BRINSON RELATIONSHIP FUNDS, POS AMI, 1998-06-12

BRINSON RELATIONSHIP FUNDS
POS AMI, 1998-06-12

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Marked to Indicate Changes

Filed with Exhibits on June 12, 1998
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. 11

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 312-220-7100
---------

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

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

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

June 12, 1998

[LOGO]

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 seventeen series of
shares: the Brinson Global Securities Fund, the Brinson Global Bond Fund, the
Brinson U.S. Equity Fund, the Brinson U.S. Large Capitalization Equity Fund, the
Brinson U.S. Intermediate Capitalization Equity Fund, the Brinson U.S. Large
Capitalization Value Equity Fund, the Brinson Post-Venture Fund, the Brinson
EXDEX(R) Fund, the Brinson Non-U.S. Equity Fund, the Brinson Emerging Markets
Equity Fund, the Brinson Bond Plus Fund, the Brinson U.S. Bond Fund, the Brinson
U.S. Short/Intermediate Fixed Income Fund, the Brinson Short-Term Fund, the
Brinson U.S. Cash Management Prime Fund, the Brinson High Yield 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.

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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 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 Markets
Index (the "Benchmark"), which is compiled by the Fund's investment advisor,
Brinson Partners, Inc. ("Brinson Partners" or the "Advisor").

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 Advisor's investment style is single focus: investment
fundamentals determine and describe future cash flows that define fundamental
investment value. The Advisor'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 Advisor 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 Advisor 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 Advisor determines the return of the relevant indices, applies
the index weighting and then determines the return of the Benchmark.

As a general matter, the Advisor will purchase for the Fund securities
contained in the underlying indices relevant to the Benchmark. The Advisor
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 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 Advisor, to produce superior performance relative
to the Benchmark.

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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 the percentage of the Fund's portfolio securities
that may be loaned, and its policies set forth in Part B concerning 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 Part A
of this Registration Statement, 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 Advisor 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 Advisor 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 Advisor, global capital markets are fairly priced
relative to each other and relative to the associated risks.

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GLOBAL SECURITIES MARKETS INDEX
NORMAL ASSET ALLOCATION MIX
<TABLE>
<CAPTION>
Normal Asset Class
Allocation Strategy
Mix Ranges
---------- -----------
<S> <C> <C>
Asset Class
- -----------

U.S. Equity 40% 10-80%
Non-U.S. Equities 22% 5-40%
Emerging Market Equities 3% 0-8%
Dollar Bonds 21% 5-70%
High Yield Bonds 3% 0-10%
Non-U.S. Bonds 9% 2-25%
Emerging Market Debt 2% 0-8%
Cash and Cash Equivalents 0% 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 temporary
defensive investments in cash equivalents as described 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, fixed income 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 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 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 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

A-4

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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 fixed income 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.

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 will 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 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

A-5
<PAGE>

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 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 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.

Pursuant to the Exemptive Order described above, in lieu of investing
directly in the cash and cash equivalents described above, the Fund may invest
a portion of its assets in the Brinson Short-Term Fund (the "Short-Term Fund")
series of the Trust. Any investment by the Fund in the Short-Term 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.

Under the terms of a second exemptive order issued by the Commission,
the Fund may invest cash (i) held for temporary defensive purposes; (ii) not
invest pending investment in securities; (iii) that is set aside to cover an
obligation or commitment of the Fund to purchase securities or other assets at a
later date; (iv) to be invested on a strategic management basis (i-iv is herein
referred to as "Uninvested Cash"); and (v) collateral that it receives from the
borrowers of its portfolio securities in connection with the Fund's securities
lending program, in a series of shares of Brinson Supplementary Trust (the
"Supplementary Trust Series"). Brinson Supplementary Trust is a private
investment company which has retained the Advisor to manage its investments. The
Trustees of the Trust also serve as Trustees of the Brinson Supplementary Trust.
The Supplementary Trust Series will invest in U.S. dollar denominated money
market instruments having a dollar-weighted average maturity of 90 days or less.
The Fund's investment of Uninvested Cash in shares of the Supplementary Trust
Series will not exceed 25% of the Fund's total assets.

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 cash
payment date and, if the issuer defaults, the Fund may obtain no return at all
on its investment. For federal tax

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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 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 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).

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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.

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.

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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 segregate in accordance with Commission positions 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.

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 Advisor. 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. 1-2. 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

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Yield Fund will be considered within this limitation. The Fund currently
intends to limit 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

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

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 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.

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LOAN PARTICIPATIONS AND ASSIGNMENTS

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 Advisor 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

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 unregistered or unlisted emerging market
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.

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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) no more than 3% of the total voting stock of any
one such investment company, (ii) no more than 5% of the Fund's net assets
invested in any one such investment company and (iii) no more than 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 invest in such series only to the extent that the
Advisor 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, but not
duplication of other fees and expenses because the Advisor and other service
providers will waive fees or reimburse expenses to avoid such duplication.

The Fund's investments in any other series of the Trust, each of which
invests primarily in one asset class a ("Core Series") will not be subject to
the percentage limitations described above. To the extent that the Fund
invests in the Trust's other series ("Other Series") and particular open-end
investment companies other than the Core 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
Other Series for purposes of these limitations.

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. Some
examples of illiquid securities are securities purchased under Rule 144A under
the Securities Act ("Rule 144A Securities"), over-the-counter options and
certain interest rate swaps described below. While maintaining oversight, the
Board of Trustees (the "Board") has delegated to the Advisor the day-to-day
function of determining whether or not Rule 144A Securities are liquid for
purposes of the Fund's 15% limitation on investments in illiquid assets. The
Board has instructed the Advisor to consider the following factors in
determining the liquidity of a Rule 144A Security: (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 Advisor, the Board
will continue to monitor and will periodically review the Advisor's selection
of Rule 144A Securities, as well as the Advisor's determination as to their
liquidity.

If the Advisor determines that a Rule 144A Security 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 Advisor 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.

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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 Advisor 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 Advisor 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 other 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

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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 Advisor 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
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

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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 Advisor 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 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 generate
internally funds necessary for growth or potential development or to generate
such funds through external financing on 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
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 publicly traded
companies representing the lower 5% of the Wilshire 5000 Index, and, as such,
at least 65% of its assets are invested

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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 Advisor, 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 Advisor 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 segregate liquid
assets in accordance with Commission positions 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 segregate 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 in accordance with Commission positions.

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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 segregates
cash, U.S. government securities or other liquid assets in accordance with
Commission positions with a value sufficient to meet its obligations under the
call option, or if the Fund owns an offsetting call option. The Fund may
receive premium income from writing call options, which may offset the cost of
purchasing 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.

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 or segregate cash, U.S. government securities or
other liquid assets in accordance with Commission positions 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 segregate cash, U.S. government securities or other liquid
assets in accordance

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with Commission positions 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. 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 segregate assets in
accordance with Commission positions 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.

RISKS AND SPECIAL CONSIDERATIONS OF OPTIONS AND FUTURES

Options and futures can be volatile investments and may not perform as
expected. If the Advisor 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.

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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.

The use of swaps involves investment techniques and risks different
from those associated with ordinary portfolio security transactions. If the
Advisor 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.

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 a swap contract, the Fund
will be limited to contractual remedies pursuant to the agreements related to
the transaction. There is no assurance that a swap contract counterparty will
be able to meet its obligations pursuant to a 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 a swap contract. However, the amount
at risk is only the net unrealized gain, if any, on the swap, not the entire
notional amount. The Advisor will closely monitor, subject to the oversight
of the Board, the creditworthiness of swap counterparties in order to minimize
the risk of swaps.

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The Advisor and the Trust do not believe that the Fund's obligations
under 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 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 segregated in accordance with Commission positions. 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 Sundays and 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 assets.

LOANS OF PORTFOLIO SECURITIES

The Fund may loan its portfolio securities in an amount up to 33 1\3%
of the value of its total 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 three 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
lend securities only after a review of all pertinent facts by the Advisor and
the lending agent, subject to overall supervision by the Board.
Creditworthiness of the borrowing broker-dealer or institution will be
monitored on an ongoing basis by the Advisor and any lending agent pursuant to
procedures reviewed and adopted by the Board. 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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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
Advisor, 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 high 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 "Brokerage Allocation" and
"Federal Taxes."

MANAGEMENT OF THE FUND

THE BOARD OF TRUSTEES

Under Delaware law and the Trust's Amended and Restated Agreement and
Declaration of Trust (the "Declaration of Trust") the Board 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 ADVISOR

Brinson Partners has been appointed by the Trust as its Investment
Advisor and furnishes investment advisory and asset management services to the
Trust with respect to its portfolios. Brinson Partners, a Delaware corporation,
is an investment management firm managing, as of March 31, 1998, approximately
U.S. $158 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 Advisers, 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 is a subsidiary of Swiss Bank
Corporation, one of the three largest banks in Switzerland. The SBC Brinson
division of Swiss Bank Corporation, of which Brinson Partners is a part, has
offices in Basel, Frankfurt, Geneva, London, Melbourne, New York, Paris,
Singapore, Sydney, Tokyo and Zurich, in addition to Brinson Partners' principal
office at 209 South LaSalle Street, Chicago, Il 60604-1295. Swiss Bank
Corporation, headquartered in Basel, Switzerland, is an internationally
diversified organization with many operations in many aspects of the financial
services industry. Swiss Bank Corporation and Union Bank of Switzerland, during
mid-1998, received regulatory approval for a merger, which will be effective on
June 29, 1998. The merger will not result in a change of control or assignment
and, therefore, will not result in a termination of the Advisory Agreement. The
resulting entity will be named UBS AG. After the merger, Brinson Partners will
continue its role as investment advisor to the Trust as part of the Brinson
Partners division of UBS AG.

Brinson Partners also serves as the investment advisor 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 Advisor is authorized, at its own expense, to
obtain statistical and other factual information and advice

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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 Advisor does not receive any
compensation under the Advisory Agreement.

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 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 Advisor. 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 "Administrator"),
pursuant to which the 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.

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, 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 the Trust, MSTC supervises and monitors such
services 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.

A-22
<PAGE>

average weekly emerging markets equity net assets of the Trust; and 0.019% of
the average weekly emerging markets debt net assets of the Trust. MSTC
receives an additional fee of 0.075% of the average weekly net assets of the
Trust for administrative duties, 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.

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 Advisor 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 and semi-annual reports which are distributed to existing Investors),
brokerage 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 Advisor 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 Advisor, 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 Advisor seeks to negotiate a
combination of the most favorable execution and the best price obtainable on
each transaction. Consequently, the Advisor 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 Advisor 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.

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<PAGE>

designed to augment the Advisor's own internal research and investment
strategy capabilities. The Advisor 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 Advisor or the Fund. The Fund may also
purchase securities in certain underwritten offerings for which an affiliate
of the Fund or the Advisor may act as underwriter. The Fund may effect
futures transactions through, and pay commissions to, futures commission
merchants who are affiliated with the Advisor or the Fund in accordance with
procedures adopted by the Board.

CAPITAL STOCK AND OTHER SECURITIES

The Trust was organized as a Delaware business trust on August 16, 1994.
The Declaration of Trust permits the Board to issue an unlimited number of
shares of beneficial interest with no par value. The Board 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 seventeen series: the Brinson
Global Securities Fund, the Brinson Global Bond Fund, the Brinson U.S. Equity
Fund, the Brinson U.S. Large Capitalization Equity Fund, the Brinson U.S.
Intermediate Capitalization Equity Fund, the Brinson U.S. Large Capitalization
Value Equity Fund, the Brinson Post-Venture Fund, the Brinson EXDEX(R) Fund, the
Brinson Non-U.S. Equity Fund, the Brinson Emerging Markets Equity Fund, the
Brinson Bond Plus Fund, the Brinson U.S. Bond Fund, the Brinson U.S.
Short/Intermediate Fixed Income Fund, the Brinson Short-Term Fund, the Brinson
U.S. Cash Management Prime Fund, the Brinson High Yield Fund and the 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 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 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
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 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 considers necessary or desirable.

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<PAGE>

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 certain 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 advisor to manage the assets.

DIVIDENDS AND DISTRIBUTIONS. The Fund does not currently intend to
declare and pay dividends or pay distributions to Investors except as may be
determined by the Board 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 312-220-7100.

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 Advisor, 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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<PAGE>

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. 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. 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 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.

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<PAGE>

the Investor at the time of the exchange. Any Investor wishing to make an
exchange should first obtain and review the Prospectus of the fund 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
(generally 4:00 p.m. Eastern time) on the NYSE on any day that the NYSE is
open for regular trading.

REDEMPTION OF SHARES OR REPURCHASE

As stated above in "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>

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.

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.

NOTE: Moody's may apply numerical modifiers, 1, 2 and 3 in each generic
rating classification from Aa through B in its corporate bond rating system.
The modifier 1 indicates that the security ranks in the higher end of its
generic rating category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates that the issue ranks in the lower end of its generic
rating category

A-28
<PAGE>

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.

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.

A-29
<PAGE>

APPENDIX B

Set forth below is the performance of the Brinson Trust Company
Collective Investment Trust's Global Securities Fund (the "BTC Global
Securities Fund") for periods ended April 28, 1995 linked with the Brinson
Relationship Funds' Brinson Global Securities Fund (the "Brinson Global
Securities Fund") for periods ending December 31, 1997. The Brinson Global
Securities Fund assumed the assets of the BTC Global Securities Fund on April
28, 1995. Brinson Trust Company is a wholly owned subsidiary of Brinson
Partners, Inc., Advisor 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 Fund 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
Global Securities Fund.

For Periods Ending 12/31/97
<TABLE>
<CAPTION>

Annualized
-------------------------------------------
1 year 2 years 3 years 5 years 10 years Inception
------ ------- ------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Brinson Global 11.75% 13.38% 17.45% 12.48% 13.36% 15.16%
Securities Fund

Global Securities 14.30% 13.48% 17.33% 13.39% 12.48% 14.45%
Index (1)
</TABLE>

Inception date was 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 Fund and the Brinson Global Securities Fund. For a further
description of the benchmark, please review the section titled "Investment
Process."

A-30
<PAGE>

OFFEREE NO. ____

BRINSON RELATIONSHIP FUNDS

BRINSON U.S. EQUITY FUND

PART A

JUNE 12, 1998

[LOGO]

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 seventeen series of
shares: the Brinson Global Securities Fund, the Brinson Global Bond Fund,
the Brinson U.S. Equity Fund, the Brinson U.S. Large Capitalization Equity Fund,
the Brinson U.S. Intermediate Capitalization Equity Fund, the Brinson U.S. Large
Capitalization Value Equity Fund, the Brinson Post-Venture Fund, the Brinson
EXDEX(R) Fund, the Brinson Non-U.S. Equity Fund, the Brinson Emerging Markets
Equity Fund, the Brinson Bond Plus Fund, the Brinson U.S. Bond Fund, the Brinson
U.S. Short/Intermediate Fixed Income Fund, the Brinson Short-Term Fund, the
Brinson U.S. Cash Management Prime Fund, the Brinson High Yield Fund and the
Brinson Emerging Markets Debt Fund. This Prospectus pertains only to the Brinson
U.S. Equity Fund (the "Fund").

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. Under normal market conditions, at least 65% of the Fund's
assets will be invested in equity securities of U.S. companies. The Fund
seeks to achieve its objective by investment in a wide range of equity
securities of U.S. companies that are traded on major stock exchanges as well
as on the over-the-counter markets. The benchmark for the Fund is the
Wilshire 5000 Index ( the "Benchmark"). The Benchmark is a broad weighted
index which includes all U.S. common stocks. The Benchmark is designed to
provide a representative indication of the capitalization and return for the
U.S. equity market.

INVESTMENT PROCESS

The investment style of the Fund's investment advisor, Brinson
Partners, Inc. ("Brinson Partners") or the "Advisor") is single focus:
investment fundamentals determine and describe future cash flows that define
fundamental investment value. The Advisor'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.

As a general matter, the Advisor will purchase for the Fund securities
contained in the underlying Benchmark. The Advisor 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. Decisions to deviate
from the Benchmark are a blend of rigorous quantitative analysis, an
understanding of the fundamental relationships in U.S. markets and the
expertise of investment professionals. The active management process is
intended, by Brinson Partners 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 the percentage of the Fund's portfolio securities
that may be loaned, and its policies set forth in Part B concerning 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 Part A
of the Registration Statement, 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.

A-2
<PAGE>

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 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 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 Fund expects its U.S. equity investments to emphasize both large
and intermediate capitalization companies. In addition, the Fund may invest
in small capitalization 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 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 U.S.
Large Capitalization Equity Fund (the "Brinson U.S. Large Capitalization
Fund") and the Brinson U.S. Intermediate Capitalization Equity Fund (the
"Brinson U.S. Intermediate Fund") series of the Trust. Pursuant to the
Exemptive Order, the Fund may invest that portion of its assets allocated to
large capitalization investments and intermediate capitalization investments
by purchasing shares of the Brinson U.S. Large Capitalization Fund and the
Brinson U.S. Intermediate Fund. The investment objective of the Brinson U.S.
Large Capitalization Fund and the Brinson U.S. Intermediate 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 assets of both the Brinson U.S. Large Capitalization Fund and the
Brinson U.S. Intermediate Fund are invested in the equity securities of U.S.
companies. The Brinson U.S. Large Capitalization Fund and the Brinson U.S.
Intermediate 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 large
capitalization and intermediate capitalization securities as described above.
Pursuant to the Exemptive Order, any investment by the Fund in the Brinson
U.S. Large Capitalization Fund and the Brinson U.S. Intermediate 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.

A-3
<PAGE>

CASH AND CASH EQUIVALENTS

Pursuant to the Exemptive Order described above, in lieu of investing
directly in the cash and cash equivalents described above, the Fund may invest
a portion of its assets in the Brinson Short-Term Fund (the "Short-Term Fund")
series of the Trust. Any investments by the Fund in the Short-Term 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.

Under the terms of a second exemptive order issued by the Commission,
the Fund may invest cash (i) held for temporary defensive purposes; (ii) not
invested pending investment in securities; (iii) that is set aside to cover an
obligation or commitment of the Fund to purchase securities or other assets at a
later date; (iv) to be invested on a strategic management basis (i-iv is herein
referred to as "Uninvested Cash"); and (v) collateral that it receives from the
borrowers of its portfolio securities in connection with the Fund's securities
lending program, in a series of shares of Brinson Supplementary Trust (the
"Supplementary Trust Series"). Brinson Supplementary Trust is a private
investment Company which has retained the Advisor to manage its investments.
The Trustees of the Trust also serve as Trustees of the Brinson Supplementary
Trust. The Supplementary Trust Series will invest in U.S. dollar denominated
money market instruments having a dollar-weighted average maturity of 90 days or
less. The Fund's investment of Uninvested Cash in shares of the Supplementary
Trust Series will not exceed 25% of the Fund's total assets.

CONVERTIBLE SECURITIES

REPURCHASE AGREEMENTS

A-4
<PAGE>

REVERSE REPURCHASE AGREEMENTS

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 unregistered or 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

A-5
<PAGE>

The Fund's investments in any other series of the Trust, each of which
invests primarily in one particular asset class (a "Core Series") will not be
subject to the percentage limitations described above. To the extent that the
Fund invests in the Trust's other series ("Other Series") and open-end
investment companies other than the Core 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
Other Series for purposes of these limitations.

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. One
example of illiquid securities is securities purchased under Rule 144A under
the Securities Act ("Rule 144A Securities"). While maintaining oversight, the
Board of Trustees (the "Board") has delegated to the Advisor the day-to-day
function of determining whether or not Rule 144A Securities are liquid for
purposes of the Fund's 15% limitation on investments in illiquid assets. The
Board has instructed the Advisor to consider the following factors in
determining the liquidity of a Rule 144 A Security: (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 Advisor, the Board
will continue to monitor and will periodically review the Advisor's selection
of Rule 144A Securities, as well as the Advisor's determination as to their
liquidity.

FUTURE DEVELOPMENTS

From time to time, the Fund may also invest in certain equity
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 Advisor 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 SMALL CAPITALIZATION ISSUES

A-6
<PAGE>

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 generate internally funds necessary for growth or potential
development or to generate such funds through external financing on 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.

Pursuant to the Exemptive Order described above, 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 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

OPTIONS

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 segregates
cash, U.S. government securities or other liquid assets in accordance with
Commission positions 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 options and may also contribute to the Fund's total return.

A-7
<PAGE>

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.

FUTURES CONTRACTS

A-8
<PAGE>

In addition, when the Fund engages in futures transactions, to the
extent required by the Commission, the Fund will segregate in accordance with
Commission positions assets 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

BORROWING

LOANS OF PORTFOLIO SECURITIES

A-9
<PAGE>

the arrangements between the borrower and the lending agent. The Fund will
lend securities only after a review of all pertinent facts by the Advisor and
the lending agent, subject to overall supervision by the Board.
Creditworthiness of the borrowing broker-dealer or institution will be
monitored on an ongoing basis by the Advisor and any lending agent pursuant to
procedures reviewed and adopted by the Board. 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 Internal Revenue Code of 1986, as amended (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
Advisor, 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 high 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 "Brokerage Allocation" and
"Federal Taxes."

MANAGEMENT OF THE FUND

THE BOARD OF TRUSTEES

Under Delaware law and the Trust's Amended and Restated Agreement and
Declaration of Trust (the "Declaration of Trust"), the Board 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 ADVISOR

Brinson Partners has been appointed by the Trust as its Investment
Advisor and furnishes investment advisory and asset management services to the
Trust with respect to its portfolios. Brinson Partners, a Delaware corporation,
is an investment management firm managing, as of March 31, 1998, approximately
U.S. $158 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 Advisers, 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 is a subsidiary of Swiss Bank
Corporation, one of the three largest banks in Switzerland. The SBC Brinson
division of Swiss Bank Corporation, of which Brinson Partners is a part, has
offices in Basel, Frankfurt, Geneva, London, Melbourne, New York, Paris,
Singapore, Sydney, Tokyo and Zurich, in addition to Brinson Partners' principal
office at 209 South LaSalle Street, Chicago, IL 60604-1295. Swiss Bank
Corporation, headquartered in Basel, Switzerland, is an internationally
diversified organization with operations in many aspects of the financial
services industry. Swiss Bank Corporation and Union Bank of Switzerland, during
mid-1998, received regulatory approval for a merger, which will be effective on
June 29, 1998. The merger will not result in a change of control or assignment
and, therefore, will not result in a termination of the Advisory Agreement. The
resulting entity will be named UBS AG. After the merger, Brinson Partners will
continue its role as investment advisor to the Trust as part of the Brinson
Partners division of UBS AG.

A-10
<PAGE>

Pursuant to its investment advisory agreement with the Trust (the
"Advisory Agreement"), the Advisor 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 Advisor does not receive any compensation under
the Advisory Agreement.

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. Subject to the supervision
of the Board of the Trust, MSTC supervises and monitors such services provided
by CGFSC.

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

A-11
<PAGE>

For its administrative, accounting, transfer agency and custodian
weekly services, MSTC receives the following as compensation from the Trust on
an annual basis: 0.0025% of the average weekly U.S. net assets of the Trust;
0.0525% of net the average weekly non-U.S. net assets of the Trust; 0.3250% of
the average weekly emerging markets equity net assets of the Trust; and 0.019%
of the average weekly emerging markets debt net assets of the Trust. MSTC
receives an additional fee of 0.075% of the average weekly net assets of the
Trust for administrative duties, 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.

INDEPENDENT AUDITORS

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

EXPENSES

The Advisor has agreed to pay the amount, if any, by which the total
operating expenses of the Fund for any fiscal year exceed 0.01% of the Fund's
average net assets. The Advisor, however, may discontinue this expense
limitation at any time in its sole discretion.

BROKERAGE ALLOCATION

A-12
<PAGE>

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 Advisor 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 Advisor's
own internal research and investment strategy capabilities. The Advisor may
use this research information in managing the Fund's assets, as well as the
assets of other clients.

CAPITAL STOCK AND OTHER SECURITIES

Pursuant to the Investment Company Act, a control person possesses the
ability to control the outcome of matters submitted for shareholder vote. As
of May 15, 1998, Mary Hitchcock Memorial Endowment Account, Lebanon, New
Hampshire, was a control person of the Fund and Brinson Trust Company
Collective Investment Trust for Pension and Profit Sharing Trusts - Global
Securities Fund, Chicago, Illinois, was a control person of the Trust, by
nature of their shareholdings.

A-13
<PAGE>

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 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, or with
respect to additional matters relating to the Trust, as required under the
Investment Company Act. Pursuant to the Trust's 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.

DIVIDENDS AND DISTRIBUTIONS. The Fund does not currently intend to
declare and pay dividends or pay distributions to Investors except as may be
determined by the Board of the Trust.

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 312-220-7100.

PURCHASE OF SECURITIES BEING OFFERED

A-14
<PAGE>

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 $10,000,000. In the sole discretion of the Advisor, 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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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 fund 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
(generally 4:00 p.m. Eastern time) on the NYSE on any day that the NYSE is
open for regular trading.

REDEMPTION OF SHARES OR REPURCHASE

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OFFEREE NO.___

BRINSON RELATIONSHIP FUNDS

BRINSON U.S. LARGE CAPITALIZATION EQUITY FUND

PART A

JUNE 12, 1998

[LOGO]

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 seventeen series of
shares: the Brinson Global Securities Fund, the Brinson Global Bond Fund, the
Brinson U.S. Equity Fund, the Brinson U.S. Large Capitalization Equity Fund, the
Brinson U.S. Intermediate Capitalization Equity Fund, the Brinson U.S. Large
Capitalizatin Value Equity Fund, the Brinson Post-Venture Fund, the Brinson
EXDEX(R) Fund, the Brinson Non-U.S. Equity Fund, the Brinson Emerging Markets
Equity Fund, the Brinson Bond Plus Fund, the Brinson U.S. Bond Fund, the Brinson
U.S. Short/Intermediate Fixed Income Fund, the Brinson Short-Term Fund, the
Brinson U.S. Cash Management Prime Fund, the Brinson High Yield Fund and the
Brinson Emerging Markets Debt Fund. This Prospectus pertains only to the Brinson
U.S. Large Capitalization Equity Fund (the "Fund").

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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. Under normal market conditions, at least 65% of the Fund's
assets will be invested in large capitalization equity securities of U.S.
companies. The Fund seeks to achieve its objective by investment in a wide
range of equity securities of U.S. companies that are traded on major stock
exchanges as well as on the over-the-counter markets. The benchmark for the
Fund is the Standard & Poor's 500 Stock Index (the "S&P 500" or "Benchmark").
The Benchmark is a broad weighted index which includes primarily U.S. common
stocks. The Benchmark is designed to provide a representative indication of
the capitalization and return for the large capitalization U.S. equity market.

INVESTMENT PROCESS

The investment style of the Fund's investment advisor, Brinson
Partners, Inc. ("Brinson Partners" or the "Advisor") is single focus:
investment fundamentals determine and describe future cash flows that define
fundamental investment value. The Advisor'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.

As a general matter, the Advisor will purchase for the Fund securities
contained in the underlying Benchmark. The Advisor 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. Decisions to deviate
from the Benchmark are a blend of rigorous quantitative analysis, an
understanding of the fundamental relationships in U.S. markets and the
expertise of investment professionals. The active management process is
intended, by Brinson Partners, to produce superior performance relative to the
Benchmark.

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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 expects its U.S. equity investments to emphasize large
capitalization companies. In addition, the Fund may invest in intermediate
capitalization issues.

CASH AND CASH EQUIVALENTS

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Under the terms of an exemptive order issued by the United States
Securities and Exchange Commission (the "Commission"), the Fund may invest cash
(i) held for temporary defensive purposes; (ii) not invested pending investment
in securities; (iii) that is set aside to cover an obligation or commitment of
the Fund to purchase securities or other assets at a later date; (iv) to be
invested on a strategic management basis (i-iv is herein referred to as
"Uninvested Cash"); and (v) collateral that it receives from the borrowers of
its portfolio securities in connection with the Fund's securities lending
program, in a series of shares of Brinson Supplementary Trust (the
"Supplementary Trust Series"). Brinson Supplementary Trust is a private
investment company which has retained the Advisor to manage its investments. The
Trustees of the Trust also serve as Trustees of the Brinson Supplementary Trust.
The Supplementary Trust Series will invest in U.S. dollar denominated money
market instruments having a dollar-weighted average maturity of 90 days or less.
The Fund's investment of Uninvested Cash in shares of the Supplementary Trust
Series will not exceed 25% of the Fund's total assets.

CONVERTIBLE SECURITIES

REPURCHASE AGREEMENTS

REVERSE REPURCHASE AGREEMENTS

The Fund will segregate in accordance with the Commission positions,
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

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 unregistered or 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

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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 (the "Exemptive Order") from
the Commission, which permits the Fund to invest its assets in securities of
other series offered by the Trust. The Fund will invest in such series only
to the extent that the Advisor 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, but not duplication of other fees and expenses
because the Advisor and other service providers will waive fees or reimburse
expenses to avoid such duplication.

The Fund's investments in any other series of the Trust will be
subject to the percentage limitations described above (so long as other series
of the Trust or certain other Brinson Partners-sponsored funds invest in the
Fund in excess of such limitations), and the Fund's investments in 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

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. One
example of illiquid securities is securities purchased under Rule 144A under
the Securities Act ("Rule 144A Securities") and over-the-counter options
described below. While maintaining oversight, the Board of Trustees (the
"Board") has delegated to the Advisor the day-to-day function of determining
whether or not Rule 144A Securities are liquid for purposes of the Fund's 15%
limitation on investments in illiquid assets. The Board has instructed the
Advisor to consider the following factors in determining the liquidity of a
Rule 144A Security : (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 Advisor, the Board will continue to monitor and will periodically
review the Advisor's selection of Rule 144A Securities, as well as the
Advisor's determination as to their liquidity.

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<PAGE>

FUTURE DEVELOPMENTS

OTHER INVESTMENT TECHNIQUES

OPTIONS

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 segregates
cash, U.S. government securities or other liquid assets in accordance with
Commission positions 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 options and may also contribute to the Fund's total return.

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<PAGE>

FUTURES CONTRACTS

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. 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 segregate assets in accordance
with Commission positions 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.

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<PAGE>

RISKS AND SPECIAL CONSIDERATIONS OF OPTIONS AND FUTURES

BORROWING

LOANS OF PORTFOLIO SECURITIES

The Fund may loan its portfolio securities in an amount up to 33 1/3%
of the value its total 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 three 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
lend securities only after a review of all pertinent facts by the Advisor and
the lending agent, subject to overall supervision by the Board.
Creditworthiness of the borrowing broker-dealer or institution will be
monitored on an ongoing basis by the Advisor and any lending agent pursuant to
procedures reviewed and adopted by the Board. 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).

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<PAGE>

INVESTMENT RESTRICTIONS

PORTFOLIO TURNOVER

MANAGEMENT OF THE FUND

THE BOARD OF TRUSTEES

THE ADVISOR

Brinson Partners has been appointed by the Trust as its Investment
Advisor and furnishes investment advisory and asset management services to the
Trust with respect to its portfolios. Brinson Partners, a Delaware corporation,
is an investment management firm managing, as of March 31, 1998, approximately
U.S. $158 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 Advisers, 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 is a subsidiary of Swiss Bank
Corporation, one of the three largest banks in Switzerland. The SBC Brinson
division of Swiss Bank Corporation, of which Brinson Partners is a part, has
offices in Basel, Frankfurt, Geneva, London, Melbourne, New York, Paris,
Singapore, Sydney, Tokyo and Zurich, in addition to Brinson Partners' principal
office at 209 South LaSalle Street, Chicago, IL 60604-1295. Swiss Bank
Corporation, headquartered in Basel, Switzerland, is an internationally
diversified organization with operations in many aspects of the financial
services industry. Swiss Bank Corporation and Union Bank of Switzerland, during
mid-1998, received regulatory approval for a merger, which will be effective on
June 29, 1998. The merger will not result in a change of control or assignment
and, therefore, will not result in a termination of the Advisory Agreement. The
resulting entity will be named UBS AG. After the merger, Brinson Partners will
continue its role as investment advisor to the Trust as part of the Brinson
Partners division of UBS AG.

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<PAGE>

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.

ADMINISTRATIVE, ACCOUNTING, TRANSFER AGENCY AND CUSTODIAN SERVICES

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

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<PAGE>

average weekly non-U.S. net assets of the Trust; 0.3250% of the average weekly
emerging markets equity net assets of the Trust; and 0.019% of the average
weekly emerging markets debt net assets of the Trust. MSTC receives an
additional fee of 0.075% of the average weekly net assets of the Trust for
administrative duties, 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 net
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.

INDEPENDENT AUDITORS

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

EXPENSES

BROKERAGE ALLOCATION

When buying or selling securities, the Fund may pay commissions to
brokers who are affiliated with the Advisor or the Fund. The Fund may also
purchase securities in certain underwritten offerings for

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<PAGE>

which an affiliate of the Fund or the Advisor may act as underwriter. The
Fund may effect futures transactions through, and pay commissions to, futures
commission merchants who are affiliated with the Advisor or the Fund in
accordance with procedures adopted by the Board.

CAPITAL STOCK AND OTHER SECURITIES

The Trust does not presently intend to hold annual or special meetings
of Investors except when required to elect members of the Board, or with
respect to additional matters relating to the Trust, as required under the
Investment Company Act. Pursuant to the 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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<PAGE>

DIVIDENDS AND DISTRIBUTIONS. The Fund does not currently intend to
declare and pay dividends or pay distributions to Investors except as may be
determined by the Board of the Trust.

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 312-220-7100.

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 $10,000,000. In the sole discretion of the Advisor, 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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<PAGE>

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.

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REDEMPTION OF SHARES OR REPURCHASE

A-15
<PAGE>

OFFEREE NO. _______

BRINSON RELATIONSHIP FUNDS

BRINSON U.S. INTERMEDIATE CAPITALIZATION EQUITY FUND

PART A

June 12,1998

[LOGO]

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 seventeen series of
shares: the Brinson Global Securities Fund, the Brinson Global Bond Fund, the
Brinson U.S. Equity Fund, the Brinson U.S. Large Capitalization Equity Fund, the
Brinson U.S. Intermediate Capitalization Equity Fund, the Brinson U.S. Large
Capitalization Value Equity Fund, the Brinson Post-Venture Fund, the Brinson
EXDEX(R) Fund, the Brinson Non-U.S. Equity Fund, the Brinson Emerging Markets
Equity Fund, the Brinson Bond Plus Fund, the Brinson U.S. Bond Fund, the Brinson
U.S. Short/Intermediate Fixed Income Fund, the Brinson Short-Term Fund,
the Brinson U.S. Cash Management Prime Fund, the Brinson High Yield Fund and the
Brinson Emerging Markets Debt Fund. This Prospectus pertains only to the Brinson
U.S. Intermediate Capitalization Equity Fund (the "Fund").

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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. Under normal market conditions, at least 65% of the Fund's
assets will be invested in equity securities of U.S. companies. The Fund
seeks to achieve its objective by investment in a wide range of equity
securities of U.S. companies that are traded on major stock exchanges as well
as on the over-the-counter markets. The benchmark for the Fund is the Frank
Russell Mid-Cap Index (the "Benchmark"). The Benchmark is a broad weighted
index which includes U.S. common stocks in a defined capitalization range. The
Benchmark is designed to provide a representative indication of the
capitalization and return for the intermediate capitalization sector of the
U.S. equity market.

INVESTMENT PROCESS

As a general matter, the Advisor will purchase for the Fund securities
contained in the underlying Benchmark. The Advisor 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. Decisions to deviate
from the Benchmark are a blend of rigorous quantitative analysis, an
understanding of the fundamental relationships among global markets and the
expertise of investment professionals. The active management process is
intended, by Brinson Partners to produce superior performance relative to the
Benchmark.

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

CASH AND CASH EQUIVALENTS

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CONVERTIBLE SECURITIES

REPURCHASE AGREEMENTS

REVERSE REPURCHASE AGREEMENTS

The Fund will segregate in accordance with the Commission positions
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

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 unregistered or 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

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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 (the "Exemptive Order") from
the Commission, which permits the Fund to invest its assets in securities of
other series offered by the Trust. The Fund will invest in such series only to
the extent that the Advisor 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, but not
duplication of other fees and expenses because the Advisor and other service
providers will waive fees or reimburse expenses to avoid such duplication.

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. One
example of illiquid securities is securities purchased under Rule 144A under
the Securities Act ("Rule 144A Securities"). While maintaining oversight, the
Board of Trustees (the "Board") has delegated to the Advisor the day-to-day
function of determining whether or not Rule 144A Securities are liquid for
purposes of the Fund's 15% limitation on investments in illiquid assets. The
Board has instructed the Advisor to consider the following factors in
determining the liquidity of a Rule 144A Security : (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 Advisor, the Board
will continue to monitor and will periodically review the Advisor's selection
of Rule 144A Securities, as well as the Advisor's determination as to their
liquidity.

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FUTURE DEVELOPMENTS

SPECIAL RISK CONSIDERATIONS OF INVESTING IN SMALL CAPITALIZATION ISSUES

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OTHER INVESTMENT TECHNIQUES

OPTIONS

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 segregates
cash, U.S. government securities or other liquid assets in accordance with
Commission positions 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 options and may also contribute to the Fund's total return.

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

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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

RISKS AND SPECIAL CONSIDERATIONS OF OPTIONS AND FUTURES

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

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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 Sundays and 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 assets.

LOANS OF PORTFOLIO SECURITIES

The Fund may loan its portfolio securities in an amount up to 33 1/3%
of the value of its total 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 three 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
lend securities only after a review of all pertinent facts by the Advisor and
the lending agent, subject to overall supervision by the Board.
Creditworthiness of the borrowing broker-dealer or institution will be
monitored on an ongoing basis by the Advisor and any lending agent pursuant to
procedures reviewed and adopted by the Board. 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

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normal circumstances, the portfolio turnover rate will not exceed 250%. A
high 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 "Brokerage Allocation" and "Federal
Taxes."

MANAGEMENT OF THE FUND

THE BOARD OF TRUSTEES

THE ADVISOR

Brinson Partners has been appointed by the Trust as its Investment
Advisor and furnishes investment advisory and asset management services to the
Trust with respect to its portfolios. Brinson Partners, a Delaware corporation,
is an in investment management firm managing, as of March 31, 1998,
approximately U.S. $158 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 Advisers, 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 is a subsidiary of
Swiss Bank Corporation, one of the three largest banks in Switzerland. The SBC
Brinson division of Swiss Bank Corporation, of which Brinson Partners is a part,
has offices in Basel, Frankfurt, Geneva, London, Melbourne, New York, Paris,
Singapore, Sydney, Tokyo and Zurich, in addition to Brinson Partners' principal
office at 209 South LaSalle Street, Chicago, IL 60604-1295. Swiss Bank
Corporation, headquartered in Basel, Switzerland, is an internationally
diversified organization with operations in many aspects of the financial
services industry. Swiss Bank Corporation and Union Bank of Switzerland, during
mid-1998, received regulatory approval for a merger, which will be effective on
June 29, 1998. The merger will not result in a change of control or assignment
and, therefore, will not result in a termination of the Advisory Agreement. The
resulting entity will be named UBS AG. After the merger, Brinson Partners will
continue its role as investment advisor to the Trust as part of the Brinson
Partners division of UBS AG.

ADMINISTRATIVE, ACCOUNTING, TRANSFER AGENCY AND CUSTODIAN SERVICES

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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 weekly U.S. net assets of the Trust;
0.0525% of the average weekly non-U.S. net assets of the Trust; 0.3250% of the
average weekly emerging markets equity net assets of the Trust; and 0.019% of
the average weekly emerging markets debt net assets of the Trust. MSTC
receives an additional fee of 0.075% of the average weekly net assets of the
Trust for administrative duties, 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.

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 Advisor pursuant to the Advisory Agreement and
organizational expenses. Such expenses may include, but are not

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limited to, legal expenses, audit fees, printing costs (e.g., cost of printing
annual reports and semi-annual reports which are distributed to existing
Investors), brokerage 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

CAPITAL STOCK AND OTHER SECURITIES

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

The Trust does not presently intend to hold annual or special meetings
of Investors except when required to elect members of the Board, or with
respect to additional matters relating to the Trust, as required under the
Investment Company Act. Pursuant to the 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.

DIVIDENDS AND DISTRIBUTIONS. The Fund does not currently intend to
declare and pay dividends or pay distributions to Investors except as may be
determined by the Board of the Trust.

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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 312-220-7100.

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 $10,000,000. In the sole discretion of the Advisor, 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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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. For a detailed description, see Item 19 in Part B.

REDEMPTION OF SHARES OR REPURCHASE

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OFFEREE NO. _____

BRINSON RELATIONSHIP FUNDS

BRINSON POST-VENTURE FUND

PART A

JUNE 12, 1998

[LOGO]

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 seventeen series of
shares: the Brinson Global Securities Fund, the Brinson Global Bond Fund, the
Brinson U.S. Equity Fund, the Brinson U.S. Large Capitalization Equity Fund, the
Brinson U.S. Intermediate Capitalization Equity Fund, the Brinson U.S. Large
Capitalization Value Equity Fund, the Brinson Post-Venture Fund, the Brinson
EXDEX(R) Fund, the Brinson Non-U.S. Equity Fund, the Brinson Emerging Markets
Equity Fund, the Brinson Bond Plus Fund, the Brinson U.S. Bond Fund, the Brinson
U.S. Short/Intermediate Fixed Income Fund, the Brinson Short-Term Fund, the
Brinson U.S. Cash Management Prime Fund, the Brinson High Yield Fund, and the
Brinson Emerging Markets Debt Fund. This Prospectus pertains only to the Brinson
Post-Venture Fund (the "Fund").

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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 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
assets will be invested in small capitalization equity securities.

INVESTMENT PROCESS

Brinson Partners, Inc.'s ("Brinson Partners" or the "Advisor")
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
Advisor'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 Advisor quantifies
expectations of a company's ability to generate profit and to grow business
into the future.

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

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The Advisor 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
Advisor 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 the percentage of the Fund's portfolio securities that may be
loaned, and its policies set forth in Part B concerning 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 Part A
of this Registration Statement, 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 Advisor 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.

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, fixed income securities convertible into or exchangeable for
common stock, and securities such as warrants or rights that are convertible
into 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
assets. The Fund's investment in temporary defensive investments may affect
the Fund's ability to attain its investment objective.

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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 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.

Under the terms of an exemptive order issued by the United States
Securities and Exchange Commission (the "Commission"), the Fund may invest cash
(i) held for temporary defensive purposes; (ii) not invested pending investment
in securities; (iii) that is set aside to cover an obligation or commitment of
the Fund to purchase securities or other assets at a later date; (iv) to be
invested on a strategic management basis (i-iv is herein referred to as
"Uninvested Cash"); and (v) collateral that it receives from the borrowers of
its portfolio securities in connection with the Fund's securities lending
program, in a series of shares of Brinson Supplementary Trust (the
"Supplementary Trust Series"). Brinson Supplementary Trust is a private
investment company which has retained the Advisor to manage its investments.
The Trustees of the Trust also serve as Trustees of the Brinson Supplementary
Trust. The Supplementary Trust Series will invest in U.S. dollar denominated
money market instruments having a dollar-weighted average maturity of 90 days or
less. The Fund's investment of Uninvested Cash in shares of the Supplementary
Trust Series will not exceed 25% of the Fund's total assets.

CONVERTIBLE SECURITIES

REPURCHASE AGREEMENTS

REVERSE REPURCHASE AGREEMENTS

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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 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 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) no more than 3% of the total voting stock of any
one such investment company, (ii) no more than 5% of the Fund's net assets
invested in to any one such investment company and (iii) no more than 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.

The Trust has received an Exemptive Order from the Commission, which
permits the Fund to invest its assets in securities of other series offered by
the Trust. The Fund will invest in such series to the extent that the Advisor
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. Investment by the Fund in another
series of the Trust may involve transaction costs, but not duplication of other
fees and expenses because the Advisor and other service providers will waive
fees or reimburse expenses to avoid such duplication.

The Fund's investments in any other series of the Trust will be
subject to the percentage limitation described above (so long as other series
of the Trust or certain other Brinson Partners-sponsored funds invest in the
Fund in excess of such limitations) and the Fund's investments in 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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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
Advisor, the Board will continue to monitor and will periodically review the
Advisor's selection of Rule 144A Securities, as well as the Advisor's
determination as to their liquidity.

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. 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 Advisor 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
other 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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FUTURE DEVELOPMENTS

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.

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securities or other liquid assets in accordance with Commission positions with
a value sufficient to meet its obligations under the call option, or if the
Fund owns an offsetting call option. The Fund may receive premium income from
writing call options, which may offset the cost of purchasing options and may
also contribute to the Fund's total return.

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 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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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 Advisor 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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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 a swap contract. However, the amount at risk is only the net
unrealized gain, if any, on the swap, not the entire notional amount. The
Advisor will closely monitor, subject to the oversight of the Board, the
creditworthiness of swap counterparties in order to minimize the risk of
swaps.

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 Advisor will
closely monitor, subject to the oversight of the Board, the creditworthiness
of swap counterparties in order to minimize the 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 Sundays and 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 assets.

LOANS OF PORTFOLIO SECURITIES

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Board. 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
Advisor, 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 high 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 "Brokerage Allocation" and
"Federal Taxes."

MANAGEMENT OF THE FUND

THE BOARD OF TRUSTEES

THE ADVISOR

Brinson Partners has been appointed by the Trust as its Investment
Advisor and furnishes investment advisory and asset management services to the
Trust with respect to its portfolios. Brinson Partners, a Delaware corporation,
is an investment management firm managing, as of March 31, 1998, approximately
U.S. $158 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 Advisers, 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 is a subsidiary of Swiss Bank
Corporation, one of the three largest banks in Switzerland. The SBC Brinson
division of Swiss Bank Corporation, of which Brinson Partners is a part, has
offices in Basel, Frankfurt, Geneva, London, Melbourne, New York, Paris,
Singapore, Sydney, Tokyo and Zurich, in addition to Brinson Partners' principal
office at 209 South LaSalle Street, Chicago, IL 60604-1295. Swiss Bank
Corporation, headquartered in Basel, Switzerland, is an internationally
diversified organization with operations in many aspects of the financial
services industry. Swiss Bank Corporation and Union Bank of Switzerland, during
mid-1998, received regulatory approval for a merger, which will be effective on
June 29, 1998. The merger will not result in a change of control or assignment
and, therefore, will not result in a termination of the Advisory Agreement. The
resulting entity will be named UBS AG. After the merger, Brinson Partners will
continue its role as investment advisor to the Trust as part of the Brinson
Partners division of UBS AG.

Brinson Partners also serves as the investment advisor to nine other
investment

A-11
<PAGE>

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 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.

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.

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 the Trust, MSTC supervises and monitors such services provided by
CGFSC.

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

A-12
<PAGE>

INDEPENDENT AUDITORS

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

EXPENSES

The Advisor 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

A-13
<PAGE>

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.

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

CAPITAL STOCK AND OTHER SECURITIES

Pursuant to the Investment Company Act, a control person possesses the
ability to control the outcome of matters submitted for shareholder vote. As
of May 15, 1998, Brinson Trust Company Collective Investment Trust for
Pension and Profit Sharing Trusts - U.S. Equity Fund, Chicago, Illinois was a
control person of the Fund and Brinson Trust Company Collective Investment
Trust for Pension and Profit Sharing Trusts - Global Securities Fund, Chicago,
Illinois, was a control person of the Trust, by nature of their shareholdings.

A-14
<PAGE>

the matter. The 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 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, or with
respect to additional matters relating to the Trust, as required under the
Investment Company Act. Pursuant to the 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.

DIVIDENDS AND DISTRIBUTIONS. The Fund does not currently intend to
declare and pay dividends or pay distributions to Investors except as may be
determined by the Board of the Trust.

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 312-220-7100.

PURCHASE OF SECURITIES BEING OFFERED

A-15
<PAGE>

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 $10,000,000. In the sole discretion of
the Advisor, 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.

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.

A-16
<PAGE>

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

REDEMPTION OF SHARES OR REPURCHASE

A-17
<PAGE>

APPENDIX A

Set forth below is the performance of the Brinson Trust Company Collective
Investment Trust's Post-Venture Fund ("BTC Post-Venture Fund") for periods ended
April 28, 1995 linked with the Brinson Relationship Funds' Post-Venture Fund
("Brinson Post-Venture Fund") for periods ending December 31, 1997. The Brinson
Post-Venture Fund assumed the assets of the BTC Post-Venture Fund on April 28,
1995. Brinson Trust Company is a wholly owned subsidiary of Brinson Partners,
Inc., Advisor 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 been verified or
audited. The BTC Post-Venture 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 Post-Venture Fund.

For Periods Ending 12/31/97

<TABLE>
<CAPTION>
Annualized
---------------------------------
Since
1 year 2 Years 3 Years 5 Years Inception
------ ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C>
Brinson Post-Venture Fund 31.55% 29.34% 30.21% 20.09% 21.32%

Wilshire Small Stock Index /(1)/ 22.82% 20.62% 23.84% 16.65% 11.60%

Inception date is 12/31/86
</TABLE>

/(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 the further description of the
benchmark, please review the section titled "Investment Process".

A-18
<PAGE>

OFFEREE NO.______

BRINSON RELATIONSHIP FUNDS

BRINSON EXDEX(R) FUND

PART A

JUNE 12, 1998

[LOGO]

INTRODUCTION

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. Under normal market conditions, at least 65% of the Fund's
assets will be invested in equity securities of U.S. companies. The Fund
seeks to achieve its objective by investment in a wide range of equity
securities of U.S. companies that are traded on major stock exchanges as well
as on the over-the-counter markets. The benchmark for the Fund is the
Standard & Poor's 500 Stock Index (the "S&P 500", or the "Benchmark"). The
Benchmark is a broad weighted index which includes primarily U.S. common
stocks. The Benchmark is designed to provide a representative indication of
the capitalization and return for the large-capitalization U.S. equity market.

INVESTMENT PROCESS

The EXDEX(R) Fund is an index-like U.S. equity portfolio with an
active management overlay designed to deliver above market returns at near
market risk by systematically excluding overvalued stocks from the S&P 500.
The EXDEX(R) Fund exploits the benefits of short sale restrictions and a lack
of active management attention to sell decisions. Brinson Partners will
pursue the portfolio's objective by using an analyst-intensive fundamental
value approach. As a general matter, the Advisor will purchase for the Fund
securities contained in the underlying Benchmark.

The Fund is reviewed each month and rebalanced as appropriate
utilizing the Advisor's proprietary equity valuation model which is based upon
analysts' company specific research. The portfolio excludes stocks from the
S&P 500 where price has deviated significantly from fundamental value such
that there is approximately a greater than 60% probability of underperformance
relative to the average S&P 500 stock.

A-2
<PAGE>

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 securities included in the S&P 500. At times,
the Fund may hold securities which have recently been eliminated from the
Benchmark, but as a matter of practice, will only hold securities included in
the Benchmark.

CASH AND CASH EQUIVALENTS

REPURCHASE AGREEMENTS

A-3
<PAGE>

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

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 securities purchased under Rule 144A under the
Securities Act ("Rule 144A Securities") and over-the-counter options described
below. While maintaining oversight, the Board of Trustees (the "Board") has
delegated to the Advisor the day-to-day function of determining whether or not
Rule 144A Securities are liquid for purposes of the Fund's 15% limitation on
investments in illiquid assets. The Board has instructed the Advisor to
consider the following factors in determining the liquidity of a Security: (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 Advisor, the Board
will continue to monitor and will periodically review the Advisor's selection
of Rule 144A Securities, as well as the Advisor's determination as to their
liquidity.

If the Advisor determines that a Rule 144A 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 Advisor 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.

OTHER INVESTMENT TECHNIQUES

OPTIONS

A-4
<PAGE>

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 segregates
cash, U.S. government securities or other liquid assets in accordance with
Commission positions 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 options and may also contribute to the Fund's total return.

A-5
<PAGE>

FUTURES CONTRACTS

RISKS AND SPECIAL CONSIDERATIONS OF OPTIONS AND FUTURES

BORROWING

A-6
<PAGE>

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 assets.

LOANS OF PORTFOLIO SECURITIES

INVESTMENT RESTRICTIONS

PORTFOLIO TURNOVER

A-7
<PAGE>

MANAGEMENT OF THE FUND

THE BOARD OF TRUSTEES

THE ADVISOR

Brinson Partners has been appointed by the Trust as its Investment
Advisor and furnishes investment advisory and asset management services to the
Trust with respect to its portfolios. Brinson Partners, a Delaware corporation,
is an investment management firm managing, as of March 31, 1998, approximately
U.S. $158 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 Advisers, 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 is a subsidiary of Swiss Bank
Corporation, one of the three largest banks in Switzerland. The SBC Brinson
division of Swiss Bank Corporation, of which Brinson Partners is a part, has
offices in Basel, Frankfurt, Geneva, London, Melbourne, New York, Paris,
Singapore, Sydney, Tokyo and Zurich, in addition to Brinson Partners' principal
office at 209 South LaSalle Street, Chicago, IL 60604-1295. Swiss Bank
Corporation, headquartered in Basel, Switzerland, is an internationally
diversified organization with operations in many aspects of the financial
services industry. Swiss Bank Corporation and Union Bank of Switzerland, during
mid-1998, received regulatory approval for a merger, which will be effective on
June 29, 1998. The merger will not result in a change of control or assignment
and, therefore, will not result in a termination of the Advisory Agreement. The
resulting entity will be named UBS AG. After the merger, Brinson Partners will
continue its role as investment advisor to the Trust as part of the Brinson
Partners division of UBS AG.

ADMINISTRATIVE, ACCOUNTING, TRANSFER AGENCY AND CUSTODIAN SERVICES

A-8
<PAGE>

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

INDEPENDENT AUDITORS

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

EXPENSES

A-9
<PAGE>

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

CAPITAL STOCK AND OTHER SECURITIES

A-10
<PAGE>

The Trust does not presently intend to hold annual or special meetings
of Investors except when required to elect members of the Board, or with
respect to additional matters relating to the Trust, as required under the
Investment Company Act. Pursuant to the 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.

DIVIDENDS AND DISTRIBUTIONS. The Fund does not currently intend to
declare and pay dividends or pay distributions to Investors except as may be
determined by the Board of the Trust.

A-11
<PAGE>

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 312-220-7100.

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 $10,000,000. In the sole discretion of the Advisor, 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.

A-12
<PAGE>

REDEMPTION OF SHARES OR REPURCHASE

A-13
<PAGE>

OFFEREE NO. ____

BRINSON RELATIONSHIP FUNDS

BRINSON NON-U.S. EQUITY FUND

PART A

June 12,1998

[LOGO]

INTRODUCTION

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 an international portfolio and as
such, under normal market conditions, at least 65% of the Fund's assets will
be invested in equity securities of issuers in at least three countries other
than the United States. The Fund seeks to achieve its objective by investing
in a wide range of equity securities, including: American, European and Global
Depositary Receipts, common and preferred stock; debt securities convertible
into or exchangeable for common stock; and securities such as warrants or
rights that are convertible into common stock. The Fund may engage in
futures, options and currency transactions for hedging and other permissible
purposes. The Benchmark for the Fund is the Morgan Stanley Capital
International (MSCI) Non-U.S. Equity (Free) Index (the "Benchmark").

INVESTMENT PROCESS

As a general matter, the Advisor will purchase for the Fund securities
contained in the underlying Benchmark. The Advisor 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. Decisions to deviate
from the Benchmark are a blend of rigorous quantitative analysis, an
understanding of the fundamental relationships among global markets and the
expertise of investment professionals. The active management process is
intended, by Brinson Partners to produce superior performance relative to the
Benchmark.

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 total 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

A-2
<PAGE>

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

NON-U.S. EQUITY SECURITIES

The Fund may invest in a broad range of equity securities of non-U.S.
issuers, including common stock of companies or closed-end investment
companies, preferred stock, fixed income 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 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.

EMERGING MARKETS EQUITY 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 invest indirectly in emerging market equity
securities by purchasing securities of open-end and closed-end investment
companies. Please see the discussions 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 equity securities.

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") 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
EM Equity Fund. The investment objective of the EM Equity 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 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 primarily from equity securities of issuers in emerging markets. The
EM Equity Fund is permitted to invest in the same types of securities as the
Fund may invest in directly and as further described herein.

A-3
<PAGE>

The Fund may invest its assets directly or indirectly in emerging
market equity securities as described above. Pursuant to the Exemptive Order,
any investment by the Fund in the EM Equity 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 below under "Investment Company Securities" for a
description of these limitations.

CASH AND CASH EQUIVALENTS

Under the terms of a second exemptive order issued by the Commission,
the Fund may invest cash (i) held for temporary defensive purposes; (ii) not
invested pending investment in securities; (iii) that is set aside to cover an
obligation or commitment of the Fund to purchase securities or other assets at a
later date; (iv) to be invested on a strategic management basis (i-iv is herein
referred to as "Uninvested Cash"); and (v) collateral that it receives from the
borrowers of its portfolio securities in connection with the Fund's securities
lending program, in a series of shares of Brinson Supplementary Trust (the
"Supplementary Trust Series"). Brinson Supplementary Trust is a private
investment company which has retained the Advisor to manage its investments. The
Trustees of the Trust also serve as trustees of the Brinson Supplementary Trust.
The Trust Series will invest in U.S. dollar denominated money market instruments
having a dollar-weighted average maturity of 90 days or less. The Fund's
investment of Uninvested Cash in shares of the Supplementary Trust Series will
not exceed 25% of the Fund's total assets.

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 unregistered or 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

A-4
<PAGE>

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) no more than 3% of the total voting stock of any one such investment
company, (ii) no more than 5% of the Fund's net assets invested in any one
such investment company and (iii) no more than 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.

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. Some
examples of illiquid securities are securities purchased under Rule 144A under
the Securities Act ("Rule 144A Securities"), over-the-counter options and
certain interest rate swaps described below. While maintaining oversight, the
Board of Trustees (the "Board") has delegated to the Advisor the day-to-day
function of determining whether or not Rule 144A Securities, are liquid for
purposes of the Fund's 15% limitation on investments in illiquid assets. The
Board has instructed the Advisor to consider the following factors in
determining the liquidity of a Rule 144A Security: (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 Advisor, the Board
will continue to monitor and will periodically review the Advisor's selection
of Rule 144A Securities, as well as the Advisor's determination as to their
liquidity.

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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 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 Advisor 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 and losses attributable to fluctuations in exchange rates which occur
between the time the 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 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 and 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
risks, there is no assurance that the Fund will do so at an appropriate time
or that they will be able to predict exchange rates accurately. The Fund will
manage currency exposure relative to the normal currency allocation and will
consider return and risk of currency exposures relative to the Benchmark.

INVESTING IN EMERGING MARKETS

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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.

CONVERTIBLE SECURITIES

REPURCHASE AGREEMENTS

REVERSE REPURCHASE AGREEMENTS

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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 or futures relating to foreign currencies and
may 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
segregate liquid assets in accordance with Commission positions to cover its
obligations. These techniques are further described below.

FORWARD FOREIGN CURRENCY TRANSACTIONS

When the Fund enters into forward contracts for non-hedging purposes,
it will segregate in accordance with Commission positions 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.

OPTIONS

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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 segregates
cash, U.S. government securities or other liquid assets in accordance with
Commission positions 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 options and may also contribute to the Fund's total return.

FUTURES CONTRACTS

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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. 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.

RISKS AND SPECIAL CONSIDERATIONS OF OPTIONS AND FUTURES

SWAPS

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If there is a default by the counterparty to a swap contract, the Fund
will be limited to contractual remedies pursuant to the agreements related to
the transaction. There is no assurance that a swap contract counterparty will
be able to meet its obligations pursuant to a 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 a swap contract. However, the amount
at risk is only the net unrealized gain, if any, on the swap, not the entire
notional amount. The Advisor will closely monitor, subject to the oversight
of the Board, the creditworthiness of swap counterparties in order to minimize
the risk of swaps.

The Advisor and the Trust do not believe that the Fund's obligations
under 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 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 segregated in accordance with Commission positions. 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, the Fund will treat the swap as illiquid and subject to the
Fund's overall limit on illiquid investments of 15% of its net assets.

BORROWING

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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 Sundays and 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 assets.

LOANS OF PORTFOLIO SECURITIES

INVESTMENT RESTRICTIONS

PORTFOLIO TURNOVER

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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 "Brokerage Allocation" and "Federal
Taxes."

MANAGEMENT OF THE FUND

THE BOARD OF TRUSTEES

THE ADVISOR

Brinson Partners has been appointed by the Trust as its Investment
Advisor and furnishes investment advisory and asset management services to the
Trust with respect to its portfolios. Brinson Partners, a Delaware corporation,
is an investment management firm managing, as of March 31, 1998, approximately
U.S. $158 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 Advisers, 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 is a subsidiary of Swiss Bank
Corporation, one of the three largest banks in Switzerland. The SBC Brinson
division of Swiss Bank Corporation, of which Brinson Partners is a part, has
offices in Basel, Frankfurt, Geneva, London, Melbourne, New York, Paris,
Singapore, Sydney, Tokyo and Zurich, in addition to Brinson Partners' principal
office at 209 South LaSalle Street, Chicago,IL 60604-1295. Swiss Bank
Corporation, headquartered in Basel, Switzerland, is an internationally
diversified organization with operations in many aspects of the financial
services industry. Swiss Bank Corporation and Union Bank of Switzerland, during
mid-1998, received regulatory approval for a merger, which will be effective on
June 29, 1998. The merger will not result in a change of control or assignment
and, therefore, will not result in a termination of the Advisory Agreement. The
resulting entity will be named UBS AG. After the merger, Brinson Partners will
continue its role as investment advisor to the Trust as part of the Brinson
Partners division of UBS AG.

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.

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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 the Trust, MSTC supervises and monitors such services provided by
CGFSC.

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

INDEPENDENT AUDITORS

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

EXPENSES

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<PAGE>

reports which are distributed to existing Investors), brokerage 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 Advisor has agreed to pay the amount, if any, by which the total
operating expenses of the Fund for any fiscal year exceed 0.06% of the Fund's
average net assets. The Advisor, however, may discontinue this expense
limitation at any time in its sole discretion.

BROKERAGE ALLOCATION

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

CAPITAL STOCK AND OTHER SECURITIES

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Income Fund, the Brinson Short-Term Fund, the Brinson U.S. Cash Management Prime
Fund, the Brinson High Yield Fund and the Brinson Emerging Markets Debt
Fund.

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 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
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 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) additional matters
relating to the Trust as required by the Investment Company Act; and (vii)
such other matters as the Board 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, or with
respect to additional matters relating to the Trust, as required under the
Investment Company Act. Pursuant to the 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.

DIVIDENDS AND DISTRIBUTIONS. The Fund does not currently intend to
declare and pay dividends or pay distributions to Investors except as may be
determined by the Board of the Trust.

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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 312-220-7100.

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 $10,000,000. In the sole discretion of the Advisor, 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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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. 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. For a detailed description, see Item 19 in Part B.

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

REDEMPTION OF SHARES OR REPURCHASE

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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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<PAGE>

OFFEREE NO. ___

BRINSON RELATIONSHIP FUNDS

BRINSON EMERGING MARKETS EQUITY FUND
BRINSON EMERGING MARKETS DEBT FUND

PART A

JUNE 12, 1998

[LOGO]

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 seventeen series of
shares: the Brinson Global Securities Fund, the Brinson Global Bond Fund, the
Brinson U.S. Equity Fund, the Brinson U.S. Large Capitalization Equity Fund, the
Brinson U.S. Intermediate Capitalization Fund, the Brinson U.S. Large
Capitalization Value Equity Fund, the Brinson Post-Venture Fund, the Brinson
EXDEX(R) Fund, the Brinson Non-U.S. Equity Fund, the Brinson Emerging Markets
Equity Fund, the Brinson Bond Plus Fund, the Brinson U.S. Bond Fund, the Brinson
U.S. Short/Intermediate Fixed Income Fund, the Brinson Short-Term Fund, the
Brinson U.S. Cash Management Prime Fund, the Brinson High Yield 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.

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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 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 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 Advisor, 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.

INVESTMENT PROCESS

The investment style of the Funds' investment advisor, Brinson
Partners, Inc. ("Brinson Partners" or the "Advisor") is single focus:
investment fundamentals determine and describe future cash flows that define
fundamental investment value. The Advisor's investment perspective for the
Funds is that periodically there are exploitable discrepancies between market
price and fundamental value. Those

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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 Advisor will purchase for the Funds
securities contained in the underlying indices relevant to the respective
Benchmarks. The Advisor 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 active management process is intended, by the Advisor, to 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 the percentage of the Funds' portfolio
securities that may be loaned, and its policies set forth in Part B concerning
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 Part A of the Registration Statement, 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.

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

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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 terms "fixed income securities" and "debt securities" are
synonymous and are used interchangeably in this Part A and in Part B of this
Registration Statement. The Brinson Emerging Markets Equity Fund may invest
up to 35% of its 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 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 Advisor 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.

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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' assets. The Funds' investment in
temporary defensive investments may affect the Funds' ability to attain their
exposure objectives.

The 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.

ZERO COUPON SECURITIES

The Funds 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 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 private, non-government
corporations, such as financial institutions.

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

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<PAGE>

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).

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.

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.

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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 segregate in accordance with the Commission positions
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
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 Advisor (referred
to herein as "low-grade securities"). Investment grade securities are
securities rated BBB or better by Standard & Poor's Ratings Group

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<PAGE>

("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 Advisor (referred
to herein as "low-grade securities"). While securities rated 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. 1-2. 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 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.

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<PAGE>

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.

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.

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.

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LOAN PARTICIPATIONS AND ASSIGNMENTS

The Funds may invest in fixed rate and floating rate loans ("Loans")
arranged through private negotiations between an issuer of 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") or 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 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 Advisor 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
or the Lender. 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 unregistered or 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 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.

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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) no more than 3% of the total voting stock of any
one such investment company, (ii) no more than 5% of the Funds' net assets
invested in any one such investment company and (iii) no more than 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.

The Trust has received an Exemptive Order from the 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 Advisor 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, but
not duplication of other fees and expenses because the Advisor and other
service providers will waive fees or reimburse expenses to avoid such
duplication.

Each of the Fund's investments in any other series of the Trust will b
subject to the percentage limitations described above (so long as other series
of the Trust or certain other Brinson Partners-sponsored funds invest in such
Fund in excess of such limitations) and such Fund's investments in 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

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. Some
examples of illiquid securities are securities purchased under Rule 144A under
the Securities Act ("Rule 144A Securities"), over-the-counter options and
certain interest rate swaps. While maintaining oversight, the Board of
Trustees (the "Board") has delegated to the Advisor the day-to-day function of
determining whether or not Rule 144A Securities are liquid for purposes of the
Funds' 15% limitation on investments in illiquid assets. The Board has
instructed the Advisor to consider the following factors in determining the
liquidity of a Rule 144A Security: (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 Advisor, the Board will continue to monitor and
will periodically review the Advisor's selection of Rule 144A Securities, as
well as the Advisor's determination as to their liquidity.

If the Advisor determines that a Rule 144A 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 Advisor 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.

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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 Funds may invest in
these securities if the Advisor 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

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 other 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.

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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 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 market countries
are subject to a variety of restrictions in many emerging market 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 market countries, the Advisor 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.

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

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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 Advisor 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.

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In light of the risks described above, the Board 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 Advisor, 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 Advisor 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 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 segregate liquid assets in
accordance with Commission positions 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 segregate cash, U.S. government securities

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or other liquid assets equal in value to their obligations with respect to
their forward contracts for non-hedging purposes in accordance with Commission
positions.

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.

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 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 segregate
cash, U.S. government securities or other liquid assets in accordance with
Commission positions 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 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 segregate cash, U.S. government securities or
other liquid assets in accordance with Commission positions with a value
sufficient to meet their obligations under the call option, or own an

A-16
<PAGE>

offsetting call option. With respect to put options on foreign currency
written by the Funds, the Funds will segregate cash, U.S. government
securities or other liquid assets in accordance with Commission positions 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.

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. 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 segregate assets in
accordance with Commission positions 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 Advisor 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

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<PAGE>

potentially unlimited. For further information concerning the risks of
options and futures, see Part B of this Registration Statement.

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
Advisor 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 a swap contract, a Fund
will be limited to contractual remedies pursuant to the agreements related to
the transaction. There is no assurance that a swap contract counterparty will
be able to meet its obligations pursuant to a swap contract or that, in the
event of default, a Fund will succeed in pursuing contractual remedies. A
Fund thus assumes the risk that it may be delayed in or prevented from
obtaining payments owed to it pursuant to a swap contract. However, the amount
at risk is only the net unrealized gain, if any, on the swap, not the

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<PAGE>

entire notional amount. The Advisor will closely monitor, subject to the
oversight of the Board, the creditworthiness of swap counterparties in order
to minimize the risk of swaps.

The Advisor and the Trust do not believe that the Funds' obligations
under 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 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 segregated in accordance with Commission positions.
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 Sundays and 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
total assets.

LOANS OF PORTFOLIO SECURITIES

Each Fund may loan its portfolio securities in an amount up to 33 1/3%
of the value of its total 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 three 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 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 Funds will
lend securities only after a review of all pertinent facts by the Advisor and
the lending agent, subject to overall supervision by the Board.
Creditworthiness of the borrowing broker-dealer or institution will be
monitored on an ongoing basis by the Advisor and the lending agent, pursuant
to procedures reviewed and adopted by the Board. 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).

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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 Advisor, 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 150%. A high 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 "Brokerage Allocation" and "Federal Taxes."

MANAGEMENT OF THE FUNDS

THE BOARD OF TRUSTEES

Under Delaware law and the Trust's Amended and Restated Agreement and
Declaration of Trust (the "Declaration of Trust"), the Board 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.

THE ADVISOR

Brinson Partners has been appointed by the Trust as its Investment
Advisor and furnishes investment advisory and asset management services to the
Trust with respect to its portfolios. Brinson Partners, a Delaware corporation,
is an investment management firm managing, as of March 31, 1998, approximately
U.S. $158 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 Advisers, 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 is a subsidiary of Swiss Bank
Corporation, of the three largest banks in Switzerland. The SBC Brinson division
of Swiss Bank Corporation, of which Brinson Partners is a part, has offices in
Basel, Frankfurt, Geneva, London, Melbourne, New York, Paris, Singapore, Sydney,
Tokyo and Zurich, in addition to Brinson Partners' principal office at 209 South
LaSalle Street, Chicago, Il 60604-1295. Swiss Bank Corporation, headquartered in
Basel, Switzerland, is an internationally diversified organization with
operations in many aspects of the financial services industry. Swiss Bank
Corporation and Union Bank of Switzerland, during mid-1998, received regulatory
approval for a merger, which will be effective on June 29, 1998. The merger will
not result in a change of control or assignment and, therefore, will not result
in a termination of the Advisory Agreement. The resulting entity will be named
UBS AG. After the merger, Brinson Partners will continue its role as investment
advisor to the Trust as part of the Brinson Partners division of UBS AG.

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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.

Investment decisions for the Funds are made by an investment
management team of the Advisor. 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.

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. Subject to the supervision of the
Board of the Trust, MSTC supervises and monitors such services provided by
CGFSC.

Pursuant to the CGFSC Agreement, CGFSC provides:

(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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average weekly emerging markets equity net assets of the Trust; and 0.019% of
the average weekly emerging markets debt assets of the Trust. MSTC receives
an additional fee of 0.075% of the average weekly net assets of the Trust for
administrative duties, 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.

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 Advisor 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 and semi-annual reports which are distributed to existing Investors),
brokerage 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.

The Advisor 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 Advisor, 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 Advisor seeks to negotiate a
combination of the most favorable execution and the best price obtainable on
each transaction. Consequently, the Advisor 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 Advisor 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.

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

CAPITAL STOCK AND OTHER SECURITIES

The Trust was organized as a Delaware business trust on August 16, 1994.
The Declaration of Trust permits the Board to issue an unlimited number of
shares of beneficial interest with no par value. The Board 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 seventeen series: the Brinson
Global Securities Fund, the Brinson Global Bond Fund, the Brinson U.S. Equity
Fund, the Brinson U.S. Large Capitalization Equity Fund, the Brinson U.S.
Intermediate Capitalization Fund, the Brinson U.S. Large Capitalization Value
Equity Fund, the Brinson Post-Venture Fund, the Brinson EXDEX(R) Fund, the
Brinson Non-U.S. Equity Fund, the Brinson Emerging Markets Equity Fund, the
Brinson Bond Plus Fund, the Brinson U.S. Bond Fund, the Brinson U.S.
Short/Intermediate Fixed Income Fund, the Brinson Short-Term Fund, the Brinson
U.S. Cash Management Prime Fund, the Brinson High Yield Fund and the 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 May 15, 1998, Brinson Trust Company Collective Investment Trust for
Pension and Profit Sharing Trusts, Custodian for Brinson Global Securities
Fund, Chicago, Illinois, was a control person of the Brinson Emerging Markets
Equity Fund and Brinson Trust Company Collective Investment Trust for Pension
and Profit Sharing Trusts - Global Securities Fund, Chicago, Illinois, was a
control person of the Trust, by nature of their shareholdings.

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<PAGE>

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 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, or with
respect to additional matters relating to the Trust, as required under the
Investment Company Act. Pursuant to the Trust's 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 certain 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 advisor to manage the assets.

DIVIDENDS AND DISTRIBUTIONS. The Funds do not currently intend to
declare and pay dividends or pay distributions to Investors except as may be
determined by the Board 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 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 312-220-7100.

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

A-24
<PAGE>

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 $10,000,000. In the
sole discretion of the Advisor, 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 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. 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

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<PAGE>

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

REDEMPTION OF SHARES OR REPURCHASE

As stated above, "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.

A-26
<PAGE>

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.

A-27
<PAGE>

APPENDIX A

CORPORATE DEBT RATINGS

MOODY'S INVESTORS SERVICE, INC. DESCRIBES CLASSIFICATIONS OF CORPORATE BONDS
AS FOLLOWS:

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.

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.

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<PAGE>

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.

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.

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.

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.

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.

A-29
<PAGE>

OFFEREE NO. ___

BRINSON RELATIONSHIP FUNDS

BRINSON BOND PLUS FUND

PART A

June 12, 1998

[LOGO]

INTRODUCTION

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. Under normal market conditions, at least 65% of the Fund's
assets will be invested in debt securities. The Fund seeks to achieve its
objective by pursuing active asset allocation strategies across global, fixed
income and money markets and active security selection within each market. The
Fund's performance is measured relative to the Salomon Brothers Broad
Investment Grade Bond Index (the "Benchmark").

INVESTMENT PROCESS

The Benchmark is a market capitalization weighted broad based index
which includes investment grade U.S. Bonds with over one year to maturity.
From time to time, the Advisor may substitute an equivalent index within a
given asset class when it believes that such index more accurately reflects
the relevant global market.

As a general matter, the Advisor will purchase for the Fund securities
contained in the Benchmark and will invest opportunistically in securities not
included in the Benchmark. The Advisor 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 market prices and fundamental values. 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. The active management process is
intended, by the Advisor, to produce superior performance relative to the
Benchmark.

A-2
<PAGE>

ASSET ALLOCATION AND MARKET MANAGEMENT

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

The Fund may invest in the more broadly defined asset classes than
those contained in 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 Advisor, global capital markets are
fairly priced relative to each other and relative to the associated risks.

Brinson Bond Plus Fund
Normal Asset Allocation Mix
<TABLE>
<CAPTION>
Normal Asset Class
Allocation Strategy
Mix Ranges
--- ------
<S> <C> <C>
Asset Class

U.S. Investment Grade Bond 80.0% 70-100%
Non-Dollar Bonds 7.5% 0-15%
Emerging Markets Debt 5.0% 0-5%
High Yield Bonds 7.5% 0-15%
</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 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 described below.

A-3
<PAGE>

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 terms "fixed income securities" and "debt securities" are
synonymous and are used interchangeably in this Part A and in Part B of this
Registration Statement. The Fund may purchase U.S. dollar denominated fixed
income 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, supranational issues, and corporate debt. 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.

HIGH YIELD/HIGHER RISK SECURITIES

The Fund's 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 Advisor. While securities rated 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 sometimes 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. 1-2. 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 an Exemptive Order for the Trust from the United States
Securities and Exchange Commission (the "Commission"), 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 normally 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.

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<PAGE>

The Fund currently intends to limit its investment in high yield fixed
income securities to no more than 15% of its net assets. Any investment in
the High Yield Fund will be considered to be subject to this limitation.

EMERGING MARKETS DEBT SECURITIES

The Fund may 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 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 debt securities.

The Exemptive Order also permits, among other things, the Fund to
invest its assets in 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 EM Debt Fund. The investment objective of 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 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 Debt Fund
is 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 Debt 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 below under "Investment Company Securities" for a
description of these limitations.

U.S. AND NON-U.S. EQUITY SECURITIES

CASH AND CASH EQUIVALENTS

A-5
<PAGE>

investment in temporary defensive investments may affect the Fund's ability to
attain its investment objective.

Under the terms of a second exemptive order issued by the Commission,
the Fund may invest cash (i) held for temporary defensive purposes; (ii) not
invested pending investment in securities; (iii) that is set aside to cover an
obligation or commitment of the Fund to purchase securities or other assets at a
later date; (iv) to be invested on a strategic management basis (i-iv is herein
referred to as "Uninvested Cash"); and (v) collateral that it receives from the
borrowers of its portfolio securities in connection with the Fund's securities
lending program, in a series of shares of Brinson Supplementary Trust (the
"Supplementary Trust Series"). Brinson Supplementary Trust is a private
investment company which has retained the Advisor to manage its investments. The
Trustees of the Trust also serve as Trustees of the Brinson Supplementary Trust.
The Supplementary Trust Series will invest in U.S. dollar denominated money
market instruments having a dollar-weighted average maturity of 90 days or less.
The Fund's investment of Uninvested Cash in shares of the Supplementary Trust
Series will not exceed 25% of the Fund's total assets.

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

MORTGAGE-BACKED SECURITIES

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<PAGE>

also invest in privately issued mortgage-backed securities issued by private,
non-government corporations, such as financial institutions.

ASSET-BACKED SECURITIES

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

A-7
<PAGE>

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 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

REVERSE REPURCHASE AGREEMENTS

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

A-8
<PAGE>

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, generally collateralized in full
as to principal by U.S. Treasury zero coupon bonds having the same maturity as
the bonds.

STRUCTURED SECURITIES

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 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

The Fund may invest in fixed rate and floating rate loans ("Loans")
arranged through private negotiations between an issuer of 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") or assignments of all or a portion of Loans
("Assignments") from third parties.

A-9
<PAGE>

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 Advisor 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
or the Lender. 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

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 unregistered or 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

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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, but not duplication
of other fees and expenses because the Advisor and other service providers
will waive fees or reimburse expenses to avoid such duplication.

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. Some
examples of illiquid securities are securities purchased under Rule 144A under
the Securities Act ("Rule 144A Securities"), over-the-counter options and
certain interest rate swaps described below. While maintaining oversight, the
Board of Trustees (the "Board") has delegated to the Advisor the day-to-day
function of determining whether or not Rule 144A Securities, are liquid for
purposes of the Fund's 15% limitation on investments in illiquid assets. The
Board has instructed the Advisor to consider the following factors in
determining the liquidity of a Rule 144A Security: (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 Advisor, the Board
will continue to monitor and will periodically review the Advisor's selection
of Rule 144A Securities, as well as the Advisor's determination as to their
liquidity.

FUTURE DEVELOPMENTS

From time to time, the Fund may also invest in certain 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 Advisor 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.

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FOREIGN SECURITIES AND CURRENCY CONSIDERATIONS

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 other 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.

INVESTING IN EMERGING MARKETS

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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
market countries, the Advisor 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.

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 Advisor and could cause a delay in the sale of Russian

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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 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.

OTHER INVESTMENT TECHNIQUES

CURRENCY MANAGEMENT

The normal currency allocation of the Fund is 100% U.S. dollars. The
currency strategy range will be: 0-15% non-U.S. dollars and 85-100% U.S.
dollars. The Fund expects to maintain this normal currency exposure when, in
the judgment of the Advisor, 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 Advisor based upon its research.

FORWARD FOREIGN CURRENCY TRANSACTIONS

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.

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OPTIONS

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 segregate

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cash, U.S. government securities or other liquid assets in accordance with
Commission positions 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 segregate cash, U.S.
government securities or other liquid assets in accordance with Commission
positions in an amount equal to the amount the Fund would be required to pay
upon exercise of the put.

FUTURES CONTRACTS

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. 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.

RISKS AND SPECIAL CONSIDERATIONS OF OPTIONS AND FUTURES

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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

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U.S. government securities or other liquid assets having an aggregate market
value at least equal to the accrued excess will be segregated in accordance
with Commission positions.

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 Sundays and 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 assets.

LOANS OF PORTFOLIO SECURITIES

INVESTMENT RESTRICTIONS

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PORTFOLIO TURNOVER

MANAGEMENT OF THE FUND

THE BOARD OF TRUSTEES

THE ADVISOR

Brinson Partners has been appointed by the Trust as its Investment
Advisor and furnishes investment advisory and asset management services to the
Trust with respect to its portfolios. Brinson Partners, a Delaware corporation,
is an investment management firm managing, as of March 31, 1998, approximately
U.S. $158 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 Advisers, 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 is a subsidiary of Swiss Bank
Corporation, one of the three largest banks in Switzerland. The SBC Brinson
division of Swiss Bank Corporation, of which Brinson Partners is a part, has
offices in Basel, Frankfurt, Geneva, London, Melbourne, New York, Paris,
Singapore, Sydney, Tokyo and Zurich, in addition to Brinson Partners' principal
office at 209 South LaSalle Street, Chicago, Il 60604-1295. Swiss Bank
Corporation, headquartered in Basel, Switzerland, is an internationally
diversified organization with operations in many aspects of the financial
services industry. Swiss Bank Corporation and Union Bank of Switzerland, during
mid-1998, received regulatory approval for a merger, which will be effective on
June 29, 1998. Union Bank of Switzerland is also one of the three largest banks
in Switzerland and is an internationally diversified financial services
organization. The merger will not result in a change of control or assignment
and, therefore, will not result in a termination of Brinson Partners' investment
advisory agreement with the Trust (the "Advisory Agreement"). The resulting
entity will be named UBS AG. After the merger, Brinson Partners will continue
its role as investment advisor to the Trust as part of the Brinson Partners
division of UBS AG.

Pursuant to the Advisory Agreement, the Advisor 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 Advisor does not receive any
compensation under the Advisory Agreement.

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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.

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 the Trust, MSTC supervises and monitors such services provided by
CGFSC.

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

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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

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 Advisor seeks
to negotiate a combination of the most favorable execution and the best price
obtainable on each transaction. Consequently, the Advisor 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 Advisor 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 Advisor's own internal research and
investment strategy capabilities. The Advisor 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 Advisor or the Fund. The Fund may also purchase securities in certain
underwritten offerings for which an affiliate of the Advisor 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
Advisor or the Fund in accordance with procedures adopted by the Board.

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CAPITAL STOCK AND OTHER SECURITIES

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 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
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 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) additional matters
relating to the Trust as required by the Investment Company Act; and (vii)
such other matters as the Board 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, or with
respect to additional matters relating to the Trust, as required under the
Investment Company Act. Pursuant to the 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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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 advisor to manage the assets.

DIVIDENDS AND DISTRIBUTIONS. The Fund does not currently intend to
declare and pay dividends or pay distributions to Investors except as may be
determined by the Board of the Trust.

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 312-220-7100.

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 $10,000,000. In the sole discretion of the Advisor, 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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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 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 (generally 4:00 p.m. Eastern time) on the NYSE on any
day that the NYSE is open for regular trading.

REDEMPTION OF SHARES OR REPURCHASE

As stated above in "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

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Regulation D under the Securities Act unless registered under, or pursuant to
another available exemption from, the Securities Act.