have been
determined to be liquid by the Board of Trustees of the Trust.

Other Investment Vehicles Available to the Funds

The Board of Trustees may, in the future, authorize a Fund to invest in
securities other than those listed in Part A or Part B of this Registration
Statement, provided such investment would be consistent with the applicable
Fund's investment objective and would not violate any fundamental investment
policies or restrictions applicable to such Fund. The investment policies
described above, except for the discussion of percentage limitations with
respect to portfolio lending transactions and borrowing, are not fundamental and
may be changed by the Board of Trustees without the approval of the
Investors.

Investment Practices Available to the Funds

The Funds may buy and sell put and call options and may attempt to manage
the overall risk of portfolio investments through hedging strategies, that is,
enhance income, or replicate a fixed income return by using, swaps, options,
futures contracts and forward currency contracts. Hedging strategies may also be
used in an attempt to manage the Funds' average duration, foreign currency
exposure and other risks of the Funds' investments which can affect fluctuations
in the Funds' net asset values. The Funds intend to use such investment
practices at the discretion of the Adviser. A detailed discussion of these
various investment practices, the limitations on the portion of the Funds'
assets that may be used in connection with these investment practices and the
risks associated with such investment practices are described in the Funds'
Prospectuses and Appendix A of this Part B.

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Limitations On Futures and Options Transactions. The Trust has filed a
notice of eligibility for exclusion from the definition of "commodity pool
operator" within the meaning provided in the Commodity Exchange Act and
regulations promulgated thereunder by the Commodity Futures Trading Commission
and the National Futures Association, which regulate trading in the futures
markets. The Funds intend to comply with Section 4.5 of the regulations under
the Commodity Exchange Act, which limits, in non-hedging situations, the extent
to which the Funds can commit assets to initial margin deposits and options
premiums.

Investment Restrictions of the Funds

Each Fund is subject to the investment restrictions set forth below adopted
by the Board of Trustees, which constitute fundamental policies and may not be
changed, as to a Fund, without the approval of a majority of the outstanding
voting shares of the Fund. As used in this Part B, a vote of "a majority of the
outstanding voting shares" of the Trust or a series of the Trust means the
affirmative vote of the lesser of: (i) more than 50% of the outstanding shares
of the Trust or series, or (ii) 67% of the shares of the Trust or series present
at a meeting at which more than 50% of the outstanding shares of the Trust or
series are represented in person or by proxy. Unless otherwise indicated, all
percentage limitations listed below apply to the Funds and apply only at the
time of the transaction. Accordingly, if a percentage restriction is adhered to
at the time of investment, a later increase or decrease in the percentage which
results from a relative change in values or from a change in a Fund's total
assets will not be considered a violation.

Except as set forth in Part A or below in this Part B, a Fund may not:

(i) Invest in real estate or interests in real estate (provided that
this will not prevent a Fund from investing in publicly-held real
estate investment trusts or marketable securities of companies which
may represent indirect interests in real estate), interests in oil,
gas and/or mineral exploration or development programs or leases;

(ii) Purchase or sell commodities or commodity contracts, except each
Fund may enter into futures contracts and options thereon in
accordance with this Registration Statement and may engage in
forward foreign currency contracts and swaps;

(iii) Make investments in securities for the purpose of exercising control
over or management of the issuer;

(iv) Sell securities short, except "short sales against the box" or
purchase securities on margin, and also except such short-term
credits as are necessary for the clearance of transactions. For this
purpose, the deposit or payment by a Fund for initial or maintenance
margin in connection with futures contracts is not considered to be
the purchase or sale of a security on margin;

(v) Make loans, except that this restriction shall not prohibit: (a) the
purchase and holding of a portion of an issue of publicly
distributed or privately placed debt

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securities; (b) the lending of portfolio securities; or (c) entry
into repurchase agreements with banks or broker-dealers;

(vi) Borrow money except as a temporary measure for extraordinary or
emergency purposes or to facilitate redemptions and in no event in
excess of 33 1/3% of the value of its assets. All borrowings will be
from a bank and to the extent that such borrowing exceeds 5% of the
value of a Fund's assets, asset coverage of at least 300% is
required. A Fund will not purchase securities while borrowings
exceed 5% of that Fund's total assets;

(vii) Issue senior securities as defined in the Investment Company Act
except that this restriction will not prevent the Funds from
entering into repurchase agreements or reverse repurchase
agreements, borrowing money in accordance with restriction (vi)
above or purchasing when-issued, delayed delivery or similar
securities;

(viii) Purchase the securities of issuers conducting their principal
business activities in the same industry (other than obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities or by foreign governments or their political
subdivisions, or by supranational organizations) if immediately
after such purchase the value of a Fund's investments in such
industry would exceed 25% of the value of the total assets of the
Fund;

(ix) Act as an underwriter of securities issued by other persons, except
that, in connection with the disposition of a security, a Fund may
technically be deemed to be an "underwriter" as that term is defined
in the Securities Act, in selling a portfolio security; and

(x) Invest in securities of any open-end or closed-end investment
company, except in accordance with the Investment Company Act or any
exemptive order therefrom obtained from the Commission which permits
investment by a Fund in other funds or other investment companies or
series thereof advised by the Adviser, and also may invest in the
securities of closed-end investment companies at customary brokerage
commission rates.

Item 14. Management of the Trust.

The Board of Trustees has the responsibility for the overall management of
the Trust, including general supervision and review of its investment
activities. The Trustees elect the officers of the Trust who are responsible for
administering the day-to-day operations of the Trust and the Funds. The
affiliations of the Trustees and officers and their principal occupations for
the past five years are listed below. There are no Trustees who are deemed to be
"interested persons" as defined in the Investment Company Act.

B-158
<PAGE>

<TABLE>
<CAPTION>
Position(s)
Held with Principal Occupation(s)
Name & Address Age Registrant During Past 5 Years
- ---------------- --- ---------- ------------------------
<S> <C> <C> <C>

Walter E. Auch 76 Trustee Retired; prior thereto, Chairman
6001 N. 62nd Place and CEO of the Chicago Board
Paradise Valley, AZ 85253 Options Exchange, 1979-1986;
Trustee, The Brinson Funds since
1992; Present Director of the
following companies: Thomson Asset
Mgmt. Corp. (NYSE), Geotek
Industries, Inc. (NASD), Smith
Barney VIP Fund, SB Advisors Fund,
SB TRAK Fund, Banyan Realty Trust
(NASD), Banyan Land Fund II
(NASD), Banyan Mortgage Investment
Fund (NYSE), Express America
Holdings Corp. (NASD), and
Nicholas/Applegate, Legend
Properties, Inc. Prior Director,
Fort Dearborn Income Securities,
Inc. 1987-1995.

Frank K. Reilly 61 Trustee Professor, University of Notre
College of Business Dame since 1982; Trustee, The
Administration Brinson Funds since 1992; Trustee,
University of Notre Dame Brinson Trust Company 1992-1993;
208 Hurley Building Director, Fort Dearborn Income
Notre Dame, IN 46556 Securities, Inc. since 1993;
Director, Greenwood Trust Company
since 1993; Director, Dean Witter
Trust, FSB, since 1996.

Edward M. Roob 62 Trustee Retired; prior thereto, Senior
841 Woodbine Lane Vice President, Daiwa Securities
Northbrook, IL 60062 America, Inc. (1986-1993);
Trustee, The Brinson Funds since
1995; Director, Fort Dearborn
Income Securities, Inc. since
1993; Director, Brinson Trust
Company since 1993; Committee
Member, Chicago Stock Exchange
since 1993; Member, Board of
Governors Chicago Stock Exchange
(1987-1991).

Officers
E. Thomas McFarlan 53 President Managing Partner and Director,
209 South LaSalle Street and Brinson Partners, Inc. since
Chicago, IL 60604 Treasurer 1991; prior thereto
Executive Vice-President of
Washington Mutual Savings Bank;
President and Trustee, The Brinson
Funds since 1992; Treasurer, The
Brinson Funds since 1995;
President and Trustee, Brinson
Trust Company since 1991.

Thomas J. Digenan 33 Assistant Partner, Brinson Partners, Inc.
209 South LaSalle Street Treasurer since 1993; prior thereto Senior
Chicago, IL 60604 Manager, KPMG Peat Marwick;
Assistant Treasurer, The Brinson
Funds since 1995; Assistant
Secretary, The Brinson Funds 1993-
1995.
</TABLE>

B-159
<PAGE>

Position(s)
Held with Principal Occupation(s)
Name & Address Age Registrant During Past 5 Years
- ---------------- --- ---------- ------------------------
<S> <C> <C> <C>
Bruce G. Leto 35 Secretary Partner, Stradley, Ronon, Stevens
2600 One Commerce Square & Young, L.L.P. since 1994; prior
Philadelphia, PA 19103 thereto, Senior Associate;
Secretary, The Brinson Funds since
1995.

Megan M. Doherty 30 Assistant Partner, Brinson Partners, Inc.
209 South LaSalle Street Secretary since January 1997; prior thereto
Chicago, IL 60604 Associate, Brinson Partners, Inc.
from August 1993 to 1997;
Administrator, Harris Associates,
L.P.

Debra L. Nichols 31 Assistant Partner, Brinson Partners, Inc.
209 South LaSalle Street Secretary since January 1995; Associate
Chicago, IL 60604 since 1991; prior thereto, private
investor; Assistant Secretary, The
Brinson Funds since 1992.

Carolyn M. Burke 30 Assistant Partner, Brinson Partners, Inc.
209 South LaSalle Street Secretary since January 1997; prior thereto
Chicago, IL 60604 Associate, Brinson Partners, Inc.
from 1995 to 1997; Financial
Analyst, Van Kampen American
Capital Investment Advisory Corp.
1992-1995; Senior Accountant, KPMG
Peat Marwick 1989-1992; Assistant
Secretary, The Brinson Funds since
1995.
</TABLE>

COMPENSATION TABLE
<TABLE>
<CAPTION>

Aggregate Pension or Total
Compensation Retirement Compensation
From Trust for Benefits Accrued From Trust and
Fiscal Year ended As Part of Fund Fund Complex
Name and Postion Held December 31, 1996 Expenses Paid to Trustees/1/
- --------------------- ----------------- -------- -------------------
<S> <C> <C> <C>
Walter E. Auch, Trustee $13,200 N/A $13,200

Frank K. Reilly, Trustee $13,200 N/A $25,200

</TABLE>

B-160

<PAGE>

Aggregate Pension or Total
Compensation Retirement Compensation
From Trust for Benefits Accrued From Trust and
Fiscal Year ended As Part of Fund Fund Complex
Name and Postion Held December 31, 1995 Expenses Paid to Trustees/1/
- --------------------- ----------------- -------- -------------------
<S> <C> <C> <C>
Edward M. Roob, Trustee $13,200 N/A $25,200
</TABLE>

/1/ This amount represents the aggregate amount of compensation paid to the
Trustees for: (a) service on the Board of Trustees for the Trust's current
fiscal year; and (b) service on the Board of Directors/Trustees of two other
investmentent companies managed by Brinson Partners, Inc. for the calendar year
ending December 31, 1996.

The amount of the Trust's shares owned by the Trust's Trustees and officers
is less than 1% of the Trust's issued and outstanding shares. No officer or
Trustee of the Trust who is also an officer or employee of the Adviser receives
any compensation from the Funds for services to the Funds. The Trust pays each
Trustee who is not affiliated with Brinson Partners a fee of $6,000 per year,
plus $300 per Fund per meeting and reimburses each Trustee and officer for out-
of-pocket expenses in connection with travel to and from and attendance at Board
meetings.

Each of the Trustees sits on the Trust's Audit Committee, which has the
responsibility, among other things, to: (i) recommend the selection of the
Funds' independent auditors; (ii) review and approve the scope of the
independent auditors' audit activity; (iii) review the financial statements
which are the subject of the independent auditors' certification; and (iv)
review with such independent auditors the adequacy of the Funds' basic
accounting system and the effectiveness of the Funds' internal accounting
controls. There is no separate Nominating or Investment Committee. Items
pertaining to these Committees are submitted to the full Board of Trustees.

Item 15. Control Persons and Principal Holders of Securities.

As of April 1, 1997 the officers and Trustees, individually and as a group,
owned beneficially less than 1% of each of the Brinson Global Securities Fund,
Brinson Short-Term Fund, Brinson Post-Venture Fund, Brinson High Yield Fund,
Brinson Emerging Markets Equity Fund and Brinson Emerging Markets Debt Fund.

B-161
<PAGE>

As of April 1, 1997, the following persons owned of record or beneficially more
than 5% of the outstanding voting shares of each of the Funds listed below.

BRINSON GLOBAL SECURITIES FUND

<TABLE>
<CAPTION>
Name & Address of
Beneficial and Record Owners Percentage
- ---------------------------- ----------
<S> <C>
*Brinson Trust Company Collective 61.25%
Investment Trust for Pension &
Profit Sharing Trust's -
Global Securities Fund
Chicago, IL

Ameritech Pension Trust 15.81%
North Quincy, MA

JP Morgan Securities Inc. 7.15%
New York, NY

Washington State University 6.00%
Pullman, WA

BRINSON SHORT-TERM FUND

*Ameritech Pension Trust 99.89%
North Quincy, MA
</TABLE>

BRINSON POST-VENTURE FUND

<TABLE>
<CAPTION>
Name & Address of
Beneficial and Record Owners Percentage
- ---------------------------- ----------
<S> <C>
*Brinson Trust Company - 63.67%
U.S. International Cap Equity Fund
Chicago, IL

Brinson Trust Company Collective 18.29%
Investment Trust for Pension &
Profit Sharing Trust's -
Post-Venture Fund
Chicago, IL

Brinson Trust Company Collective 8.25%
Investment Trust for Pension &
Profit Sharing Trust's -
MAP Fund
Chicago, IL

Bankers Trust Company 7.52%
Custodian for Brinson
Global Securities Fund
Chicago, IL
</TABLE>

BRINSON HIGH YIELD FUND

<TABLE>
<CAPTION>
Name & Address of
Beneficial and Record Owners Percentage
- ----------------------------- ----------
<S> <C>
*Bankers Trust Company 32.72%
Custodian for Brinson Global
Securities Fund
Chicago, IL

*Brinson Trust Company Collective 26.12%
Investment Trust for Pension &
Profit Sharing Trust's -
U.S. High Yield Fund
Chicago, IL

Brinson Trust Company Collective 23.43%
Investment Trust for Pension &
Profit Sharing Trust's -
MAP Fund
Chicago, IL

Bankers Trust Company 10.17%
Custodian for Brinson
Global Fund
Chicago, IL

Brinson Trust Company Collective 5.51%
Investment Trust for Pension &
Profit Sharing Trust's -
U.S. Balanced Fund
Chicago, IL
</TABLE>

BRINSON EMERGING MARKETS EQUITY FUND

<TABLE>
<CAPTION>
Name & Address of
Beneficial and Record Owners Percentage
- ---------------------------- ----------
<S> <C>
Bankers Trust Company 16.78%
Custodian for Brinson
Global Securities Fund
Chicago, IL

U.S. West Pension Trust 13.31%
Brinson Partners
International Equity Account
Englewood, CO

Brinson Trust Company Collective 11.27%
Investment Trust for Pension &
Profit Sharing Trust's - MAP Fund
Chicago, IL

The Northern Trust Company 10.69%
Chicago, IL

Brinson Trust Company Collective 10.15%
Investment Trust for Pension &
Profit Sharing Trust's -
Brinson Emerging Markets Equity Fund
Chicago, IL

First Chicago Corp. Pension Trust 6.90%
Chicago, IL

Tidecove & Company 6.86%
North Quincy, MA

Bankers Trust Company 5.31%
Custodian for Brinson Global Fund
Chicago, IL
</TABLE>

B-162

<PAGE>

<TABLE>
<CAPTION>
BRINSON EMERGING MARKETS DEBT FUND

Name & Address of Beneficial and Record Owners Percentage
- ---------------------------------------------- ----------
<S> <C>

Brinson Trust Company Collective 23.61%
Investment Trust for Pension &
Profit Sharing Trust's - MAP Fund
Chicago, IL

Bankers Trust Company 22.82%
Custodian for Brinson Global
Securities Fund
Chicago, IL

First Chicago Corp. Pension Trust 17.07%
Chicago, IL

Bankers Trust Company 8.49%
Custodian for Brinson Global Fund
Chicago, IL

San Francisco City and County 7.77%
Employees Retirement System
San Francisco, CA

Brinson Trust Company Collective 6.05%
Investment Trust for Pension &
Profit Sharing Trust's - Brinson
Emerging Markets Bond Fund
Chicago, IL

Andrew W. Mellon Foundation 5.91%
New York, NY

</TABLE>

* Person deemed to control the Fund under the provisions of the Investment
Company Act. Note that a controlling person possesses the ability to control
the outcome of matters submitted for shareholder vote of the Fund.

As of April 1, 1997, the following persons owned of record or beneficially
more than 5% of the outstanding voting shares of the Trust:

<TABLE>

Name & Address of Beneficial and Record Owners Percentage
- ----------------------------------------------- ----------
<S> <C>
**Brinson Trust Company Collective Investment 39.23%
Trust for Pension & Profit Sharing
Trust's-Global Securities Fund
Chicago, IL

Ameritech Pension Trust 10.13%
North Quincy, MA

Brinson Trust Company 6.05%
U.S. International Cap Equity Fund
Chicago, IL

</TABLE>

** Person deemed to control the Fund under the provisions of the Investment
Company Act. Note that a controlling person possesses the ability to control
the outcome of matters submitted for shareholder vote of the Trust.

B-163
<PAGE>

Item 16. Investment Advisory and Other Services.

Investment Adviser

Brinson Partners, Inc. ("Brinson Partners") manages the assets of the Trust
pursuant to an Investment Advisory Agreement with the Trust (the "Advisory
Agreement"). Brinson Partners is an investment management firm managing as of
December 31, 1996 over $119 billion, primarily for institutional pension and
profit sharing funds with offices located in Chicago, London, Melbourne, New
York, Paris, Singapore, Sydney and Tokyo. Brinson Partners and its predecessor,
First Chicago Investment Advisors, have managed investment portfolios since
1974. Brinson Partners also serves as the investment adviser or sub-adviser to
seven other investment companies.

Brinson Partners is a wholly-owned subsidiary of Swiss Bank Corporation
("Swiss Bank") which purchased the stock of the Adviser's parent in April 1995.
Swiss Bank, with headquarters in Basel, Switzerland, is an internationally
diversified organization with operations in many areas of the financial services
industry.

Under the Advisory Agreement, the Adviser is responsible for the management
of the investment and reinvestment of the assets of each Fund, subject to the
control of the Trust's officers and Board of Trustees. The Adviser receives no
fees from the Funds or the Trust for providing investment advisory services and
it is responsible for paying its expenses.

The Advisory Agreement provides that it will terminate in the event of its
assignment (as defined in the Investment Company Act) and that it may be
terminated by the Trust (by the Board of Trustees or vote of a majority of the
outstanding voting shares of the Trust) or the Adviser upon 60 days' written
notice, without payment of any penalty. The Advisory Agreement provides that it
will continue in effect for a period of more than two years from its execution
only so long as such continuance is specifically approved at least annually in
conformity with the Investment Company Act.

Administrative, Accounting, Transfer Agency and Custodian Services

The Trust, on behalf of the Fund, has entered into a Multiple Services
Agreement (the "Services Agreement") with Morgan Stanley Trust Company, One
Pierrepont Plaza, Brooklyn, New York 11201 ("MSTC"), pursuant to which MSTC is
required to provide general administrative, accounting, portfolio valuation,
transfer agency and custodian services to the Fund, including the coordination
and monitoring of any third party service providers.

As authorized under the Services Agreement, MSTC has entered into a Mutual
Funds Service Agreement (the "CGFSC Agreement") with Chase Global Funds Services
Company ("CGFSC"), a corporate affiliate of The Chase Manhattan Bank, under
which CGFSC provides administrative, accounting, portfolio valuation and
transfer agency services to the Fund. CGFSC's business address is 73 Tremont
Street, Boston, Massachusetts 02108-3913.

Pursuant to the CGFSC Agreement, CGFSC provides:

(2) accounting and portfolio valuation services, including the daily
calculation of the Fund's net asset value and the preparation of certain
financial statements; and

For its administrative, accounting, transfer agency and custodian services,
MSTC receives the following as compensation from the Trust on an annual basis:
0.0025% for the average daily U.S. assets of the Trust; 0.0525% of the average
daily non-U.S. assets of the Trust; 0.3250% of the average daily emerging
markets equity assets of the Trust; and 0.019% of the average daily emerging
markets debt assets of the Trust. MSTC receives an additional fee of 0.075% of
the average daily net assets of the Trust for administrative duties, the latter
subject to the expense limitation applicable to the Trust. No fee (asset based
or otherwise) is charged on any investments made by any fund into any other fund
sponsored or managed by the Advisor and assets of a fund that are invested in
another investment company or series thereof sponsored or managed by the Advisor
will not be counted in determining the 0.075% administrative duties fee or the
applicability of the expense limitation on such fee. The foregoing fees include
all out-of-pocket expenses or transaction charges incurred by MSTC and any third
party service provider in providing such services. Pursuant to the CGFSC
Agreement, MSTC pays CGFSC for the services CGFSC provides to MSTC in fulfilling
its obligations under the Services Agreement.

B-164
<PAGE>

Until May 9, 1997, FPS Services, Inc. served as the Administrator of the
Funds and provided the administration, fund accounting and portfolio valuation
and transfer agency services described above.

Aggregate fees paid to FPS Services, Inc. as Administrator were as
follows: with respect to the Brinson Global Securities Fund for the period
April 28, 1995 (commencement of operations) through December 31, 1996,
$749,786.96; with respect to the Brinson High-Yield Fund for the period April
28, 1995 (commencement of operations) through December 31, 1996, $191,952.69;
with respect to the Brinson Post-Venture Fund for the period April 28,1995
(commencement of operations) through December 31, 1996, $255,736.26; with
respect to the Brinson Emerging Markets Equity Fund for the period June 30, 1995
(commencement of operations) through December 31, 1996, $191,461.79; with
respect to the Brinson Emerging Markets Debt Fund for the period June 30, 1995
(commencement of operations) through December 31, 1996, $208,870.95; and with
respect to the Brinson Short-Term Fund for the period June 28, 1996
(commencement of operations) through December 31, 1996, $50,988.71.

Other Services

The Administrator also serves as the Funds' transfer agent (in such
capacity, the "Transfer Agent"), accounting/pricing agent, and dividend and
distribution disbursing agent pursuant to the Services Agreement. Until May 9,
1997, Bankers Trust Company, One Bankers Trust Plaza, New York, New York 10006-
1107, was the custodian for the securities and cash of the Funds pursuant to a
Custodian Agreement with the Trust. Effective May 9, 1997, the Administrator
became the Custodian of the Trust pursuant to the Services Agreement. See
"Management of the Fund(s) - The Custodian" in the Prospectuses. Ernst & Young
LLP, Sears Tower, 233 South Wacker Drive, Chicago, Illinois 60606-6301, is the
independent accounting and auditing firm which services the Trust.

B-165
<PAGE>

Code of Ethics

The Trust has adopted a Code of Ethics (the "Code of Ethics") which
establishes standards by which certain access persons of the Trust, which
include officers of the Adviser and officers and Trustees of the Trust, must
abide relating to personal securities trading activities.

Under the Code of Ethics, access persons are prohibited from engaging in
certain conduct, including, but not limited to: (1) investing in companies in
which the Funds invest unless the securities have a broad public market and are
registered on a national securities exchange or are traded in the over-the-
counter markets; (2) making or maintaining an investment in any corporation or
business with which the Funds have business relationships if the investment
might create, or give the appearance of creating, a conflict of interest; (3)
participating in an initial public offering; (4) entering into a securities
transaction when the access person knows or should know that such activity will
anticipate, parallel or counter any securities transaction of a Fund; (5)
entering into any securities transaction, without prior approval, in connection
with any security which has been designated as restricted; (6) entering into a
net short position with respect to any security held by a Fund; (7) entering
into any derivative transaction when a direct transaction in the underlying
security would be a violation of the Code of Ethics; and (8) engaging in self-
dealing or other transactions benefiting the access person at the expense of the
Trust or the Investors.

In addition, access persons are required to receive advance approval prior
to purchasing or selling a restricted security, and may not buy or sell a
prohibited security. Access persons are required to file quarterly reports of
security investment transactions. Trustees who are not "interested trustees" of
the Trust, as defined in the Investment Company Act, need only report a
transaction in a security if such Trustee, at the time of the transaction, knew
or should have known, in the ordinary course of fulfilling his or her official
duties as a Trustee, that, during the 15-day period immediately preceding or
after the date of the transaction by the Trustee, such security was purchased or
sold by a Fund, or was being considered for purchase or sale by a Fund.

Item 17. Brokerage Allocation and Other Practices.

The Adviser is responsible for decisions to buy and sell securities for
each Fund and for the placement of portfolio business and the negotiation of
commissions, if any, paid on such transactions. Fixed income securities in
which the Funds invest are traded in the over-the-counter market. These
securities are generally traded on a net basis with dealers acting as principal
for their own accounts without a stated commission, although the bid/ask spread
quoted on securities includes an implicit profit to the dealers. In over-the-
counter transactions, orders are placed directly with a principal market-maker
unless a better price and execution can be obtained by using a broker.
Brokerage commissions are paid on transactions in listed securities, futures
contracts and options thereon. The Adviser is responsible for effecting
portfolio transactions and will do so in a manner deemed fair and reasonable to
the Funds. Under the Advisory Agreement, the Adviser is authorized to utilize
the trading desk of its foreign subsidiaries to execute foreign securities
transactions, but

B-166
<PAGE>

monitors the selection by such subsidiaries of brokers and dealers used to
execute transactions for a Fund.

The primary consideration in all portfolio transactions will be prompt
execution of orders in an efficient manner at the most favorable price. In
selecting and monitoring broker-dealers and negotiating commissions, the Adviser
considers the broker-dealer's reliability, the quality of its execution services
on a continuing basis and its financial condition. When more than one broker-
dealer is believed to meet these criteria, preference may be given to brokers
who provide research or statistical material or other services to the Funds or
to the Adviser. Such services include advice, both directly and in writing, as
to the value of the securities; the advisability of investing in, purchasing or
selling securities; and the availability of securities, or purchasers or sellers
of securities; as well as analyses and reports concerning issues, industries,
securities, economic factors and trends, portfolio strategy or the performance
of accounts. This allows the Adviser to supplement its own investment research
activities and obtain the views and information of others prior to making
investment decisions. The Adviser is of the opinion that, because this material
must be analyzed and reviewed by its staff, its receipt and use does not tend to
reduce expenses but may benefit the Funds by supplementing the Adviser's
research. See the "Fund Management - Brokerage Allocation" sections in the
Prospectuses.

The aggregate amount of brokerage commissions paid by the Funds that have
commenced operations during the period April 28, 1995 through December 31, 1995
(all Funds except Brinson Short-Term Fund) was approximately $893,391. The
Brinson Short-Term Fund, which commenced operations June 28, 1996, had not
incurred any brokerage commissions as of December 2, 1996.

The aggregate amount of brokerage commissions paid by the Funds during the
fiscal year ended December 31, 1996 was approximately $3,081,399.13.

Brinson Partners effects portfolio transactions for other investment
companies and advisory accounts. Research services furnished by dealers through
whom the Funds effect their securities transactions may be used by Brinson
Partners in servicing all of its accounts; not all such services may be used in
connection with the Funds. In the opinion of Brinson Partners, it is not
possible to measure separately the benefits from research services to each of
the accounts (including the Funds). Brinson Partners will attempt to equitably
allocate portfolio transactions among the Funds and others whenever concurrent
decisions are made to purchase or sell securities by the Funds and another
account. In making such allocations between the Funds and others, the main
factors to be considered are the respective investment objectives, the relative
size of portfolio holdings of the same or comparable securities, the
availability of cash for investment, the size of investment commitments
generally held, and the opinions of the persons responsible for recommending
investments to the Funds and others. In some cases, this procedure could have
an adverse effect on the Funds. In the opinion of Brinson Partners, however,
the results of such procedures will, on the whole, be in the best interest of
each of its clients.

Portfolio Turnover

B-167
<PAGE>

or be limited to a predetermined rate of portfolio turnover, such a turnover
always being incidental to transactions undertaken with a view to achieving that
Fund's investment objective.

While it is the policy of the Funds generally not to engage in trading for
short-term gains, the Funds will effect portfolio transactions without regard to
the holding period if, in the judgment of the Adviser, such transactions are
advisable in light of a change in circumstances of a particular company, within
a particular industry or country, or in general market, economic or political
conditions. The rate of portfolio turnover shall be calculated by dividing (a)
the lesser of purchases or sales of portfolio securities for the particular
fiscal year by (b) the monthly average of the value of the portfolio securities
owned by that Fund during the particular fiscal year. Such monthly average
shall be calculated by totaling the values of the portfolio securities as of the
beginning and end of the first month of the particular fiscal year and as of the
end of each of the succeeding eleven months and dividing the sum by 13.
Although the portfolio turnover rates for each Fund may vary greatly from year
to year, the Funds expect that under normal circumstances, the portfolio
turnover rate will not exceed 250% with respect to the Brinson Global Securities
Fund and 100% with respect to all other Funds. Higher portfolio turnover rates
will increase aggregate brokerage commission expenses which must be borne
directly by a Fund and ultimately by that Fund's Investors and the incidence of
short-term capital gains (which are taxable to Investors as ordinary income
Investors).

Item 18. Capital Stock and Other Securities.

The Trust presently offers six series of shares of beneficial interest.
Each share represents an equal proportionate interest in the assets and
liabilities of the applicable Fund with each other share and is entitled to such
dividends and distributions as are declared by the Trustees of the Trust. Under
Delaware law, the Trust does not normally hold annual or special meetings of
Investors. See "Capital Stock and Other Securities" in each Fund's
Prospectus.

Item 19. Purchase, Redemption and Pricing of Securities Being Offered.

Purchases

Beneficial interests in the Funds are issued solely in private placement
transactions that do not involve a "public offering" within the meaning of
Section 4(2) of the Securities Act. Investments in a Fund may only be made by
common or commingled trust funds, investment companies, registered broker-
dealers, investment banks, commercial banks, corporations, group trusts or
similar organizations or entities that are "accredited investors" within the
meaning of Regulation D under the Securities Act. See "Purchase of Securities
Being Offered" in the Funds' Prospectuses.

B-168
<PAGE>

Net Asset Value. The net asset value per share is calculated separately
for each Fund. The net asset value per share of a Fund is computed by dividing
the value of the assets of the Fund, less its liabilities, by the number of
shares of the Fund outstanding.

Presented below is the computation of the net asset value/offering price
per share for each Fund as of December 31, 1996, using the following formula:
Total Assets - Total Liabilities (divided by) Outstanding Shares = Net Asset
Value/Offering Price.

Brinson Global Securities Fund
$1,816,020,113 - $57,510,647 (divided by) 130,464,603 shares = 13.4788 (NAV/
offering price)

Brinson Short-Term Fund
$22,961,165 - $1,253,798 (divided by) 2,106,298 shares = 10.3059 (NAV/offering
price)

Brinson Post-Venture Fund
$300,040,782 - $1,062,534 (divided by) 19,604,032 shares = 15.2509 (NAV/
offering price)

Brinson High Yield Fund
$168,123,182 - $3,073,141 (divided by) 13,399,664 shares = 12.3175 (NAV/
offering price)

Brinson Emerging Markets Equity Fund
$186,773,915 - $7,435,740 (divided by) 17,606,002 shares = 10.1862 (NAV/
offering price)

Brinson Emerging Markets Debt Fund
$222,745,556 - $174,988 (divided by) 13,184,226 shares = 16.8816 (NAV/offering
price)

Investors in the Brinson Emerging Markets Equity Fund and the Brinson
Emerging Markets Debt Fund are subject to a transaction charge equal to 1.50%
and 0.50%, respectively, of the Fund's offering price on Fund share purchases.

Fund securities are valued and net asset value per share is determined for
all Funds with the exception of the Brinson High Yield Fund as of the close of
regular trading on the New York Stock Exchange ("NYSE"), which currently is 4:00
p.m. (Eastern time), on each day the NYSE is open for trading. Fund securities
are valued and net asset value per share is determined for the Brinson High
Yield Fund as of one hour prior to the close of the NYSE, which currently is 3
p.m. (Eastern time), on each day the NYSE is open for trading. The NYSE is open
for trading on every day except Saturdays, Sundays and the following holidays:
New Year's Day, Presidents Day, Good Friday, Memorial Day (day observed),
Independence Day, Labor Day, Thanksgiving and Christmas and on the
preceding Friday or subsequent Monday when any of these holidays falls on a
Saturday or Sunday, respectively.

Fund securities listed on a national or foreign securities exchange and
over-the-counter securities carried as NASDAQ National Market System issues are
valued on the basis of the last sale prior to the time net asset value is
determined on the date the valuation is made. Other portfolio securities which
are traded in the over-the-counter market are valued at the last available bid
price prior to the time net asset value is determined. Valuations of fixed
income and equity securities may be obtained from a pricing service when such
prices are believed to reflect the fair value of such securities. Use of a
pricing service has been approved by the Board of Trustees. Securities traded on
securities exchanges are valued at the last sale price or, if there has been no
sale that day, at the last reported bid price, using prices as of the close of
trading on their respective exchanges. Price information on listed securities is
generally taken from the closing price on the exchange where the security is
primarily traded. Futures contracts and options thereon are valued at their
daily quoted settlement price. Forward foreign currency contracts are valued
daily at forward exchange rates and an unrealized gain or loss is recorded. The
Fund realizes a gain or loss upon settlement of the contracts. The Funds'
obligations under a swap agreement will be accrued daily (offset by any amounts
owing to the portfolio) and any accrued but unpaid net amounts owed to a swap
counter party will be covered by the maintenance of a segregated account
consisting of cash, U.S. government securities or high grade liquid assets. For
valuation purposes, foreign securities initially expressed in foreign currency
values will be converted into U.S. dollar values using WM/Reuters closing spot
rates as of 4:00 p.m. London time. Securities with a remaining maturity of 60
days or less are valued at amortized cost, which approximates market value.
Redeemable securities issued by open-end investment companies are valued using
their respective net asset values for purchase orders placed at the close of the
NYSE. Securities (including over-the-counter options) for which market
quotations are not readily-available and other assets are valued at their fair
value as determined in good faith by or under the direction of the Board of
Trustees.

Because of time zone differences, foreign exchanges and securities markets
will usually be closed prior to the time of the closing of the NYSE and values
of foreign futures and options and foreign securities will be determined as of
the earlier closing of such exchanges and securities markets. However, events
affecting the values of such foreign securities may occasionally occur between
the earlier closings of such exchanges and securities markets and the closing of
the NYSE which will not be reflected in the computation of the net asset value
of a Fund. If an event materially affecting

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the value of such foreign securities occurs during such period, then such
securities will be valued at fair value as determined in good faith by or under
the direction of the Board of Trustees.

Where a foreign securities market remains open at the time that the Funds
value their portfolio securities, or closing prices of securities from that
market may not be retrieved because of local time differences or other
difficulties in obtaining such prices at that time, last sale prices in such
market at a point in time most practicable to timely valuation of the Funds may
be used.

Redemptions

Under normal circumstances Investors may redeem their shares at any time
without a fee. The redemption price will be based upon the net asset value per
share next determined after receipt of the redemption request. The redemption
price may be more or less than the Investor's cost, depending upon the net asset
value per share at the time of redemption.

Payment for shares tendered for redemption is regularly made by check or
wire within seven days after tender in proper form, except that the Trust
reserves the right to suspend the right of redemption, or to postpone the date
of payment upon redemption beyond seven days in certain circumstances, as
disclosed in the Funds' Prospectuses. The Trust has also reserved the right,
subject to certain restrictions, to redeem its shares "in kind" rather than in
cash. See "Redemption of Shares or Repurchase" in the Funds' Prospectuses.

Item 20. Tax Status.

General

The following discussion summarizes certain anticipated material U.S.
federal income tax consequences of investing in the Funds. The discussion is
based on the Code, existing and proposed Treasury Regulations thereunder,
Internal Revenue Service ("IRS") positions and court decisions in effect as of
the date of this Part B. All the authorities are subject to change by
legislative or administrative action, possibly with retroactive effect. The
summary does not address all tax considerations that may be relevant to
prospective Investors or to certain types of Investors subject to special
treatment under the U.S. federal income tax laws. The discussion does not
constitute legal or tax advice. Furthermore, the tax consequences of investing
in the Funds may vary depending on the particular Investor's status.
ACCORDINGLY, EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWN TAX ADVISER AS TO
THE U.S. FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF INVESTING IN THE
FUNDS.

Classification of the Funds

The Trust has received rulings from the IRS that each Fund will be treated
as a separate partnership for federal income tax purposes rather than as an
association taxable as a corporation. The Funds will not be "regulated
investment companies" for federal income tax purposes.

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Classification of Funds as "Publicly Traded Partnerships"

The Trust has received rulings from the IRS that the Funds will not be
treated as "publicly traded partnerships" because the Funds will satisfy the
private placement safe harbor set forth in an IRS Notice 88-75, regarding
publicly traded partnerships. Subsequent to the receipt of such rulings from the
IRS, the Department of Treasury promulgated final regulations (the "Final
Regulations") under Section 7704 of Code, pertaining to publicly traded
partnerships. In general, the Final Regulations limit the availability of the
private placement safe harbor to those partnerships which do not have more than
100 partners at any time during the taxable year, subject to certain anti-
avoidance rules. Under a transitional rule, the Final Regulations generally are
effective for taxable years beginning after December 31, 2005, if a partnership
was actively engaged in an activity before December 4, 1995. During such
transition period, an eligible partnership may continue to rely on the
provisions of IRS Notice 88-75. The Brinson Global Securities Fund, Brinson
Post-Venture Fund, Brinson High Yield Fund, Brinson Emerging Markets Equity Fund
and Brinson Emerging Markets Debt Fund presently qualify for this transitional
rule.

Taxation of Partnership Operations Generally

The Funds will not be subject to U.S. federal income tax. Instead, each
Investor in a Fund will be required to report separately on its own income tax
return its distributive share of items of such Fund's income, gains, losses,
deductions and credits. Each Investor will be required to report its
distributive share of such tax items regardless of whether it has received or
will receive corresponding distributions of cash or property from a Fund. In
general, cash distributions by the Funds to Investors will represent a non-
taxable return of capital up to the amount of such Investor's adjusted tax
basis.

Partnership Allocations

For federal income tax purposes, an Investor's distributive share of each
item of a Fund's income, gain, loss, deduction and credit will be determined by
the Agreement and Declaration of Trust (the "Trust Agreement") so long as the
allocation has "substantial economic effect" within the meaning of Code Section
704 and the regulations thereunder. In general, the Trust Agreement provides
that each Investor's capital account will be increased by all contributions made
by the Investor and will be reduced by all distributions made to the Investor.
In addition, an Investor's capital account will be increased by the Investor's
allocable share of the Fund's income and gains and decreased by the Investor's
allocable share of the Fund's losses. For book purposes, capital accounts will
be adjusted daily as if the Funds' assets had been sold at fair market value.
An Investor's allocable share of income, gain and loss for tax purposes
generally will be based on such Investor's capital account for book purposes but
adjustments will be made to account for differences in the book value of assets
and the adjusted tax basis of those assets. The Trust Agreement also provides
that the allocations specified therein will be interpreted and applied in a
manner consistent with regulations under Code Section 704 and that no allocation
will be made unless such allocation will be respected for tax purposes pursuant
to those regulations. The Trust has received rulings from the IRS that this
allocation method has economic effect.

Gains and Losses from Commodities, Options, Securities and Other Capital
Transactions.

General

The Funds intend to invest in a variety of investments as described herein.
In general, such investments will give rise to dividend or interest income
(treated as ordinary income) during the period such investments are held and to
capital gain or losses on disposition. However, special rules apply to certain
of the proposed types of investments. Certain of those rules are briefly
described

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below. For a complete description of the special rules which may apply to each
type of investment, Investors are advised to consult their own tax advisers.

Section 1256 Contracts

The Code provides specific rules for "Section 1256 Contracts," a class of
property interests that includes futures and certain option contracts traded on
a qualified board or exchange and foreign currency contracts. A foreign currency
contract is defined in the Code as a contract " (i) which requires delivery of,
or the settlement of which depends on the value of, a foreign currency which is
a currency in which positions are also traded through regulated futures
contracts, (ii) which is traded in the interbank market, and (iii) which is
entered into at arm's-length at a price determined by reference to the price in
the interbank market."

Section 1256 Contracts are subject to a "mark-to-market" system of taxation
which requires that all Section 1256 Contracts held by the Funds on the last
business day of its taxable year be treated as having been sold for their fair
market value on that day. Unrealized gains and losses in these open positions
must be recognized in the year in which the deemed sale occurs. Gains and
losses from Section 1256 Contracts (subject to the discussion below with respect
to foreign currency contracts which are Section 1256 Contracts), whether
realized through termination of the position or under the mark-to-market rule,
generally are treated as 60% long-term capital gain or loss and 40% short-term
capital gain or loss (the "60/40 rule"), regardless of the actual holding period
of the position. The character of an Investor's distributive share of Fund
profits or losses from Section 1256 Contracts will, therefore, be 60% long-term
capital gain or loss and 40% short-term capital gain or loss. Each Investor's
distributive share of such gain or loss will be combined with other items of
capital gain or loss for the taxable year in computing the federal income tax
liability of the Investor. However, as more fully described below under "Tax
Treatment of Capital Gains and Losses," Investors will be limited in their
ability to carry back losses from Section 1256 Contracts. The above-described
rules will apply with respect to a Section 1256 Contract which is a foreign
currency contract only if the position is a capital asset (which is not part of
a straddle) for which a Fund has made an election under Code Section 988 at the
time the position is entered into to treat the gain or loss in accordance with
the above-described rules. Given the investment policies of the Funds, there
can be no assurance that such an election can be made. In the case of a Section
1256 Contract which is a foreign currency contract for which this election is
not made, the mark-to-market rules described above apply to determine when gain
or loss is recognized but the gain or loss will be ordinary income or loss for
federal income tax purposes, and each Investor's distributive share thereof will
be ordinary income or loss to such Investor.

Non-Section 1256 Positions

Gain or loss with respect to positions that are not Section 1256 Contracts
("Non-Section 1256 Positions") and are not positions of a mixed straddle are
includable for tax purposes only when realized. Such gains and losses are not
subject to the 60/40 rule, but will be characterized as long- or short-term
capital gain or loss in accordance with general holding period and other
applicable

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rules, subject to the following discussion. The above-described rules will apply
with respect to gain or loss on a Non-Section 1256 Position in foreign currency
only if the position is a forward contract, futures contract or option which is
a capital asset (and not part of a straddle) for which a Fund has made an
election under Code Section 988 at the time the position is entered into to
treat the gain or loss thereon as capital gain or loss. In the case of such Non-
Section 1256 Positions for which such Section 988 election is not made, any gain
or loss will be ordinary income or loss for federal income tax purposes.

Treatment of Straddles

The tax consequences described above apply to single Section 1256 Contracts
and single Non-Section 1256 Positions. Those consequences may, however, be
limited or modified if the positions are positions of a straddle. The term
"straddle" is defined as offsetting positions in personal property. Two or more
positions are offsetting if the taxpayer's risk of loss from holding one
position in personal property is substantially diminished by reason of holding
one or more other positions in personal property. It is anticipated that the
Funds may hold offsetting positions in the course of their trading activity.

Straddles consisting solely of Section 1256 Contracts are subject to the
mark-to-market and 60/40 rules discussed above, and are not subject to the
straddle provisions of Code Section 1092 (discussed below). In the event a Fund
takes delivery under or exercises any position of a straddle consisting solely
of Section 1256 Contracts, then each position of the straddle will be treated as
terminated on the day on which such Fund takes delivery or exercises its
position.

Code Section 1092 and the temporary regulations promulgated thereunder (the
"Temporary Regulations") limit the deductibility of losses incurred on positions
of a straddle in which all of the positions are Non-Section 1256 Positions.
Those rules provide that a loss may be deducted only to the extent it exceeds
unrecognized gains at year end in: (a) offsetting positions; (b) successor
positions; and (c) offsetting positions to successor positions. A successor
position is a position that was entered within 30 days before or after the loss
position was disposed of and which offsets a second position which was
offsetting to the loss position. This rule prevents the taxpayer from
recognizing losses in one year while deferring recognition of corresponding
gains until a subsequent year. The disallowed losses may be recognized in a
subsequent year to the extent the loss exceeds the unrecognized gain at the
subsequent year end in the offsetting positions, successor positions, or
offsetting positions to the successor position. Further, the Temporary
Regulations apply a modified wash sale rule which requires deferral of loss if,
during the 61-day period surrounding disposition of the loss position, the
taxpayer acquires, or enters into a contract to acquire, stock or securities
that are substantially identical to those sold at a loss.

A mixed straddle is a straddle, one but not all of the positions of which
is a Section 1256 Contract. Under Code Section 1256 and the Temporary
Regulations, a Fund may elect to treat its mixed straddles under the mixed
straddle account rules.

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Foreign Currency Transactions

Under Code Section 988, special rules are provided for certain transactions
in a foreign currency other than the taxpayer's functional currency (i.e.,
unless certain special rules apply, currencies other than the U.S. dollar). In
general, foreign currency gains or losses from certain forward contracts, from
futures contracts that are not regulated futures contracts, and from unlisted
options will be treated as ordinary income or loss. As discussed above, in
certain circumstances where transactions are not undertaken as part of a
straddle, a Fund may elect capital gain or loss treatment for such transactions.
Alternatively, a Fund may elect ordinary income or loss treatment for
transactions in regulated futures contracts and listed options on foreign
currency that would otherwise produce capital gain or loss. In general, gains
or losses from a foreign currency transaction subject to Code Section 988 will
increase or decrease the amount of a Fund's ordinary income, rather than
increase or decrease the amount of such Fund's net capital gain income. Income
or loss attributable to notional principal contracts relating to a foreign
currency (e.g., currency swaps) is also ordinary income or loss under Code
Section 988. Also, gains or losses attributable to fluctuations in exchange
rates that occur between the time a Fund accrues interest or other receivables
or accrues expenses or other liabilities denominated in a foreign currency and
the time the Fund actually collects such interest or receivables or pays such
expenses or liabilities may be treated as ordinary income or loss, as will gains
and losses attributable to fluctuations in exchange rates between the date a
foreign currency denominated debt instrument is purchased and the date that debt
instrument is disposed of or retired.

Section 1258 Conversion Transactions

Under Code Section 1258, a taxpayer shall not be entitled to capital gain
treatment for gain on the disposition or termination of any positions held as a
part of a "conversion transaction" which would otherwise qualify for capital
gains treatment. In general, a conversion transaction is one in which: (1)
substantially all of the taxpayer's expected return is attributable to the time
value of the taxpayer's net investment in the transaction; and (2) which
involves the taxpayer taking two or more offsetting positions with respect to
property (but only if such property was acquired and such offsetting positions
were entered into on a substantially contemporaneous basis) or entering into
certain straddle positions. If applicable, Code Section 1258 would
recharacterize a portion of the taxpayer's gain as ordinary income to the extent
of interest which would have accrued on the taxpayer's net investment in the
conversion transaction for the period ending on the date of such disposition at
a rate equal to 120% of the relevant applicable federal rate. Code Section
1258(c)(2)(D) gives the Treasury Department broad authority to promulgate
regulations to define the concept of conversion transactions.

Although the Funds do not believe that their trading strategies will result
in the Funds engaging in conversion transactions, it is possible that the
Treasury Department could draft regulations which provide that some of the
Funds' trades will be treated as conversion transactions. Such regulations
could have a retroactive effect.

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Organization and Offering Expenses

The Funds are not entitled to deduct their organization and offering
expenses except to the extent amortization of certain organization expenditures
is permitted.

Calculation of Investor's "Adjusted Basis" and "At Risk Basis"

Each Investor's adjusted basis in his share in a Fund will equal his
purchase price thereof, increased by the amount of his share of items of income
and gain of the Fund and reduced, but not below zero, by: (a) the amount of his
share of Fund deductions and losses; (b) expenditures which are neither properly
deductible nor properly chargeable to his capital account; and (c) the amount
of any distributions received by such Investor.

An Investor who is an individual, trust, estate or a specific type of
closely-held corporation will be allowed to deduct his share of Fund losses only
to the extent of his "at risk" basis for his Fund interest. Generally, an
Investor will be considered "at risk" for an activity with respect to the amount
of money and the adjusted basis of property contributed to that activity and
amounts borrowed for use in an activity, to the extent that the Investor is
personally liable for the repayment of such borrowed amounts or has pledged
property, other than property used in such activity, as security for such
borrowed amounts.

Current Distributions by the Funds; Redemptions

Current Distributions. A current cash distribution by a Fund with respect
to shares held by an Investor will result in gain to the distributee Investor
only to the extent that the amount of cash distributed exceeds the Investor's
adjusted basis in its Fund shares owned. A current distribution will reduce the
distributee Investor's adjusted basis in his Fund shares, but not below zero.
Gain recognized as a result of such distributions will be considered as gain
from the sale or exchange of such Investor's shares in the Fund. Loss will not
be recognized by an Investor as a result of a current distribution by the Fund.

Liquidation of an Investor's Entire Interest in a Fund. Generally, a
distribution or series of distributions by a Fund to an Investor that results in
termination of its entire interest in such Fund will result in gain to the
distributee Investor only to the extent that cash, if any, distributed exceeds
the Investor's adjusted basis in its Fund shares. When only cash and unrealized
receivables are distributed, loss will be recognized to the extent that the
Investor's adjusted basis in its Fund shares exceeds the amount of cash
distributed and the basis to the Investor of any unrealized receivables
distributed. Any gain or loss recognized as a result of such distributions will
be considered as gain or loss from the sale or exchange of the distributee
Investor's Fund shares. Such gain or loss generally will be capital gain or
loss except to the extent the Funds distribute short-term obligations or "market
discount" obligations on which the Funds have not recognized income.

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Tax Treatment of Capital Gains and Losses

Amounts realized from the sale or exchange of assets of a Fund will
generally be treated as amounts realized from the sale or exchange of capital
assets. A net capital loss allocated to an Investor may be used to offset other
capital gains. Present law taxes both long-term and short-term capital gains of
corporations at the rates applicable to ordinary income. However, for Investors
other than corporations, net long-term capital gains (i.e., the excess of net
long-term capital gain over net short-term capital loss) are taxed at a maximum
marginal rate of 28%, while short-term capital gains are taxed at a maximum
marginal rate of 39.6%. For a taxpayer other than a corporation, such net
capital loss also may be used to offset ordinary income up to $3,000 per year.
In general, for taxpayers other than corporations, the unused portion of such
loss may be carried forward indefinitely, but not carried back. However, a
taxpayer, other than a corporation, may elect to carry back for three years net
losses resulting from Section 1256 Contracts, but only to the extent of
previously reported gain attributable to Section 1256 Contracts. In the case of
a corporate taxpayer, such capital loss may be offset only against capital
gains, but generally may be carried back three years or forward five years.
Further, the amount that may be carried back is limited to an amount which does
not cause or increase a net operating loss in a carryback year.

Limitation on Deduction of Investment Interest

The deduction by noncorporate taxpayers of interest on funds borrowed to
acquire or carry investment assets is limited to net investment income. Net
investment income is the excess of investment income over the expenses directly
incurred in earning such income. The amount disallowed may be carried forward
to subsequent tax years within certain limits. This limitation, if applicable,
is computed separately by each Investor and not by the Funds.

Limitation on Deductibility of Section 212 Expenses

Under Code Section 212, expenses incurred by an individual in the
production of income are deductible only to the extent they exceed 2% of the
individual's adjusted gross income. Under regulations promulgated by the
Treasury Department, the determination of whether Fund expenses are subject to
Code Section 212 is made at the entity level. The Funds intend to report fees
and expenses incurred in their trading activities as ordinary and necessary
business expenses allowable under Code Section 162. On audit, the IRS might
assert that the Funds' expenses are allowable under Code Section 212, and
therefore subject to the 2% floor.

Passive Activity Income or Loss

Under IRS regulations, the trading activity of the Funds will not
constitute a passive activity. Accordingly, neither the income nor the loss of
the Funds will be subject to the passive activity rules.

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Tax Elections

The Code provides for optional adjustments to the basis of Fund property
upon distribution of Fund property to an Investor (Code Section 734) and
transfers of shares (including by reason of death) (Code Section 743), provided
that a Fund election has been made pursuant to Code Section 754. The general
effect of such an election is that transferees of shares are treated, for
purposes of computing gain or loss, as though they had acquired a direct
interest in the Fund assets. Any such election, once made, is irrevocable
without the consent of the IRS. As a result of the complexities and added
expense of the tax accounting required to implement such an election, the Funds
do not presently intend to make such an election.

Tax Returns; Audits

The Funds will report their operations for tax purposes on the accrual
method for each year, and each will file annually a partnership information
income tax return and will distribute annually to their respective Investors a
form (Treasury Form K-1) showing its distributive share of such Fund's items of
income, gain, loss, deduction or credit. The Adviser will arrange for the
preparation and filing of all necessary tax returns for the Funds and will
furnish necessary instructions and information to the Investors for their
individual Federal income tax returns.

The Code generally provides that upon audit of a partnership return, the
tax treatment of any "partnership item" (including among other things, items of
partnership income, gain, loss, deduction, and credit) will be determined at the
partnership level in one uniform proceeding rather than in separate proceedings
with the partners. The period for assessment with respect to Fund items
generally will not expire before three years from the date of filing the Fund
return or, if later, the last date prescribed for filing such return determined
without regard to extension. Under some circumstances, the provisions of the
Code extend the period for assessment and, in addition, the period may be
extended with respect to any Investor by agreement with such Investor or, for
all Investors, by agreement with the designated "Tax Matters Partner." One
Investor of each Fund will be appointed the Tax Matters Partner with respect to
that Fund within the meaning of Code Section 6231(a)(7).

Additionally, Investors must report Fund items on their tax returns in a
manner consistent with the treatment of such items on the Fund information
return, or notify the IRS of any inconsistency. Failure to report the
inconsistency will allow the IRS to assess automatically and collect any
deficiency resulting from an adjustment to conform the treatment of the item to
that presented on the Fund tax return and could result in the imposition of
certain penalties.

Tax-Exempt Investors

Under Code Section 511, a tax is imposed on the "unrelated business taxable
income" ("UBTI") of organizations otherwise exempt from tax under Code section
501(a). Code Section 512 defines the term UBTI as the gross income derived by
any organization from any unrelated trade or

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business (as defined in Code Section 513) less applicable deductions. Income
from certain types of investments made by the Funds which is allocated to tax-
exempt Investors may be treated as UBTI subject to the tax imposed by Code
section 511. In addition, if and to the extent that a Fund borrows in connection
with the acquisition of any property, income from such debt financed property
will be subject to the tax on UBTI. Income from securities trading transactions
generally will not give rise to UBTI. While it is anticipated that the Adviser
generally will attempt to make investments in a manner which does not give rise
to the tax imposed on UBTI, the Adviser may make investments in assets the
income from which gives rise to UBTI or may borrow in connection with the
acquisition of property if the Adviser believes that the returns on such
investments justify incurring or the risk of incurring UBTI. The Funds
anticipate that they will distribute annually to each such tax-exempt Investor
after the end of the Funds' fiscal year, the information necessary for that
Investor to determine the portion of its distributive share of each item of
income, gain and deduction that is to be taken into account in the determination
of unrelated business taxable income.

Foreign Income Taxes

The Funds may pay or accrue foreign income taxes in connection with
trading. Such amounts will be deemed to be received by Investors and paid to
the foreign government. An Investor may (subject to certain limitations) elect
each taxable year to treat its share of these foreign income taxes as a credit
against its U.S. income tax liability or to deduct such amount from its U.S.
taxable income. However, an Investor's ability to obtain a credit for such
taxes depends on the particular circumstances applicable to that Investor and it
is possible that an Investor may get little or no foreign tax credit benefit
with respect to its share of foreign taxes paid or accrued by the Funds. In
those cases in which an Investor can fully utilize foreign tax credits for a
particular year, such tax credits would increase the effective return on its
investment in the Funds as compared with the effective return if the Investor
deducted such taxes in determining its U.S. taxable income. In most instances,
credits will be included in the foreign "basket" of an Investor for foreign tax
credit purposes.

Foreign Investors

A nonresident alien or foreign entity (a "Foreign Person") is generally
subject to U.S. federal income tax on all income that is effectively connected
with the conduct of a U.S. trade or business. A Foreign Person who is a partner
in a partnership is generally considered to be engaged in a U.S. trade or
business if the partnership is so engaged. Accordingly, a Foreign Person that
invests in a Fund (a "Foreign Investor") may be treated as engaged in a U.S.
trade or business and, if so, will be obligated to file a U.S. income tax return
with respect to its share of the Fund's income that is effectively connected
with the conduct of a trade or business of the Fund in the United States. Any
such trade or business income will be taxed at the graduated rates that apply to
income earned by U.S. persons. In addition, foreign corporations may be subject
to the "branch profits tax" on its "effectively connected earnings and profits"
arising out of an investment in the Funds.

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The Funds will be required to withhold a tax at the highest applicable rate
(currently 39.6% in the case of an individual and 35% in the case of a
corporation) from the Foreign Person's distributive share of any income/gain or
loss that is effectively connected with that U.S. trade or business. Any tax
withheld will constitute a credit against the Foreign Investor's U.S. federal
income tax liability and will be refundable to the extent that it exceeds such
liability. Foreign Persons are also generally subject to a 30% withholding tax
(unless reduced by an applicable treaty) on certain investment income that is
not effectively connected with the conduct of a U.S. trade or business.

State and Local Taxation

An Investor's distributive share of a Fund's taxable income or loss
generally will have to be taken into account in determining the Investor's state
and local income tax liability in a jurisdiction in which such Investor is a
resident. In addition, a state or other taxing jurisdiction in which an
Investor is not a resident but in which the Investor may be deemed to be engaged
in business may impose a tax on that Investor with respect to its share of Fund
income derived from that state or other taxing jurisdiction.

The Funds themselves may also be subject to state and/or local tax on some
or all of their net income, depending on the nature and extent of a Fund's
activities in the particular state or locality. Any such tax imposed on the
Funds will be an expense paid out of the Funds' income and allocated among the
Investors in accordance with the Trust Agreement.

Prospective Investors should consult their own tax advisers concerning the
state and local tax consequences of investing in a Fund.

THE FOREGOING ANALYSIS IS NOT INTENDED AS A SUBSTITUTE FOR CAREFUL
INCOME TAX PLANNING. PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN TAX
ADVISERS WITH RESPECT TO THE EFFECTS OF THIS INVESTMENT ON THEIR OWN TAX
SITUATIONS.

Item 21. Underwriters.

Not applicable.

Item 22. Calculation of Performance Data.

Total Return

Current yield and total return quotations used by the Funds are based on
standardized methods of computing performance mandated by SEC Rules and Form N-
1A under the Investment Company Act. As the following formula indicates, the
average annual total return is determined by multiplying a hypothetical initial
purchase order of $1,000 by the average annual compound rate of return
(including capital appreciation/depreciation and

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dividends and distributions paid and reinvested) for the stated period less any
fees charged to all shareholder accounts and annualizing the result. The
calculation assumes that all dividends and distributions are reinvested at the
net asset value on the reinvestment dates during the period. The quotation
assumes the account was completely redeemed at the end of each period and
deduction of all applicable charges and fees. According to the Commission
formula:

P(1+T)/n/=ERV

where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical
$1,000 payment made at the beginning of the 1,
5 or 10 year periods at the end of the 1, 5 or
10 year periods (or fractional portion thereof).

Based upon the foregoing calculations, the average annual total return for: (i)
the Brinson Global Securities Fund for the period April 28, 1995 (commencement
of operations) through December 31, 1996, was 19.45% and for the fiscal year
ended December 31, 1996 was 15.03%; (ii) the Brinson Post-Venture Fund for the
period April 28, 1995 (commencement of operations) through December 31, 1996 was
28.57% and for the fiscal year ended December 31, 1996 was 27.16% (iii) the
Brinson High Yield Fund for the period April 28, 1995 (commencement of
operations) through December 31, 1996 was 13.21% and for the fiscal year ended
December 31, 1996 was 14.73%; (iv) the Brinson Emerging Markets Equity Fund for
the period June 30, 1995 (commencement of operations) through, December 31, 1996
was 1.23% and for the fiscal year ended December 31, 1996 was 9.34%; (v) the
Brinson Emerging Markets Debt Fund for the period June 30, 1995 (commencement of
operations) through December 31, 1996 was 41.55% and for the fiscal year ended
December 31, 1996 was 45.03%; and (vi) the Brinson Short-Term Fund for the
period June 28, 1996 (commencement of operations) through December 31, 1996 was
6.09%.

Yield
- -----

As indicated below, current yield is determined by dividing the net investment
income per share earned during the period by the maximum offering price per
share on the last day of the period and annualizing the result. Expenses
accrued for the period include any fees charged to all shareholders during the
30-day (or one month) base periods. According to the Commission formula:

Yield = 2[( a - b + 1)/6/ -1]
-----
cd

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

B-180
<PAGE>

The yield of the Funds may be calculated by dividing the net investment income
per share earned by the particular Fund during a 30-day (or one-month) period by
the net asset value per share on the last day of the period and annualizing the
result on a semi-annual basis. A Fund's net investment income per share earned
during the period is based on the average daily number of shares outstanding
during the period entitled to receive dividends and includes dividends and
interest earned during the period minus expenses accrued for the period, net of
reimbursements.

Item 23. Financial Statements.

The Financial Statements contained in the Funds' Annual Report dated
December 31, 1996 are incorporated herein by reference.

B-181
<PAGE>

APPENDIX A
INVESTMENT PRACTICES

Set forth below is a discussion of various hedging and fixed income
strategies that may be pursued by the Adviser on behalf of some or all of the
Funds. The discussion herein is general in nature and describes hedging and
fixed income strategies of the Funds in both U.S. and non-U.S. markets; certain
of the Funds limit their investments to the United States and the discussion
below should therefore be read in conjunction with the applicable Prospectuses.
The Funds will not be obligated to pursue any of these investment strategies and
make no representation as to the availability of these techniques at this time
or at any time in the future.

The Funds may buy and sell put and call options traded on U.S. or foreign
exchanges or over-the-counter and may attempt to manage the overall risk of the
portfolio investments through hedging strategies. The Funds may engage in
certain options strategies involving securities, stock and fixed income indexes,
futures and currencies and may enter into forward currency contracts in order to
attempt to enhance income or to hedge the Funds' investments. The Funds also
may use futures contracts, and forward currency contracts, and use options and
futures contracts for hedging purposes or in other circumstances permitted by
the Commodity Futures Trading Commission ("CFTC"). The foregoing instruments
are sometimes referred to collectively as "Hedging Instruments" and certain
special characteristics of and risks associated with using Hedging Instruments
are discussed below. Hedging Instruments may also be used in an attempt to
manage the Funds' average duration, foreign currency exposure and other risks of
investment which can affect fluctuations in the Funds' net asset values.

In addition to the investment limitations of the Funds described herein,
use of these instruments may be subject to applicable regulations of the
Commission, the several options and futures exchanges upon which options and
futures contracts are traded, and other regulatory authorities. In addition to
the products, strategies and risks described herein, the Adviser may become
aware of additional opportunities in connection with options, futures contracts,
forward currency contracts and other hedging techniques. The Adviser may
utilize these opportunities to the extent that they are consistent with the
Funds' investment objectives and permitted by the Funds' investment limitations
and applicable regulatory authorities.

Cover for Options and Futures Strategies. The Funds generally will not use
leverage in their options and futures strategies. In the case of a transaction
entered into as a hedge, the Funds will hold securities, currencies or other
options or futures positions whose values are expected to offset ("cover")
obligations under the transaction. A Fund will not enter into an option or a
futures strategy that exposes the Fund to an obligation to another party unless
it owns (1) an offsetting ("covered") position in securities, currencies or
other options or futures contracts or (2) cash or U.S. government securities
with a value sufficient at all times to cover its potential obligations. The
Funds will comply with guidelines established by the Commission with respect to
coverage of option and futures strategies by mutual funds and, if such
guidelines so require, will set aside cash and U.S. government securities in a
segregated account with their custodian in the amount prescribed. Securities,
currencies or other options or futures positions used for cover and securities
held in a segregated account cannot be sold or closed out while the option or
futures strategy is outstanding,

B-182
<PAGE>

unless they are replaced with similar assets. As a result, there is a
possibility that the use of cover or segregation involving a large percentage of
the Funds' assets could impede fund management or the Funds' ability to meet
current obligations.

Option Income and Hedging Strategies. The Funds may purchase and write
(sell) options traded on a U.S. or, where applicable, foreign exchange or over-
the-counter.

The Funds may purchase call options on securities that the Adviser intends
to include in the Funds' portfolio in order to fix the cost of a future
purchase. Call options also may be purchased as a means of enhancing returns
by, for example, participating in an anticipated price increase of a security on
a more limited risk basis than would be possible if the security itself were
purchased. In the event of a decline in the price of the underlying security,
use of this strategy would serve to limit the Funds' potential loss to the
option premium paid; conversely, if the market price of the underlying security
increases above the exercise price and a Fund either sells or exercises the
option, any profit eventually realized will be reduced by the premium paid.

The Funds may purchase put options on securities in order to attempt to
hedge against a decline in the market value of securities held in their
portfolios or to enhance return. A put option would enable the Funds to sell
the underlying security at a predetermined exercise price; thus the potential
for loss to the Funds below the exercise price would be limited to the option
premium paid. If the market price of the underlying security were higher than
the exercise price of the put option, any profit the Funds realize on the sale
of the security would be reduced by the premium paid for the put option less any
amount for which the put option may be sold.

The Funds may write covered call options on securities in which they may
invest for hedging purposes or to increase income in the form of premiums
received from the purchasers of the options. Because it can be expected that a
call option will be exercised if the market value of the underlying security
increases to a level greater than the exercise price, the Funds will generally
write covered call options on securities when the Adviser believes that the
premium received by the Funds, plus anticipated appreciation in the market price
of the underlying security up to the exercise price of the option, will be
greater than the total appreciation in the price of the security. The strategy
may also be used to provide limited protection against a decrease in the market
price of the security in an amount equal to the premium received for writing the
call option less any transactional costs. Thus, in the event that the market
price of the underlying security held by the Funds declines, the amount of such
decline will be offset wholly or in part by the amount of the premium received
by the Funds. If, however, there is an increase in the market price of the
underlying security and the option is exercised, the Funds would be obligated to
sell the security at less than its market value. The Funds would give up the
ability to sell the portfolio securities used to cover the call option while the
call option is outstanding. In the case of over-the-counter options written by
the Funds, such securities would also be considered illiquid. Similarly, assets
used to "cover" over-the-counter options written by the Funds will be treated as
illiquid unless the over-the-counter options are sold to qualified dealers who
agree that a Fund may repurchase any over-the-counter options it writes for a
maximum price to be calculated by a formula set forth in the option agreement.
The "cover" for an over-the-

B-183
<PAGE>

counter option written subject to this procedure would be considered illiquid
only to the extent that the maximum repurchase price under the formula exceeds
the intrinsic value of the option. In addition, the Funds could lose the ability
to participate in an increase in the value of such securities above the exercise
price of the call option because such an increase would likely be offset by an
increase in the cost of closing out the call option (or could be negated if the
buyer chose to exercise the call option at an exercise price below the
securities' current market value).

The Funds may write put options. A put option gives the purchaser of the
option the right to sell, and the writer (seller) the obligation to buy, the
underlying security at the exercise price during the option period. So long as
the obligation of the writer continues, the writer may be assigned an exercise
notice by the purchaser of options requiring the writer to make payment of the
exercise price against delivery of the underlying security or take delivery.
The operation of put options in other respects, including their related risks
and rewards, is substantially identical to that of call options. If the put
option is not exercised, the Funds will realize income in the amount of the
premium received. This technique could be used to enhance current return during
periods when the Adviser expects that the price of the security will not
fluctuate greatly. The risk in such a transaction would be that the market
price of the underlying security would decline below the exercise price less the
premium received, in which case the Funds would expect to suffer a loss.

The Funds may purchase put and call options and write put and covered call
options on indices in much the same manner as the options discussed above,
except that index options may serve as a hedge against overall fluctuations in
the securities markets (or a market sector) rather than anticipated increases or
decreases in the value of a particular security. An index assigns a value to
the securities included in the index and fluctuates with changes in such values.
An option on an index gives the holder the right, upon exercise, to receive an
amount of cash if the closing level of the index upon which the option is based
is greater than (in the case of a call) or lesser than (in the case of a put)
the exercise price of the option. This amount of cash is equal to the
difference between the closing price of the index and the exercise price of the
option expressed in dollars times a specified multiple (the "multiplier"). The
indices on which options are traded include both U.S. and non-U.S. markets. The
effectiveness of hedging techniques using index options will depend on the
extent to which price movements in the index selected correlate with price
movements of the securities in which the Funds invest.

The Funds may purchase and write covered straddles on securities or
indexes. A long straddle is a combination of a call and a put option purchased
on the same security. The Funds would enter into a long straddle when the
Adviser believes that it is likely that the price of the underlying security
will be more volatile during the term of the options than the option pricing
implies. A short straddle is a combination of a call and a put written on the
same security. The Funds would enter into a short straddle when the Adviser
believes that it is unlikely the price of the underlying security will be as
volatile during the term of the options as the option pricing implies.

The writing of a call option on a futures contract constitutes a partial
hedge against the declining price of the security or foreign currency which is
deliverable upon exercise of the futures

B-184
<PAGE>

contract. If the futures price at the expiration of the option is below the
exercise price, the Funds will retain the full amount of the option premium
which provides a partial hedge against any decline that may have occurred in the
value of a Fund's investment portfolio holdings. The writing of a put option on
a futures contract constitutes a partial hedge against the increasing price of
the security or foreign currency which is deliverable upon exercise of the
futures contract. If the futures price at the expiration of the option is higher
than the exercise price, the Funds will retain the full amount of the option
premium which provides a partial hedge against any increase in the price of
securities which the Funds intend to purchase.

Options on a stock index future give the holder the right to receive cash.
Upon exercise of the option, the delivery of the futures position by the writer
of the option to the holder of the option will be accompanied by delivery of the
accumulated balance in the writer's futures margin account which represents the
amount by which the market price of the futures contract, at exercise, exceeds,
in the case of a call, or is less than, in the case of a put, the exercise price
of the futures contract. If an option is exercised on the last trading day
prior to the expiration date of the option, the settlement will be made entirely
in cash equal to the difference between the exercise price of the option and the
closing price of the futures contract on the expiration date. If a put or call
option which a Fund has written is exercised, the Fund may incur a loss which
will be reduced by the amount of the premium it received. Depending on the
degree of correlation between changes in the value of its portfolio securities
and changes in the value of its options positions, a Fund's losses from existing
options on futures may, to some extent, be reduced or increased by changes in
the value of portfolio securities. For example, a Fund will purchase a put
option on a futures contract to hedge the Fund's investment portfolio against
the risk of rising interest rates.

Further, with respect to options on futures contracts, a Fund may seek to
close out an option position by writing or buying an offsetting position
covering the same securities or contracts and have the same exercise price and
expiration date. The ability to establish and close out positions on options
will be subject to the maintenance of a liquid secondary market, which cannot be
assured.

Special Characteristics and Risks of Options Trading. A Fund may
effectively terminate its right or obligation under an option by entering into a
closing transaction. If a Fund wishes to terminate its obligation to purchase
or sell securities under a put or call option it has written, the Fund may
purchase a put or call option of the same series (i.e., an option identical in
its terms to the option previously written); this is known as a closing purchase
transaction. Conversely, in order to terminate its right to purchase or sell
specified securities or currencies under a call or put option it has purchased,
a Fund may write an option of the same series as the option held; this is known
as a closing sale transaction. Closing transactions essentially permit the
Funds to realize profits or limit losses on options positions prior to the
exercise or

B-185
<PAGE>

expiration of the option. Whether a profit or loss is realized from a closing
transaction depends on the price movement of the underlying security or currency
and the market value of the option.

In considering the use of options to enhance income or to hedge the Funds'
investments, particular note should be taken of the following:

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

(2) Options normally have expiration dates of up to 90 days. The exercise
price of the options may be below, equal to or above the current market value of
the underlying securities, index or currencies. Purchased options that expire
unexercised have no value. Unless an option purchased by the Funds is exercised
or unless a closing transaction is effected with respect to that position, the
Funds will realize a loss in the amount of the premium paid and any transaction
costs.

(3) A position in an exchange-listed option may be closed out only on an
exchange that provides a secondary market for identical options. Although the
Funds intend to purchase or write only those options for which there appears to
be an active secondary market, there is no assurance that a liquid secondary
market will exist for any particular option at any specific time. Closing
transactions may be effected with respect to options traded in the over-the-
counter markets (currently the primary markets for options on debt securities)
only by negotiating directly with the other party to the option contract, or in
a secondary market for the option if such a market exists. Although the Funds
will enter into over-the-counter options only with dealers that are expected to
be capable of entering into closing transactions with the Funds, there can be no
assurance that the Funds will be able to liquidate an over-the-counter option at
a favorable price at any time prior to expiration. In the event of insolvency
of the counter-party, the Funds may be unable to liquidate an over-the-counter
option. Accordingly, it may not be possible to effect closing transactions with
respect to certain options, with the result that the Funds would have to
exercise those options which they have purchased in order to realize any profit.
With respect to options written by the Funds, the inability to enter into a
closing transaction may result in material losses to the Funds. For example,
because the Funds must maintain a covered position with respect to any call
option they write on a security, index, currency or future, the Funds may not
sell the underlying security or currency (or invest any cash, government
securities or short-term debt securities used to cover an index option) during
the period they are obligated under the option. This requirement may impair the
Funds' ability to sell the security or make an investment at a time when such a
sale or investment might be advantageous.

(4) Index options are typically settled in cash. If a Fund writes a call
option on an index, the Fund will not know in advance the difference, if any,
between the closing value of the index on the

B-186
<PAGE>

exercise date and the exercise price of the call option itself and thus will not
know the amount of cash payable upon settlement. In addition, a holder of an
index option who exercises it before the closing index value for that day is
available runs the risk that the level of the underlying index may subsequently
change.

(5) Index prices may be distorted if trading of a substantial number of
securities included in the index is interrupted causing the trading of options
on that index to be halted. If a trading halt occurred, a Fund would not be
able to close out options which it had purchased and the Fund may incur losses
if the underlying index moved adversely before trading resumed. If a trading
halt occurred and restrictions prohibiting the exercise of options were imposed
through the close of trading on the last day before expiration, exercises on
that day would be settled on the basis of a closing index value that may not
reflect current price information for securities representing a substantial
portion of the value of the index.

(6) If a Fund holds an index option and exercises it before final
determination of the closing index value for that day, it runs the risk that the
level of the underlying index may change before closing. If such a change
causes the exercised option to fall "out-of-the-money," the Fund will be
required to pay the difference between the closing index value and the exercise
price of the option (times the applicable multiplier) to the assigned writer.
Although a Fund may be able to minimize this risk by withholding exercise
instructions until just before the daily cutoff time or by selling rather than
exercising the option when the index level is close to the exercise price, it
may not be possible to eliminate this risk entirely because the cutoff times for
index options may be earlier than those fixed for other types of options and may
occur before definitive closing index values are announced.

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

Investment Limitations On Options Transactions. The ability of the Funds
to engage in options transactions is subject to certain limitations. A Fund may
purchase call options to the extent that premiums paid by the Fund do not
aggregate more than 20% of such Fund's total assets. A Fund will write call
options only on a covered basis, which means that such Fund will own the
underlying security subject to a call option at all times during the option
period. The Funds may only purchase put options to the extent that the premiums
on all outstanding put options do not exceed 20% of each Fund's total assets.
With regard to the writing of put options, the Funds will limit the aggregate
value of the obligations underlying such put options to 40% of each Fund's total
net assets. The Funds will only invest in over-the-counter options to the
extent consistent with the 15% limit on investments in illiquid securities.

B-187
<PAGE>

Forward Foreign Currency Contracts (All Funds, with the exception of the
Brinson High Yield Fund and Brinson Post-Venture Fund). The Funds may purchase
or sell currencies and/or engage in forward foreign currency transactions in
order to expedite settlement of portfolio transactions and to manage currency
risk. A forward foreign currency contract involves an obligation to purchase or
sell 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. 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 generally charged at any stage for trades. The Funds will
account for these contracts by marking-to-market each day at current forward
values .

Although the contracts are not presently regulated by the CFTC, the CFTC
may in the future assert authority to regulate these contracts. In such event,
the Funds' ability to utilize forward foreign currency exchange contracts may be
restricted. The Funds will comply with guidelines established by the Commission
with respect to coverage of forward contracts entered into by mutual funds and,
if such guidelines so require, will set aside cash, U.S. government securities
or liquid, high-grade debt securities in a segregated account with their
custodian in the amount prescribed. Under normal circumstances, consideration
of the prospect for currency parities will be incorporated into the longer term
investment decisions made with regard to overall diversification strategies.
However, the Adviser believes that it is important to have the flexibility to
enter into such forward contracts when it determines that the best interests of
the Funds will be served.

At the maturity of a forward contract, the Funds may either accept or make
delivery of the currency specified in the contract or, at or prior to maturity,
enter into a closing purchase transaction involving the purchase or sale of an
offsetting contract. Closing purchase transactions with respect to forward
contracts are usually effected with the currency trader who is a party to the
original forward contract.

At or before the maturity date of a forward contract requiring the Funds to
sell a currency, the Funds may either sell the portfolio security and use the
sale proceeds to make delivery of the currency or retain the security and offset
their contractual obligation to deliver the currency by purchasing a second
contract pursuant to which the Funds will obtain, on the same maturity date, the
same amount of the currency that they are obligated to deliver. Similarly, a
Fund may close out a forward contract requiring it to purchase a specified
currency by entering into a second contract entitling it to sell the same amount
of the same currency on the maturity date of the first contract. The Funds
would realize a gain or loss as a result of entering into such an offsetting
forward currency contract under either circumstance to the extent the exchange
rate or rates between the currencies involved moved between the execution dates
of the first contract and the offsetting contract.

The cost to the Funds of engaging in forward currency contracts will vary
with factors such as the currencies involved, the length of the contract period
and the market conditions then prevailing. Because forward currency contracts
are usually entered into on a principal basis, no fees

B-188
<PAGE>

or commissions are involved. The use of forward currency contracts will not
eliminate fluctuations in the prices of the underlying securities a Fund owns or
intends to acquire, but it will fix a rate of exchange in advance. In addition,
although forward currency contracts limit the risk of loss due to a decline in
the value of the hedged currencies, at the same time they limit any potential
gain that might result should the value of the currencies increase.

Futures Contracts. The Funds may enter into contracts for the purchase or
sale for future delivery of securities, including index contracts or foreign
currencies. While futures contracts provide for the delivery of securities,
deliveries usually do not occur. Futures contracts are generally terminated by
entering into offsetting transactions.

The Funds may enter into such futures contracts to protect against the
adverse affects of fluctuations in security prices, interest or foreign exchange
rates without actually buying or selling the securities or foreign currency.
For example, if interest rates are expected to increase, a Fund might enter into
futures contracts for the sale of debt securities. Such a sale would have much
the same effect as selling an equivalent value of the debt securities owned by
the Funds. If interest rates did increase, the value of the debt securities in
the portfolio would decline, but the value of the futures contracts to the Funds
would increase at approximately the same rate, thereby keeping the net asset
value of a Fund from declining as much as it otherwise would have. Similarly,
when it is expected that interest rates may decline, futures contracts may be
purchased to hedge in anticipation of subsequent purchases of securities at
higher prices. Since the fluctuations in the value of futures contracts should
be similar to those of debt securities, the Funds could take advantage of the
anticipated rise in value of debt securities without actually buying them until
the market had stabilized. At that time, the futures contracts could be
liquidated and the Funds could then buy debt securities on the cash market.

A stock index futures contract obligates the seller to deliver (and the
purchaser to take) an amount of cash equal to a specific dollar amount times the
difference between the value of a specific stock index at the close of the last
trading day of the contract and the price at which the agreement was made. Open
futures contracts are valued on a daily basis and a Fund may be obligated to
provide or receive cash reflecting any decline or increase in the contract's
value. No physical delivery of the underlying stocks in the index is made in
the future.

To the extent that market prices move in an unexpected direction, the Funds
may not achieve the anticipated benefits of futures contracts or may realize a
loss. For example, if a Fund is hedged against the possibility of an increase
in interest rates which would adversely affect the price of securities held in
its portfolio and interest rates decrease instead, such Fund would lose part or
all of the benefit of the increased value which it has because it would have
offsetting losses in its futures position. In addition, in such situations, if
the Fund had insufficient cash, it may be required to sell securities from its
portfolio to meet daily variation margin requirements. Such sales of securities
may, but will not necessarily, be at increased prices which reflect the rising
market. A Fund may be required to sell securities at a time when it may be
disadvantageous to do so.

B-189
<PAGE>

In addition, when a Fund engages in futures transactions, to the extent
required by the Commission, it will maintain with its custodian, assets in a
segregated account to cover its obligations with respect to such contracts,
which assets will consist of cash, cash equivalents or high quality debt
securities from its portfolio in an amount equal to the difference between the
fluctuating market value of such futures contracts and the aggregate value of
the initial and variation margin payments made by the Fund with respect to such
futures contracts.

Swaps. The Funds may engage in interest rate, currency and index swaps and
the purchase or sale of related caps, floors and collars and other derivative
instruments. The Funds expect to enter into these transactions primarily to
preserve a return or spread on a particular investment or portion of their
portfolios, to protect against currency fluctuations, as a technique for
managing portfolio duration (i.e., the price sensitivity to changes in interest
rates) or to protect against any increase in the price of securities the Funds
anticipate purchasing at a later date, or to gain exposure to certain markets.

B-190
<PAGE>

B-191
<PAGE>

BRINSON RELATIONSHIP FUNDS

Form N-1A

Part C. Other Information

Item 24. Financial Statements and Exhibits.

(a) Financial Statements:

Included in Part A:
None.

Included in Part B:

Brinson Relationship Funds:

(1) Notes to Financial Statements at December 31, 1996 (audited).*

(2) Report of Independent Auditors relating to the Financial
Statements at December 31, 1996 and for the year then ended.*

Brinson Global Securities Fund:
-------------------------------

(1) Schedule of Investments at December 31, 1996 (audited).*

(2) Statement of Assets and Liabilities at December 31, 1996
(audited).*

(3) Statement of Operations for the period April 28, 1995
(commencement of operations) to December 31, 1995 and the fiscal
year ended December 31, 1996 (audited).*

(4) Statement of Changes in Net Assets for the period April 28, 1995
(commencement of operations) to December 31, 1995 and the fiscal
year ended December 31, 1996 (audited).*

192
<PAGE>

(5) Financial Highlights (audited).*

Brinson Short-Term Fund:
------------------------

(1) Schedule of Investments at December 31, 1996 (audited).

(2) Statement of Assets and Liabilities at December 31, 1996
(audited).

(3) Statement of Operations for the period June 28, 1996
(commencement of operations) to December 31, 1995 and the fiscal
year ended December 31, 1996 (audited).

(4) Statement of Changes in Net Assets for the period June 28, 1996
(commencement of operations) to December 31, 1995 and the fiscal
year ended December 31, 1996 (audited).

(5) Financial Highlights (audited).

Brinson Post-Venture Fund:
--------------------------

(1) Schedule of Investments at December 31, 1996 (audited).*

(2) Statement of Assets and Liabilities at December 31, 1996
(audited).*

(3) Statement of Operations for the period April 28, 1995
(commencement of operations) to December 31, 1995 and the fiscal
year ended December 31, 1996 (audited).*

(4) Statement of Changes in Net Assets for the period April 28, 1995
(commencement of operations) to December 31, 1995 and the fiscal
year ended December 31, 1996 (audited).*

(5) Financial Highlights (audited).*

Brinson High Yield Fund:
------------------------

(1) Schedule of Investments at December 31, 1996 (audited).*

(2) Statement of Assets and Liabilities at December 31, 1996
(audited).*

(3) Statement of Operations for the period April 28, 1995
(commencement of operations) to December 31, 1995 and the fiscal
year ended December 31, 1996 (audited).*

(4) Statement of Changes in Net Assets for the period April 28, 1995
(commencement of operations) to December 31, 1995 and the fiscal
year ended December 31, 1996 (audited).*

(5) Financial Highlights (audited).*

Brinson Emerging Markets Equity Fund:
-------------------------------------

(1) Schedule of Investments at December 31, 1996

193
<PAGE>

(audited).*

(2) Statement of Assets and Liabilities at December 31, 1996
(audited).*

(3) Statement of Operations for the period June 30, 1995
(commencement of operations) to December 31, 1995 and the fiscal
year ended December 31, 1996 (audited).*

(4) Statement of Changes in Net Assets for the period June 30, 1995
(commencement of operations) to December 31, 1995 and the fiscal
year ended December 31, 1996 (audited).*

(5) Financial Highlights (audited).*

Brinson Emerging Markets Debt Fund:
-----------------------------------

(1) Schedule of Investments at December 31, 1996 (audited).*

(2) Statement of Assets and Liabilities at December 31, 1996
(audited).*

(3) Statement of Operations for the period June 30, 1995
(commencement of operations) to December 31, 1995 and the fiscal
year ended December 31, 1996 (audited).*

(4) Statement of Changes in Net Assets for the period June 30, 1995
(commencement of operations) to December 31, 1995 and the fiscal
year ended December 31, 1996 (audited).*

(5) Financial Highlights (audited).*

(b) Exhibits:
---------

<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
(1) (a) Certificate of Trust, Amendment to Certificate of Trust
and Agreement and Declaration of Trust of the
Registrant./1/

(b) Certificate of Amendment of Agreement and Declaration of
Trust of the Registrant./4/

</TABLE>

* Incorporated by reference to the Trust's Financial Statements filed
electronically with the Annual Report dated December 31, 1996 and filed with
the Securities and Exchange Commission on February 28, 1997.

194
<PAGE>

<TABLE>
<S> <C>
(2) By-Laws of the Registrant filed herewith electronically.

(3) None.

(4) None.

(5) Investment Advisory Agreement between the Registrant and
Brinson Partners, Inc., dated April 26, 1995, filed herewith
electronically.

(6) Not Applicable.

(7) Not Applicable.

(8) (a) Custodian Agreement between the Registrant and Bankers
Trust Company (the "Custodian")./1/

(b) See (9) (e).

(9) (a) Multiple Services Agreement dated March 1, 1995 between
the Registrant and Fund/Plan Services, Inc./1/

(b) Amendment to Multiple Services Agreement dated April 26,
1995 between the Registrant and Fund/Plan Services,
Inc./2/

(c) Amendment to Multiple Services Agreement dated August 21,
1995 between the Registrant and Fund/Plan Services,
Inc./2/

(d) Multiple Services Agreement dated November 20, 1995
between the Registrant and Fund/Plan Services, Inc./3/

(e) Form of Multiple Services Agreement dated _________, 1997
between the Registrant and Morgan Stanley Trust Company
("MSTC") filed herewith electronically.

(10) Not Applicable.

(11) Not Applicable.

(12) Not Applicable.

(13) Not Applicable.

(14) None.

(15) None.

(17) See Exhibit 27 below.

(18) None.

</TABLE>

195
<PAGE>

<TABLE>
<S> <C>
(16) None.

(27) Financial Data Schedule - filed herewith electronically.
</TABLE>
- ------------------------------

/1/ Incorporated by reference from the Registrant's Registration Statement on
Form N-1A filed with the Securities and Exchange Commission on April 27,
1995.

/2/ Incorporated by reference from the Registrant's Registration Statement on
Form N-1A filed with the Securities and Exchange Commission on October 30,
1995.

/3/ Incorporated by reference from the Registrant's Registration Statement on
Form N-1A filed electronically with the Securities and Exchange Commission
on February 29, 1996.

/4/ Incorporated by reference from the Registrant's Registration Statement on
Form N-1A filed electronically with the Securities and Exchange Commission
on August 13, 1996.

Item 25. Persons Controlled by or under Common Control with Registrant.

Registrant is controlled by Brinson Trust Company Collective
Investment Trust for Pension & Profit Sharing Trust's Global
Securities Fund. Chicago, IL by reason of its ownership of 39.23% of
shares of the Trust.

Item 26. Number of Holders of Securities.

<TABLE>
<CAPTION>
(1) (2)
Title of Class Number of Shareholders of Record
Shares of Beneficial Interest as of April 1, 1997
----------------------------- ---------------------------------
<S> <C>
Series 1: Brinson Global Securities Fund 12

Series 2: Brinson Short-Term Fund 2

Series 3: Brinson Post-Venture Fund 6

Series 4: Brinson High Yield Fund 7

Series 5: Brinson Emerging Markets Equity Fund 19

Series 6: Brinson Emerging Markets Debt Fund 14
</TABLE>

Item 27. Indemnification.

As permitted by Sections 17(h) and (i) of the Investment Company Act of 1940,
as amended (the "Investment Company Act"), indemnification provisions for each
of the Registrant's Trustees, officers, employees, agents and persons who serve
at the Trust's request as directors, officers or trustees of other organizations
in which the Trust has any interest as a shareholder, creditor or otherwise are
set forth in Article V, Section 5.2 of the Registrant's Agreement and
Declaration of Trust, as amended (included in Item 24(b)(1) above).

196
<PAGE>

Pursuant to Article V, Section 5.1 of the Registrant's Agreement and
Declaration of Trust, as amended, the Trust shall indemnify each of its
Trustees, officers, employees, and agents against all liabilities and expenses
(including amounts paid in satisfaction of judgements, in compromise, as fines
and penalties, and as counsel fees) reasonably incurred by him, her or it in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, in which he, she or it may be involved or
with which he, she or it may be threatened, while in office or thereafter, by
reason of his, her or its being or having been such a Trustee, officer, employee
or agent, except with respect to any matter as to which he, she or it shall have
been adjudicated to have acted in bad faith, or with willful misfeasance, gross
negligence or reckless disregard of his, her or its duties to the Registrant.

"Director and Officer" liability policies purchased by the Trust insure the
Trust's Trustees and officers, subject to the policies' coverage limits,
exclusions and deductibles, against loss resulting from claims by reason of any
act, error, omission, misstatement, misleading statement, neglect or breach of
duty.

Indemnification of the Registrant's Custodian and Administrator against
certain liabilities is provided for in the following documents:

(a) Section V of the Custodian Agreement (Item 24(b)(8) above).

(b) Section 9(d) of the Multiple Services Agreement (Item 24(b)(9)(d)
above).

The Registrant hereby undertakes that it will apply the indemnification
provision of its Agreement and Declaration of Trust as amended, in a manner
consistent with Release 11,330 of the Securities and Exchange Commission under
the Investment Company Act, so long as the interpretation of Sections 17(h) and
17(i) of the Investment Company Act remains in effect.

Item 28. Business and Other Connections of Adviser.

Brinson Partners, Inc. provides investment advisory services for a variety of
individuals and institutions and as of December 31, 1996 had approximately $119
billion in assets under management. It presently acts as investment advisor to
seven other investment companies: The Brinson Funds, Enterprise Accumulation
Trust - International Growth Portfolio, Enterprise Group of Funds, Inc.-
International Growth Portfolio, Fort Dearborn Income Securities, Inc., Managed
Account Services Portfolio Trust -Pace Large Company Value Equity Investments,
Hirtle Callaghan Trust - International Equity Portfolio and John Hancock
Variable Series Trust I- International Balanced Fund. Brinson Partners, Inc. is
controlled by Swiss Bank Corporation. Swiss Bank Corporation with headquarters
in Basel, Switzerland, is an internationally diversified organization with
operations in many areas of the financial services industry.

For information as to the business, profession, vocation or employment of a
substantial nature engaged in by Brinson Partners, Inc. or any of its respective
officers and directors during the past two years, reference is made to Form ADV,
filed with the Securities and Exchange

197
<PAGE>

Commission under the Investment Advisers Act of 1940, as amended, by Brinson
Partners, Inc., incorporated herein by reference (SEC File No. 801-34910).

Item 29. Principal Underwriter.

Not Applicable.

Item 30. Location of Accounts and Records.

All accounts, books and other documents required to be maintained by Section
31(a) of the Investment Company Act and Rules 31a-1 to 31a-3 promulgated
thereunder will be maintained either at the offices of (i) the Registrant
(Brinson Relationship Funds, 209 South LaSalle Street, Chicago, IL 60604-1294);
(ii) the Adviser (Brinson Partners, Inc., 209 South LaSalle Street, Chicago, IL
60604-1294); (iii) the administrators--until May 9, 1997, FPS Services, Inc.,
3200 Horizon Drive, P.O. Box 61503, King of Prussia, PA 19406-0903. Effective
May 10, 1997, Morgan Stanley Trust Company, One Pierrepont Plaza, Brooklyn, NY
11201, or Chase Global Funds Services Company, 73 Tremont Street, Boston,
Massachusetts, 02108-3913; or (iv) the Custodian--until May 9, 1997, Bankers
Trust Company, One Bankers Trust Plaza, New York, NY 10006-1107; effective May
10, 1997, Morgan Stanley Trust Company, One Pierrepont Plaza, Brooklyn, NY
11201.

Item 31. Management Services.

The Registrant is not a party to any management-related service contract not
discussed in Part A or Part B of this Form.

Item 32. Undertakings.

The undersigned Registrant hereby undertakes to include a discussion of the
Trust's performance in the Trust's annual report to shareholders which will be
made available to shareholders upon request and without charge.

The undersigned Registrant hereby undertakes to promptly call a meeting of
shareholders for the purpose of voting upon the question of removal of a Trustee
or Trustees if it is requested to do so by the holders of at least 10% of its
outstanding shares, and to assist in communications with other shareholders as
required by Section 16(c) of the Investment Company Act, as though Section 16(c)
of the Investment Company Act were applicable to the Registrant.

198
<PAGE>

SIGNATURES

Pursuant to the requirements of the Investment Company Act of 1940, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Chicago,
State of Illinois on the 30th day of April, 1997.

BRINSON RELATIONSHIP FUNDS
(Registrant)

By E. Thomas McFarlan*
-------------------
E. Thomas McFarlan
President and Treasurer

By /s/ Carolyn F. Mead,
--------------------
Carolyn F. Mead
as Attorney-in-Fact and Agent
pursuant to Power of Attorney
<PAGE>

===============================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

EXHIBITS
TO
FORM N-1A

REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940

BRINSON RELATIONSHIP FUNDS
(Exact Name of Registrant as Specified in Charter)

200

<PAGE>

===============================================================================

BRINSON RELATIONSHIP FUNDS

Index to Exhibits to Form N-1A

<TABLE>
<CAPTION>
Exhibit Description of Sequentially
Number Exhibit Numbered Page
<S> <C> <C>

99.B.2 By-Laws of the Registrant...............................

99.B.5 Investment Advisory Agreement...........................

99.B.9(e) Form of Multiple Services Agreement dated , 1997
between the Registrant and Morgan Stanley Trust
Company.................................................

99.B.27 Financial Data Schedules................................

</TABLE>

201

<PAGE>

Exhibit 99B.2

BRINSON RELATIONSHIP FUNDS
--------------------------

BY-LAWS
-------

These By-Laws are made as of the 22nd day of August, 1994 and adopted
pursuant to Section 2.7 of the Agreement and Declaration of Trust establishing
Brinson Relationship Funds (the "Trust") dated August 15, 1994, as from time to
time amended (hereinafter called the "Declaration"). All words and terms
capitalized in these By-Laws shall have the meaning or meanings set forth for
such words or terms in the Declaration.

ARTICLE I
---------
Meetings of Holders
-------------------

Section 1.1. Annual Meeting. An annual meeting of the Holders in the
Trust, which may be held on such date and at such hour as may from time to time
be designated by the Board of Trustees and stated in the notice of such meeting,
is not required to be held unless certain actions must be taken by the Holders
as set forth in Section 9.1 of the Declaration, or except when the Trustees
consider it necessary or desirable.

Section 1.2. Chairman. The Chairman of the Board or, in his or her
absence, the President or, in his or her absence, the Chief Operating Officer
shall act as chairman at all meetings of the Holders and, in the absence of all
of them, the Trustee or Trustees present at the meeting may elect a temporary
chairman for the meeting, who may be one of themselves or an officer of the
Trust.

Section 1.3. Proxies; Voting. Holders may vote either in person or by
duly executed proxy and each Holder shall be entitled to a vote proportionate to
its Units in the Trust, all as provided in Section 9.4 of the Declaration. No
proxy shall be valid after eleven (11) months from the date of its execution,
unless a longer period is expressly stated in such proxy.

Section 1.4. Fixing Record Dates. For the purpose of determining the
Holders who are entitled to notice of or to vote or act at a meeting, including
any adjournment thereof, or who are entitled to participate in any
distributions, or for any other proper purpose, the Trustees may from time to
time fix a record date in the manner provided in Section 9.3 of the Declaration.
If the Trustees do not, prior to any meeting of the Holders, so fix a record
date, then the date of mailing notice of the meeting shall be the record date.

Section 1.5. Inspectors of Election. In advance of any meeting of the
Holders, the Trustees may appoint inspectors of election to act at the meeting
or any adjournment thereof (the "Inspectors of Election"). If Inspectors of
Election are not so appointed, the chairman, if any, of any meeting of the
Holders may, and on the request of any Holder or his or her proxy shall,
<PAGE>

appoint Inspectors of Election of the meeting. The number of Inspectors of
Election shall be either one or more. If appointed at the meeting on the
request of one or more Holders or proxies, a Majority Units Vote shall determine
whether one or more Inspectors of Election are to be appointed, but failure to
allow such determination by the Holders shall not affect the validity of the
appointment of Inspectors of Election. In case any person appointed as
Inspector of Election fails to appear or fails or refuses to act, the vacancy
may be filled by appointment made by the Trustees in advance of the convening of
the meeting or at the meeting by the person acting as chairman. The Inspectors
of Election shall determine the Units owned by Holders, the Units represented at
the meeting, the existence of a quorum, the authenticity, validity and effect of
proxies, shall receive votes, ballots or consents, shall hear and determine all
challenges and questions in any way arising in connection with the right to
vote, shall count and tabulate all votes or consents, determine the results, and
do such other acts as may be proper to conduct the election or vote with
fairness to all Holders. If there are three or more Inspectors of Election, the
decision, act or certificate of a majority is effective in all respects as the
decision, act or certificate of all. On request of the chairman, if any, of the
meeting, or of any Holder or his or her proxy, the Inspectors of Election shall
make a report in writing of any challenge or question or matter determined by
them and shall execute a certificate of any facts found by them.

Section 1.6. Records of Meetings of Holders. At each meeting of the
Holders there shall be open for inspection the minutes of the last previous
meeting of Holders and a list of the Holders, certified to be true and correct
by the Secretary or other proper agent of the Trust, as of the record date of
the meeting. Such list of Holders shall contain the name of each Holder in
alphabetical order, the Holder's address and Units owned by such Holder.
Holders shall have the right to inspect books and records of the Trust during
normal business hours for any purpose not harmful to the Trust.

ARTICLE II
----------
Trustees
--------

Section 2.1. Annual and Regular Meetings. The Trustees shall hold an
annual meeting of the Trustees for the transaction of business which may come
before such meeting. Regular meetings of the Trustees may be held without call
or notice at such place or places and times as the Trustees may by resolution
provide from time to time.

Section 2.2. Special Meetings. Special Meetings of the Trustees shall be
held upon the call of the chairman, if any, the President, the Secretary, or any
two Trustees, at such time, on such day and at such place, as shall be
designated in the notice of the meeting.

Section 2.3. Notice. Notice of a meeting shall be given by United States
mail (which term shall include overnight mail) or by electronic transmission
(which term shall include without limitation by telephone, cablegram or
telefacsimile) or delivered personally, to each Trustee at his or her business
address as set forth in the records of the Trust. If notice is given by mail,
it shall be mailed not later than 72 hours preceding the meeting and if given by
telegram or personally, such notice shall be delivered not later than 24 hours
preceding the meeting. Notice
<PAGE>

of a meeting of Trustees may be waived before or after any meeting by signed
written waiver. Neither the business to be transacted at, nor the purpose of,
any meeting of the Board of Trustees need be stated in the notice or waiver of
notice of such meeting, and no notice need be given of action proposed to be
taken by written consent. The attendance of a Trustee at a meeting shall
constitute a waiver of notice of such meeting except where a Trustee attends a
meeting for the express purpose of objecting, at the commencement of such
meeting, to the transaction of any business on the ground that the meeting has
not been lawfully called or convened.

Section 2.4. Chairman; Records. The Trustees shall appoint a Chairman of
the Board from among their number. Such Chairman of the Board shall act as
chairman at all meetings of the Trustees; in his or her absence the President
shall act as chairman; and, in the absence of all of them, the Trustees present
shall elect one of their number to act as temporary chairman. The results of
all actions taken at a meeting of the Trustees, or by written consent of the
Trustees, shall be recorded by the Secretary.

Section 2.5. Committees. The Board of Trustees may, by the affirmative
vote of a majority of the entire Board, appoint from its members an Audit
Committee composed of two or more Trustees who are not "interested persons" (as
defined in the 1940 Act) of the Trust, as the Board may from time to time
determine. The Board of Trustees may, by the affirmative vote of a majority of
the entire Board, appoint from among its members a Nomination Committee, an
Executive Committee or other committees composed of two or more of its Trustees
which shall have such powers as may be delegated or authorized by the resolution
appointing them.

Section 2.6. Committee Procedures. The Board of Trustees may at any time
change the members of any committee, fill vacancies or discharge any committee.
In the absence of any member of any committee, the member or members thereof
present at any meeting, whether or not they constitute a quorum, may unanimously
appoint to act in the place of such absent member a member of the Board who,
except in the case of the Executive Committee, is not an "interested person" of
the Trust as the Board may from time to time determine. Each committee may fix
its own rules of procedure and may meet as and when provided by those rules.
Copies of the minutes of all meetings of committees other than the Nominating
Committee and the Executive Committee shall be distributed to the Board unless
the Board shall otherwise provide.

ARTICLE III
-----------
Officers
--------

Section 3.1. Officers of the Trust; Compensation. The officers of the
Trust shall consist of a President, a Secretary, a Treasurer and such other
officers or assistant officers, including Vice Presidents, as may be elected by
the Trustees. Any two or more of the offices may be held by the same person.
The Trustees may designate a Vice President as an Executive Vice President and
may designate the order in which the other Vice Presidents may act. No officer
of the Trust need be a Trustee. The Board of Trustees may determine what, if
any, compensation shall be paid to officers of the Trust.
<PAGE>

Section 3.2. Election and Tenure. At the initial organizational meeting,
the Trustees shall elect the Chairman, President, Secretary, Treasurer and such
other officers as the Trustees shall deem necessary or appropriate in order to
carry out the business of the Trust. The Chairman of the Board and such
officers shall hold office until resignation or removal in accordance with
Section 3.3, and until their successors have been duly elected and qualified.
The Trustees may fill any vacancy in or add any additional officers at any time.

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

Section 3.4. Bonds and Surety. Any officer may be required by the
Trustees to be bonded for the faithful performance of his or her duties in such
amount and with such sureties as the Trustees may determine.

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

Section 3.6. Secretary. The Secretary shall keep the minutes of all
meetings of, and record all votes of, Holders, Trustees and any committees of
Trustees, provided that, in the absence or disability of the Secretary, the
Trustees may appoint any other person to keep the
<PAGE>

minutes of a meeting and record votes. The Secretary shall attest the signature
or signatures of the officer or officers executing any instrument on behalf of
the Trust. The Secretary shall also perform any other duties commonly incident
to such office in a Delaware corporation, and shall have such other authorities
and duties as the Trustees shall from time to time determine.

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

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

ARTICLE IV
----------
Custodian
---------

Section 4.1. Appointment and Duties. The Trustees shall at all times
employ a custodian or custodians with authority as its agent, but subject to
such restrictions, limitations and other requirements, if any, as may be
contained in these By-Laws:

(1) to hold the securities owned by the Trust and deliver the same
upon written order;

(2) to receive and receipt for any moneys due to the Trust and
deposit the same in its own banking department or elsewhere as the Trustees
may direct;

(3) to disburse such funds upon orders or vouchers;
<PAGE>

(4) if authorized by the Trustees, to keep the books and accounts of
the Trust and furnish clerical and accounting services; and

(5) if authorized to do so by the Trustees, to compute the net income
and net assets of the Trust;

all upon such basis of compensation as may be agreed upon between the Trustees
and the custodian. The Trustees may also authorize the custodian to employ one
or more sub-custodians, from time to time, to perform such of the acts and
services of the custodian and upon such terms and conditions as may be agreed
upon between the custodian and such sub-custodian and approved by the Trustee.

Section 4.2. Central Certificate System. Subject to such rules,
regulations and orders as the Commission may adopt, the Trustees may direct the
custodian to deposit all or any part of the securities owned by the Trust in a
system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, any such other person or
entity with which the Trustees may authorize deposit in accordance with the 1940
Act, pursuant to which system all securities of any particular class or series
of any issuer deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical delivery of such
securities. All such deposits shall be subject to withdrawal only upon the
order of the Trust.

ARTICLE V
---------
Miscellaneous
-------------

Section 5.1. Depositories. In accordance with Article IV of these By-
Laws, the funds of the Trust shall be deposited in such depositories as the
Trustees shall designate and shall be drawn out on checks, drafts or other
orders signed by such officer, officers, agent or agents (including any adviser
or administrator), as the Trustees may from time to time authorize.

Section 5.2. Signature. All contracts and other instruments shall be
executed on behalf of the Trust by such officer, officers, agent or agents, as
provided in these By-Laws or as the Trustees may from time to time by resolution
or authorization provide.

Section 5.3. Fiscal Year. The fiscal year of the Trust shall end on
[December 31] of each year, subject, however, to change from time to time by the
Board of Trustees.

ARTICLE VI
----------
Interests
---------

Section 6.1. Units. Except as otherwise provided by law, the Trust shall
be entitled to recognize the exclusive right of a person in whose name Units
stand on the record of Holders as the owners of such Units for all purposes,
including, without limitation, the rights to receive
<PAGE>

distributions, and to vote as such owner, and the Trust shall not be bound to
recognize any equitable or legal claim to or interest in any such Interests on
the part of any other person.

Section 6.2. Regulations. The Trustee may make such additional rules and
regulations, not inconsistent with these By-Laws, as they may deem expedient
concerning the sale and purchase of Units of the Trust.

Section 6.3. Distribution Disbursing Agents and the Like. The Trustees
shall have the power to employ and compensate such distribution disbursing
agents, warrant agents and agents for the reinvestment of distributions as they
shall deem necessary or desirable. Any of such agents shall have such power and
authority as is delegated to any of them by the Trustees.

ARTICLE VII
-----------
Amendment of By-Laws
--------------------

Section 7.1. Amendment and Repeal of By-Laws. In accordance with Section
2.7 of the Declaration, the Trustees shall have the power to alter, amend or
repeal the By-Laws or adopt new By-Laws at any time. The Trustees shall in no
event adopt By-Laws which are in conflict with the Declaration, DBTA, the 1940
Act or applicable federal securities laws.

Section 7.2. No Personal Liability. The Declaration provides that no
Trustee, officer, employee or agent of Brinson Relationship Funds shall be held
to any personal liability, nor shall resort be had to their private property for
the satisfaction of any obligation or claim or otherwise in connection with the
affairs of Brinson Relationship Funds.

<PAGE>

Exhibit 99B.5

INVESTMENT ADVISORY AGREEMENT
-----------------------------

This Agreement made this 26th day of April, 1995, by and between Brinson
Relationship Funds, a Delaware Business Trust (the "Trust") and Brinson
Partners, Inc., a Delaware corporation (the "Adviser").

W I T N E S S E T H:
-------------------

WHEREAS, the Trust is an investment company registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"); and

WHEREAS, the Trust is authorized to issue separate series of shares
representing interests in separate investment portfolios (each referred to as a
"Portfolio" and collectively referred to as the "Portfolios"), which Portfolios
are identified on Schedule A attached hereto, and which Schedule A may be
amended from time to time by mutual agreement of the Trust and the Adviser; and

WHEREAS, the Trust and the Adviser desire to enter into an agreement
pursuant to which the Adviser will provide investment advisory services for each
of the Portfolios of the Trust that are from time to time set forth on Schedule
A hereto, on the terms and conditions hereinafter set forth;

NOW THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto, intending to be legally bound, do
hereby agree as follows:

1. Duties of Adviser. The Trust hereby appoints the Adviser to act as
investment adviser to the Portfolios for the period and on such terms set forth
in this Agreement. The Trust employs the Adviser to manage the investment and
reinvestment of the assets of the Portfolios, to continuously review, supervise
and administer the investment program of the Portfolios, to determine in its
discretion the assets to be held uninvested, to provide the Trust with records
concerning the Adviser's activities which the Trust is required to maintain, and
to render regular reports to the Trust's officers and Board of Trustees
concerning the Adviser's discharge of the foregoing responsibilities. The
Adviser shall discharge the foregoing responsibilities subject to the control of
the officers and the Board of Trustees of the Trust, and in compliance with the
objectives, policies and limitations set forth in the Trust's prospectuses and
statement of additional information. The Adviser accepts such employment and
agrees to render the services and to provide, at its own expense, the office
space, furnishings, equipment and the personnel required by it to perform the
services on the terms provided herein. With respect to foreign securities, at
its own expense, the Adviser may obtain statistical and other factual
information and advice regarding the economic factors and trends from its
foreign subsidiaries, but it may not
<PAGE>

generally receive advice or recommendations regarding the purchase or sale of
securities from such subsidiaries.

2. Portfolio Transactions. The Adviser shall provide the Portfolios with
a trading department and with respect to foreign securities, the Adviser is
authorized to utilize the trading department of its foreign subsidiaries. The
Adviser shall select, and with respect to its foreign subsidiaries, shall
monitor the selection of, the brokers or dealers that will execute the purchases
and sales of securities for the Portfolios and is directed to use its best
efforts to ensure that the best available price and most favorable execution of
securities transactions for the Portfolios are obtained. Subject to policies
established by the Board of Trustees of the Trust and communicated to the
Adviser, it is understood that the Adviser will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Trust or in respect of
any Portfolio, or be in breach of any obligation owing to the Trust or in
respect of any Portfolio under this Agreement, or otherwise, solely by reason of
its having caused any Portfolio to pay a member of a securities exchange, a
broker or a dealer a commission for effecting a securities transaction for any
Portfolio in excess of the amount of commission another member of an exchange,
broker or dealer would have charged if the Adviser determines in good faith that
the commission paid was reasonable in relation to the brokerage or research
services provided by such member, broker or dealer, viewed in terms of that
particular transaction or the Adviser's overall responsibilities with respect to
the accounts, including the Portfolios, as to which it exercises investment
discretion. The Adviser will promptly communicate to the officers and Trustees
of the Trust such information relating to Portfolio transactions as they may
reasonably request.

3. Compensation of the Adviser. The Adviser shall not receive a fee from
the Trust or its Portfolios for the services to be rendered by the Adviser.

4. Reports. The Portfolios and the Adviser agree to furnish to each other
such information regarding their operations with regard to their affairs as each
may reasonably request.

5. Status of Adviser. The services of the Adviser to the Portfolios are
not to be deemed exclusive, and the Adviser shall be free to render similar
services to others so long as its services to the Portfolios are not impaired
thereby.

6. Liability of Adviser. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard by the Adviser of its obligations
and duties hereunder, the Adviser shall not be subject to any liability
whatsoever to the Portfolios, or to any shareholder of the Portfolios, for any
error of judgment, mistake of law or any other act or omission in the course of,
or connected with, rendering services hereunder including, without limitation,
for any losses that may be sustained in connection with the purchase, holding,
redemption or sale of any security on behalf of the Portfolios.

7. Duration and Termination. This Agreement shall become effective April
28, 1995, provided that first it is approved by the Board of Trustees of the
Trust, including a majority of those Trustees who are not parties to this
Agreement or interested persons of any party hereto,
<PAGE>

in the manner provided in section 15(c) of the Investment Company Act, and by
the holders of a majority of the outstanding voting securities of the
Portfolios; and shall continue in effect until April 28, 1997. Thereafter,
this Agreement may continue in effect only if such continuance is approved at
least annually by, (i) the Trust's Board of Trustees or, (ii) by the vote of a
majority of the outstanding voting securities of the Portfolios; and in either
event by a vote of a majority of those Trustees of the Trust who are not parties
to this Agreement or interested persons of any such party in the manner provided
in section 15(c) of the Investment Company Act. This Agreement may be
terminated by the Trust at any time, without the payment of any penalty, by the
Board of Trustees of the Trust or by vote of the holders of a majority of the
outstanding voting securities of the Portfolios on 60 days written notice to the
Adviser. This Agreement may be terminated by the Adviser at any time, without
the payment of any penalty, upon 60 days written notice to the Trust. This
Agreement will automatically terminate in the event of its assignment. Any
notice under this Agreement shall be given in writing, addressed and delivered
or mailed postpaid, to the other party at the principal office of such party.

As used in this Section 7, the terms "assignment", "interested person", and
"a vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and Section
2(a)(42) of the Investment Company Act and Rule 18f-2 thereunder.

8. Name of Adviser. The parties agree that the Adviser has a proprietary
interest in the name "Brinson," and the Trust agrees to promptly take such
action as may be necessary to delete from its legal name and/or the name of the
Portfolios any reference to the name of the Adviser promptly after receipt from
the Adviser of a written request therefor.

9. Severability. If any provisions of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of this 26th day of April, 1995.

Attest: BRINSON RELATIONSHIP FUNDS

By:/s/ Debra L. Nichols By:/s/ E. Thomas Mc Farlan
----------------------------------- ------------------------------
Debra L. Nichols, Assistant Secretary E. Thomas McFarlan, President

Attest: BRINSON PARTNERS, INC.

By:/s/ Mark F. Kemper By:/s/ Samuel W. Anderson
----------------------------------- ------------------------------
Mark F. Kemper, Assistant Secretary Samual W. Anderson, Vice President
<PAGE>

SCHEDULE A

Portfolios of Brinson Relationship Funds
----------------------------------------

Brinson Global Securities Fund
Brinson Short-Term Fund
Brinson Post-Venture Fund
Brison High Yield Fund
Brinson Emerging Markets Equity Fund
Brinson Emerging Markets Debt Fund

<PAGE>

FORM OF
MULTIPLE SERVICES AGREEMENT

This AGREEMENT is effective May 9, 1997, and is between Morgan Stanley
Trust Company, a New York state chartered trust company (the "Bank"), and
Brinson Relationship Funds, a Delaware business trust (the "Customer") on behalf
of its separate series of shares representing interests in separate portfolios
which are listed on Schedule B1, as may be amended from time to time ("Series").

WHEREAS, Customer is an investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act") as an open-end investment
company; and

WHEREAS, the Customer desires to enter into one agreement providing for the
furnishing of global custody, administrative, accounting and transfer agency
services to the Series; and

WHEREAS, the Bank desires to furnish such services to the Customer or to
arrange for the furnishing of such services through the use of certain agents;

NOW, THEREFORE, IT IS AGREED AS FOLLOWS

I. GLOBAL CUSTODY SERVICES

The Customer hereby appoints the Bank as its global custodian to the
Series, and the Bank hereby accepts such appointment. This Section I. of this
Multiple Services Agreement (the "Agreement") relates solely to the provision of
global custody services to the Customer.

1. Customer Accounts.

The Bank agrees to establish and maintain the following accounts
("Accounts"):

Separate custody accounts for each Series in the name of the Customer on
behalf of each such Series as listed in Schedule B1 for any and all stocks,
shares, bonds, debentures, notes, mortgages or other obligations for the payment
of money, bullion, coin and any certificates, receipts, warrants or other
instruments representing rights to receive, purchase or subscribe to the same or
evidencing or representing any other rights or interests therein and other
similar property whether certificated or uncertificated as may be received by
the Bank or its Subcustodian (as defined in Sub-section 3 of this Section I.)
for the account of the Customer on behalf of a Series ("Securities") and any and
all cash equivalents.

Prior to the delivery of any Assets (as defined hereinafter) by the
Customer to the Bank, the Customer shall deliver to the Bank each applicable
document or other item listed
<PAGE>

in Schedule B2, which schedule may be amended from time to time by the Customer
and the Bank.

The Customer warrants its authority to: 1) deposit the cash and Securities
("Assets") received in the Accounts and 2) give Instructions (as defined in Sub-
section 11 of this Section I.) concerning the Accounts. Such Instructions shall
specifically indicate to which Series such Assets belong or, if such Assets
belong to more than one Series, shall allocate such Assets to the appropriate
Series. The Bank may deliver securities of the same type and class in place of
those deposited in the Accounts.

Upon receipt of Instructions and appropriate documentation, the Bank shall
establish additional Accounts, which shall be separately accounted for as
additional Accounts under the terms of this Agreement.

The procedures the Bank and the Customer will use in performing activities
in connection with this Agreement are set forth in a client services guide
provided to the Customer by the Bank, as such guide may be amended from time to
time by the Bank (the "Client Services Guide") with the consent of the Customer;
provided, however, that any customer enhancement or amendments deemed necessary
by the Bank in order to comply with existing or new rules, regulations or market
practices, in any jurisdiction, may be made by the Custodian without the consent
of the Customer. Any Customer specific procedures which are included in the
Client Services Guide must be agreed to or changed in writing by both parties
and such Customer specific procedures shall be deemed to be a part of this
Agreement.

2. Maintenance of Securities and Cash at Bank and Subcustodian Locations.

Unless Instructions specifically require another location, securities will
be held in the country or other jurisdiction in which the principal trading
market for such Securities is located, where such Securities are to be presented
for payment or where such Securities are acquired.

3. Subcustodians and Securities Depositories.

Subject to the provisions of Sub-section 2 above of this Section I., the
Assets held for each Series may be held in custody and deposit accounts that
have been established by the Bank (i) with one or more domestic or foreign banks
or other institutions as listed on Schedule A1 (the "Subcustodians"), as such
Schedule may be amended from time to time by the Bank by ninety (90) days'
written notice to the Customer, or (ii) through the facilities of one or more
securities depositories or clearing agencies as listed on Schedule A2, as such
Schedule may be amended from time to time by the Bank by sixty (60) days' prior
written notice to the Customer. (The parties agree that, for so long as
required by the 1940 Act and the rules thereunder, including Rule 17f-5, any new
securities depositories or clearing agencies are subject to approval or
ratification by the Customer's Board of Trustees.) Any

2
<PAGE>

Subcustodian may hold Assets of the Customer in a securities depository and may
utilize a clearing agency. Each of the entities listed on Schedule A1 are
"Eligible Foreign Custodians" (as such term is defined in Rule 17f-5(c)(2) of
the Investment Company Act of 1940 (the "1940 Act")), except as otherwise noted
on Schedule A1. Each of the entities listed on Schedule A2 are "Eligible
Foreign Custodians" or "Securities Depositories" as such term is defined in Rule
17f-4(a) and (b) of the 1940 Act, or have been so qualified by exemptive order,
rule or other appropriate action of the SEC, except as otherwise noted on
Schedule A2; provided, however, that although the Bank is of the opinion that
each of the securities depositories used by it does operate either a central
system for handling securities in their respective countries or a transnational
system for the central handling of securities or equivalent book-entries, the
determination that a securities depository operates a central system absent any
official proclamation by the SEC is a factual one and the Bank shall not be
liable for any future determination by the SEC that any such securities
depository does not in fact operate such a central system.

The Customer will be given reasonable notice by the Bank of any amendment
to Schedule A1 or A2. Upon request by the Customer, the Bank will identify the
name, address and principal place of business of any Subcustodian of the
Customer's Assets and the name and address of the governmental agency or other
regulatory authority that supervises or regulates such Subcustodian.

4. Use of Subcustodian.

(a) The Bank will identify the Assets on its books as belonging to the
Customer on behalf of a particular Series.

(b) A Subcustodian will hold such Assets together with assets belonging to
other customers of the Bank in accounts identified on such Subcustodian's books
as custody accounts for the exclusive benefit of customers of the Bank. In the
event the Subcustodian holds Assets in a securities depository, such
Subcustodian shall be required by its agreement with the Bank to identify on its
books such Assets as being held for the account of the Bank as custodian for its
customers or in such other manner as is required by local law or market
practice.

(c) Any Assets in the Accounts held by a Subcustodian will be subject only
to the instructions of the Bank or its agent. Any Securities held in a
securities depository for the account of a Subcustodian will be subject only to
the instructions of such Subcustodian or its agent.

(d) Any agreement the Bank enters into with a Subcustodian for holding the
Customer's Assets shall provide that: (i) the Account will be adequately
indemnified and its assets adequately insured in the event of a loss; (ii) the
Assets are not subject to any right, charge, security interest, lien or claim of
any kind in favor of such Subcustodian or its creditors except a claim of
payment for their safe custody or administration; (iii) beneficial

<PAGE>

ownership of such Assets will be freely transferable without the payment of
money or value other than for safe custody or administration; (iv) adequate
records will be maintained identifying the Assets held pursuant to such
Agreement as belonging to the Bank on behalf of Customer; (v) the independent
public accountants of or designated by, the Customer, will be given access to or
confirmation of the contents of the books and records of such Subcustodian
relating to its actions under its agreement pertaining to any Assets held by it
thereunder; and (vi) Customer will receive periodic reports with respect to the
safekeeping of the Assets, including notification of any transfer to or from the
Customer's account.

(e) The Bank shall deliver to the Customer annually documents stating: (i)
the identity of each Subcustodian then acting on behalf of the Bank and the name
and address of the governmental agency or other regulatory authority that
supervises or regulates such Subcustodian; (ii) the countries in which each
Subcustodian is located; and (iii) so long as Rule 17f-5 of the 1940 Act
requires the Customer's Board of Trustees to directly approve its foreign
custody arrangements, such other information relating to such Subcustodians as
may reasonably be requested by the Customer to ensure Customer's compliance with
Rule 17f-5 of the 1940 Act. The Bank shall furnish annually to the Customer
information concerning such Subcustodians similar in kind and scope as that
furnished to the Customer in connection with the initial approval of this
Agreement. Bank agrees to provide Customer with notice of any material adverse
changes in the facts or circumstances upon which such information is based as
soon as practicable after it becomes aware of any such material adverse changes
in the normal course of its custodian activities.

5. Cash Transactions.

(a) All cash received by the Bank for each of the Accounts shall be held by
the Bank as a short-term credit balance in favor of the Customer on behalf of
the Series to which the Account relates and, because the Bank and the Customer
have agreed in writing in advance that such credit balances shall bear interest,
the relevant Series shall earn interest at the rates and times as agreed between
the Bank and the Customer. The Customer acknowledges that any such credit
balances shall not be accompanied by the benefit of any governmental insurance.

(b) The Bank or its Subcustodians will make cash payments from the Account
upon receipt of Instructions.

(c) In the event that any payment to be made under this Sub-section 5
exceeds the funds available in an Account, the Bank, in its discretion, may
advance the Customer on behalf of the relevant Series whose Assets are held in
such Account such excess amount which shall be deemed a short-term credit
extension which is (i) necessary in connection with payment and clearance of
securities and foreign exchange transactions or (ii) pursuant to an agreed
schedule, as and if set forth in the Client Services Guide, of credits for
dividends and interest payments on the Assets. Such credit extensions shall be
payable on demand, bearing

<PAGE>

interest at the rate customarily charged by the Bank on similar loans and
consistent with the fee schedule set forth on Schedule F.

(d) If the Bank credits an Account on a payable date, or at any time prior
to actual collection and reconciliation to the Account, with interest,
dividends, redemptions or any other amount due, the Customer on behalf of and
from the Assets of the Series to which the Account relates will promptly return
any such amount upon written notification: (i) that such amount has not been
received in the ordinary course of business, or (ii) that such amount was
incorrectly credited. If the Customer on behalf of and from the Assets of the
Series to which the Account relates does not promptly return any amount upon
such notification, the Bank shall be entitled, upon written notification to the
Customer, to reverse such credit by debiting the Account for the amount
previously credited. The Bank shall be entitled to charge the Customer on
behalf of the Assets of the Series in the Account interest for any such credit
extension at rates to be agreed upon from time to time or, if such credit is
arranged by the Bank with a third party on behalf of the Series, the Customer
out of the Series' assets shall reimburse the Bank for any interest charge. In
addition to any other remedies available, with respect to the extension of
credit to a particular Series, the Bank shall be entitled to a right of set-off
against the Assets of such Series to satisfy the repayment of such credit
extension and the payment of, or reimbursement for, accrued interest thereon.

(e) The Bank shall provide the Customer, in a format mutually agreed upon
by both parties, the Customer's short-term credit balances in the Account by no
later than 9:00 a.m. Eastern Time and securities lending collateral by no later
than 11:00 a.m. and updated at 1:00 p.m., on each business day that the Bank is
open or authorized to transact business in the State of New York and the
Customer shall be entitled to rely on such short-term credit balance
calculations. The Bank shall provide the Customer with a five day cash
projection report, on each business day that the Bank is open or authorized to
transact business in the State of New York. The short-term credit balance and
cash projection report shall include Class level shareholder activity from the
previous day as reported by each Series' transfer agent.

6. Custody Account Transactions.

(a) Securities will be transferred, exchanged or delivered by the Bank or
its Subcustodian upon receipt by the Bank of Instructions. Settlement and
payment for Securities received for, and delivery of Securities out of, the
Accounts may be made in accordance with the customary or established securities
trading or securities processing practices and procedures in the jurisdiction or
market in which the transaction occurs. Under all circumstances, Bank shall use
its reasonable efforts to make delivery of Securities to a purchaser, dealer or
their agents only against payment subject to local custom and regulations.
Delivery of Securities out of an Account may also be made in any other manner
specifically required by Instructions.

<PAGE>

(b) The Bank, upon receipt of Instructions, will credit or debit an Account
on a contractual settlement date, if consistent with applicable law, with cash
or Securities with respect to any sale, exchange or purchase of Securities.
Otherwise, such transactions will be credited or debited to an Account on the
date cash or Securities are actually received by the Bank and reconciled to such
Account.

7. Actions of the Bank.

The Bank shall follow Instructions received regarding assets held in the
Accounts. However, until it receives Instructions to the contrary, the Bank
will:

(a) Present for payment any Securities which are called, redeemed or
retired or otherwise become payable and all coupons and other income items which
call for payment upon presentation, to the extent that the Bank or Subcustodian
is actually aware of such opportunities.

(b) Execute in the name of the Customer such ownership and other
certificates as may be required to obtain payments in respect of Securities.

(d) Issue statements to the Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.

(e) Receive and collect all income and principal with respect to Securities
and to credit cash receipts to the Accounts.

(f) Take non-discretionary action on mandatory corporate actions.

(g) Pay or cause to be paid, from the Accounts, any and all taxes and
levies of any nature imposed on the Assets by any governmental authority in
connection with custody of and transactions in such Assets.

(h) In general, attend to all nondiscretionary details in connection with
the custody, sale, purchase, transfer and other dealings with the Assets held in
the Accounts.

The Bank will send the Customer an advice or notification of any
transfers of Assets to or from the Accounts. Such statements, advices or
notifications shall indicate the identity of the entity having custody of the
Assets. Unless the Customer sends the Bank a written exception or objection to
any Bank statement within ninety (90) days of receipt, the Customer shall be
deemed to have approved such statement.

All collections of funds or other property paid or distributed in
respect of Securities in the Accounts shall be made at the risk of the Customer.
The Bank shall have

<PAGE>

no liability for any loss occasioned by delay in the actual receipt of notice by
the Bank or by its Subcustodians of any payment, redemption or other transaction
regarding Securities in the Accounts in respect of which the Bank has agreed to
take any action under this Agreement.

8. Corporate Actions; Proxies; Tax Reclaims.

(a) Corporate Actions. Whenever the Bank receives information concerning
the Securities which requires discretionary action by the beneficial owner of
the Securities (other than a proxy), such as subscription rights, bonus issues,
stock repurchase plans and rights offerings, or legal notices or other material
intended to be transmitted to securities holders ("Corporate Actions"), the Bank
will give the Customer notice of such Corporate Actions to the extent that the
Bank's central corporate actions department has actual knowledge of a Corporate
Action in time to notify its customers.

When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action is
received which bears an expiration date, the Bank will endeavor to obtain
Instructions, as defined in Sub-section 11 of this Section I., but if
Instructions are not received in time for the Bank to take timely action, or
actual notice of such Corporate Action was received too late to seek
Instructions, the Bank is authorized to act in accordance with the default
option provided by local market practice and/or the issuer of the Securities.
Fractional interests resulting from Corporate Action activity shall be treated
in accordance with local market practices. The Bank shall be held harmless for
any such action provided such action was made in good faith.

The indemnification provision of this Sub-section 8(a) will survive
the termination of this Agreement.

(b) Proxy Voting. The Bank will provide proxy voting services only
pursuant to the Client Services Guide. Proxy voting services may be provided by
the Bank or, in whole or in part, by one or more third parties appointed by the
Bank (which may be affiliates of the Bank).

(i) Subject to the provisions hereof and the receipt of Instructions
as described in the Client Services Guide, the Bank will timely apply for or
facilitate the application for a reduction of withholding tax and any refund of
any tax paid or tax credits which apply in each applicable market in respect of
income payments on Securities for the benefit of the Customer which the Bank
believes may be available to such Customer. The Bank shall notify the Customer
that it is making such application for a reduction of withholding tax and refund
of any tax paid or tax credits which apply in each applicable market in respect
of income payments on Securities for the benefit of Customer.

7
<PAGE>

(ii) The provisions of tax reclaim services by the Bank is conditional
upon the Bank receiving from the beneficial owner of Securities (A) a
declaration of its identity and place of residence and (B) certain other
documentation (pro forma copies of which are available from the Bank). The Bank
shall use reasonable means to notify Customer of the declarations, documentation
and information which the Customer is to provide to Bank in order for the Bank
to perform the tax reclaim services described herein. The Customer acknowledges
that, if the Bank does not receive such information, additional United Kingdom
taxation will be deducted from all income received in respect of Securities
issued outside the United Kingdom and that U.S. non-resident alien tax or U.S.
backup withholding tax will be deducted from U.S. source income. The Customer
shall provide to the Bank such documentation and information as it may require
in connection with taxation, and warrants that, when given, this information
shall be true and correct in every respect, not misleading in any way, and
contain all material information. The Customer undertakes to notify the Bank
immediately if any such information requires updating or amendment.

(iii) The Bank shall not be liable to the Customer or any third party
for any tax, fines or penalties payable by the Bank or the Customer, and shall
be indemnified accordingly, whether these result from the inaccurate completion
of documents by the Customer or any third party, or as a result of the provision
to the Bank or any third party of inaccurate or misleading information or the
withholding of material information by the Customer or any other third party, or
as a result of any delay of any revenue authority or any other matter beyond the
control of the Bank. The provisions of this Sub-section 8(c)(iii) shall survive
the termination of this Agreement.

(iv) The Customer confirms that the Bank is authorized to deduct from
any cash received or credited to the Accounts any taxes or levies required by
any revenue or governmental authority for whatever reason in respect of the
Accounts.

(v) The Bank shall perform tax reclaim services only with respect to
taxation levied by the revenue authorities of the countries notified to the
Customer from time to time and, upon Instructions as described in the Client
Services Guide, the Bank may, if the Bank offers tax reclaim services in new
markets, supplement or amend the markets in which the tax reclaim services are
offered. Other than as expressly provided in this sub-clause and to the extent
that the Bank acts in accordance with the information provided on Schedule B2,
the Bank shall have no responsibility with regard to the Customer's tax position
or status in any jurisdiction.

(vi) The Customer confirms that the Bank is authorized to disclose any
information requested by any revenue authority or any governmental body in
relation to the Customer or the Securities and/or Cash held for the Customer for
the purpose of obtaining tax reclaims only. This provision does not authorize
any other disclosure to any revenue authority or any governmental body without
the prior written consent of Customer.

8
<PAGE>

(vii) Tax reclaim services may be provided by the Bank or, in whole
or in part, by one or more third parties appointed by the Bank (which may be
affiliates of the Bank); provided that the Bank shall be liable for the
performance of any such third party to the same extent as the Bank would have
been if it performed such services itself.

(viii) The Bank shall monitor tax reclaims and report on such
reclaims on a monthly basis.

9. Nominees.

Securities which are ordinarily held in registered form may be registered
in the name of the Bank, Subcustodian or securities depository or any of their
nominees, as the case may be. The Bank may without notice to the Customer cause
any such Securities to cease to be registered in the name of any such nominee
and to be registered in the name of the Customer. Under no circumstances, shall
any of the Securities be registered in the name of Brinson Partners, Inc. unless
the Bank has been instructed otherwise. In the event that any Securities
registered in a nominee name are called for partial redemption by the issuer,
the Bank may allot the called portion to the respective beneficial holders of
such class of security in any manner the Bank deems to be fair and equitable.

Where the Bank has been instructed by the Customer to hold any Securities
in the name of any person or entity other than the Bank, its Subcustodian or any
such entity's nominee, the Bank shall not be responsible for any failure to
collect such dividends or other income or participate in any such corporate
action with respect to such Securities.

10. Authorized Persons.

As used in this Agreement, the term "Authorized Person" means persons as
have been designated on Schedule B3, or entities as have been designated on
Schedule B4, as such Schedules may be amended from time to time by written
notice from the Customer or its designated agent to act on behalf of the
Customer under this Agreement. Such persons or entities shall continue to be
Authorized Persons until such time as the Bank receives Instructions that any
such person or entity is no longer an Authorized Person. Prior to the delivery
of the Assets to the Bank, the Bank shall provide to Customer a list of
designated system user ID numbers and passwords that the Customer shall be
responsible for assigning to Authorized Persons. The Bank shall assume that an
electronic transmission received and identified by a system user ID number and
password was sent by an Authorized Person. The Bank agrees to provide
additional designated system user ID numbers and passwords as needed by the
Customer. The Customer authorizes the Bank to issue new system user ID numbers
upon the request of a previously existing Authorized Person. Upon the issuance
of additional system user ID numbers by the Bank to the Customer, Schedule B4
shall be deemed automatically amended accordingly. The Customer authorizes and
instructs the Bank to assume that a facsimile transmission received which sets
forth only the typed name of an Authorized Person is an Instruction sent by an
Authorized Person. The Customer authorizes

9
<PAGE>

the Bank to receive, act and rely upon any Instructions received by the Bank
which have been issued, or purport to have been issued, by an Authorized Person.

Any Authorized Person may cancel/correct or otherwise amend any Instruction
received by the Bank, but the Customer agrees to indemnify the Bank for any
liability, loss or expense incurred by the Bank and its Subcustodians as a
result of their having relied upon or acted in good faith on any prior
Instruction. The Bank will use its reasonable efforts to process trades once
the trades have settled, upon receipt of an amendment or cancellation of an
Instruction to deliver or receive any security or funds with respect to such
trades.

11. Instructions.

The term "Instructions" for purposes of Section I. of this Agreement means
instructions of any Authorized Person received by the Bank, via telex, facsimile
transmission, bank wire, SWIFT or other teleprocess or electronic instruction or
trade information system acceptable to the Bank which the Bank reasonably
believes in good faith to have been given by Authorized Persons or by such other
means as may be agreed in writing by Bank and Customer or which are transmitted
with proper testing or authentication pursuant to terms and conditions which the
Bank may specify and provided that such Instructions are timely received by the
Bank. Unless otherwise expressed, Instructions shall continue in full force and
effect until canceled or superseded.

The Customer shall be responsible for safeguarding any testkeys,
identification codes or other security devices which the Bank shall make
available to the Customer or its Authorized Persons.

II. ADMINISTRATIVE, ACCOUNTING AND TRANSFER AGENCY SERVICES

The Customer hereby appoints the Bank as its administrative, accounting
services and transfer agent to the Series, and the Bank hereby accepts such
appointment. This Section II. of this Agreement relates solely to the provision
of administrative, accounting and transfer agency services to the Customer and
its Series. For purposes of this Section II., the term "Bank" shall include the
Bank and its agents.

A. Administrative Services

1. Services.

Subject to the succeeding provisions of this section and subject to
the direction and supervision of the Board of Trustees of the Customer, Bank
shall provide to Customer and each of the Series administrative services as set
forth in Schedule C attached hereto and incorporated by reference into this
Agreement. In addition to the obligations set forth in Schedule C, the Bank, in
its capacity as administrator for the Customer and each of the

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<PAGE>

Series ("Administrator"), shall: (i) provide its own office space, facilities,
equipment and personnel for the performance of its duties under this Section
II.A. of this Agreement; and (ii) take all actions the Bank deems necessary to
properly execute administration on behalf of the Series.

2. Cooperation of Other Parties.

So that the Bank may perform its duties under the terms of this
Agreement, the Board of Trustees of the Customer shall direct the officers,
investment adviser, legal counsel, independent accountants and other agents of
the Customer to cooperate with the Bank in performing administrative services
hereunder and, upon request of the Bank, to provide such information, documents
and advice as is within the possession or knowledge of such persons provided
that no such person need provide any information to the Bank if to do so would
result in the loss of any privilege with respect to such information unless the
Customer elects to waive such privilege. In the event that the Customer does
not elect to waive such privilege, the Bank shall not be liable for and shall be
indemnified against any losses directly resulting from the failure to deliver
such information, documents or advice. In connection with its duties hereunder,
the Bank shall be entitled to rely, and shall be held harmless by the Customer
when acting in reliance upon the instruction, advice or any documents relating
to the Customer as provided to the Bank by any of the aforementioned persons
provided that such reliance is reasonable.

The indemnification provisions of this Sub-section 2 of this Section
II.A. shall survive the termination of this Agreement.

3. Compliance with Laws and Other Requirements.

Any activities performed by the Bank under this Section II.A. of this
Agreement shall conform to the requirements of:

(a) the provisions of the 1940 Act and of any rules or regulations in
force thereunder;

(b) any other applicable provision of state and Federal law;

(d) any policies and determinations of the Board of Trustees of the
Customer provided to the Bank in writing; and

(e) the fundamental policies of the Series as reflected in the
Customer's registration statement on Form N-1A ("Form N-1A") under the 1940 Act
and any amendments thereto.

<PAGE>

4. Non-Exclusivity.

Nothing in this Agreement shall prevent the Bank or any officer or
employee thereof from acting as administrator for or with any other person,
firm, corporation or trust. While the administrative services supplied to the
Customer and the Series may be different than those supplied to other persons,
firms, corporations or trusts, the Bank shall provide the Customer and the
Series equitable treatment in supplying services. The Bank agrees to maintain
the records and all other information of the Customer and the Series as required
by the 1940 Act and shall not use such information for any purpose other than
the performance of the Bank's duties under this Agreement.

B. Accounting Services

1. Services.

The Bank, in its capacity as accounting services agent for the
Customer and the Series ("Accounting Agent"), will in addition to the duties and
functions listed below, perform accounting services listed in Schedule D
attached hereto.

2. Instructions.

For purposes of this Section II.B. of this Agreement:

(a) Oral Instructions shall mean an authorization, instruction,
approval, item or set of data, or information of any kind transmitted to the
Bank in person or by telephone, telegram, telecopy, or other mechanical or
documentary means lacking a signature, by an Authorized Person, as defined in
Sub-section 10 of Section I. of this Agreement or by any of the Customer's
officers, employees, shareholders or other agents reasonably believed by Bank to
be authorized to give such Oral Instructions.

(b) Written Instructions shall mean an authorization, instruction,
approval, item or set of data or information of any kind transmitted to the Bank
in original writing containing original signatures or a copy of such document
transmitted by telecopy or facsimile transmission including transmission of such
signature reasonably identified to the Bank to be the signature of an Authorized
Person, as defined in Sub-section 10 of Section I. of this Agreement or by any
of the Customer's officers, employees, shareholders or other agents reasonably
believed by Bank to be authorized to give such Written Instructions.

3. Maintenance of Accounts and Records.

To the extent the Bank receives the necessary information from the
Customer or its agents by Written or Oral Instructions, the Bank shall maintain
and keep current the following Accounts and Records relating to the Customer's
business in such form as may be mutually agreed upon between the Customer and
the Bank:

<PAGE>

(a) Net Asset Value Calculation Reports;

(b) cash Receipts Journal;

(d) dividends Paid and Payable Schedule;

(e) purchase and Sales Journals - Portfolio Securities;

(f) security Ledgers - Transaction Report and Tax Lot Holdings
Report;

(g) broker Ledger - Commission Report;

(h) daily Expense Accruals;

(i) daily Interest Accruals;

(j) daily Trial Balance;

(k) portfolio Interest Receivable and Income Journal;

(l) portfolio Dividend Receivable and Income Register;

(m) listing of Portfolio Holdings - showing cost, market value and
percentage of portfolio comprised of each security;

(n) average daily net assets provided on monthly basis; and

(o) daily accounting reports as agreed to by the parties.

The necessary information to perform the above functions and the
calculation of each Series' net asset value as provided below, is to be
furnished by Written or Oral Instructions to the Bank daily (in accordance with
the time frame identified in Sub-section 7 of this Section II.B.).

4. Calculation of Net Asset Value.

The Bank shall perform the calculations necessary to calculate each
Series' net asset value daily, in accordance with: (i) the Customer's Advisory
Agreements and Declaration of Trust; (ii) the provisions of the Customer's Form
N-1A; and (iii) any other procedures approved by the Board of Trustees of the
Customer and supplied to the Bank by the Customer in writing. Portfolio items
for which market quotations are available by the Bank's use of automated
financial information services which shall be authorized by the

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<PAGE>

Customer in writing to the Bank ("Services") shall be based on the closing
prices of such Services except where the Customer has given or caused to be
given specific Written Instructions to utilize a different value. Restricted
securities and other securities requiring valuation not readily ascertainable
solely by such Services shall be given values as the Customer provides by
Written Instructions. The Bank shall not have any responsibility or liability
for: (i) the accuracy of prices quoted by any of the Services; (ii) the
accuracy of any information supplied by the Customer; or (iii) for any loss,
liability, damage, or cost arising out of any inaccuracy, delay or omissions
from such data provided by the Services or the Customer. The Bank shall have no
responsibility or duty to include information or valuations to be provided by
the Customer in any computation unless and until it is timely supplied to the
Bank in usable form. The Bank shall record corporate action information of
which it has become aware in its capacity as Custodian for Customer or from the
Services or the Customer. The Bank shall not have any duty to gather or record
corporate action information not supplied by these sources.

The Bank will not be responsible for any losses, damages or costs to
the Customer, the Series or its shareholders for any price errors caused by:
the Customer, the Series, its advisers, corporate action and dividend
information, or any other party other than the Bank itself.

5. Authority to Act Upon Receipt of Instructions.

For all purposes under Section II.B. of this Agreement, the Bank is
authorized to act upon receipt of any Written or Oral Instruction it receives.
The Customer agrees to provide Written Instructions to the Bank with respect to
trade confirmation and cash instruction. The Bank shall be entitled to rely on
any Oral or Written Instruction received. For any act or omission undertaken in
compliance with such Oral or Written Instruction received, the Bank shall be
free of liability and fully indemnified and held harmless by the Customer,
provided, however, that in the event an Oral or Written Instruction received by
the Bank is countermanded by a timely later Oral or Written Instruction received
by the Bank prior to acting upon such countermanded Instruction, the Bank shall
act upon such later Oral or Written Instruction. The indemnification provisions
of this Sub-section 5 shall survive termination of this Agreement.

6. Provision of Reports.

The Bank shall promptly supply daily and periodic reports to the
Customer as requested by the Customer and agreed upon by the Bank.

7. Provision of Information by the Customer.

The Customer shall provide to the Bank or shall cause to be provided
to the Bank as of the close of each business day or on such other schedule as
the Bank determines is necessary, Oral or Written Instructions containing any
additional data or information

<PAGE>

necessary for the Bank to maintain the Customer's and the Series' Accounts and
Records. Such Oral or Written Instructions shall be delivered to the Bank no
later than 11:00 a.m., Eastern time the following business day.

8. Adoption of Additional Procedures.

In connection with and in furtherance of the rendering of services
under this Section II.B., the Bank and the Customer may from time to time adopt
such procedures as agreed upon in writing, and the Bank may conclusively assume
that any procedure approved by the Customer or direction by the Customer does
not conflict with or violate any requirements of the Customer's Declaration of
Trust, By-Laws, or any rule or regulation of any regulatory body or governmental
agency.

C. Transfer Agency Services

1. Services.

The Bank, in its capacity as transfer agent to the Customer and the
Series ("Transfer Agent") will, in addition to the duties and functions listed
below, perform the duties and functions of a transfer agent for an open-end
investment company as listed in Schedule E attached hereto. The terms as
defined in this Section II.C. wherever used in this Section II.C., or in any
amendment or supplement with respect to this Section II.C., shall have the
meanings herein specified unless the context otherwise requires.

Share Certificates shall mean the certificates representing shares of
beneficial interest of the Series.

Shareholders shall mean the registered owners of the Shares of the
Series in accordance with the share registry records maintained by the Bank.

Shares shall mean the issued and outstanding shares of the Series.

Signature Guarantee shall mean the guarantee of signatures by an
"eligible guarantor institution" as defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Eligible guarantor
institutions include banks, brokers, dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and savings
associations. Broker-dealers guaranteeing signatures must be members of a
clearing corporation or maintain net capital of at least $100,000. Signature
guarantees will be accepted from any eligible guarantor institution which
participates in a signature guarantee program.

<PAGE>

2. Issuance of Shares.

The Bank, as Transfer Agent, shall make original issuances of Shares
in accordance with Sub-sections 7 and 8 of this Section II.C. of this Agreement
and with the Customer's Declaration of Trust upon the written request of the
Customer and upon being furnished with: (i) a certified copy of a resolution or
resolutions of the Board of Trustees of the Customer authorizing such; and (ii)
necessary funds for the payment of any original issue tax applicable to such
additional Shares.

3. Transfer of Shares.

Transfers of Shares shall be registered and new Shares issued by the
Bank upon redemption of outstanding Shares:

(a) in the form deemed by the Bank to be properly endorsed for
transfer;

(b) with all necessary endorser's signatures as required to be
guaranteed in accordance with the Customer's Form N-1A;

(c) upon receipt of such assurances as the Bank shall deem necessary
or appropriate to evidence the genuineness and effectiveness of each necessary
endorsement; and

(d) upon receipt of satisfactory evidence of compliance with all
applicable laws relating to the payment or collection of taxes.

4. Reliance on Applicable Law.

In registering transfers, the Bank, as Transfer Agent, will comply
with applicable law relating to its activities as Transfer Agent for the
Customer.

5. Maintenance of Records.

The Bank will maintain records in the usual form in which it will note
the issuance, transfer and redemption of Shares. The Bank is responsible for
providing reports of Share purchases, redemptions and total Shares outstanding
on the next business day after each net asset value calculation. The Bank is
authorized to keep records, which will be part of the transfer records, in which
it will note the names and registered address of Shareholders and the number of
Shares and fractions thereof held by them.

6. Reliance Upon Lists, Instructions or Other Instruments.

The Bank, as Transfer Agent, may rely conclusively and act without
further investigation upon any list, instruction, certification, authorization
or other instrument or paper believed by it in good faith to be genuine and
unaltered, and to have been signed,

<PAGE>

countersigned, or executed by a duly authorized person or persons, or upon the
instructions of any officer of the Customer, or upon the advice of counsel for
the Customer or for the Bank. The Bank may record any transfer of Shares which
is reasonably believed by it to have been duly authorized or may refuse to
record any transfer of Shares if in good faith, the Bank, in its capacity as
Transfer Agent, deems such refusal necessary in order to avoid any liability on
the part of either the Series or the Bank. The Customer agrees to indemnify and
hold the Bank harmless from and against any and all losses, costs, claims, and
liability which it may suffer or incur by reason of so relying or acting or
refusing to act, except for actions taken pursuant to advice of the Bank's
counsel and actions resulting from the Bank's negligence or lack of good faith.
The Bank shall maintain and reconcile all operating bank accounts necessary to
facilitate all transfer agency processes; including, but not limited to,
distribution disbursements, redemptions and payment clearance accounts. The
indemnification provisions of this Sub-section II.C.6. shall survive the
termination of this Agreement.

7. Processing of Purchase Orders.

Prior to the daily determination of net asset value in accordance with
the Customer's Declaration of Trust and Form N-1A, the Bank shall process all
purchase orders received since the last determination of each Series' net asset
value.

The Bank shall place a purchase order daily with the appropriate
Series for the proper number of Shares and fractional Shares to be purchased and
confirm such number to the Customer in writing.

8. Issuance and Crediting of Shares.

The proper number of Shares and fractional Shares shall then be issued
daily and credited by the Bank to the Shareholder Registration Records. The
Shares and fractional Shares purchased for each Shareholder will be credited by
the Bank to that Shareholder's account. The Bank shall mail to each Shareholder
a confirmation of each purchase, with copies to the Customer as requested by the
Customer. Such confirmations will show the prior Share balance, the new Share
balance, the amount invested and the price paid for the newly purchased Shares.

9. Daily Processing of Redemption Requests.

The Bank shall, prior to the daily determination of net asset value in
accordance with the Customer's Declaration of Trust and Form N-1A, process all
requests from Shareholders to redeem Shares and determine the number of Shares
required to be redeemed to make monthly payments, automatic payments or the
like. Thereupon, the Bank shall advise the Customer of total number of Shares
available for redemption and the number of Shares and fractional Shares
requested to be redeemed. The Bank shall furnish the Customer with an
appropriate confirmation of the redemption and process the redemption by

<PAGE>

making the proper distribution and application of the redemption proceeds in
accordance with the Customer's Declaration of Trust and Form N-1A then in
effect. The registry books recording outstanding Shares, the Shareholder
Registration Records and the individual account of the Shareholder shall be
properly debited.

10. Redemptions After Recent Purchase.

With respect to redemption of Shares which have been purchased within
fifteen (15) calendar days of a redemption request, the Customer shall provide
the Bank, from time to time, with Written Instructions concerning the time
within which such requests may be honored.

III. GENERAL PROVISIONS
------------------

1. Standard of Care; Liabilities - Section I.

(a) With respect to Section I. of this Agreement, the Bank shall be
responsible for the performance of only such duties as are set forth in Section
I. of this Agreement or expressly contained in Instructions which are consistent
with the provisions of Section I. of this Agreement as follows:

(i) The Bank will use reasonable care with respect to its obligations
under this Agreement and the safekeeping of Assets. The Bank shall be liable to
the Customer for any loss which shall occur as the result of the negligence or
willful misconduct of the Bank or a Subcustodian with respect to the safekeeping
of such Assets. In the event of any loss to the Customer or Series by reason of
the failure of the Bank or its Subcustodian to utilize reasonable care, the Bank
shall be liable to the Customer and the Series only to the extent of the
Customer's actual damages.

(ii) The Bank will not be responsible for any act, omission, default
or the solvency of any agent which it or a Subcustodian uses unless such use was
made negligently or in bad faith.

(iii) The Customer and the Series shall be indemnified by, and
without liability to, the Bank for any action taken or omitted by the Bank
within the scope of this Agreement as a result of the Bank's negligence or
willful misconduct.

(iv) The Bank and its nominees shall be indemnified by, and without
liability to, the Customer, the Series, or the Shareholders for any action taken
or omitted by the Bank whether pursuant to or in reliance upon Instructions for
any losses arising out of the Bank's performance hereunder, arising out of its
nominees acting as a nominee or holder of record of the Securities, or for any
action or omission otherwise within the scope of this Agreement if such act or
omission was in good faith, without negligence. In performing its

18
<PAGE>

obligations under this Agreement, the Bank may rely on the genuineness of any
document which it reasonably believes in good faith to have been validly
executed.

(v) The Customer agrees to pay for and hold the Bank harmless from any
liability or loss resulting from the imposition or assessment of any taxes or
other governmental charges, and any related expenses with respect to income from
or Assets in the Accounts.

(vi) The Bank shall be entitled to rely, and may act, upon the advice
of counsel for the Customer on all matters and shall be without liability for
any action reasonably taken or omitted pursuant to such advice.

(vii) Without limiting the foregoing, the Bank shall not be liable
for any loss which results from: 1) the general risk of investing, or 2)
investing or holding Assets in a particular country including, but not limited
to, losses resulting from nationalization, expropriation or other governmental
actions; regulation of the banking or securities industry; currency
restrictions, devaluations or fluctuations; and market conditions which prevent
the orderly execution of securities transactions or affect the value of Assets
provided, however, that where the Bank is required to provide information to the
Customer as part of its services herewith, the Bank shall be responsible for
obtaining and relaying such information in accordance with the standard of care
described in this Section III.1.

(viii) In no event shall the Bank be liable to the Customer or the
Series for any indirect, incidental, special or consequential losses or damages
of any kind whatsoever (including but not limited to lost profits), even if the
Bank has been advised of the likelihood of such loss or damage and regardless of
the form of action.

(b) Consistent with and without limiting the first paragraph of this Sub-
section 1 of this Section III. of this Agreement, it is specifically
acknowledged that the Bank shall have no duty or responsibility to:

(i) supervise or make recommendations with respect to investments or
the retention of Securities;

(ii) advise the Customer or an Authorized Person regarding any default
in the payment of principal or income of any security other than as provided in
Sub-section 5(c) of Section I. of this Agreement;

(iii) evaluate or report to the Customer or an Authorized Person
regarding the financial condition of any broker, agent or other party to which
Securities are delivered or payments are made pursuant to this Agreement.
Nothing contained in this clause shall limit the Bank's responsibilities
pursuant to Section I.4 of this Agreement;

19
<PAGE>

(iv) review or reconcile trade confirmations received from brokers.
The Customer or its Authorized Persons (as defined in Sub-section 10 of Section
I. of this Agreement) issuing Instructions shall bear any responsibility to
review such confirmations against Instructions issued to and statements issued
by the Bank;

(v) The Bank hereby warrants to the Customer that in its opinion,
after due inquiry, the established procedures to be followed by each of its
branches, each branch of a qualified U.S. bank, each eligible foreign custodian
and each eligible foreign securities depository holding the Customer's
Securities pursuant to this Agreement afford reasonable protection for such
Securities given prevailing practices, procedures and controls available in that
market; and

(vi) The provisions of this Section III.1 shall survive the
termination of this Agreement.

2. Standard of Care; Liabilities - Section II.

(a) For purposes of Section II. of this Agreement, the Bank shall not be
liable for any error of judgment or mistake of law or for any loss or expense
suffered by the Bank or the Customer, the Series, or the Shareholders in
connection with the matters to which this Agreement relates, except for a loss
or expense to the extent caused by or resulting from willful misfeasance, bad
faith or negligence on the Bank's part in the performance of its duties or from
reckless disregard by the Bank of its obligations and duties under this
Agreement. In the performance of its services, however, the Bank shall be
obligated to exercise the due care and diligence of an open-end fund
administrative, accounting and transfer agent. In no event shall the Bank be
liable for any indirect, incidental, special or consequential losses or damages
of any kind whatsoever (including but not limited to lost profits), even if the
Bank has been advised of the likelihood of such loss or damage and regardless of
the form of action.

(b) Subject to Section 2(a) above, the Bank shall not be responsible for,
and the Customer shall indemnify and hold the Bank harmless from and against,
any and all losses, damages, costs, reasonable attorneys' fees and expenses,
payments, expenses and liabilities incurred by the Bank, any of its agents, or
the Customer's agents in the performance of its/their duties hereunder,
including but not limited to those arising out of or attributable to:

(i) any and all actions of the Bank or its officers or agents required
to be taken pursuant to this Agreement;

(ii) the reasonable reliance on or use by the Bank or its officers or
agents of information, records, or documents which are received by the Bank or
its officers or agents and furnished to it or them by or on behalf of the
Customer, and which have been prepared or maintained by the Customer or any
third party on behalf of the Customer;

<PAGE>

(iii) the Customer's refusal or failure to comply with the material
terms of this Agreement or the Customer's lack of good faith, or its actions, or
lack thereof, involving negligence or willful misfeasance;

(iv) the breach of any material representation or warranty of the
Customer hereunder;

(v) the taping or other form of recording of telephone conversations
or other forms of electronic communications with investors and shareholders, or
reliance by the Bank, its officers or agents on telephone or other electronic
instructions of any person acting on behalf of a shareholder or shareholder
account for which telephone or other electronic services have been authorized,
provided the Bank, its officers or agents complies with all laws relating to the
taping or other form of recording of telephone conversations;

(vi) the reliance on or the carrying out by the Bank or its officers
or agents of any proper instructions reasonably believed to be duly authorized,
or requests of the Customer or recognition by the Bank or its officers or agents
of any share certificates which are reasonably believed to bear the proper
signatures of the officers of the Customer and the proper countersignature of
any transfer agent or registrar of the Customer;

(vii) any delays, inaccuracies or omissions from information or data
provided to the Bank or its officers or agents by data services, corporate
action services, Services or securities brokers and dealers;

(viii) the offer or sale of shares by the Customer in violation of
any requirement under the Federal securities laws or regulations or the
securities laws or regulations of any state, or in violation of any stop order
or other determination or ruling by any Federal agency or any state agency with
respect to the offer or sale of such shares in such state (1) resulting from
activities, actions or omissions by the Customer or its other service providers
and agents, or (2) existing or arising out of activities, actions or omissions
by or on behalf of the Customer prior to the effective date of this Agreement;

(ix) any failure of the Customer's registration statement to
materially comply with the 1940 Act (including the rules and regulations
thereunder) and any other applicable laws, or any untrue statement of a material
fact or omission of a material fact necessary to make any statement therein not
misleading in Customer's registration statement on Form N1-A; and

(x) the actions taken by the Customer, and its investment advisers, in
compliance with applicable securities, tax, commodities and other laws, rules
and regulations, or the failure to so comply.

(c) In performing the services required under Section II. hereof, the Bank
shall be entitled to rely on any Oral or Written Instructions, notices or other
communications,

21
<PAGE>

including electronic transmissions, from the Customer and its officers and
trustees, investors, agents and other service providers which the Bank or its
agents reasonably believes to be genuine, valid and authorized, and shall be
indemnified by the Customer for any loss or expense caused by such reliance.
The Bank shall also be entitled to consult with and rely on the advice and
opinions of outside legal counsel retained by the Customer, as necessary or
appropriate.

(d) The Bank shall indemnify and hold the Customer and the Series harmless
from and against any and all losses, damages, costs, charges, reasonable
attorneys' fees and expenses, payments, expenses and liabilities arising out of
or attributable to the Bank's refusal or failure to comply with the material
terms of this Agreement; the Bank's breach of any material representation made
by it herein; or the Bank's lack of good faith or acts involving negligence,
willful misfeasance or reckless disregard of its duties under this Agreement.

(e) The provisions of this Section III.2. shall survive the termination of
this Agreement.

3. Indemnification.

(a) In connection with any indemnification required under this Section
III., the party seeking indemnification ("Indemnified Party") shall give written
notice within a reasonable period of time to the other party ("Indemnifying
Party") of a written assertion or claim of any threatened or pending legal
proceeding which may be subject to this indemnification. The failure to so
notify the Indemnifying Party of such written assertion or claim shall not,
however, operate in any manner whatsoever to relieve the Indemnifying Party of
any liability arising from this Section III. or otherwise, except to the extent
failure to give notice prejudices the Indemnifying Party.

(b) For any legal proceeding giving rise to indemnification under this
Agreement, the Indemnifying Party shall be entitled to defend or prosecute any
claim in the name of the Indemnified Party at its own expense and through
counsel of its own choosing if it gives written notice to the Indemnified Party
within fifteen (15) business days of receiving notice of such claim.
Notwithstanding the foregoing, the Indemnified Party may participate in the
litigation at its own expense through counsel of its own choosing. If the
Indemnifying Party chooses to defend or prosecute such claim, then the parties
shall cooperate in the defense or prosecution thereof and shall furnish such
records and other information as are reasonably necessary.

<PAGE>

4. Use of Other Parties by the Bank.

(a) In furnishing the services required to be provided under Section II. of
this Agreement, the Bank may, upon prior written approval of Customer, sub-
contract with other parties ("Other Parties") for the provision of all or such
part of those services as Bank deems appropriate. In the event that the Bank
utilizes the services of Other Parties in performing the functions required to
be performed by it as set forth in Section II. of this Agreement, the Bank shall
be responsible for the actions of such Other Parties to the same extent as if
the Bank performed such functions. Termination of such Other Parties may be
made only upon prior written approval of Customer.

(b) To the extent the Bank contracts with Other Parties to perform services
required by Section II., of this Agreement, Bank is authorized to make
representations in writing to such Other Parties concerning the Customer only
(i) to the same extent as the Customer makes representations and warranties to
the Bank in this Agreement; and (ii) concerning the obligations of Customer set
forth in Sub-section 4(c) of this Agreement.

(c) The Customer and the Bank agree that to the extent the Bank utilizes
Other Parties to perform certain functions called for by Section II. of this
Agreement, the Customer may communicate directly with such Other Parties and
agrees to pay the direct Customer expenses set forth in Schedule F.

(d) To the extent the Bank contracts with Other Parties to perform any of
the functions required under Section II. of this Agreement and is required
pursuant to contracts with such Other Parties to supply documents to such Other
Parties relating to the Customer, the Customer shall supply such documents to
the Bank upon reasonable request.

5. Representations and Warranties of Customer.

The Customer represents and warrants to Bank that:

(a) the Customer is a business trust duly organized and existing and in
good standing under the laws of the State of Delaware;

(b) the Customer is an open-end investment company properly registered
under the 1940 Act; and

(c) all records and regulatory filings of the Customer have been properly
maintained or made in accordance with applicable laws.

<PAGE>

6. Representations of Bank

The Bank represents and warrants to the Customer that:

(a) the Bank is a New York State Chartered Trust Company duly organized and
existing and in good standing under the laws of New York;

(b) the Bank is empowered under applicable laws and by its Charter Document
and By-Laws to enter into and perform this Agreement;

(d) the Bank is not a party to any pending or threatened legal proceedings
which would impair its ability to perform the duties and obligations called for
by this Agreement; and

(e) the Bank will only sub-contract with an Other Party to perform services
under this Agreement if such Other Party:

(i) is duly organized, existing and in good standing under the laws of
its state of organization;

(ii) is duly qualified to carry on its business wherever it is legally
required to be so qualified;

(iii) is empowered under applicable laws and by its charter documents
and By-Laws to perform the functions required under Section II. of this
Agreement which the Bank has contracted with it to provide;

(iv) has and will continue to have access to the facilities, personnel
and equipment required to fully perform the functions which the Bank has
contracted with it to provide; and

(v) is not a party to any pending or threatened legal proceedings
which would impair such Other Party's ability to perform the duties and
obligations which the Bank has contracted with it to provide.

7. Fees and Expenses.

(a) The Customer agrees to pay the Bank or its agents for all services to
be provided under this Agreement such amount as may be agreed upon in writing
and as set forth on Schedule F. For any amount of fees that has not been
contested in accordance with Sub-section (e) of this Section III.7., the Bank
shall have a lien on and is authorized to

24
<PAGE>

charge the Account of any Series for any amount owing to the Bank by Customer on
behalf of such Series under any provision of this Agreement. The fee schedule
agreed to and as set forth on Schedule F shall be fixed for a period of three
years from the date hereof.

(b) The Bank is, and any Subcustodians are, authorized to charge the
Account of any Series for such items and the Bank shall have a lien, charge and
security interest on any and all Assets of such Series for any amount owing to
the Bank with respect to such Series from time to time under this Agreement.

(c) The Customer may from time to time request additional services,
additional processing, or special reports. The Customer shall submit such
requests in writing together with such specifications and requirements
documentation as may be reasonably required by the Bank. If the Bank elects to
provide such services or arrange for their provision, it shall be entitled to
additional fees and expenses at its customary rates and charges. The Bank's
agreement to perform such additional services shall not be unreasonably
withheld.

(d) The Bank will render, after the close of each month in which services
have been furnished, a statement reflecting all of the charges for such month.
Undisputed charges remaining unpaid after sixty (60) days shall bear interest in
finance charges equivalent to, in the aggregate, the Prime Rate (as determined
by the Bank) plus two percent per year and all costs and expenses of effecting
collection of any such sums, including reasonable attorney's fees, shall be paid
by the Customer to the Bank.

(e) In the event that the Customer is more than ninety (90) days delinquent
in its payments of monthly billings in connection with this Agreement (with the
exception of specific amounts which may be reasonably contested by the
Customer), this Agreement may be terminated upon sixty (60) days' written notice
to the Customer by the Bank. The Customer must notify the Bank in writing of
any contested amounts within thirty (30) days of receipt of a billing for such
amounts. Disputed amounts are not due and payable while they are being
investigated.

8. Records; Proprietary Nature; Duty to Maintain; Access and Inspection;
Report on Internal Accounting Controls.

(a) Proprietary Nature. The Bank agrees that all accounts, books and
records of the Bank relating thereto, in its capacity as Custodian under this
Agreement, are the property of the Bank. The Bank agrees that all accounts,
books and records of the Customer maintained in its capacity as Administrative,
Accounting Services and Transfer Agent pursuant to Section 31 of the 1940 Act
and Rule 31a-1 and 31a-2 are the property of the Customer. All books and
records maintained in accordance with this Agreement shall be open to inspection
and audit at all reasonable times during normal business hours by any person
designated by the Customer. All such accounts, books and records shall be
maintained and preserved in the form acceptable to and the periods prescribed by
the Customer and in accordance with and for the periods prescribed by the 1940
Act and the

25
<PAGE>

Rules and Regulations thereunder, including, without limitation, Section 31
thereof and Rules 31a-1 and 31a-2 thereunder.

(b) Access and Inspection. The Bank shall assist the Customer, the
Customer's independent auditors, or, upon approval of the Customer, any
regulatory body, in any requested review of the Customer's or Series' accounts,
books and records maintained by the Bank in its capacity as Custodian,
Administrative, Accounting or Transfer Agent. The Bank shall be reimbursed by
the Customer for all reasonable expenses incurred in connection with any such
review, other than routine and normal periodic reviews and audits. Bank, in its
capacity as Accounting Agent, will supply the necessary data for the Customer's
or an independent auditor's completion of any necessary tax returns,
questionnaires, periodic reports to shareholders and such other reports and
information requests as the Customer and the Bank shall agree upon from time to
time. In case of any other request or demand for the inspection of any
accounts, books or records maintained by the Bank on Customer's behalf, the Bank
shall not permit such inspection except upon prior written approval of Customer,
which approval shall not be unreasonably withheld.

(c) Records of Subcustodians. Subject to restrictions under applicable
law, the Bank shall also obtain from each Subcustodian an undertaking to permit
the Customer's independent public accountants reasonable access to the records
of each Subcustodian which has physical possession of any Assets, as may be
required in connection with the examination of the Customer's books and records.

(d) Report on Internal Accounting Controls. Upon reasonable request from
the Customer, the Bank shall furnish the Customer such reports (or portions
thereof) of the Bank's system of internal accounting controls (SAS-70)
applicable to the Bank's duties under this Agreement. The Bank shall use its
reasonable efforts to obtain and furnish the Customer with such similar reports
as it may reasonably request with respect to each Subcustodian and securities
depository holding the Customer's assets.

9. Miscellaneous.

(a) Foreign Exchange Transactions. To facilitate the administration of the
Customer's trading and investment activity, the Bank is authorized to enter into
spot or forward foreign exchange contracts with the Customer or an Authorized
Person for the Customer on behalf of a Series on a principal and agency basis
and may also provide foreign exchange through its subsidiaries, affiliates,
Subcustodians or third parties. Instructions, including standing instructions,
may be issued with respect to such contracts but the Bank may establish rules or
limitations concerning any foreign exchange facility made available. In all
cases where the Bank, its subsidiaries, affiliates or Subcustodians enter into a
foreign exchange contract related to Accounts, the terms and conditions of the
then current foreign exchange contract of the Bank, its subsidiary, affiliate or
Subcustodian and, to the extent not inconsistent, this Agreement shall apply to
such transaction.

<PAGE>

(b) Certification of Residency, etc. The Customer certifies that it is a
resident of the United States and agrees to notify the Bank of any changes in
residency. The Bank may rely upon this certification or the certification of
such other facts as may be required to administer the Bank's obligations under
this Agreement. The Customer will indemnify the Bank against all losses,
liability, claims or demands arising directly or indirectly from any such
certifications. The indemnification provisions of this Sub-section 9(b) shall
survive termination of this Agreement.

(c) Governing Law; Successors and Assign. This Agreement shall be governed
by the laws of the State of New York and shall not be assignable by either
party, but shall bind the successors in interest of the Customer and the Bank.

(d) Entire Agreement; Applicable Riders. This Agreement consists
exclusively of this document together with Schedule A1, Schedule A2, Schedules
B1, B2, B3, B4, Schedule C, Schedule D, Schedule E, and Schedule F. There are
no other provisions of this Agreement, and this Agreement supersedes any other
agreements, whether written or oral, between the parties. Any amendment to this
Agreement must be in writing, executed by both parties. With respect to the
services required to be provided under Section II. of this Agreement, the Bank
and the Customer may from time to time adopt such procedures to facilitate the
provision of such services, as agreed upon in writing.

(e) Severability. In the event that one or more provisions of this
Agreement are held invalid, illegal or unenforceable in any respect on the basis
of any particular circumstances or in any jurisdiction, the validity, legality
and enforceability of such provision or provisions under other circumstances or
in other jurisdictions and of the remaining provisions will not in any way be
affected or impaired.

(f) Waiver. Except as otherwise provided in this Agreement, no failure or
delay on the part of either party in exercising any power or right under this
Agreement operates as a waiver, nor does any single or partial exercise of any
power or right preclude any other or further exercise, or the exercise of any
other power or right. No waiver by a party of any provision of this Agreement,
or waiver of any breach or default, is effective unless in writing and signed by
the party against whom the waiver is to be enforced.

(g) Notices. All notices under this Agreement shall be effective when
actually received. Any notices or other communications which may be required
under this Agreement are to be sent to the parties at the following addresses or
such other addresses as may subsequently be furnished to the other party in
writing by certified or registered mail, unless otherwise specified in this
Agreement or in the Client Services Guide:

<PAGE>

Bank: Morgan Stanley Trust Company
One Pierrepont Plaza
Brooklyn, NY 11201
Attention: President

or facsimile: (718) 754-6160

Customer: Brinson Relationship Funds
209 South LaSalle Street
Chicago, IL 60604-1295
Attention: President

or facsimile: (312) 554-3935

(h) Term and Termination.

(i) This Agreement shall become effective on the date first written
above and shall continue in effect for an initial three year period. The
Agreement may be terminated in its entirety or as to Section I. or Section II.
only prior to the expiration of the initial term only if a party commits a
material breach of any term or condition hereof and any such breach is not cured
or rectified within ninety (90) calendar days after the party claiming the
breach shall have given written notice of such to the other party ("Curable
Breach") except that neither party shall have a right to cure a material breach
resulting from willful misconduct, reckless disregard or intentional misconduct
("Non-curable Breach"). In the event that a Curable Breach is not cured within
such ninety (90) day period, the party claiming a material breach shall have
thirty (30) days to notify the party committing the breach of its intention to
terminate this Agreement in accordance with subparagraph (ii) of Section
III.9.(h).

(ii) The Customer or the Bank may give notification of termination to
the other party following a Non-Curable Breach or following a Curable Breach
which has not been cured or after the initial three year period by giving ninety
(90) days written notice to the other, provided that such notice to the Bank
shall specify the names of the persons to whom the Bank shall deliver the Assets
in the Accounts; and further provided that, if Bank is the terminating party
(other than on account of a material breach hereof by Customer) Customer may
extend the termination period by up to an additional sixty (60) days by sending
prompt written notice ("Extension Notice") to Bank of its intent to do so
(including the number of additional days). If notice of termination is given by
the Bank, the Customer shall, within ninety (90) days (or such other amount of
days as is contemplated by the Extension Notice) following receipt of the
notice, deliver to the Bank Instructions specifying the names of the persons to
whom the Bank shall deliver the Assets. In either case the Bank will deliver
the Assets to the persons so specified, after deducting any amounts which the
Bank determines in good faith to be owed to it under Sub-section 7 of Section
III. of this Agreement.

28
<PAGE>

If within ninety (90) days following receipt of a notice of
termination by the Bank, the Bank does not receive Instructions from the
Customer specifying the names of the persons to whom the Bank shall deliver the
Assets, the Bank, at its election, may deliver the Assets to a bank or trust
company doing business in any State within the United States to be held and
disposed of pursuant to the provisions of this Agreement, or to Authorized
Persons, or may continue to hold the Assets until Instructions are provided to
the Bank; provided, however, that the Bank shall have no obligation to settle
any transactions in securities for the Accounts following the expiration of the
ninety (90) day period referred to in this sentence except those transactions
which remained open prior to the expiration of such ninety (90) day period.

(iii) Termination as to One or More Series. This Agreement may be
terminated as to one or more Series (but less than all of the Series) by
delivery of an amended Schedule B1 deleting such Series, in which case
termination as to such deleted Series shall take effect sixty (60) days after
the date of such delivery. The execution and delivery of an amended Schedule B1
which deletes one or more Series shall constitute a termination of this
Agreement only with respect to such deleted Series, shall be governed by the
preceding provisions of this Sub-section 9(h) of Section III. of this Agreement
as to the identification of a successor custodian and the delivery of Assets of
the Series so deleted to such successor custodian, and shall not affect the
obligations of the Bank and the Customer hereunder with respect to the other
Series set forth in Schedule B1, as amended from time to time.

(i) Several Obligations of the Series. With respect to any obligations of
the Customer on behalf of the Series and their related Accounts arising out of
this Agreement, the Bank shall look for payment or satisfaction of any
obligation solely to the assets and property of the Series and such Accounts to
which such obligation relates as though the Customer had separately contracted
with the Custodian by separate written instrument with respect to each Series
and its related Accounts.

(j) Representations and Warranties. (A) The Customer represents and
warrants that (i) the execution, delivery and performance of this agreement
(including, without limitation, the ability to obtain the short-term extensions
of credit in accordance with Section I.5.) are within the Customer's and the
Series' power and authority and have been duly authorized by all requisite
action (corporate or otherwise) of the Customer, and (ii) this Agreement and
each extension of short-term credit extended to or arranged for the benefit of
any Series in accordance with Section I.5. shall at all times constitute a
legal, valid and binding obligation of the Customer on behalf of and solely from
the assets attributable to such Series and be enforceable against the Customer
on behalf of and solely from the assets attributable to such Series in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
in general and subject to the effect of general principles of equity (regardless
of whether considered in a proceeding in equity or at law).

<PAGE>

(k) The Bank represents and warrants that (i) the execution, delivery and
performance of this Agreement are within the Bank's power and authority and have
been duly authorized by all requisite action (corporate or otherwise) of the
Bank and (ii) this Agreement constitutes the legal, valid and binding obligation
of the Bank enforceable against the Bank in accordance with its terms, except as
may be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights in general and subject to the effect of general
principles of equity (regardless of whether considered in a proceeding in equity
or at law).

(l) Force Majeure. Subject to reasonable compliance with the Bank's then-
existing disaster recovery plans, the Bank shall not be liable for any harm,
loss or damage suffered by the Customer, its investors, or other third parties
or for any failure or delay in performance of the Bank's obligations under this
Agreement arising out of or caused, directly or indirectly, by circumstances
beyond the Bank's control. In the event of a force majeure, any resulting harm,
loss, damage, failure or delay by the Bank will not give the Customer the right
to terminate this Agreement.

(m) Confidentiality.

(i) Except to the extent necessary to perform the functions required
under this Agreement, the Bank, its agents and employees shall maintain the
confidentiality of information concerning any Assets held under this Agreement,
including in dealings with affiliates of the Bank. In the event the Bank or any
Subcustodian is requested or required to disclose any confidential information
concerning any such Assets, the Bank shall, to the extent practicable and
legally permissible, promptly notify the Customer of such request or requirement
so that the Bank may seek a protective order or waive any objection to the
Bank's or such Subcustodian's compliance with this Sub-section 9(m). In the
absence of such a waiver, if the Bank or such Subcustodian is compelled, in the
opinion of its counsel, to disclose any confidential information, the Bank or
such Subcustodian may disclose such information to such persons as, in the
opinion of counsel, is so required.

(ii) The Customer shall maintain the confidentiality of, and not
provide to any third parties absent the written permission of the Bank, any
computer software, hardware or communications facilities made available to the
Customer or its agents by the Bank.

(iii) Neither the Bank nor any Other Party may create written or
other promotional materials and/or distribute such promotional materials to the
public or to prospective customers or clients which state that it is providing
services to the Customer or any of its affiliates in connection with this
Agreement without the prior verbal or written consent of the Customer, which
consent will not be unreasonably withheld. For purposes of Sub-section 9(m) of
this Agreement, the term "written or other promotional materials" shall mean any
(A) material prepared in connection with the solicitation of prospective or
existing customers; and (B) material published, or designed for use in, a
newspaper, magazine or other periodical, radio, television, telephone or tape
recording, videotape display, signs or

30
<PAGE>

billboards, motion pictures, telephone directories (other than routine
listings), electronic or other public media.

BRINSON RELATIONSHIP FUNDS

By:_____________________________
Title:
Date:

MORGAN STANLEY TRUST COMPANY

By:_____________________________
Title:
Date:

31
<PAGE>

STATE OF ILLINOIS )
: SS.
COUNTY OF COOK )

On this ___________ day of ___________________________, 19__, before
me personally came ______________________________, to me known, who being by me
duly sworn, did depose and say that he/she resides in ________________________
at _________________________ that he/she is _______________________ of
______________________________, the entity described in and which executed the
foregoing instrument; that he/she knows the seal of said entity, that the seal
affixed to said instrument is such seal, that it was so affixed by order of said
entity, and that he/she signed his/her name thereto by like order.

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

Sworn to before me this ______________
day of _________________, 19__.

- --------------------------------------
Notary

32
<PAGE>

STATE OF NEW YORK )
: SS.
COUNTY OF KINGS )

On this ___________ day of ___________________________, 19__, before
me personally came ______________________________, to me known, who being by me
duly sworn, did depose and say that he/she resides in ________________________
at _________________________; that he/she is a Vice President of
_______________________ the corporation described in and which executed the
foregoing instrument; that he/she knows the seal of said corporation, that the
seal affixed to said instrument is such corporate seal, that it was so affixed
by order of the Board of Trustees of said corporation, and that he/she signed
his/her name thereto by like order.

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

Sworn to before me this ______________
day of _________________, 19__.

- --------------------------------------
Notary

33
<PAGE>

SCHEDULE A1
-----------
LIST OF SUBCUSTODIANS
---------------------

<TABLE>
<CAPTION>
Country Sub-Custodian
------- -------------
<S> <C>
Argentina Citibank N.A.
Australia Westpac Banking Corporation
Austria Creditanstalt-Bankverein
Bangladesh Standard Chartered Bank
Belgium Bank Brussels Lambert S.A.
Botswana Barclays Bank of Botswana Ltd.
Brazil Banco de Boston
Canada The Toronto-Dominion Bank
Canada Royal Bank of Canada*
Chile Citibank N.A.
China Hongkong and Shanghai Banking Corporation
Colombia Cititrust S.A.
Cote d'Ivoire Societe Generale
Cyprus Barclays Bank PLC
Czech Republic ING Bank N.V.
Denmark Den Danske Bank
Ecuador Citibank N.A.
Egypt Citibank N.A.
Estonia Hansabank**
Finland Merita Bank
France Banque Indosuez
Germany Dresdner Bank AG
Ghana Barclays Bank of Ghana Ltd.
Greece Citibank N.A.
Hong Kong Hongkong and Shanghai Banking Corporation
Hungary Citibank Budapest Rt.
India Standard Chartered Bank
India Hongkong and Shanghai Banking Corporation
India State Bank of India/Stock Holding Corporation of India Limited
India MSTC Mumbai Branch
Indonesia Hongkong and Shanghai Banking Corporation
Ireland Allied Irish Banks plc
Israel Bank Leumi
Italy Citibank N.A.
Japan The Bank of Tokyo-Mitsubishi Limited
Japan Morgan Stanley Japan Limited**
Jordan Arab Bank plc
Kenya Barclays Bank of Kenya Ltd.
*Effective May 23, 1997
**Not an eligible foreign custodian under Rule 17f-5
</TABLE>

34
<PAGE>

LIST OF SUBCUSTODIANS
---------------------

<TABLE>
<CAPTION>
Country Sub-Custodian
------- -------------
<S> <C>
Luxembourg Bank Brussels Lambert S.A.
Malaysia OCBC Bank (Malaysia) Berhad
Mauritius Hongkong and Shanghai Banking Corporation
Mexico Citibank Mexico S.A.
Morocco Banque Commerciale du Maroc
Netherlands ABN AMRO Bank N.V.
New Zealand ANZ Banking Group (New Zealand) Limited
Norway Den Norske Bank
Pakistan Standard Chartered Bank
Papua New Guinea Westpac Banking Corporation
Peru Citibank N.A.
Philippines Hongkong and Shanghai Banking Corporation
Poland Citibank Poland S.A.
Portugal Banco Comercial Portugues
Russia Credit Suisse (Moscow) Ltd.
Singapore Oversea-Chinese Banking Corporation Limited
Slovakia ING Bank N.V.
South Africa First National Bank of Southern Africa, Ltd.
South Korea Standard Chartered Bank
Spain Banco Santander
Sri Lanka Hongkong and Shanghai Banking Corporation
Swaziland Barclays Bank of Swaziland Ltd.
Sweden Svenska Handelsbanken
Switzerland Bank Leu Limited
Taiwan Hongkong and Shanghai Banking Corporation
Thailand Standard Chartered Bank
Tunisia Banque Internationale Arabe de Tunisie**
Turkey Citibank N.A.
UK Barclays Bank PLC
USA Chase Manhattan Bank
Uruguay Citibank N.A.
Venezuela Citibank N.A.
Zambia Barclays Bank of Zambia Ltd.
Zimbabwe Barclays Bank of Zimbabwe Ltd.
</TABLE>

**Not an eligible foreign custodian under Rule 17f-5

35
<PAGE>

SCHEDULE A2
-----------

LIST OF SECURITIES DEPOSITORIES OR CLEARING AGENCIES
----------------------------------------------------

<TABLE>
<CAPTION>
Country Central Depository
------- ------------------
<S> <C> <C>

Argentina Caja de Valores
Australia CHESS Clearing House Electronic
Subregister System
Austria OKB OsterreicheKontrollbank
Bangladesh None
Belgium CIK Caisse Interprofessionelle de
Depots et de Virements de
Titres
Botswana None
Brazil BOVESPA Bolsa de Valores de Sao Paulo
BVRJ Bolsa de Valores de Rio de
Janeiro
CETIP - fixed income Central de Custodia e
Liquidacao Financeira de
Titulos
SELIC - fixed income Sistema Especial de Liquidacao
e Custodia
Canada CDS The Canadian Depository for
Securities
Chile Depositorio Central de
Valores
China SSCCRC Shanghai Securities Central
Clearing and Registration
Corporation
SSCC Shenzhen Securities Central
Clearing Company Ltd.
Colombia DCV - central bank Deposito Central de Valores
securities
DECEVAL - fixed income
securities
Cyprus None

Cote d'Ivoire None
Czech Republic SCP Stredisko cennych papiru
(Center for Securities)
Denmark VP Vaerdipapircentralen
Ecuador None
Egypt None
</TABLE>

36
<PAGE>

<TABLE>
<CAPTION>
Country Central Depository
------- ------------------
<S> <C> <C>
Finland None
France SICOVAM Societe Interprofessionelle pour
la Compensation des Valeurs
Mobilieres
Germany DKV Deutscher Kassenverein AG
Ghana None
Greece Apothetirio Titlon A.E.
Hong Kong CCASS Central Clearing and Settlement
System
Hungary KELER Kozponti Elszamolohas es
Ertktar (Budapest) Rt.
India National Securities National Securities Depository
Depository Limited Limited
Indonesia KDEI Kustodian Dipositari Efek
Indonesia
Ireland CGO - gilts only Central Gilts Office
Israel SECH (for securities Stock Exchange Clearing House
listed on the Tel Aviv
Stock Exchange)
Italy Monte Titoli S.P.A.
Banco d'Italia
Japan JASDEC Japan Securities Depository
Center
Jordan None
Kenya None
Luxembourg None
Malaysia MCD Malaysian Central Depository
Mauritius None
Mexico S.D. INDEVAL, S.A.
Morocco None
Netherlands NECIGEF Netherlands Central Institute
for Giral Effectenclearing
New Zealand NZCSD New Zealand Central Securities
Depository
Norway VPS Verdipapirsentralen
Pakistan CDC Central Depository Company of
Pakistan
Papua New CHESS Clearing House Electronic
Guinea Subregister System
Peru Caja de Valores Caja de Valores de Lima
Philippines PCD Phillippine Central Depository
Poland NDS National Depository of
</TABLE>

37
<PAGE>

<TABLE>
<CAPTION>
Country Central Depository
------- ------------------
<S> <C> <C>
Securities
Portugal CENTRAL
Russia None
Singapore CDP Central Depository Pte Ltd.
Slovak Republic SCP Stredisko cennych papierov
Slovenskej Republiky (Center
for Securities)
South Africa Central Depository Ltd.
South Korea KSD Korean Securities Depository
Spain SCLV Servicio de Compensacion y
Liquidacion de Valores
Sri Lanka CDS Central Depository System Pvt
Ltd.
Swaziland None
Sweden VPS Vardipapperscentralen
Switzerland SEGA Schweizerische EffektenGiro
AG
Taiwan TSCD Taiwan Securities Depository
Co.
Thailand SDC or TSD Thailand Securities Depository
Center
Tunisia
Turkey None
United Kingdom CGO - gilts only Central Gilts Office
CREST
United States DTC Depository Trust Company
Uruguay None
Venezuela None
Zambia Lusaka Stock Exchange
Depository
Zimbabwe None
</TABLE>

<PAGE>

SCHEDULE B1
-----------

LIST OF SERIES OF BRINSON RELATIONSHIP FUNDS
--------------------------------------------

Global Securities Fund
Short-Term Fund
Post-Venture Fund
High Yield Fund
Emerging Markets Equity Fund
Emerging Markets Debt Fund

<PAGE>

SCHEDULE B2
-----------

LIST OF DOCUMENTS TO BE PROVIDED BY CUSTOMER TO BANK
----------------------------------------------------

REQUIRED DOCUMENTATION FOR CORE CUSTODIAL SERVICES (INCLUDING TAX RECLAIMS):
- ---------------------------------------------------------------------------

CUSTODY AGREEMENT

CLIENT SERVICES GUIDE (INCLUDING APPENDICES)

FEE SCHEDULE/BILLING GUIDE

GENERAL ACCOUNT INFORMATION

US TAX AUTHORITY DOCUMENTATION

LOCAL TAX OFFICE LETTER/APPLICATION LETTER
(NON-UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)

FORM 6166/REQUEST FOR FOREIGN CERTIFICATION FORM
(UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)

CERTIFICATION OF BENEFICIAL OWNERSHIP, LEGAL NAME, LEGAL RESIDENCY, TAX STATUS
AND TAX IDS

TAX RECLAIM POWER OF ATTORNEY

PREVIOUS TAX RECLAIM FILING INFORMATION
(PREVIOUS FILERS, ONLY)

UK TAX AUTHORITY DOCUMENTATION

SOPHISTICATED INVESTOR (ACCREDITED INVESTOR LETTER)
(UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)

40
<PAGE>

DOCUMENTATION THAT IS REQUIRED FROM AN ENTITY CLASSIFIED AS TAX-EXEMPT BY ITS
- -----------------------------------------------------------------------------
LOCAL TAX AUTHORITY:
- -------------------

UK FORM 4338
(EXEMPT NON-UNITED KINGDOM-RESIDENT BENEFICIAL OWNERS, ONLY)

UK FORM 309A
(EXEMPT UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)

FOREIGN EXEMPTION LETTERS/APPLICATION FOR AUSTRALIAN EXEMPTION LETTER
(EXEMPT BENEFICIAL OWNERS, ONLY)

DOCUMENTATION THAT IS REQUIRED ONLY IF YOU WILL DEAL IN CERTAIN SECURITIES:
- --------------------------------------------------------------------------

THAI AUTHORIZATION LETTER

JGB INDEMNIFICATION LETTER

KOREAN SECURITIES POWER OF ATTORNEY

NEW ZEALAND "APPROVED ISSUER LEVY" LETTER

SPANISH POWER OF ATTORNEY WITH APOSTILE

ITALIAN GOVERNMENT BONDS LETTER

UK STAR LETTER

<PAGE>

SCHEDULE B3
-----------

LIST OF AUTHORIZED PERSONS
--------------------------
NAME SIGNATURE

42
<PAGE>

SCHEDULE B4
-----------

DESIGNATED SYSTEM USER ID NUMBERS
---------------------------------
<TABLE>
<CAPTION>
Account Account
Mnemonic Number Account Name Fund Type
<S> <C> <C> <C>

69 BSTC 00043033 Short-Term Cash BRF Fund Relationship Fund

70 BUHY 00043034 U.S. High Yield Bond BRF Fund Relationship Fund

71 BEMD 00043035 Emerging Markets Debt BRF Fund Relationship Fund

72 EMD1 00043036 Segregated Segregated

73 EMD2 00043037 Currency Segregated

74 BPVB 00043038 Post Venture BRF Fund Relationship Fund

75 PVB1 00043039 Segregated Segregated

76 BEME 00043040 Emerging Market Equity BRF Fund Relationship Fund

77 EME1 00043041 Segregated Swap Segregated

78 EME2 00043042 Merrill Lynch Segregated Swap Segregated

79 EME3 00043043 Barings Segregated Swap Segregated

80 EME4 00043044 BZW Segregated Swap Segregated

81 EME5 00043045 Segregated Segregated

82 EME6 00043046 Currency Segregated

83 BGBF 00043047 Global BRF Fund Relationship Fund

84 GBF1 00043048 When Issued TBA's Segregated

85 GBF2 00043049 Segregated Segregated

86 GBF3 00043050 Secured Segregated

87 GBF4 00043051 Currency Segregated
</TABLE>

43
<PAGE>

SCHEDULE C
----------

BRINSON RELATIONSHIP FUNDS
--------------------------
GENERAL DESCRIPTION OF FUND ADMINISTRATIVE SERVICES
---------------------------------------------------

I. Regulatory Compliance

A. Compliance - Federal Investment Company Act of 1940
1. Review, report and renew
a. Investment advisory contracts
b. File and monitor compliance of Fidelity bond
c. Underwriting contract (if applicable)
d. Distribution (12b-1) plans (if applicable)
e. Multiple Services Agreement

2. Filings
a. N-SAR (semi-annual report and annual report)
b. Initial registration statement on Form N1-A, post-effective
amendments on Form N-1A, and supplements ("stickers")
c. Notice pursuant to Rule 24f-2 (registration of indefinite
number of shares)
d. Filing fidelity bond under Rule 17g-1
e. Filing shareholders reports under Rule 30b2-1
f. Proxy statement, when necessary

3. Annual up-dates of biographical information and questionnaires
for Trustees and Officers, coordinated with The Brinson Funds'
questionnaire

B. Compliance - State "Blue Sky" (if applicable)
1. Blue Sky (state registration)
a. Registration shares (initial/renewal)
b. Monitor sales shares
c. Report shares sold
d. Filing of federal registration statements and contracts
e. Filing annual and semi-annual reports with states

C. Compliance - Registration Statement
1. Analyze and review portfolio reports from Adviser regarding:
a. compliance with investment objectives, although the primary
responsibility for such compliance remains with the
investment adviser or investment manager.

44
<PAGE>

SCHEDULE C
----------

b. maximum investment by company/industry size, although the
primary responsibility for such compliance remains with the
investment adviser or investment manager.

D. Compliance - Exemptive Orders and No-Action Letters
1. Monitor compliance with all exemptive orders and no-action
letters, although the primary responsibility for such compliance
remains with the investment adviser or investment manager.

E. Compliance - Other (if applicable as directed by the Adviser)
1. Proxy, when necessary
2. Applicable Stock Exchange Rules
3. Applicable to state tax laws

II. Corporate Business and Shareholder/Public Information

A. Trustees/Management
1. Preparation of meetings
a. agendas and resolutions - all necessary items of compliance
b. compile and distribute Board materials
c. attend and record minutes of meetings
d. keep attendance records
e. maintain corporate records/minute book

2. Preparation and distribution of periodic operation reports to
management

B. Maintain Corporate Calendars and Files
1. General
2. Blue Sky (if applicable)

C. Shareholder Meetings
1. Assist with Preparation of Proxy
2. Conduct Meetings
3. Preparation of minutes and record ballot results

D. Release Corporate Information
1. To partners
a. distributions (if applicable)
b. tax information for K-1 preparation
c. changes to registration statement

45
<PAGE>

SCHEDULE C
----------

d. letters from management
e. Funds' performance
f. provide rating agencies with statistical data as required
(monthly/quarterly) (if applicable)

2. To financial and general press

3. Respond to:
a. financial press, as authorized (if applicable)
b. miscellaneous shareholder inquiries (if applicable)
c. industry questionnaires (if applicable)

4. Prepare, maintain and update monthly information manual

E. Communications to Shareholders
1. Coordinate printing and distribution of annual and semi-annual
reports and prospectus

III. Financial and Management Reporting

A. Income and Expenses
1. Preparation of budgets
2. Expense figures calculated and accrual levels set
3. Monitoring of expenses paid and expense caps (monthly)
4. Approve and process payment of authorized expenses
5. Checking Account Reconciliation (monthly)
6. Write checks to pay vendors

B. Distributions to Shareholders (if applicable)
1. Projections of distribution amounts
2. Compilation of taxable income for reporting on partners'
Schedules K-1

C. Financial Reporting
1. Liaison between fund management and auditors
2. Preparation of unaudited and audited financial statements to
shareholders
3. 60 day delivery to SEC and shareholders
4. Preparation of semi-annual and annual N-SARs and Financial Data
Sheet (Financial Information)
5. Provide work area for auditors

46
<PAGE>

SCHEDULE C
----------

D. Other Financial Analyses
1. Sales information, portfolio turnover (monthly)
2. Performance Calculations (monthly)
3. 1099 Miscellaneous - prepared for Directors/Trustees (annually)

E. Review and Monitoring Functions
1. Review accruals and reclassification entries

IV. Special Issues Related to Foreign Investments

A. Financial Reporting
1. Review and monitor treatment of currency gain/loss and capital
gain/loss
a. section 988 transactions
b. section 1256 contracts
c. section 1092 deferrals

C. Tax Reporting
1. Calculate distributions to shareholders (if applicable)
a. monitor character and impact of realized currency gain/loss
on distribution amount

2. Calculate income (reclaims) and expenses (tax withheld) by
country in order to determine foreign tax credit available to
shareholders (if required)

3. Assist the advisor in the identification of Passive Foreign
Investment Companies (if appropriate)

47
<PAGE>

SCHEDULE D
----------

BRINSON RELATIONSHIP FUNDS
--------------------------
DESCRIPTION OF FUND ACCOUNTING SERVICES
---------------------------------------

Daily Accounting Services
--------------------------

1) Maintain the books and records of each Series.

2) Calculate Net Asset Value Per Share:

. If necessary, enter manual prices supplied by Customer and/or broker.
. Monitor securities for which there is no change in price from one day
to the next.
. Review variance reporting on-line and in hard copy for price changes
in individual securities using variance levels established by
Customer. Verify U.S. dollar security prices exceeding variance
levels by notifying client and pricing sources of noted variances.
. Complete daily variance review on foreign exchange rates and local
foreign prices. Notify the client of changes exceeding established
levels for the client's verification.
. Provide daily file transmissions and auto-reconciliation reports to
the Advisor.
. Communicate required pricing information (NAV) to Customer, Transfer
Agent and additional Brinson Mutual Funds clients/Custodian
. Report NAV to 4 decimal places.

3) Perform Partnership Allocation, as required.

4) Reconcile and Record All Daily Expense Accruals.

5) Verify and Record All Daily Income Accruals for Debt Issues:

. Separately allocate Partners' percentage of:
a) domestic interest income
b) foreign interest income
c) miscellaneous income

6) Record Corporate Action, Cash Dividends and Capital changes on Securities:

. Interface with Custodian to monitor timely collections and postings of
corporate actions, dividends, interest and capital changes

48
<PAGE>

SCHEDULE D
----------

7) Record all Security Trades based on instruction from the Customer:

. Verify settlement through the Custodian statements.
. Determine realized gains/losses on security trades using the Trust
approved FIFO methodologies.
. Provide Foreign Currency exchange rate realized and unrealized
gains/losses details.
. Separately allocate each Partner's economic percentage, as required
of:
a) Realized Short-Term gains/losses
b) Realized Long-Term gains/losses
c) Realized Currency gains/losses
. Allocate each Partner's percentage of realized gains/losses, as
required.

8) Record All Funds Share/Partner Transactions.

9) Review and Reconcile With Custodian Statements.

10) Provide Daily Accounting Reports as agreed to from time to time by Bank and
Customer:

. Bank represents that all Customer Information, in whatever form, is
the property of the Customer.
. Provide Summaries Schedule.

11) Provide Daily yield for the Brinson Short-Term Fund and any short-term fund
that may be developed.

Monthly Accounting Services
---------------------------

1) Full Financial Statement Preparation (automated Statements of Assets and
Liabilities, of Operations and of Changes in Net Assets) and submission to
Customer by 10th Business Day.

2) Submission of Monthly Automated Reports:

. Security Purchase/Sales Journal.
. Interest and Maturity Report.
. Brokers Ledger (Commission Report).
. Security Ledger Transaction Report with Realized Gains/Losses.
. Security Ledger Tax Lot Holdings Report.
. Additional reports available upon request.

49
<PAGE>

SCHEDULE D
----------

3) Reconcile Accounting Asset Listing to Custodian Asset Listing:

. Report any security balance discrepancies to the Custodian/Customer.

4) Provide Monthly Analysis and Reconciliation of Additional Trial Balance
Accounts, such as:

. Security cost and realized gains/losses.
. Interest/dividend receivable and income.
. Payable/receivable for securities purchased and sold.
. Unrealized and realized currency gains/losses.
. Payable/receivable for Fund shares; issued and redeemed
. Expense payments and accruals analysis

5) Be available for special verification of month-end NAVs.

Semi-Annual Accounting Services
-------------------------------

1) Provide NSAR Reporting.

Annual Accounting Services
--------------------------

Assist and supply auditors with schedules supporting securities and shareholder
transactions, income and expense accruals, etc. during the year in accordance
with standard audit assistance requirements. Provide space and necessary
personnel to accommodate auditors.

Partnership Accounting
----------------------

1) Perform Partnership Accounting.

Partnership Allocations will be performed utilizing the relative value of each
Partner's capital balance (which has been updated with contributions and
withdrawals) as a percent of total partnership capital. The allocation ratios
are calculated whenever there is a capital change for each active partner to
allocate the appropriate ordinary income, realized/unrealized capital
gains/losses, and ordinary expense components.

Economic allocations distribution partnership components per the noted relative
ownership percentages. Tax Allocations will utilize the periodic aggregate tax
method to more equitably allocate realized gains/losses to Partners.

50
<PAGE>

SCHEDULE D
----------

. Allocate to each Partner, their percentage of unrealized
appreciation/depreciation due to market movement.

2) Prepare Tax Basis Schedule of changes and Tax Allocation Summary Schedule
for approval by the Funds' Administrator and Advisor.

3) Release to the Funds' Administrator and Independent Accountant partner-
specific K-1 tax information to facilitate tax schedule preparation.

4) Provide Monthly Partner Valuation Statements.

51
<PAGE>

SCHEDULE E
----------

BRINSON RELATIONSHIP FUNDS
--------------------------
DESCRIPTION OF TRANSFER AGENCY RESPONSIBILITIES
-----------------------------------------------

1) Establish new accounts and enter demographic data into Investar system.

2) Processing all transactions, including:
. initial investments
. subsequent investments
. transfer-in-kind transactions
. redemptions
. dividend reinvestment or distribution (if applicable)

3) Provide Partner account statements:
. daily transaction confirmations
. annual dividend statement (if applicable)
. monthly statements representing book value of investments
. distribute statement to designated parties

4) Settlement and review of declared dividends and capital gains (if
applicable).

52
<PAGE>

SCHEDULE F
----------

FEE SCHEDULE FOR BRINSON RELATIONSHIP FUNDS
-------------------------------------------

Accounting, Administration, Transfer Agency and
Custody Services Annual Fee Schedule

<PAGE>

<ARTICLE> 6
<CIK> 0000944684
<NAME> BRINSON RELATIONSHIP FUNDS
<SERIES>
<NUMBER> 1
<NAME> GLOBAL SECURITIES FUND
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 1658145761
<INVESTMENTS-AT-VALUE> 1775497984
<RECEIVABLES> 35982079
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 4540050
<TOTAL-ASSETS> 1816020113
<PAYABLE-FOR-SECURITIES> 57288883
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 221764
<TOTAL-LIABILITIES> 57510647
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1426759908
<SHARES-COMMON-STOCK> 130464603
<SHARES-COMMON-PRIOR> 82569418
<ACCUMULATED-NII-CURRENT> 86276085
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 120672565
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 124800908
<NET-ASSETS> 1758509466
<DIVIDEND-INCOME> 12586409
<INTEREST-INCOME> 43202635
<OTHER-INCOME> 0
<EXPENSES-NET> 630953
<NET-INVESTMENT-INCOME> 55158091
<REALIZED-GAINS-CURRENT> 77363628
<APPREC-INCREASE-CURRENT> 53605928
<NET-CHANGE-FROM-OPS> 186127647
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 69041410
<NUMBER-OF-SHARES-REDEEMED> 21146225
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 790954990
<ACCUMULATED-NII-PRIOR> 31117994
<ACCUMULATED-GAINS-PRIOR> 43308937
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 630953
<AVERAGE-NET-ASSETS> 1264084873
<PER-SHARE-NAV-BEGIN> 11.718
<PER-SHARE-NII> 0.284
<PER-SHARE-GAIN-APPREC> 1.476
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.479
<EXPENSE-RATIO> 0.05
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>

<ARTICLE> 6
<CIK> 0000944684
<NAME> BRINSON RELATIONSHIP FUNDS
<SERIES>
<NUMBER> 2
<NAME> SHORT-TERM FUND
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 22873111
<INVESTMENTS-AT-VALUE> 22873111
<RECEIVABLES> 0
<ASSETS-OTHER> 87465
<OTHER-ITEMS-ASSETS> 589
<TOTAL-ASSETS> 22961165
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1253798
<TOTAL-LIABILITIES> 1253798
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 21146228
<SHARES-COMMON-STOCK> 2106298
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 561241
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (102)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 21707367
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 566081
<OTHER-INCOME> 0
<EXPENSES-NET> 4840
<NET-INVESTMENT-INCOME> 561241
<REALIZED-GAINS-CURRENT> (102)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 561139
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3789397
<NUMBER-OF-SHARES-REDEEMED> 1684099
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 21697367
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 92305
<AVERAGE-NET-ASSETS> 19274570
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.306
<PER-SHARE-GAIN-APPREC> (0.000)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.306
<EXPENSE-RATIO> 0.05
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>

<ARTICLE> 6
<CIK> 0000944684
<NAME> BRINSON RELATIONSHIP FUNDS
<SERIES>
<NUMBER> 3
<NAME> POST-VENTURE FUND
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 250297408
<INVESTMENTS-AT-VALUE> 295280804
<RECEIVABLES> 4652887
<ASSETS-OTHER> 107091
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 300040782
<PAYABLE-FOR-SECURITIES> 587022
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 475512
<TOTAL-LIABILITIES> 1062534
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 189933762
<SHARES-COMMON-STOCK> 19604032
<SHARES-COMMON-PRIOR> 21412207
<ACCUMULATED-NII-CURRENT> 8384809
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 55887831
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 44771846
<NET-ASSETS> 298978248
<DIVIDEND-INCOME> 3750043
<INTEREST-INCOME> 1080433
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 4830476
<REALIZED-GAINS-CURRENT> 37696001
<APPREC-INCREASE-CURRENT> 19063701
<NET-CHANGE-FROM-OPS> 61590178
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 16920464
<NUMBER-OF-SHARES-REDEEMED> 18728639
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 42167924
<ACCUMULATED-NII-PRIOR> 3554333
<ACCUMULATED-GAINS-PRIOR> 18191830
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 246477
<AVERAGE-NET-ASSETS> 257908763
<PER-SHARE-NAV-BEGIN> 11.994
<PER-SHARE-NII> 0.262
<PER-SHARE-GAIN-APPREC> 2.996
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.251
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>

<ARTICLE> 6
<CIK> 0000944684
<NAME> BRINSON RELATIONSHIP FUNDS
<SERIES>
<NUMBER> 4
<NAME> HIGH YIELD FUND
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 158356847
<INVESTMENTS-AT-VALUE> 164272167
<RECEIVABLES> 3532205
<ASSETS-OTHER> 73141
<OTHER-ITEMS-ASSETS> 245669
<TOTAL-ASSETS> 168123182
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3073141
<TOTAL-LIABILITIES> 3073141
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 139665538
<SHARES-COMMON-STOCK> 13399664
<SHARES-COMMON-PRIOR> 10055114
<ACCUMULATED-NII-CURRENT> 18020454
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1448729
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5915320
<NET-ASSETS> 165050041
<DIVIDEND-INCOME> 89900
<INTEREST-INCOME> 12492995
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 12582895
<REALIZED-GAINS-CURRENT> 2690004
<APPREC-INCREASE-CURRENT> 3781750
<NET-CHANGE-FROM-OPS> 19054649
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10044820
<NUMBER-OF-SHARES-REDEEMED> 6700270
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 57097119
<ACCUMULATED-NII-PRIOR> 5437559
<ACCUMULATED-GAINS-PRIOR> (1241275)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 184489
<AVERAGE-NET-ASSETS> 135167782
<PER-SHARE-NAV-BEGIN> 10.736
<PER-SHARE-NII> 0.804
<PER-SHARE-GAIN-APPREC> 0.777
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.318
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>

<ARTICLE> 6
<CIK> 0000944684
<NAME> BRINSON RELATIONSHIP FUNDS
<SERIES>
<NUMBER> 5
<NAME> EMERGING MARKETS EQUITY FUND
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 177953768
<INVESTMENTS-AT-VALUE> 178945381
<RECEIVABLES> 1765728
<ASSETS-OTHER> 7163
<OTHER-ITEMS-ASSETS> 6055643
<TOTAL-ASSETS> 186773915
<PAYABLE-FOR-SECURITIES> 6902380
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 533360
<TOTAL-LIABILITIES> 7435750
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 174975422
<SHARES-COMMON-STOCK> 17606002
<SHARES-COMMON-PRIOR> 9674258
<ACCUMULATED-NII-CURRENT> 4997026
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (2383228)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1748955
<NET-ASSETS> 179338175
<DIVIDEND-INCOME> 1689944
<INTEREST-INCOME> 2846784
<OTHER-INCOME> 0
<EXPENSES-NET> 534391
<NET-INVESTMENT-INCOME> 4002337
<REALIZED-GAINS-CURRENT> (1482828)
<APPREC-INCREASE-CURRENT> 5411782
<NET-CHANGE-FROM-OPS> 7931291
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 12742970
<NUMBER-OF-SHARES-REDEEMED> 4811226
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 89209203
<ACCUMULATED-NII-PRIOR> 994689
<ACCUMULATED-GAINS-PRIOR> (900400)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 534391
<AVERAGE-NET-ASSETS> 116937927
<PER-SHARE-NAV-BEGIN> 9.316
<PER-SHARE-NII> 0.181
<PER-SHARE-GAIN-APPREC> 0.689
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.186
<EXPENSE-RATIO> 0.46
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>

<ARTICLE> 6
<CIK> 0000944684
<NAME> BRINSON RELATIONSHIP FUNDS
<SERIES>
<NUMBER> 6
<NAME> EMERGING MARKETS DEBT FUND
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 189484914
<INVESTMENTS-AT-VALUE> 219992130
<RECEIVABLES> 2743189
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 10237
<TOTAL-ASSETS> 222745556
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 174988
<TOTAL-LIABILITIES> 174988
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 149101121
<SHARES-COMMON-STOCK> 13184226
<SHARES-COMMON-PRIOR> 10279463
<ACCUMULATED-NII-CURRENT> 24214478
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 19012315
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 30242654
<NET-ASSETS> 222570568
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 19893017
<OTHER-INCOME> 0
<EXPENSES-NET> 288501
<NET-INVESTMENT-INCOME> 19604516
<REALIZED-GAINS-CURRENT> 18170077
<APPREC-INCREASE-CURRENT> 24138171
<NET-CHANGE-FROM-OPS> 61912764
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9793589
<NUMBER-OF-SHARES-REDEEMED> 6888826
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 102916375
<ACCUMULATED-NII-PRIOR> 4609962
<ACCUMULATED-GAINS-PRIOR> 842238
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 288501
<AVERAGE-NET-ASSETS> 164849358
<PER-SHARE-NAV-BEGIN> 11.640
<PER-SHARE-NII> 1.388
<PER-SHARE-GAIN-APPREC> 3.853
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.881
<EXPENSE-RATIO> 0.18
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>