CADRE INSTITUTIONAL INVESTORS TRUST, 485APOS, 1998-05-11

CADRE INSTITUTIONAL INVESTORS TRUST
485APOS, 1998-05-11

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<PAGE> 1

As filed with the Securities and Exchange Commission on May 11, 1998

Securities Act File No. 33-94206
Investment Company Act File No. 811-9064

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
---
Post-Effective Amendment No. 4 [X]
---

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 5 [X]

(Check appropriate box or boxes.)

CADRE INSTITUTIONAL INVESTORS TRUST
(Exact Name of Registrant as Specified in Charter)

905 Marconi Avenue
Ronkonkoma, New York 11779
(Address of Principal Executive Offices)

(Registrant's Telephone Number, Including Area Code (516) 467-0200

William M. Sullivan
905 Marconi Avenue
Ronkonkoma, New York 11779
(Name and address of Agent for Service)

Copy to:

Kenneth S. Gerstein, Esq.
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022

Approximate Date of Proposed Public Offering:
As soon as practicable after this Post-Effective Amendment becomes effective.

It is proposed that this filing will become effective (check
appropriate box)

|_| immediately upon filing pursuant to paragraph (b)
|_| on (date) pursuant to paragraph (b) |_| 60 days after filing
pursuant to paragraph (a)
|_| on (date) pursuant to paragraph (a) of rule 485
|X| 75 days after filing pursuant to paragraph (a)(2)
|_| on (date) pursuant to paragraph (a)(2) of rule 485

If appropriate, check the following box:

|_| this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE> 2
FORM N-1A

CADRE INSTITUTIONAL INVESTORS TRUST

CROSS REFERENCE SHEET

(FOR INSTITUTIONAL CASH FUND AND LIQUID ASSET FUND ONLY)

<TABLE>
<CAPTION>
N-1A ITEM NUMBER
PART A CAPTION

<S> <C> <C>
1. Cover Page Cover Page

2. Synopsis Summary of Expenses

3. Condensed Financial Information Financial Highlights (For Liquid
Asset Fund Only); Not Applicable
for Institutional Cash Fund

4. General Description of Registrant Cover Page; Investment Objective
and Policies; General Information

5. Management of Fund Management of the Fund

5A. Management's Discussion of Fund Performance Not Applicable

6. Capital Stock and Other Securities Purchasing Shares; Dividends and
Distributions; Taxes; General
Information

7. Purchase of Securities Being Offered Purchasing Shares; Shareholder
Accounts; Redeeming Shares;
Exchange Privilege; Net Asset
Value

8. Redemption or Repurchase Shareholder Accounts; Redeeming
Shares; Exchange Privilege; Net
Asset Value

9. Pending Legal Proceedings Not Applicable
</TABLE>

-2-
<PAGE> 3
<TABLE>
<CAPTION>
PART B CAPTION
------ -------

<S> <C> <C>
10. Cover Page Cover Page

11. Table of Contents Table of Contents

12. General Information and History General Information

13. Investment Objectives and Policies Investment Policies and
Practices; Investment
Restrictions

14. Management of the Fund Investment Advisory and Other
Services; Trustees and Officers

15. Control Persons and Principal Holders of Securities General Information

16. Investment Advisory and Other Services Investment Advisory Agreement
and Other Services; Purchasing
Shares; Expenses; General
Information

17. Brokerage Allocation and Other Practices Portfolio Transactions and
Brokerage

18. Capital Stock and Other Securities General Information

19. Purchase, Redemption and Pricing of Securities Being Purchasing Shares; Shareholder
Offered Accounts; Redeeming Shares;
Exchange Privilege;
Determination of Net Asset Value

20. Tax Status Taxes

21. Underwriters Purchasing Shares
</TABLE>

-3-
<PAGE> 4
<TABLE>
<S> <C> <C>
22. Calculation of Performance Data Performance Information

23. Financial Statements Financial Statements
</TABLE>

-4-
<PAGE> 5

LIQUID ASSET FUND
A SERIES OF CADRE INSTITUTIONAL
INVESTORS TRUST

905 Marconi Avenue
Ronkonkoma, New York 11779

Liquid Asset Fund (the "Fund") is a series of Cadre
Institutional Investors Trust (the "Trust"), a diversified, open-end
management investment company. The Fund is a money market fund and
seeks to maintain a stable net asset value of $1.00 per share. The
investment objective of the Fund is high current income, consistent
with preservation of capital and maintenance of liquidity. The Fund
pursues this objective by investing all of its investable assets in the
U.S. Government Money Market Portfolio (the "Portfolio"), a separate
series of the Trust that has the same investment objective and policies
as the Fund. The Portfolio invests exclusively in short-term debt
securities that are issued or guaranteed by the U.S. government or an
agency or instrumentality of the U.S. government ("Government
Securities") and repurchase agreements collateralized by Government
Securities. See "Investment Objective and Policies." Cadre Financial
Services, Inc. (the "Investment Adviser") serves as the investment
adviser of the Portfolio.

Shares of the Fund are offered for sale on a no-load basis to
states and municipalities, and their subdivisions and agencies, as well
as to other institutional investors. No sales commissions or other
charges are imposed upon the purchase or redemption of shares. No
minimum initial or subsequent investment in the Fund is required. See
"Purchasing Shares." Shares of the Fund are not insured by Ambac
Assurance Corporation.

An investment in the Fund is neither insured nor guaranteed by
the U.S. government and there can be no assurance that the Fund will be
able to maintain a stable net asset value of $1.00 per share. See "Net
Asset Value."

This Prospectus sets forth concisely the information about the
Fund and the Trust that a prospective investor should know before
investing. Additional information about the Fund and the Trust has been
filed with the Securities and Exchange Commission (the "SEC") in a
Statement of Additional Information dated __________, 1998, which is
incorporated herein by reference and is available without charge by
writing to the transfer agent or by calling 1-800-221-4524.

Investors are advised to read this Prospectus and retain it
for future reference.

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

The date of this Prospectus is June __, 1998
<PAGE> 6
SUMMARY OF EXPENSES

The following table is designed to assist prospective investors in
understanding the various direct and indirect costs and expenses that a
shareholder in the Fund will bear. It summarizes the estimated shareholder
transaction and annual operating expenses of the Fund and the Portfolio in which
it invests. The amounts set forth below under "Other Expenses," as well as the
amounts in the example below, are based upon estimates of expenses for the
current fiscal year.

<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES

<S> <C> <C>
Maximum Sales Load Imposed on Purchases........................... None

Maximum Sales Load Imposed on Reinvested Dividends................ None

Deferred Sales Load............................................... None

Redemption Fee.................................................... None

Exchange Fee...................................................... None
</TABLE>

<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES Net of Expense
Reimbursement
(as a percentage of average net assets)
<S> <C>
Investment Advisory Fee........................................... 0.06%

12b-1 Fees........................................................ None

Other Expenses.................................................... 0.39%

Total Fund Operating Expenses..................................... 0.45%
</TABLE>

The Investment Adviser has voluntarily agreed to waive its fees or absorb
expenses to the extent necessary to assure that the ordinary operating expenses
of the Fund do not exceed annually .45% of the Fund's average daily net assets.
Absent this agreement, other estimated expenses and estimated total operating
expenses of the Fund annually would be 0.43% and 0.49%, respectively, of the
Fund's average daily net assets. The Investment Adviser reserves the right to
modify or terminate at any time its agreement to waive fees and absorb expenses
upon prior written notice to the Fund.

<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a
$1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of
each period: $4.60 $14.46. $29.99 $56.98
</TABLE>

The example is based upon estimated Total Fund Operating Expenses, as
set forth in the table above, after giving effect to the fee waiver and
absorption of expenses. Actual expenses and annual return may be greater or less
than the amounts shown above. The example should not be considered a
representation of past or future expenses.

For a more complete description of costs and expenses, see "Management
of the Fund."

2
<PAGE> 7
LIQUID ASSET FUND

FINANCIAL HIGHLIGHTS

The following Information has been audited by KPMG Peat Marwick LLP,
independent auditors, whose report thereon appears in the Fund's annual report
dated October 31, 1997. This information should be read in conjunction with the
financial statements, the notes thereto and the independent auditors report
which is incorporated by reference in the Statement of Additional Information.

<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
OCTOBER 31, 1997 OCTOBER 31, 1996
---------------- ----------------
<S> <C> <C>
Net Asset Value, beginning of period $ 1.000 $ 1.000
------------ -----------
Income from Investment Operations:
Net investment income (2) ..... 0.053 0.027
------------ -----------
Less Distributions from:
Net investment income ......... (0.053) (0.027)
------------ -----------
Net Realized Gain ............. (0.000)*** --
------------ -----------
Total Distributions ........... (0.053) (0.027)
Net increase in net asset value .... -- --
------------ -----------
Net Asset Value, End of period ..... $ 1.000 $ 1.000
============ ===========
Total Return ....................... 5.39% 2.72%*
Ratios/Supplemental Data:
Net Assets, End of period (000s) .. $ 138,661 $ 70,881
----------- ---------
Ratios to average net assets:
Net investment income including
reimbursement/waiver ........ 5.38% 5.18%**
Operating expenses including
reimbursement/waiver ........ .26% 0.20%**
Operating expenses excluding
reimbursement/waiver ........ .49% 0.75%**
</TABLE>

- --------------
* Not Annualized

** Annualized

*** Amount is less than 0.000 per share

(1) The Fund commenced investment operations on April 24, 1996.

(2) Net investment income per share before reimbursement/waiver of fees and
expenses by the Investment Adviser for the year ended October 31, 1997 and
period ended October 31, 1996 was $0.0514 and $0.024, respectively.

SUITABLE INVESTORS

The Fund is specifically designed for investors concerned about the
safety of their investments and is a low-cost, professionally managed cash
management vehicle for states, municipalities, and their subdivisions and
agencies, including school and special purpose districts, and for other
institutional investors. It offers investment diversification, administrative
convenience and operating economies of scale to investors whose investment
policies and guidelines are consistent with those of the Fund.

INVESTMENT OBJECTIVE AND POLICIES

The investment objective of the Fund is to seek high current income,
consistent with preservation of capital and maintenance of liquidity. The Fund
pursues this objective by investing all of its investable assets in the U.S.
Government Money Market Portfolio (the "Portfolio"). The Portfolio is a series
of the Trust that has the same investment objective as the Fund and invests
exclusively in short-term debt securities issued or guaranteed by the U.S.
government or an agency or instrumentality of the U.S. government ("Government
Securities") and repurchase agreements collateralized by Government Securities.
The Portfolio maintains a dollar-weighted average maturity of 90 days or less,
and invests only in securities having remaining maturities of 397 days or less.
As a

3
<PAGE> 8
money market fund, the Fund seeks to maintain a stable net asset value of
$1.00 per share at all times. No assurance can be given that the Fund will be
able to achieve its investment objective or maintain a stable net asset value.
See "Net Asset Value."

Government Securities include obligations that are issued by the U.S.
Treasury. These obligations, which include Treasury bills, notes and bonds, are
backed by the full faith and credit of the U.S. government. Government
Securities also include obligations issued by federal agencies and
instrumentalities ("Agency Securities"). Certain Agency Securities, such as the
Export-Import Bank of the United States, the General Services Administration,
the Government National Mortgage Association, and the Small Business
Administration, are backed by the full faith and credit of the U.S. government.
Other Agency Securities, such as obligations of the Federal Farm Credit Banks,
Federal Home Loan Banks, Federal Home Loan Mortgage Corporation, Federal
National Mortgage Association and Student Loan Marketing Association, are backed
by the right of the issuer to borrow from the U.S. Treasury under certain
circumstances or are backed by the credit of the agency or instrumentality
issuing the obligation. These types of Agency Securities are not deemed direct
obligations of the United States, and therefore involve more risk than
obligations which are backed by the full faith and credit of the U.S.
government. All securities purchased by the Portfolio, including repurchase
agreements, must be of high quality and be determined by the Investment Adviser
to present minimal credit risks pursuant to procedures adopted by the Board of
Trustees of the Trust.

THE PORTFOLIO MAY INVEST IN CERTAIN VARIABLE AND FLOATING RATE
SECURITIES, AS DESCRIBED BELOW, BUT DOES NOT INVEST IN ANY OTHER SECURITIES
COMMONLY KNOWN AS DERIVATIVES.

The Fund's investment objective is fundamental and may not be changed
without the approval of the holders of a majority of the outstanding voting
securities of the Fund, as defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act").

Repurchase Agreements. A repurchase agreement involves the purchase of
a security by the Portfolio with an agreement by the seller of the security to
repurchase it from the Portfolio at a mutually agreed upon day and price,
frequently the next business day. The resale price is in excess of the purchase
price and reflects the rate of return earned by the Portfolio. The maturities of
repurchase agreements entered into by the Portfolio normally do not exceed seven
days. However, the Portfolio may enter into a repurchase agreement maturing in
more than seven days provided that not more than 10% of the Portfolio's net
assets would, as a result, be invested in repurchase agreements having
maturities in excess of seven days and under which the Portfolio also does not
have the right to repayment within seven days. Repurchase agreements will at all
times be fully collateralized by their underlying securities ("collateral") in
an amount at least equal to the purchase price plus accrued interest, marked to
market daily. The collateral for repurchase agreements is held by the Trust's
custodian (or a subcustodian) and is required to consist of Government
Securities (without regard to the maturity of such obligations). If the seller
defaults and the value of the collateral securing a repurchase agreement
declines, the Fund may incur a loss. The Portfolio, however, enters into
repurchase agreements only with banks or primary dealers designated as such by
the Federal Reserve Bank of New York and which have been determined by the
Investment Adviser to present minimal credit risk in accordance with guidelines
established by the Board of Trustees of the Trust.

Variable and Floating Rate Securities. Government Securities purchased
by the Portfolio may include variable and floating rate securities. The interest
rates payable on these securities are adjusted either at predesignated intervals
or whenever there is a change in an established benchmark rate of interest, and,
upon reset, the market value approximates par. These securities may also have a
demand feature under which the Portfolio can demand repayment of principal on
specified dates or after giving specified notice. The Portfolio only purchases
variable and floating rate Government Securities that are eligible for purchase
by money market funds under applicable regulations, and therefore does not
purchase securities such as inverse floaters, range floaters, COFI floaters,
capped floaters or dual index floaters. In determining the maturities of
securities and calculating the Portfolio's dollar-weighted average portfolio
maturity, variable rate Government Securities are deemed to have a maturity
equal to the period remaining until the next readjustment of the interest rate.
Floating rate Government Securities with demand features are deemed to have a
maturity equal to the period remaining until the principal amount can be
recovered through demand.

When-Issued and Delayed Delivery Securities. The Portfolio may purchase
or sell securities on a when-issued or delayed delivery basis. In these
transactions, securities are purchased or sold with payment and delivery taking
place as much as a month or more in the future. The transactions are used to
secure an advantageous price and yield at the time of entering into the
transactions. However, the value of securities purchased on a when-issued basis
is subject to market fluctuation and no interest accrues to the purchaser during
the period between purchase and settlement.

4
<PAGE> 9
Borrowings. The Fund and the Portfolio do not borrow for purposes of
making investments (a practice known as "leverage"). However, they each may
borrow money from banks in an amount not exceeding one-third of the value of its
total assets (calculated at the time of the borrowing), for temporary
extraordinary or emergency purposes. The Fund and the Portfolio may pledge their
assets to secure these borrowings. Additional investments will not be made by
the Fund or the Portfolio while it has any borrowings outstanding.

Investment Restrictions. The Fund and the Portfolio are subject to
various additional restrictions on their investments. Certain of these
restrictions are deemed fundamental policies and cannot be changed without the
approval of the holders of a majority of the Fund's or the Portfolio's
outstanding voting securities, as defined in the Investment Company Act. See
"Investment Restrictions" in the Statement of Additional Information.

Investment Characteristics. The Portfolio invests solely in obligations
issued or guaranteed by the U.S. government or an agency or instrumentality of
the U.S. government, and repurchase agreements collateralized by such
securities. Government Securities are of very high credit quality. Shares of the
Fund are not insured or guaranteed by the U.S. government or any government
agency. The return on an investment in the Fund will increase or decrease in
response to changes in short-term market interest rates. The market value of the
Portfolio's investments will fluctuate, with investments increasing in value as
interest rates fall and decreasing in value as interest rates rise. However, due
to the method used by the Portfolio and the Fund in valuing their assets, it is
expected but cannot be assured that the net asset value of shares of the Fund
will be a stable $1.00 per share. See "Net Asset Value." Virtually all portfolio
transactions for the Portfolio will be effected on a principal basis with
issuers, underwriters or dealers serving as primary market-makers.

Special Information Concerning Investment Structure. The Fund does not
invest directly in securities. Instead, it invests all of its investable assets
in the Portfolio, which is a series of the Trust that has the same investment
objective and policies as the Fund. The Portfolio, in turn, purchases, holds and
sells investments in accordance with that objective and those policies. The
Trustees of the Trust believe that the per share expenses of the Fund (including
its share of the Portfolio's expenses) will be less than or approximately equal
to the expenses that the Fund would incur if its assets were invested directly
in securities and other investments. The Fund may withdraw its assets from the
Portfolio at any time, and will do so if the Trustees believe it to be in the
best interest of the Fund's shareholders. If the Fund were to withdraw its
investment in the Portfolio, the Fund could either invest directly in securities
in accordance with the investment policies described above or invest in another
pooled investment vehicle having the same investment objective and policies as
the Fund. In connection with the withdrawal of its interest in the Portfolio,
the Fund could receive securities and other investments from the Portfolio
instead of cash, which could cause the Fund to incur brokerage, tax and other
charges.

The Portfolio may change its investment objective and certain of its
investment policies and restrictions without approval by its investors, but the
Portfolio will notify the Fund (which in turn will notify its shareholders) at
least 30 days before implementing any such changes. A change in the objective,
policies or restrictions of the Portfolio may cause the Fund to withdraw its
investment in the Portfolio.

Certain investment restrictions of the Portfolio may not be changed
without the approval of investors in the Portfolio. These restrictions are
described in the Statement of Additional Information. When the Fund is asked to
vote on matters concerning the Portfolio, the Fund will hold a shareholder
meeting and vote its shares of the Portfolio in accordance with shareholder
instructions. However, the Fund could be outvoted, or otherwise adversely
affected, by other investors in the Portfolio.

Shares of the Portfolio will be held by investors other than the Fund.
These investors, which may include other series of the Trust, other mutual funds
and other types of pooled investment vehicles, offer shares (or interests) to
their investors which have costs and expenses that differ from those of the
Fund. Thus, the investment returns for investors in each fund that invests in
the Portfolio may differ. These differences in returns are also present in other
fund structures. Information about other holders of shares of the Portfolio is
available from the Transfer Agent.

PURCHASING SHARES

5
<PAGE> 10
New York Stock Exchange is open for trading and the Federal Reserve Bank of New
York is open (each, a "Business Day"), except on days for which the Public
Securities Association (the "PSA") recommends an early closing of the U.S.
government securities markets when the net asset value will be computed as of
such earlier closing time. See "Net Asset Value." There are no minimum initial
or subsequent investment requirements.

Shares become entitled to receive dividends beginning on the day of
purchase. For this reason, the Fund must have federal funds available to it
(i.e., monies credited to its custodian bank by a Federal Reserve bank) on the
day the purchase order is accepted. An order for the purchase of shares of the
Fund is accepted (i) immediately upon receipt of federal funds by wire as
described below or (ii) when a check is credited to the shareholder's account in
the form of federal funds (generally one Business Day after receipt of a check).
Shares will be issued at the net asset value next determined after acceptance of
the purchase order and will be entitled to that day's dividend. The Fund
reserves the right to reject any purchase order and to modify or suspend the
continuous offering of its shares.

In order to permit the Investment Adviser to manage the Portfolio most
effectively, investors should place purchase orders as early in the day as
possible by calling Cadre Financial Services, Inc., in its capacity as the
Fund's transfer agent (the "Transfer Agent"), toll-free at 1-800-221-4524.

Prior to making an initial investment by wire or check, an account
number must be obtained by calling the Transfer Agent toll-free at
1-800-221-4524, or by mailing a completed registration form to:

Cadre Liquid Asset Fund
905 Marconi Avenue
Ronkonkoma, New York 11779

In order to receive an account number by telephone, an investor must
provide the name, address, and tax identification number of the account owner,
the amount being wired or mailed as the initial investment, and the name of the
wiring bank. Promptly after opening accounts by telephone, investors should mail
an original completed registration form for each account opened to the Transfer
Agent. Although share purchases can be made before a registration form is
submitted, shares may not be redeemed until a completed registration form has
been submitted.

Purchases by Federal Funds. Shares may be purchased by wiring federal
funds directly to the Fund in accordance with the instructions below. The Fund
does not impose any transaction charges; however, wire charges may be imposed by
the shareholder's transmitting bank. Shares will be issued at the net asset
value next determined after receipt of an order to purchase shares and will be
entitled to the dividend declared on the date the order is received if the
Trust's custodian receives payment in federal funds in the amount of the
purchase order not later than the close of the Federal Reserve wire on that day.
If a purchase order is not received and accepted prior to 4:00 p.m. (Eastern
time), or as of the closing time of the U.S. government securities markets on
days when the PSA recommends an early closing of such markets, or if federal
funds are not received by the close of the Federal Reserve wire, shares will not
be issued or entitled to receive dividends until the next computation of net
asset value following the receipt of the purchase order or of federal funds by
the Trust's custodian.

Additional purchases of shares can be made by calling the Transfer
Agent toll-free at 1-800-221-4524, to place a purchase order and then wiring
federal funds in the amount of the purchase.

With respect to both initial and subsequent purchases of shares, the
wiring bank should be instructed to wire federal funds to:

Cadre Liquid Asset Fund
c/o BSD&T Co. ABA # 011001234
CR DDA # 05-338-4
CR CIIT A/C # ____________
[insert your account number]

6
<PAGE> 11
dividends when a check is credited to the shareholder's account in the form of
federal funds (generally one Business Day after receipt of a check).

Checks for both initial and subsequent purchases of shares should
indicate the account name and number and be made payable to Liquid Asset Fund
and sent by mail to the Transfer Agent at:

Cadre Liquid Asset Fund
905 Marconi Avenue
Ronkonkoma, New York 11779

SHAREHOLDER ACCOUNTS

The Trust does not issue certificates for shares of the Fund. Instead,
one or more accounts are maintained for each shareholder reflecting full and
fractional shares of the Fund the shareholder owns. Shareholders are sent
confirmations of each account transaction, and monthly statements showing
account balances.

Sub-Account Services. Special sub-accounting procedures are available
for investors wishing to open multiple accounts to meet requirements regarding
the commingling of funds or for accounting convenience. Sub-accounts can be
established at any time by calling the Transfer Agent. Please call toll-free at
1-800-221-4524 for further information and appropriate forms. Investors who have
established sub-accounts will receive periodic confirmations and statements of
holdings and transactions.

Minimum Account Balance. There is no minimum account balance for the
Fund. In order to avoid costs to the Fund that are associated with maintaining
inactive accounts, if there has been no activity in an account with no balance
for a period of six months, the Fund may close the account. However, a
shareholder will first be sent written notice of the Fund's intention to close
the account, and given 60 days to purchase additional shares to increase the
account balance.

REDEEMING SHARES

Shareholders may redeem all or any portion of the shares in their
accounts at any time at the net asset value next computed after the receipt of a
redemption request in proper form. Redemptions may be made by telephone, mail,
or check, as described below. Redemption proceeds will be paid by federal funds
wire to one or more of the bank accounts that have been predesignated by the
shareholder, normally on the day the redemption request is received. If a
redemption request is not received prior to 2:00 p.m. (Eastern time), or as of
the closing time of the U.S. government securities markets on days when the PSA
recommends an early closing of such markets, it will be processed on the
following Business Day. Shares are not entitled to receive dividends declared on
the day the shares are redeemed. See "Dividends and Distributions." In the case
of complete redemption of all shares in an account, the redemption payment will
include the amount of all dividends declared for the month-to-date on shares
held in the account. Except in unusual circumstances described in the Statement
of Additional Information, the Fund will not suspend the right of redemption or
postpone the payment of redemption proceeds for more than seven days; however,
if shares have recently been purchased by check (including, in each case,
certified checks and cashiers checks), the payment of redemption proceeds will
be delayed until the purchase check has cleared (the time varies from state to
state) which may take up to 15 days. For this reason, shareholders who
anticipate the need for immediate access to their investment should purchase
shares with federal funds.

A completed registration form must be on file with the Transfer Agent
in order to redeem shares. See "Purchasing Shares." Shareholders will be asked
to designate a primary recipient bank account on their registration form. The
primary recipient account may be changed at any time, and any number of
secondary recipient bank accounts can be added, provided proper written
instructions are on file. Please call the Transfer Agent to receive additional
information and appropriate forms.

In order to permit the Investment Adviser to manage the Fund most
effectively, investors should place telephone redemption requests as early in
the day as possible by calling the Transfer Agent toll-free at 1-800- 221-4524.

7
<PAGE> 12
the day the redemption request is received. Redemption requests that are not
received prior to 2:00 p.m. (Eastern time), or as of the closing time of the
U.S. government securities markets on days when the PSA recommends an early
closing of such markets, will be processed the following Business Day.

The Transfer Agent employs reasonable procedures to confirm that
telephone redemption instructions are genuine such as recording telephone calls,
providing written confirmation of transactions, or requiring a form of personal
identification or other information prior to effecting a telephone redemption.
To the extent such procedures are used, neither the Trust or the Fund, nor the
Investment Adviser or any of its affiliates, will be liable for a loss due to
fraudulent or unauthorized telephone instructions. A REDEMPTION BY TELEPHONE MAY
BE MADE ONLY IF THE TELEPHONE REDEMPTION PRIVILEGE HAS BEEN SELECTED ON THE
REGISTRATION FORM, OR WRITTEN INSTRUCTIONS HAVE BEEN FILED WITH THE TRANSFER
AGENT.

During periods of severe market or economic conditions, it may be
difficult to contact the Transfer Agent by telephone. In such an event a
shareholder should send a written redemption request by overnight delivery to
the Transfer Agent and follow the procedures for written redemption requests
described below.

Written Redemption Requests. Shares of the Fund may be redeemed by
written redemption request. A written redemption request must be signed by each
of the persons who the shareholder has specified as required to sign such
requests. The request must include the complete account name and address, the
amount of the redemption, and the predesignated primary or secondary recipient
bank account to which the proceeds of the redemption are to be sent. The
signature of each person signing the request must be guaranteed by an eligible
guarantor institution. Organizations that may qualify as eligible guarantor
institutions include banks, brokers, dealers, national securities exchanges,
clearing agencies, credit unions, and savings associations. The Transfer Agent
reserves the right to request additional information from, and to make
reasonable inquiries of, any eligible guarantor institution.

Written redemption requests should be sent to:

Cadre Liquid Asset Fund
905 Marconi Avenue
Ronkonkoma, New York 11779

Check Redemption Privilege. Shareholders may make arrangements to
redeem shares of the Fund by check by filling out a checkwriting authorization
form and signing the subcustodian bank's certificate of authority form.
Shareholders may write checks in any dollar amount. Checks will be honored only
if they are properly signed by a person authorized on the certificate of
authority. Checks will be furnished without charge, and may be written in any
amount (not exceeding the balance of the shareholder's account) and made payable
to any person. Redemption checks will not be honored if there is an insufficient
share balance to pay the check or if the check requires the redemption of shares
recently purchased by check which has not cleared. There is a charge for
stop-payments or if the Fund cannot honor a redemption check due to insufficient
funds or other valid reasons. Checkwriting privileges may be modified or
terminated at any time by the Fund.

EXCHANGE PRIVILEGE

Shareholders may exchange shares of the Fund for shares of the
Institutional Cash Fund (another series of the Trust) based upon the relative
net asset values per share of the funds at the time the exchange is effected. No
sales charge or other fee is imposed in connection with exchanges. Before
requesting an exchange, shareholders should obtain and read the prospectus of
the fund whose shares will be acquired in the exchange. Prospectuses can be
obtained by calling the Transfer Agent at 1-800-221-4524.

All exchanges are subject to applicable minimum initial and subsequent
investment requirements of the fund whose shares will be acquired. In addition,
exchange is permitted only between accounts that have identical registrations.
Shares of a fund may be acquired in an exchange only if the shares are currently
being offered and are legally available for sale in the state of the
shareholder's residence.

8
<PAGE> 13
available (normally, on the day the exchange request is received) at the net
asset value of those shares then in effect. See "Redeeming Shares." The acquired
shares will be entitled to receive dividends in accordance with the policies of
the applicable fund.

The exchange privilege may be modified or terminated at any time.
However, 60 days' prior notification of any modification or termination will be
given to shareholders.

Telephone Exchange Procedures. A request to exchange shares may be
placed by calling the Transfer Agent at 1-800-221-4524. Telephone exchange
requests that are not received prior to 2:00 p.m. (Eastern time), or as of the
closing time of the U.S. government securities markets on days when the PSA
recommends an early closing of such markets, will be proceeds the following
Business Day. A written confirmation of the exchange transaction will be sent to
the shareholder. As in the case of telephone redemption requests, the Transfer
Agent employs reasonable procedures to confirm that telephone exchange
instructions are genuine. To the extent such procedures are used, neither the
Trust or the Fund, nor the Investment Adviser or any of its affiliates, will be
liable for a loss due to fraudulent or unauthorized telephone exchange
instructions. An exchange by telephone may be made only if the telephone
exchange privilege has been selected on the account application, or written
instructions have been filed with the Transfer Agent.

During periods of severe market or economic conditions, it may be
difficult to contact the Transfer Agent by telephone. In such event, a
shareholder should send a written exchange request by overnight delivery to the
Transfer Agent and follow the procedures for written exchange requests described
below.

Written Exchange Procedures. Requests to exchange shares may be
submitted in writing. Each written exchange request should specify the complete
account name and number of the shareholder's account with the Fund, the amount
to be exchange, and the name of the fund whose shares are to be acquired in the
exchange. The request must be signed by each of the persons who the shareholder
has specified as required to sign redemption requests. The signature of each
person signing the exchange request must be guaranteed by an eligible guarantor
institution. Written exchange requests should be sent to the Transfer Agent at
the address indicated above under "Redeeming Shares--Written Redemption
Requests."

NET ASSET VALUE

The Fund's share price, or net asset value per share, is calculated as
of 4:00 p.m. (Eastern time) each Business Day, except on days for which the PSA
recommends an early closing of the U.S. government securities markets when the
net asset value will be computed as of such earlier closing time. Net asset
value per share is determined by subtracting the Fund's liabilities (including
accrued expenses and dividends payable) from the total value of the Fund's
investments and other assets (including the Fund's interest in the Portfolio)
and dividing the result by the total number of outstanding shares of the Fund.

For purposes of calculating net asset value per share, securities held
by the Portfolio are valued using the "amortized cost" method of valuation. This
method involves valuing each investment at cost and thereafter assuming a
constant amortization to maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the investment.
Amortized cost valuation provides certainty in valuation, but may result in
periods during which the value of an investment, as determined by amortized
cost, is higher or lower than the price that would be received if the investment
were sold. Use of this valuation method permits the maintenance of the Fund's
net asset value at $1.00 per share. There can be no assurance, however, that the
Fund will be able to maintain a stable net asset value of $1.00 per share.

In using this method, the Trust has adopted certain procedures and
adheres to various investment limitations as required by Rule 2a-7 under the
Investment Company Act. These procedures, among other things, require the
Investment Adviser to monitor the deviation between the Fund's net asset value
determined by using available market quotations or market equivalents and its
net asset value determined by using amortized cost.

FUND EXPENSES

9
<PAGE> 14
reports with regulatory bodies and the maintenance of the Trust's legal
existence; federal and state registration fees; the fees and expenses of
non-interested Trustees of the Trust; and any extraordinary expenses of a
non-recurring nature.

As discussed under "Summary of Expenses," the Investment Adviser has
voluntarily undertaken to waive its fees or to absorb expenses of the Fund as
may be necessary to limit total ordinary operating expenses of the Fund to a
specified percentage of the Fund's average daily net assets. The Investment
Adviser may modify or terminate this undertaking at any time upon prior written
notice to the Fund.

DIVIDENDS AND DISTRIBUTIONS

Dividends are declared and accrued daily on each Business Day based
upon the Fund's net investment income (i.e., income other than net realized
capital gains), and are paid monthly. Distributions of net realized capital
gains, if any, are declared and paid annually at the end of the Fund's fiscal
year in which they have been earned. All dividends and other distributions are
automatically reinvested in full and fractional shares of the Fund at net asset
value unless otherwise requested by the shareholder. A shareholder can request
that dividends and other distributions be paid by wire transfer to a
predesignated bank account by sending a written request to the Transfer Agent.
Any such request must be received by the Transfer Agent at least five Business
Days prior to a payment date in order to be effective on such date.

Dividends are payable to all shareholders of record as of the time of
declaration. Shareholders will begin receiving dividends on shares the day the
shares are purchased, but will not be entitled to receive dividends declared the
day shares are redeemed. Shares purchased through dividend reinvestment will
begin earning dividends the day after they are credited to the shareholder's
account.

The Fund does not expect to realize any long-term capital gains. Should
any such gains be realized, they will be distributed annually. In addition, in
order to satisfy certain distribution requirements of the Internal Revenue Code
of 1986, as amended (the "Code"), the Fund may declare special or regular
year-end dividend and capital gains distributions during October, November or
December. Such distributions, if received by shareholders by January 31, are
deemed to have been paid by the Fund and received by shareholders on December 31
of the prior year.

TAXES

Taxation of the Fund. The Fund has elected and intends to qualify each
year as a "regulated investment company" under Subchapter M of the Code. If so
qualified, the Fund will not be subject to federal income tax to the extent it
distributes its net income to shareholders. Certain federal income and excise
taxes would be imposed on the Fund if it failed to make certain required
distributions of income to shareholders. The Fund intends to make distributions
in a manner which will avoid the imposition of such tax. If the Fund should fail
to qualify as a "regulated investment company," it would be subject to regular
federal income tax on its taxable income. The Fund intends to carry on its
operations so that it will continue to qualify as a regulated investment
company.

Federal Taxation of Shareholders. Dividend distributions, whether
received in cash or reinvested in additional shares, will be taxable as ordinary
income. Although the Fund does not expect to distribute any long-term capital
gains, investors will also be subject to tax on any capital gains distributions
they receive. Since the Fund does not expect to earn dividend income, dividends
and other distributions from the Fund will generally not qualify for the
dividends-received deduction available to corporate investors. In January of
each year, the Fund sends each shareholder a statement showing the tax status of
distributions for the past calendar year.

Section 115(1) of the Code provides, in part, that gross income does
not include income derived from the exercise of any essential government
function accruing to a state or any political subdivision thereof. Shareholders
are urged to consult their own tax advisors to determine any limitations on the
applicability of Section 115(1) to earnings from their investment in the Fund. A
portion of the earnings derived from funds which are subject to the arbitrage
limitations or rebate requirements of the Code may be required to be paid to the
U.S. Treasury as computed in accordance with such requirements.

The redemption of shares of the Fund is a taxable event, and may result
in a capital gain or loss. However, because the Fund seeks to maintain a stable
net asset value of $1.00 per share for both purchases and redemptions, it is
generally expected that shareholders will not ordinarily realize any capital
gain or loss upon redemptions of shares.

10
<PAGE> 15
The Fund is required to withhold 31% of all taxable distributions and
redemption proceeds paid to shareholders who either have not complied with IRS
taxpayer identification regulations or are otherwise subject to backup
withholding. Shareholders are asked to certify on their registration forms that
their taxpayer identification numbers are correct and that they are not subject
to backup withholding. Failure to so certify will result in backup withholding.

State and Local Taxes. Investors may be subject to state and local
taxes on their investment. For example, dividends and other distributions made
by the Fund and received by an investor may be subject to state and local taxes.
Although shareholders of the Fund do not directly receive interest on Government
Securities held by the Fund, certain states and localities may allow the
character of the Fund's income to pass through to shareholders. If so, the
portion of dividends paid by the Fund that is derived from interest on certain
Government Securities may be exempt from state and local taxes. Applicable rules
vary from state to state, and interest on certain Agency Securities may not
qualify for exemption from income tax in some states. The United States Supreme
Court has ruled that income from certain types of repurchase agreements
involving Government Securities does not constitute interest on Government
Securities for this purpose. However, it is not clear whether the Court's
holding extends to all types of repurchase agreements involving Government
Securities in which the Fund may invest. Any exemption from state and local
income taxes does not preclude states from assessing other taxes (such as
intangible property taxes) on the ownership of Government Securities.

The tax discussion set forth above regarding federal and state income
taxation is included for general information only. Prospective investors should
consult their own tax advisors concerning the federal and state tax consequences
of an investment in the Fund.

MANAGEMENT OF THE FUND

The Board of Trustees of the Trust is responsible for supervising the
operations and affairs of the Trust, the Fund and the Portfolio. The Trust's
officers, who are all officers or employees of the Investment Adviser, are
responsible for the daily management and administration of the Fund's
operations.

Investment Adviser. The Investment Adviser, Cadre Financial Services,
Inc., 905 Marconi Avenue, Ronkonkoma, New York 11779, is a wholly-owned
subsidiary of Ambac Capital Corporation which, in turn, is a wholly-owned
subsidiary of Ambac Financial Group, Inc. ("Ambac"). Through its subsidiaries,
Ambac is a leading insurer of municipal and structured finance obligations and a
provider of investment contracts, and investment advisory and administration
services to state municipalities and municipal authorities. Ambac is a publicly
held company whose shares are traded on the New York Stock Exchange.

As of February 20, 1998, the Investment Adviser provided investment
management services to 20 investment accounts and had aggregate assets under
management in excess of $2 billion. In addition, through its subsidiaries, Ambac
manages its own investment portfolios of approximately $5 billion.

Subject to overall supervision of the Board of Trustees, the Investment
Adviser is responsible for managing the assets of the Portfolio in accordance
with the its investment objective and policies. The Investment Adviser
formulates a continuing investment program and makes all decisions regarding
securities to be purchased or sold for the Portfolio. In addition, the
Investment Adviser provides all necessary administrative services to the
Portfolio; and furnishes, without expense to the Fund, the services of its
personnel to serve as officers and Trustees of the Trust. The Portfolio pays the
Investment Adviser a monthly fee computed at the annual rate of 0.06% of the
Portfolio's average daily net assets during the month.

Administrator. The Investment Adviser also provides administration
services to the Fund pursuant to a separate Administration Agreement. The
administrative services provided include, but are not limited to: overseeing the
preparation and maintenance of all documents and records required to be
maintained by the Trust; preparing and updating required regulatory filings,
prospectuses and shareholder reports; providing, at its own expense, the
services of its personnel to serve as officers of the Trust; and preparing and
disseminating material for meetings of the Board of Trustees. For these
services, the Fund pays the Investment Adviser a monthly fee calculated at an
annual rate of 0.19% of the Fund's average daily net assets on the first $250
million of net assets of the Fund, 0.165% on the next $750 million of average
daily net assets of the Fund and 0.14% on average daily net assets of the Trust
in excess of $1 billion. The Investment Adviser also provides the Trust with
fund accounting services for which it is not paid any additional compensation.

PERFORMANCE INFORMATION

11
<PAGE> 16
The Fund may publish its "current yield" and "effective yield" in
advertisements, sales materials and shareholder reports. Current yield refers to
the income generated by an investment in the Fund over a seven-day period; the
income is then annualized. In annualizing income, the amount of income generated
by the investment during the period is assumed to be generated each week over a
52-week period and is shown as a percentage of the investment. The effective
yield is calculated in the same manner, but when annualized, the income earned
by an investment in the Fund is assumed to be reinvested. The effective yield
will be slightly higher than the current yield because of the compounding effect
of the assumed reinvestment. All quotations of investment performance are based
upon historical investment results and are not intended to predict future
performance.

In addition, comparative performance information may be used from time
to time in advertisements, sales literature and shareholder reports. This
information may include data, ratings and rankings from Lipper Analytical
Services, Inc., IBC Financial Data Money Fund Report, The Bank Rate Monitor,
Morningstar and other industry publications, business periodicals and services.
Comparisons to recognized market indices and to the returns on specific money
market securities or types of securities or investments may also be used. The
Fund may disseminate yields for periods longer than seven days, and may report
its total return. The "total return" of the Fund refers to the average annual
compounded rate of return over a specified period (as stated in the
advertisement) that would equate an initial amount invested at the beginning of
the period to the end of period redeemable value of the investment, assuming the
reinvestment of all dividends and distributions.

GENERAL INFORMATION

Description of Shares. The Trust is a Delaware business trust organized
pursuant to a Certificate of Trust dated June 27, 1995, as amended June 30,
1997, and is authorized to issue an unlimited number of shares of beneficial
interest, $.001 par value. As of the date of this Prospectus, the Trust has four
authorized series of its shares, each representing interests in a separate
investment portfolio. One of those series represents interests in the Fund. The
other series represent interests in the following investment portfolios of the
Trust: Institutional Cash Fund; U.S. Government Money Market Portfolio; and
Money Market Portfolio. The Board of Trustees has the power to establish
additional series of shares, representing interests in separate investment
portfolios and, subject to applicable laws and regulations, to issue two or more
classes of shares of each series. Shares are fully paid and non-assessable, and
have no preemptive or conversion rights.

Shareholders of the Fund, together with shareholders of each other
series of the Trust, are entitled to vote on the election of Trustees and the
ratification of the Trust's independent auditors when those matters are voted
upon at a meeting of shareholders. On other matters affecting the Fund on which
shareholders are entitled to vote, shares of the Fund will generally be voted as
a separate class from other series. Each share (and fractional share) is
entitled to that number of votes which equals the net asset value of such share
(or fraction thereof). All shares have non-cumulative voting rights, meaning
that shareholders entitled to cast more than 50% of the votes for the election
of Trustees can elect all of the Trustees standing for election if they choose
to do so.

Under Delaware law, shareholders of the Fund could, under certain
circumstances, be held personally liable for the obligations of the Trust but
only to the extent of the shareholder's investment. However, the Declaration of
Trust disclaims liability of the shareholders, Trustees or officers of the Trust
for acts or obligations of the Trust, which are binding only on the assets and
property of the Trust. The risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which the Trust
itself would be unable to meet its obligations and should be considered remote.

Annual meetings of shareholders will not be held except as required by
the Investment Company Act or other applicable law. A meeting will be held on
the removal of a Trustee or Trustees of the Trust if requested in writing by
holders of not less than 10% of the outstanding shares of the Trust.

Transfer Agent. The Investment Adviser serves as the Trust's transfer
agent, shareholder servicing agent and dividend disbursing agent. Shareholders
of the Fund should call 1-800-221-4524 with their questions regarding
transactions in shares of the Fund and share account balances.

Custodian. U.S. Bank National Association, U.S. Bank Place, 601 Second
Avenue South, Minneapolis, Minnesota 55402, serves as custodian of the Trust,
and in that capacity maintains custody of all securities and cash assets of the
Fund and the Portfolio. The custodian is authorized to hold the Portfolio's
investments in securities depositories and to use subcustodians approved by the
Trust.

12
<PAGE> 17
Distributor. Cadre Securities, Inc., 905 Marconi Avenue, Ronkonkoma,
New York, 11779, serves as Distributor of the Fund's shares. The Distributor
may, from time to time, enter into selling agreements with dealers or other
financial institutions, and in accordance therewith, pay to such dealers or
institutions, in connection with sales or the distribution of shares of the
Fund, material compensation or promotional incentives, in the form of cash or
other compensation. Such compensation and incentives are not paid by the Fund
and will not be a Fund expense.

Additional Information. This Prospectus, including the Statement of
Additional Information which has been incorporated by reference herein, does not
contain all the information set forth in the Registration Statement filed by the
Trust with the SEC under the Securities Act of 1933. Copies of the Registration
Statement may be obtained at a reasonable charge from the SEC or may be
examined, without charge, at the office of the SEC in Washington, D.C.

Shareholder Reports. The Trust sends shareholders annual and
semi-annual reports without charge. These reports include further information
regarding the Fund's performance. The financial statements of the Fund appearing
in the Trust's annual reports are audited by KPMG Peat Marwick LLP, the Trust's
independent auditors.

Shareholder Inquiries. For questions concerning shareholder accounts,
dividends and share purchase and redemption procedures, contact the Transfer
Agent toll free at 1-800-221-4524 or at 905 Marconi Avenue, Ronkonkoma, New York
11779.

13
<PAGE> 18
INVESTMENT ADVISER, ADMINISTRATOR
AND TRANSFER AGENT
Cadre Financial Services, Inc.
905 Marconi Avenue,
Ronkonkoma, New York 11779

DISTRIBUTOR
Cadre Securities, Inc.
905 Marconi Avenue
Ronkonkoma, New York 11779

CUSTODIAN
U.S. Bank National Association
U.S. Bank Place
601 Second Avenue South
Minneapolis, Minnesota 55402

INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
345 Park Avenue
New York, New York 10154

LEGAL COUNSEL
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022

14
<PAGE> 19
Investors are advised to read this Prospectus and retain it for future
reference.

NO DEALER, SALES REPRESENTATIVE OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS. IN CONNECTION WITH THE OFFER CONTAINED HEREIN, AND IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE TRUST OR THE DISTRIBUTOR. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER BY THE TRUST OR BY THE DISTRIBUTOR TO SELL OR A SOLICITATION
OR AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.

TABLE OF CONTENTS

LIQUID ASSET FUND
A SERIES OF CADRE INSTITUTIONAL INVESTORS TRUST

SUMMARY OF EXPENSES 2

FINANCIAL HIGHLIGHTS 3

SUITABLE INVESTORS 3

INVESTMENT OBJECTIVE AND POLICIES 4

PURCHASING SHARES 6

SHAREHOLDER ACCOUNTS 7

REDEEMING SHARES 7

EXCHANGE PRIVILEGE 8

NET ASSET VALUE 9

FUND EXPENSES 10

DIVIDENDS AND DISTRIBUTIONS 10

TAXES 10

MANAGEMENT OF THE FUND 12

PERFORMANCE INFORMATION 12

GENERAL INFORMATION 13

Prospectus
_______________, 1998

15
<PAGE> 20
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY THE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITAION OR SALE WOULD BE UNLAWFUL PRIOR
TO THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
STATE.

INSTITUTIONAL CASH FUND
A SERIES OF CADRE INSTITUTIONAL
INVESTORS TRUST

905 Marconi Avenue
Ronkonkoma, New York 11779

Institutional Cash Fund (the "Fund") is a series of Cadre
Institutional Investors Trust (the "Trust"), a diversified, open-end
management investment company. The Fund is a money market fund and
seeks to maintain a stable net asset value of $1.00 per share. The
investment objective of the Fund is high current income, consistent
with preservation of capital and maintenance of liquidity. The Fund
pursues this objective by investing all of its investable assets in the
U.S. Government Money Market Portfolio (the "Portfolio"), a separate
series of the Trust that has the same investment objective and policies
as the Fund. The Portfolio invests exclusively in short-term debt
securities that are issued or guaranteed by the U.S. government or an
agency or instrumentality of the U.S. government ("Government
Securities") and repurchase agreements collateralized by Government
Securities. See "Investment Objective and Policies." Cadre Financial
Services, Inc. (the "Investment Adviser") serves as the investment
adviser of the Portfolio.

Shares of the Fund are offered for sale on a no-load basis to
states and municipalities, and their subdivisions and agencies, as well
as to other institutional investors. No sales commissions or other
charges are imposed upon the purchase or redemption of shares. The
minimum initial investment in shares of the Fund is $1 million.
Subsequent investments may be made in any amount. See "Purchasing
Shares." Investors in the Fund must maintain a minimum share account
balance of $1 million. Shares of the Fund are not insured by Ambac
Assurance Corporation.

Investors are advised to read this Prospectus and retain it for future
reference.

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

The date of this Prospectus is June __, 1998
<PAGE> 21
SUMMARY OF EXPENSES

<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES

<S> <C>
Maximum Sales Load Imposed on Purchases................... None

Maximum Sales Load Imposed on Reinvested Dividends........ None

Deferred Sales Load....................................... None

Redemption Fee............................................ None

Exchange Fee.............................................. None
</TABLE>

<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES Net of Expense
(as a percentage of average net assets) Reimbursement

<S> <C>
Investment Advisory Fee................................... 0.06%

12b-1 Fees................................................ None

Other Expenses (after reimbursement)...................... 0.14%

Total Fund Operating Expenses............................. 0.20%
</TABLE>

The Investment Adviser has voluntarily agreed to waive its fees or
absorb expenses to the extent necessary to assure that the ordinary operating
expenses of the Fund do not exceed annually 0.20% of the Fund's average daily
net assets. Absent this agreement, other estimated expenses and estimated total
operating expenses annually would be 0.24% and 0.30%, respectively, of the
Fund's average daily net assets. The Investment Adviser reserves the right to
modify or terminate at any time its agreement to waive fees and absorb expenses
upon prior written notice to the Fund.

<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS
------- ------ -------

<S> <C>
You would pay the following expenses on a
$1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of
each time period: $2.05 $6.45
</TABLE>

For a more complete description of costs and expenses, see "Management
of the Fund."

2
<PAGE> 22
SUITABLE INVESTORS

INVESTMENT OBJECTIVE AND POLICIES

THE PORTFOLIO MAY INVEST IN CERTAIN VARIABLE AND FLOATING RATE
SECURITIES, AS DESCRIBED BELOW, BUT DOES NOT INVEST IN ANY OTHER SECURITIES
COMMONLY KNOWN AS DERIVATIVES.

Repurchase Agreements. A repurchase agreement involves the purchase of
a security by the Portfolio with an agreement by the seller of the security to
repurchase it from the Portfolio at a mutually agreed upon day and price,
frequently the next business day. The resale price is in excess of the purchase
price and reflects the rate of return earned by the Portfolio. The maturities of
repurchase agreements entered into by the Portfolio normally do not exceed seven
days. However, the Portfolio may enter into a repurchase agreement maturing in
more than seven days provided that not more than 10% of its net assets would, as
a result, be invested in repurchase agreements having maturities in excess of
seven days and under which the Portfolio also does not have the right to
repayment within seven days. Repurchase agreements will at all times be fully
collateralized by their underlying securities ("collateral") in an amount at
least equal to the purchase price plus accrued interest, marked to market daily.
The collateral for repurchase agreements is held by the Trust's custodian (or a
subcustodian) and is required to consist of Government Securities (without
regard to the maturity of such obligations). If the seller defaults and the
value of the collateral securing a repurchase agreement declines, the Fund may
incur a loss. The Portfolio, however, enters into repurchase agreements only
with banks or primary dealers designated as such by the Federal Reserve Bank of
New York and which have been determined by the Investment Adviser to present
minimal credit risk in accordance with guidelines established by the Board of
Trustees of the Trust.

3
<PAGE> 23
Variable and Floating Rate Securities. Government Securities purchased
by the Portfolio may include variable and floating rate securities. The interest
rates payable on these securities are adjusted either at predesignated intervals
or whenever there is a change in an established benchmark rate of interest, and,
upon reset, the market value approximates par. These securities may also have a
demand feature under which the Portfolio can demand repayment of principal on
specified dates or after giving specified notice. The Portfolio only purchases
variable and floating rate Government Securities that are eligible for purchase
by money market funds under applicable regulations, and therefore does not
purchase securities such as inverse floaters, range floaters, COFI floaters,
capped floaters or dual index floaters. In determining the maturities of
securities and calculating the dollar-weighted average portfolio maturity,
variable rate Government Securities are deemed to have a maturity equal to the
period remaining until the next readjustment of the interest rate. Floating rate
Government Securities with demand features are deemed to have a maturity equal
to the period remaining until the principal amount can be recovered through
demand.

When-Issued and Delayed Delivery Securities. The Portfolio may purchase
or sell securities on a when-issued or delayed delivery basis. In these
transactions, securities are purchased or sold with payment and delivery taking
place as much as a month or more in the future. These transactions are used to
secure an advantageous price and yield at the time of entering into the
transactions. However, the value of securities purchased on a when-issued basis
is subject to market fluctuation and no interest accrues to the purchaser during
the period between purchase and settlement.

Borrowings. The Fund and the Portfolio do not borrow for purposes of
making investments (a practice known as "leverage"). However, they each may
borrow money from banks in an amount not exceeding one-third of the value of its
total assets (calculated at the time of the borrowing), for temporary
extraordinary or emergency purposes. The Fund and the Portfolio may pledge their
assets to secure these borrowings. Additional investments will not be made by
the Fund or the Portfolio while it has any borrowings outstanding.

Special Information Concerning Investment Structure. The Fund does not
invest directly in securities. Instead, it invests all of its intestables assets
in the Portfolio, which is a series of the Trust that has the same investment
objective and policies as the Fund. The Portfolio, in turn, purchases, holds and
sells investments in accordance with that objective and those policies. The
Trustees of the Trust believe that the per share expenses of the Fund (including
its share of the Portfolio's expenses) will be less then or approximately equal
to the expenses that the Fund would incur if its assets were invested directly
in securities and other investments. The Fund may withdraw its assets from the
Portfolio at any time, and will do so if the Trustees believe it to be in the
best interest of the Fund's shareholders. If the Fund were to withdraw its
investment in the Portfolio, the Fund could either invest directly in securities
in accordance with the investment policies described above or invest in another
pooled investment vehicle having the same investment objective and policies as
the Fund. In connection with the withdrawal of its interest in the Portfolio,
the Fund could receive securities and other investments from the Portfolio
instead of cash, which could cause the Fund to incur brokerage, tax and other
charges.

4
<PAGE> 24
Certain investment restrictions of the Portfolio may not be changed
without the approval of investors in the Portfolio. These restrictions are
described in the Statement of Additional Information. When the Fund is asked to
vote on matters concerning the Portfolio, the Fund will hold a shareholder
meeting and vote its shares of the Portfolio in accordance with shareholder
instructions. However, the Fund could be outvoted, or otherwise adversely
affected, by other investors in the Portfolio.

PURCHASING SHARES

Shares of the Fund are offered for sale, without sales charge, at the
net asset value per share next determined after receipt and acceptance of a
purchase order by Cadre Securities, Inc., as distributor of the Fund's shares
(the "Distributor"), subject to timely receipt of federal funds as described
below. Net asset value is computed as of 4:00 p.m. (Eastern time) on each day on
which both the New York Stock Exchange is open for trading and the Federal
Reserve Bank of New York is open (each, a "Business Day"), except on days for
which the Public Securities Association (the "PSA") recommends an early closing
of the U.S. government securities markets when the net asset value will be
computed as of such earlier closing time. See "Net Asset Value." A minimum
initial investment of $1 million is required (except in special circumstances as
described in the Statement of Additional Information. Subsequent investments may
be made in any amount.

Prior to making an initial investment by wire or check, an account
number must be obtained by calling the Transfer Agent toll-free at
1-800-221-4524, or by mailing a completed registration form to:

Cadre Institutional Cash Fund
905 Marconi Avenue
Ronkonkoma, New York 11779

5
<PAGE> 25
recommends an early closing of such markets, or if federal funds are not
received by the close of the Federal Reserve wire, shares will not be issued or
entitled to receive dividends until the next computation of net asset value
following the receipt of the purchase order or of federal funds by the Trust's
custodian.

Additional purchases of shares can be made by calling the Transfer
Agent toll-free at 1-800-221-4524, to place a purchase order and then wiring
federal funds in the amount of the purchase.

With respect to both initial and subsequent purchases of shares, the
wiring bank should be instructed to wire federal funds to:

Cadre Institutional Cash Fund
c/o BSD&T Co. ABA # 011001234
CR DDA # 05-338-4
CR CIIT A/C # ____________
[insert your account number]

Purchases by Check. Shares may be purchased by check in accordance with
the instructions below. Shares will be issued on the next Business Day after
receipt of a check at the net asset value determined on such day. Shareholders
will become entitled to dividends when a check is credited to the shareholder's
account in the form of federal funds (generally one Business Day after receipt
of a check).

Checks for both initial and subsequent purchases of shares should
indicate the account name and number and be made payable to Institutional Cash
Fund and sent by mail to the Transfer Agent at:

Cadre Institutional Cash Fund
905 Marconi Avenue
Ronkonkoma, New York 11779

SHAREHOLDER ACCOUNTS

Minimum Account Balance. In order to avoid costs to the Fund that are
associated with small accounts, the Fund requires a minimum account balance of
$1 million. Accounts with balances of less than that amount as a result of one
or more redemptions of shares are subject to redemption at the option of the
Fund. However, a shareholder will first be sent written notice of the Fund's
intention and given 60 days to purchase additional shares to increase the
account balance.

REDEEMING SHARES

Shareholders may redeem all or any portion of the shares in their
accounts at any time at the net asset value next computed after the receipt of a
redemption request in proper form. Redemptions may be made by telephone or mail
as described below. Redemption proceeds will be paid by federal funds wire to
one or more of the bank accounts that have been predesignated by the
shareholder, normally on the day the redemption request is received. If a
redemption request is not received prior to 2:00 p.m. (Eastern time), or as of
the closing time of the U.S. government securities markets on days when the PSA
recommends an early closing of such markets, it will be processed on the
following Business Day. Shares are not entitled to receive dividends declared on
the day the shares are redeemed. See "Dividends and Distributions." In the case
of complete redemption of all shares in an account, the redemption payment will
include the amount of all dividends declared for the month-to-date on shares
held in the account. Except in unusual circumstances described in the Statement
of Additional Information, the Fund will not suspend the right of redemption or
postpone the payment of

6
<PAGE> 26
redemption proceeds for more than seven days; however, if shares have recently
been purchased by check (including, in each case, certified checks and cashiers
checks), the payment of redemption proceeds will be delayed until the purchase
check has cleared (the time varies from state to state) which may take up to 15
days. For this reason, shareholders who anticipate the need for immediate access
to their investment should purchase shares with federal funds.

Telephone Redemption Procedures. A request to redeem shares may be
placed by calling the Transfer Agent at 1-800-221-4524. The shareholder will be
asked to provide the account name and number, and the amount of the redemption.
Proceeds of the redemption will be sent to the primary recipient bank account
designated by the shareholder unless the shareholder requests that payment be
made to a predesignated secondary recipient bank account. Proceeds will be sent
by Federal Reserve wire, normally on the day the redemption request is received.
Redemption requests that are not received prior to 2:00 p.m. (Eastern time), or
as of the closing time of the U.S. government securities markets on days when
the PSA recommends an early closing of such markets, will be processed the
following Business Day.

Written redemption requests should be sent to:

Cadre Institutional Cash Fund
905 Marconi Avenue
Ronkonkoma, New York 11779

EXCHANGE PRIVILEGE

Shareholders may exchange shares of the Fund for shares of the Liquid
Asset Fund (another series of the Trust) based upon the relative net asset
values per share of the funds at the time the exchange is effected. No sales
charge or other fee is imposed in connection with exchanges. Before requesting
an exchange, shareholders should obtain and read the prospectus of the fund
whose shares will be acquired in the exchange. Prospectuses can be obtained by
calling the Transfer Agent at 1-800-221-4524.

7
<PAGE> 27
All exchanges are subject to applicable minimum initial and subsequent
investment requirements of the fund whose shares will be acquired. In addition,
exchange is permitted only between accounts that have identical registrations.
Shares of a fund may be acquired in an exchange only if the shares are currently
being offered and are legally available for sale in the state of the
shareholder's residence.

An exchange involves the redemption of shares of the Fund and the
purchase of shares of another fund. Shares of the Fund will be redeemed at the
net asset value per share of the Fund next computed after receipt of an exchange
request in proper form. See "Net Asset Value." Shares of the fund being acquired
in the exchange will be purchased when the proceeds of the redemption become
available (normally, on the day the exchange request is received) at the net
asset value of those shares then in effect. See "Redeeming Shares." The acquired
shares will be entitled to receive dividends in accordance with the policies of
the applicable fund.

The exchange privilege may be modified or terminated at any time.
However, 60 days' prior notification of any modification or termination will be
given to shareholders.

NET ASSET VALUE

8
<PAGE> 28
FUND EXPENSES

The Fund's expenses are deducted from total income before dividends are
paid. The Fund bears all expenses of its operations other than those expressly
assumed by the Investment Adviser. Expenses borne by the Fund, which include its
proportionate share of the fees and expenses of the Portfolio, include, but are
not limited to: investment advisory, administration and transfer agent fees; the
fees and expenses of the Trust's independent auditors, legal counsel and
custodian; taxes; brokerage fees and commissions; interest; costs incident to
meetings of Trustees and shareholders, printing and mailing prospectuses and
reports to shareholders, and the filing of reports with regulatory bodies and
the maintenance of the Trust's legal existence; federal and state registration
fees; the fees and expenses of Trustees of the Trust who are not employees of
the Investment Adviser or one of its affiliates; and any extraordinary expenses
of a non-recurring nature.

DIVIDENDS AND DISTRIBUTIONS

TAXES

9
<PAGE> 29
to determine any limitations on the applicability of Section 115(1) to earnings
from their investment in the Fund. A portion of the earnings derived from funds
which are subject to the arbitrage limitations or rebate requirements of the
Code may be required to be paid to the U.S. Treasury as computed in accordance
with such requirements.

The Fund is required to withhold 31% of all taxable distributions and
redemption proceeds paid to shareholders who either have not complied with IRS
taxpayer identification regulations or are otherwise subject to backup
withholding. Shareholders are asked to certify on their registration forms that
their taxpayer identification numbers are correct and that they are not subject
to backup withholding. Failure to so certify will result in backup withholding.

MANAGEMENT OF THE FUND

Subject to overall supervision of the Board of Trustees, the Investment
Adviser is responsible for managing the assets of the Portfolio in accordance
with the its investment objective and policies. The Investment Adviser
formulates a continuing investment program and makes all decisions regarding
securities to be purchased or sold for the Portfolio. In addition, the
Investment Adviser provides all necessary administrative services to the
Portfolio, and furnishes, without expense to the Fund, the services of its
personnel to serve as officers and Trustees of the Trust. The Portfolio pays the
Investment Adviser a monthly fee computed at the annual rate of 0.06% of the
Portfolio's average daily net assets during the month.

10
<PAGE> 30
shareholder reports; providing, at its own expense, the services of its
personnel to serve as officers of the Trust; and preparing and disseminating
material for meetings of the Board of Trustees. For these services, the Fund
pays the Investment Adviser a monthly fee calculated at an annual rate of 0.10%
of the Fund's average daily net assets on the first $250 million of average
daily net assets of the Fund, 0.075% on the next $750 million of average daily
net assets of the Fund and 0.05% on average daily net assets of the Trust in
excess of $1 billion. The Investment Adviser also provides the Trust with fund
accounting services for which it is not paid any additional compensation.

PERFORMANCE INFORMATION

The Fund may publish its "current yield" and "effective yield" in
advertisements, sales materials and shareholder reports. Current yield refers to
the income generated by an investment in the Fund over a seven-day period; the
income is then annualized. In annualizing income, the amount of income generated
by the investment during the period is assumed to be generated each week over a
52-week period and is shown as a percentage of the investment. The effective
yield is calculated in the same manner, but when annualized, the income earned
by an investment in the Fund is assumed to be reinvested. The effective yield
will be slightly higher than the current yield because of the compounding effect
of the assumed reinvestment. All quotations of investment performance are based
upon historical investment results and are not intended to predict future
performance.

GENERAL INFORMATION

Description of Shares. The Trust is a Delaware business trust organized
pursuant to a Certificate of Trust dated June 27, 1995, as amended June 30,
1997, and is authorized to issue an unlimited number of shares of beneficial
interest, $.001 par value. As of the date of this Prospectus, the Trust has four
authorized series of its shares, each representing interests in a separate
investment portfolio. One of those series represents interests in the Fund. The
other series represent interests in the following investment portfolios of the
Trust: Liquid Asset Fund; U.S. Government Money Market Portfolio; and Money
Market Portfolio. The Board of Trustees has the power to establish additional
series of shares, representing interests in separate investment portfolios and,
subject to applicable laws and regulations, to issue two or more classes of
shares of each series. Shares are fully paid and non-assessable, and have no
preemptive or conversion rights.

11
<PAGE> 31
Transfer Agent. The Investment Adviser serves as the Trust's transfer
agent, shareholder servicing agent and dividend disbursing agent. Shareholders
of the Fund should call 1-800-221-4524 with their questions regarding
transactions in shares of the Fund and share account balances.

Custodian. U.S. Bank Trust National Association, U.S. Bank Place, 601
Second Avenue South, Minneapolis, Minnesota 55402, serves as custodian of the
Trust, and in that capacity maintains custody of all securities and cash assets
of the Fund and the Portfolio. The custodian is authorized to hold the
Portfolio's investments in securities depositories and to use subcustodians
approved by the Trust.

Distributor. Cadre Securities, Inc., 905 Marconi Avenue, Ronkonkoma,
New York, 11779, serves as Distributor of the Fund's shares. The Distributor
may, from time to time, enter into selling agreements with dealers or other
financial institutions, and in accordance therewith, pay to such dealers or
institutions, in connection with sales or the distribution of shares of the
Fund, material compensation or promotional incentives, in the form of cash or
other compensation. Such compensation and incentives are not paid by the Fund
and will not be a Fund expense.

Shareholder Reports. The Trust sends shareholders annual and
semi-annual reports without charge. These reports include further information
regarding the Fund's performance. The financial statements of the Fund appearing
in the Trust's annual reports will be audited by KPMG Peat Marwick LLP, the
Trust's independent auditors.

12
<PAGE> 32
INVESTMENT ADVISER, ADMINISTRATOR
AND TRANSFER AGENT
Cadre Financial Services, Inc.
905 Marconi Avenue,
Ronkonkoma, New York 11779

DISTRIBUTOR
Cadre Securities, Inc.
905 Marconi Avenue
Ronkonkoma, New York 11779

CUSTODIAN
U.S. Bank National Association
U.S. Bank Place
601 Second Avenue South
Minneapolis, Minnesota 55402

INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
345 Park Avenue
New York, New York 10154

LEGAL COUNSEL
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022

13
<PAGE> 33
Investors are advised to read this Prospectus and retain it for future
reference.

TABLE OF CONTENTS

INSTITUTIONAL CASH FUND
A SERIES OF CADRE INSTITUTIONAL INVESTORS TRUST

<TABLE>
<S> <C>
SUMMARY OF EXPENSES 2

FINANCIAL HIGHLIGHTS 3

SUITABLE INVESTORS 3

INVESTMENT OBJECTIVE AND POLICIES 4

PURCHASING SHARES 6

SHAREHOLDER ACCOUNTS 7

REDEEMING SHARES 7

EXCHANGE PRIVILEGE 7

NET ASSET VALUE 9

FUND EXPENSES 10

DIVIDENDS AND DISTRIBUTIONS 10

TAXES 10

MANAGEMENT OF THE FUND 12

PERFORMANCE INFORMATION 12

GENERAL INFORMATION 13
</TABLE>

Prospectus
_______________, 1998

14
<PAGE> 34

<PAGE> 35

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
any offers to buy be accepted prior to the time the registration statement
becomes effective. This Statement of Additional Information does not
constitute a prospectus.

LIQUID ASSET FUND
INSTITUTIONAL CASH FUND
(SERIES OF CADRE INSTITUTIONAL INVESTORS TRUST)

905 Marconi Avenue
Ronkonkoma, New York
11779-7255

STATEMENT OF ADDITIONAL INFORMATION DATED __________, 1998

Cadre Institutional Investors Trust (the "Trust") is a diversified,
open-end, management investment company. Liquid Asset Fund and Institutional
Cash Fund (each, a "Fund," and collectively, the "Funds") are series of the
Trust. The Funds are money market funds which seek to maintain stable net asset
values of $1.00 per share. The Funds seek high current income, consistent with
preservation of capital and maintenance of liquidity. See "Investment Policies
and Practices." They pursue this investment objective by investing all of their
investable assets in the U.S. Government Money Market Portfolio (the
"Portfolio"), a separate series of the Trust that has the same investment
objective and policies as the Funds. Cadre Financial Services, Inc. (the
"Investment Adviser") serves as the investment adviser of the Portfolio. See
"Investment Advisory Arrangements."

Shares of the Trust are offered for sale on a no-load basis to states
and municipalities, and their sub-divisions and agencies, as well as to other
institutional investors. No sales commissions or other charges are imposed upon
the purchase or redemption of shares. No minimum initial investment in the Fund
is required. See "Purchasing Shares." Shares of the Fund are not insured by
Ambac Assurance Corporation.

AN INVESTMENT IN THE FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT
AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A STABLE
NET ASSET VALUE OF $1.00 PER SHARE. SEE "DETERMINATION OF NET ASSET VALUE."

Information about the Funds are set forth in the Prospectuses of the Funds dated
_______, 1998, which provide the basic information you should know before
investing. The Prospectuses may be obtained without charge by writing to the
Transfer Agent or by calling 1-800-221-4524. This Statement of Additional
Information is not a prospectus, but contains information in addition to and
more detailed than that set forth in the Prospectuses of the Funds. It is
intended to provide you with additional information regarding the activities and
operations of the Funds and the Trust, and should be read in conjunction with
the Funds' Prospectuses.

TABLE OF CONTENTS

Page
----
INVESTMENT POLICIES AND PRACTICES .... 2

INVESTMENT RESTRICTIONS .............. 3

PORTFOLIO TRANSACTIONS AND BROKERAGE . 5

PURCHASING SHARES .................... 5

SHAREHOLDER ACCOUNTS ................. 6

REDEEMING SHARES ..................... 7

EXCHANGE PRIVILEGES .................. 7

DETERMINATION OF NET ASSET VALUE ..... 7

TAXES ................................ 8

INVESTMENT ADVISORY AND OTHER SERVICES 8

TRUSTEES AND OFFICERS ................ 10

<PAGE> 36

EXPENSES ............................. 12

PERFORMANCE INFORMATION .............. 13

GENERAL INFORMATION .................. 14

INVESTMENT POLICIES AND PRACTICES

The Funds pursue their investment objectives by investing all of their
investable assets in the Portfolio. The Portfolio, which is a separate series of
the Trust, has the same investment objective and the same investment policies as
the Funds. It has elected to be treated as a diversified investment company. The
sections below provide additional information regarding the types of investments
that may be made by the Portfolio and the investment practices in which the
Portfolio may engage. The investment objective and general investment policies
of the Funds and the Portfolio are described in the Funds' Prospectuses.

Each of the Funds may withdraw its investment from the Portfolio at any
time if the Board of Trustees of the Trust determines that it is in the best
interest of the Fund to do so. Upon any such withdrawal, a Fund's assets would
be invested in accordance with the investment policies described below with
respect to the Portfolio. The approval of the investors in the Portfolio would
not be required to change the Portfolio's investment objective or, except as
otherwise stated in the Prospectuses or this Statement of Additional
Information, any of the Portfolio's investment policies or restrictions.

Treasury, Government and Agency Securities. The Portfolio invests in
short-term debt securities that are issued or guaranteed by the U.S. government
or an agency or instrumentality of the U.S. government ("Government
Securities"), and repurchase agreements collateralized by Government Securities.

These securities include obligations issued by the U.S. Treasury
("Treasury Securities"), including Treasury bills, notes and bonds. These are
direct obligations of the U.S. government and differ primarily in their rates of
interest and the length of their original maturities. Treasury Securities are
backed by the full faith and credit of the U.S. government. Government
Securities include Treasury Securities as well as securities issued or
guaranteed by the U.S. government or its agencies and instrumentalities ("Agency
Securities"). As described in the Prospectuses, Agency Securities are in some
cases backed by the full faith and credit of the U.S. government. In other
cases, Agency Securities are backed solely by the credit of the governmental
issuer. Certain issuers of Agency Securities have the right to borrow from the
U.S. Treasury, subject to certain conditions. Government Securities purchased by
the Portfolio may include variable and floating rate securities, which are
described in the Prospectuses of the Funds.

Repurchase Agreements. As discussed in the Prospectuses, the Portfolio
may enter into repurchase agreements. A repurchase agreement, which may be
viewed as a type of secured lending by the Portfolio, involves the acquisition
by the Portfolio of a security from a selling financial institution such as a
bank or broker-dealer. The agreement provides that the Portfolio will sell back
to the institution, and that the institution will repurchase, the underlying
security ("collateral") at a specified price and at a fixed time in the future.
The Portfolio will receive interest from the institution until the time when the
repurchase is to occur. Although such date is deemed to be the maturity date of
a repurchase agreement, the maturities of securities that are purchased by the
Portfolio through repurchase agreements are not subject to any limitation as to
maturity. The Portfolio may enter into repurchase agreements maturing in more
than seven days. However, the Portfolio may not enter into such a repurchase
agreement if, as a result, more than 10% of the value of its net assets would be
invested in repurchase agreements under which the Portfolio does not have the
right to obtain repayment in seven days or less.

Because repurchase agreements involve certain risks not associated with
direct investment in securities, the Trust follows procedures designed to
minimize these risks. These procedures include requirements that the Investment
Adviser effect repurchase transactions only with banks or primary dealers
designated as such by the Federal Reserve Bank of New York, and that the bank or
dealer has been determined by the Investment Adviser to present minimal credit
risk in accordance with guidelines established and monitored by the Board of
Trustees of the Trust. In addition, the collateral underlying a repurchase
agreement is required to be held by the Trust's custodian (or a subcustodian) in
a segregated account on behalf of the Portfolio. The collateral is marked to
market daily and required to be maintained in an amount at least equal to the
repurchase price plus accrued interest. In the event of a default or bankruptcy
by a selling financial institution, the Trust will seek to liquidate the
collateral. However, the exercise of the Trust's right

2
<PAGE> 37
to liquidate collateral could involve certain costs or delays and, to the extent
that proceeds from any sale upon a default of the obligation to repurchase are
less than the repurchase price, the Portfolio will suffer a loss.

When-Issued and Delayed Delivery Securities. As noted in the
Prospectuses, the Portfolio may purchase and sell securities on a when-issued or
delayed delivery basis. These transactions arise when the Portfolio purchases or
sells a security, with payment and delivery taking place in the future beyond
the normal settlement period. A transaction of this type will be effected in
order to secure for the Portfolio an attractive price or yield at the time of
entering into the transaction. When purchasing securities on a when-issued or
delayed delivery basis, the Portfolio assumes the rights and risks of ownership,
including the risk of price and yield fluctuations. Because the Portfolio is not
required to pay for securities until the delivery date, these risks are in
addition to the risks associated with the Portfolio's other investments. If the
Portfolio remains fully invested at a time during which when-issued or delayed
delivery purchases are outstanding, such purchases will result in a form of
leverage. When the Portfolio enters into purchase transactions of this type, the
Trust's custodian maintains, in a segregated account for the Portfolio, cash and
debt obligations held by the Portfolio and having a value equal to or greater
than the Portfolio's purchase commitments. When the Portfolio has sold a
security on a when-issued or delayed delivery basis, the Portfolio does not
participate in further gains or losses with respect to the security. If the
counterparty fails to deliver or pay for the securities, the Portfolio could
miss a favorable price or yield opportunity, or could suffer a loss. When the
Portfolio enters into a sales transaction of this type, the Trust's custodian
segregates the securities sold on a delayed delivery basis to cover the
Portfolio's settlement obligations.

Investment Characteristics. In managing the Portfolio, the Investment
Adviser attempts to balance the Portfolio's goal of seeking high income with its
goal of seeking to preserve capital. For this reason, the Portfolio does not
necessarily invest in securities offering the highest available yields. The
maturities of the securities purchased by the Portfolio and the Portfolio's
average portfolio maturity will vary from time to time as the Investment Adviser
deems consistent with the Portfolio's investment objective, which is the same as
the investment objective of the Funds, and the Investment Adviser's assessment
of risks, subject to applicable limitations on the maturities of investments and
dollar-weighted average portfolio maturity.

When market rates of interest increase, the market value of debt
obligations held by the Portfolio will decline. Conversely, when market rates of
interest decrease, the market value of obligations held by the Portfolio will
increase. Debt obligations having longer maturities generally pay higher rates
of interest, but the market values of longer term obligations can be expected to
be subject to greater fluctuations from general changes in interest rates than
shorter term obligations. These changes will cause fluctuations in the amount of
daily dividends of the Fund and in extreme cases, changes in interest rates
could cause the net asset value per share of the Fund to decline. See
"Determination of Net Asset Value." In the event of unusually large redemption
demands, securities may have to be sold at a loss prior to maturity or the Fund
may have to borrow money and incur interest expense. The Investment Adviser
seeks to manage investment risk by purchasing and selling investments for the
Portfolio consistent with its best judgment and expectations regarding
anticipated changes in interest rates. However, there can be no assurance that
the Funds will achieve their investment objectives.

INVESTMENT RESTRICTIONS

The Funds and the Portfolio are subject to a variety of investment
restrictions. Certain of these restrictions are deemed fundamental, and may not
be changed without the approval of the holders of a majority of a Fund's or the
Portfolio's outstanding voting securities. A "majority of the outstanding voting
securities" of a Fund or of the Portfolio for this purpose means the lesser of
(i) 67% of the shares of that Fund or of the Portfolio represented at a meeting
at which holders of more than 50% of the outstanding shares are present in
person or represented by proxy or (ii) more than 50% of the outstanding shares
of the Fund or the Portfolio. Whenever there is a vote on a change in the
fundamental restrictions of the Portfolio or in a policy which cannot be changed
without a shareholder vote, the Trust will hold meetings of shareholders of the
Funds and will vote each Fund's shares of the Portfolio as instructed by
shareholders of that Fund. In this regard, each Fund's shares of the Portfolio
will be voted for and against the proposed change in the same proportion as
shares of that Fund are voted. As to shares of a Fund that are not voted by
shareholders, the Fund will vote in the same proportion as shares of that Fund's
shareholders who give voting instructions are voted. Thus, shareholders of the
Funds who do not vote will have no effect on the outcome of matters being voted
upon by the Funds as investors in the Portfolio.

As fundamental investment restrictions, neither of the Funds nor the
Portfolio may:

(1) Purchase a security, other than a Government Security or, in the case of
a Fund, shares of in the Portfolio, if as a result of such purchase more
than 5% of the value of the Fund's or Portfolio's assets would be
invested in the securities of any one issuer, or

3
<PAGE> 38
the Fund or Portfolio would own more than 10% of the voting securities,
or of any class of securities, of any one issuer. (For purposes of this
restriction, all outstanding indebtedness of an issuer is deemed to be
a single class.)

(2) Purchase a security, other than a Government Security or, in the case
of a Fund, shares of the Portfolio, if as a result of such purchase 25%
or more of the value of the Fund's or Portfolio's total assets would be
invested in the securities of issuers engaged in any one industry.

(3) Issue senior securities as defined by the Investment Company Act of
1940 (the "1940 Act") or borrow money, except that the Funds and the
Portfolio may borrow from banks for temporary extraordinary or
emergency purposes (but not for investment) in an amount up to
one-third of the value of their respective total assets (calculated at
the time of the borrowing). Neither of the Funds nor the Portfolio may
make additional investments while they have any borrowings outstanding.
This restriction shall not be deemed to prohibit a Fund or the
Portfolio from purchasing or selling securities on a when-issued or
delayed delivery basis, or entering into repurchase agreements.

(4) Purchase or sell commodities or commodity contracts, or real estate or
interests in real estate (including limited partnership interests),
except that the Funds and the Portfolio, to the extent not prohibited
by other investment policies, may purchase and sell securities of
issuers engaged in real estate activities and may purchase and sell
securities secured by real estate or interests therein.

(5) Underwrite the securities of other issuers, except to the extent that,
in connection with the disposition of securities, a Fund or the
Portfolio may be deemed to be an underwriter under the Securities Act
of 1933.

(6) Make loans of money or securities, except through the purchase of
permitted investments, including repurchase agreements.

(7) Make short sales of securities or purchase securities on margin, except
for such short-term credits as may be necessary for the clearance of
transactions.

(8) Pledge, hypothecate, mortgage or otherwise encumber a Fund's or the
Portfolio's assets, except as may be necessary to secure permitted
borrowings. (Collateral and other arrangements incident to permissible
investment practices are not deemed to be subject to this restriction.)

The Funds and the Portfolio have the following additional investment
restrictions which are not fundamental and may be changed by the Board of
Trustees, without a vote of shareholders. Under these restrictions, neither of
the Funds nor the Portfolio may:

(1) Make investments for the purpose of exercising control or management of
another company.

(2) Participate on a joint or joint and several basis in any trading
account in securities.

(3) Purchase any illiquid securities, except that a Fund or the Portfolio
may invest in repurchase agreements maturing in more than seven days
provided that a Fund or the Portfolio may not enter into such a
repurchase agreement if more than 10% of the value of its net assets
would, as a result, be invested in repurchase agreements under which
the Fund or the Portfolio does not have the right to obtain repayment
in seven days or less. The Funds and the Portfolio are authorized to
invest in restricted securities which can be sold in transactions
pursuant to Rule 144A under the Securities Act of 1933 and which have
been determined to be liquid under procedures adopted by the Board of
Trustees. However, the Funds and the Portfolio do not intend to invest
in any such restricted securities during the coming year.

(4) Invest in oil, gas or other mineral leases, rights, royalty contracts,
or exploration or development programs.

(5) Invest in warrants or rights.

(6) Purchase the securities of another investment company, except in
connection with a merger, consolidation, reorganization or acquisition
of assets, and except insofar as either of the Funds may invest all of
its investable assets in the Portfolio.

4
<PAGE> 39
Unless otherwise specified, all percentage and other restrictions,
requirements and limitations on investments set forth in this Statement of
Additional Information, and those set forth in the Prospectuses, apply
immediately after purchase of an investment, and subsequent changes and events
do not constitute a violation or require the sale of any investment by the
Portfolio or a Fund.

PORTFOLIO TRANSACTIONS AND BROKERAGE

Subject to the general supervision of the Board of Trustees of the Trust, the
Investment Adviser is responsible for decisions to buy and sell securities for
the Portfolio and for the selection of dealers to effect those transactions.
Purchases of securities for the Portfolio will be made from issuers,
underwriters and dealers. Sales of securities will be made to dealers and
issuers. The Portfolio does not normally incur brokerage commissions on
transactions in the types of securities in which it invests. These transactions
are generally traded on a "net" basis, with dealers acting as principal in such
transactions. However, the price at which securities are purchased from and sold
to dealers will usually include a spread which represents a profit to the
dealer. Securities purchased in underwritten offerings include a fixed amount of
compensation to the underwriter (an underwriting concession).

In placing orders for the purchase and sale of investments for the
Portfolio, the Investment Adviser gives primary consideration to the ability of
dealers to provide the most favorable prices and efficient executions on
transactions. If such price and execution are obtainable from more than one
dealer, transactions may be placed with dealers who also furnish research
services to the Trust or the Investment Adviser. Such services may include, but
are not limited to, any one or more of the following: information as to the
availability of securities for purchase or sale; statistical or factual
information or opinions pertaining to investments; wire services; and appraisals
or evaluations of securities. These research services may be of benefit to the
Investment Adviser or its affiliates in the management of accounts of other
clients, or the accounts of the Investment Adviser and its affiliated companies,
and may not in all cases benefit the Funds or the Portfolio. While such services
are useful and important in supplementing the Investment Adviser's own research
and facilities, the Investment Adviser believes the value of such services is
not determinable and does not significantly reduce its expenses.

The Investment Adviser serves as the investment adviser to other
clients, including other series of the Trust, other investment funds and
companies, and follows a policy of allocating investment opportunities and
purchase and sale transactions equitably among its clients. In making such
allocations, the primary factors considered are the respective investment
objectives, the relative size of portfolio holdings of the same or comparable
securities, and the availability of cash for investment. This procedure may have
an adverse effect on a client, including the Portfolio, in a particular
transaction, but is expected to benefit all clients on a general basis.

The Investment Adviser and its affiliates may invest in the same
securities that are purchased for its clients. This at times may adversely
affect the prices that can be obtained in transactions for the Portfolio or the
availability of securities for purchase by the Portfolio. In the case of
simultaneous orders to purchase or sell the same securities being handled by the
Investment Adviser and involving a client account and the account of the
Investment Adviser or one of its affiliates, client orders will be given
preference so that client transactions will not be adversely affected by
transactions being placed by the Investment Adviser for its own account or for
the accounts of its affiliates. Investments made on behalf of the Investment
Adviser or its affiliates are effected in transactions which are separate from
any transactions for the accounts of clients in the same securities.

PURCHASING SHARES

As described under "Purchasing Shares" in the Funds' Prospectuses,
shares of the Funds are offered for sale, without a sales charge, at the net
asset value per share next computed after receipt of a purchase order by Cadre
Securities, Inc., as distributor of the Fund's shares (the "Distributor"). Net
asset value is computed once daily for each Fund, on each day on which both the
New York Stock Exchange is open for trading and the Federal Reserve Bank of New
York is open (each, a "Business Day"). See "Determination of Net Asset Value."
The following shows the calculation of the offering price of shares of the Funds
as of October 31, 1997:

<TABLE>
<CAPTION>
NET ASSETS SHARES OUTSTANDING OFFERING PRICE
---------- ------------------ --------------
<S> <C> <C> <C>
Liquid Asset Fund $ 138,660,616 138,660,822 $ 1.00

Institutional Cash Fund N/A N/A N/A

</TABLE>

5
<PAGE> 40
Distribution Arrangements. The Distributor serves as the sole
distributor of shares of the Funds pursuant to a distribution agreement with the
Trust dated as of July 1, 1997 (the "Distribution Agreement"). Pursuant to the
Distribution Agreement, the Distributor is authorized to enter into selling
agreements with securities dealers and other financial institutions for the
distribution of shares. Shares of the Funds are available for purchase from the
Distributor and from organizations which have entered into selling agreements.
The Distributor may, from time to time, pay to such dealers and institutions, in
connection with sales or the distribution of shares of the Funds, material
compensation or promotional incentives, in the form of cash or other
compensation. Such compensation and incentives are not paid by either of the
Funds and will not be an expense of the Funds.

The Board of Trustees, including a majority of the Trustees who are not
parties to the Distribution Agreement or "interested persons" of the Investment
Adviser or the Distributor, as defined by the 1940 Act (the "Independent
Trustees"), approved the Distribution Agreement at a meeting held in person on
February 26, 1997. The Distribution Agreement will remain in effect until June
30, 1999, and may be continued in effect from year to year thereafter if
approved annually by the Board of Trustees, including a majority of the
Independent Trustees, by vote cast in person at a meeting called for such
purpose. The Distribution Agreement may be terminated at any time, without
penalty, by either party upon 60 days written notice and terminates
automatically in the event of an "assignment" as defined by the 1940 Act and the
rules thereunder. Under the Distribution Agreement, the Distributor is required
to bear all of the costs associated with distribution of shares of the Funds,
including the incremental cost of printing prospectuses, annual reports and
other periodic reports for distribution to prospective investors and the costs
of preparing, distributing and publishing sales literature and advertising
materials. Unlike many other mutual funds, the Funds do not bear expenses
relating to the distribution of shares, and thus, do not make any payments
pursuant to a Rule 12b-1 plan or a services plan. In the Distribution Agreement,
the Trust has agreed to indemnify the Distributor to the extent permitted by
applicable law against certain liabilities under the Securities Act of 1933, as
amended.

The Distributor is a wholly-owned subsidiary of Ambac Capital
Corporation, which in turn is a wholly-owned subsidiary of Ambac Financial
Group, Inc. The Distributor's address is 905 Marconi Avenue, Ronkonkoma, New
York 11779.

Purchases by Check. Shares of the Funds may be purchased by check as
described in the Funds' Prospectuses. If a check to purchase shares does not
clear, the shares purchased may be redeemed by the Distributor and the investor
will be responsible for any loss or expenses incurred by the Funds or the
Distributor as a result of the redemption or non-clearance.

SHAREHOLDER ACCOUNTS

Cadre Financial Services, Inc., in its capacity as transfer agent for
the Funds (the "Transfer Agent"), maintains one or more accounts for each
shareholder reflecting the amount of full and fractional shares of the Funds the
shareholder owns. Shareholders are sent confirmations of each account
transaction, and monthly statements showing account balances. The Trust does not
issue certificates for shares of the Funds.

Sub-Account Services. Special procedures have been designed for
investors wishing to open multiple accounts to meet requirements regarding the
commingling of funds or for accounting convenience. Individual sub-accounts may
be opened at any time by written advice or by filing forms supplied by the
Transfer Agent. Procedures are available to identify sub-accounts by name and
number.

When sub-accounts have been established, the Transfer Agent provides
written confirmations of transactions in sub-accounts. The Transfer Agent also
provides monthly statements setting forth the share balance of and the dividends
and other distributions paid to each sub-account for the current month, as well
as for the year-to-date. Further information on this service is available from
the Transfer Agent.

Minimum Account Balance. Under the Declaration of Trust, the Trust has
the right to redeem all shares of a Fund held by a shareholder if as a result of
one or more redemptions the aggregate value of shares held in the shareholder's
account is less than such dollar amount as may be specified by the Trustees,
which amount may be no greater than the then applicable minimum initial
investment amount. There is currently no minimum account balance required for
the Liquid Asset Fund. However, as described in the Prospectus of Institutional
Cash Fund, the Trust may effect a redemption of shares of Institutional Cash
Fund if, as a result of one or more redemptions, the balance of an account in
that Fund is less than $1 million. Accounts in Liquid Asset Fund are not
presently subject to this redemption procedure because Liquid Asset Fund does
not presently impose a minimum initial investment requirement. However, an
inactive account in Liquid Asset Fund with no balance for a period of six months
may be closed at the discretion of the

6
<PAGE> 41
Trust. The applicable procedures are described in the Prospectuses of the Funds.
The Trust is under no obligation to compel the redemption of any account.

REDEEMING SHARES

Redemption proceeds are normally paid as described in the Prospectuses
of the Funds. However, the payment of redemption proceeds by the Funds or the
Portfolio may be postponed for more than seven days or the right of redemption
suspended at times (a) when the New York Stock Exchange is closed for other than
customary weekends and holidays, (b) when trading on the New York Stock Exchange
is restricted, (c) when an emergency exists as a result of which disposal by a
Fund or the Portfolio of securities owned by it is not reasonably practicable or
it is not reasonably practicable for a Fund to determine fairly the value of its
net assets, or (d) during any other period when the Securities and Exchange
Commission (the "SEC"), by order, so permits for the protection of shareholders.
Applicable rules and regulations of the SEC will govern as to whether the
conditions described in (b) or (c) exist. In addition, in the event that the
Board of Trustees of the Trust determines that it would be detrimental to the
best interests of remaining shareholders of a Fund or to investors in the
Portfolio to pay any redemption or redemptions in cash, a redemption payment by
a Fund or the Portfolio may be made in whole or in part by a distribution in
kind of portfolio securities, subject to applicable rules of the SEC. Any
securities distributed in kind will be readily marketable and will be valued,
for purposes of the redemption, in the same manner as such securities are
normally valued in computing net asset value per share. In the unlikely event
that shares are redeemed in kind, the redeeming shareholder would incur
transaction costs in converting the distributed securities to cash. The Trust
has elected to be governed by Rule 18f-1 under the 1940 Act and is therefore
obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of
the net asset value of a Fund during any 90 day period for any one shareholder.

EXCHANGE PRIVILEGE

As described under "Exchange Privilege" in each Fund's Prospectus,
shareholders may exchange shares of one of the Funds for shares of any of the
other Fund based upon the relative net asset values per share of the Funds at
the time the exchange is effected. Neither Fund currently imposes any limitation
on the frequency of exchanges, but may impose such limitations upon notice to
shareholders.

DETERMINATION OF NET ASSET VALUE

The Funds' Prospectuses describe the days on which the net asset value
per share of the Funds are computed for purposes of purchases and redemptions of
shares by investors, and also sets forth the times as of which such computations
are made. Net asset value is computed once daily as of 4:00 p.m. (Eastern time)
on each day on which both the New York Stock Exchange is open for trading and
the Federal Reserve Bank of New York is open, except as described below. The New
York Stock Exchange currently observes the following holidays: New Year's Day;
Martin Luther King's Birthday (third Monday in January); Presidents' Day (third
Monday in February); Good Friday (Friday before Easter); Memorial Day (last
Monday in May); Independence Day; Labor Day (first Monday in September);
Thanksgiving Day (fourth Thursday in November); and Christmas Day. The Federal
Reserve Bank of New York currently observes all the holidays listed above except
Good Friday, and also observes Columbus Day (second Monday in October) and
Veterans Day.

Net asset value is computed as of the closing time of the U.S.
government securities markets on days when the Public Securities Association
recommends an early closing of such markets. Early closings may occur the
Fridays preceding the following holidays: Martin Luther King's Birthday,
Presidents' Day, Memorial Day, Labor Day and Columbus Day, and the business days
preceding the following holidays: Independence Day, Veterans Day, Thanksgiving
Day, Christmas Day, and New Year's Day, and the Friday succeeding Thanksgiving
Day.

The value of the Portfolio's net assets (its securities and other
assets, less its liabilities, including expenses payable or accrued) is
determined at the same time and on the same days as the net asset values per
share of the Funds are determined.

In accordance with rules adopted by the SEC, the amortized cost method
of valuation is used to determine the value of the investments held by the
Portfolio. This method of valuation is used in seeking to maintain stable net
asset values of $1.00 per share for the Portfolio and the Funds. However, no
assurance can be given that the Portfolio or the Funds will be able to maintain
stable share prices.

7
<PAGE> 42
Amortized cost involves valuing a security at its cost and amortizing
any discount or premium over the period remaining until the maturity of the
security. This method of valuation does not take into account unrealized capital
gains and losses resulting from changes in the market values of the securities.
The market values of debt securities purchased by the Portfolio will generally
fluctuate as a result of changes in prevailing interest rate level and other
factors.

In order to use the amortized cost method of valuation, the Portfolio
is required to maintain a dollar-weighted average maturity of 90 days or less,
to purchase securities with remaining maturities of 397 days or less and to
invest only in securities which have been determined by the Investment Adviser,
under procedures adopted by the Board of Trustees, to present minimal credit
risks and to be of eligible credit quality under applicable regulations. In
addition, procedures have been adopted by the Board of Trustees which are
designed to stabilize, to the extent reasonably possible, the prices of shares
of the Portfolio and the Funds as computed for purposes of sales and redemptions
at $1.00. These procedures include review by the Board of Trustees, at such
intervals as it deems appropriate, to determine whether the net asset value per
share calculated by using available market quotations deviates from the net
asset value per share of $1.00 computed by using the amortized cost method. If
such deviation exceeds 1/2 of 1%, the Board will promptly consider what action,
if any, should be taken. The Trustees will take such action as they deem
appropriate to eliminate or to reduce, to the extent reasonably practicable, any
material dilution or other unfair results which might arise from differences
between the two valuation methods. Such action may include selling instruments
prior to maturity to realize capital gains or losses or to shorten average
maturity, redeeming shares in kind, withholding dividends, paying distributions
from capital gains, or utilizing a net asset value per share based upon
available market quotations.

TAXES

It is the policy of the Trust to distribute each fiscal year
substantially all of each Fund's net investment income and net realized capital
gains, if any, to shareholders. The Trust intends that the Funds will each
qualify as a regulated investment company under the provisions of the Internal
Revenue Code of 1986, as amended (the "Code"). If so qualified, a Fund will not
be subject to federal income tax on that part of its net investment income and
net realized capital gains which it distributes to its shareholders. To qualify
for such tax treatment, a Fund must generally, among other things: (a) derive at
least 90% of its gross income from dividends, interest, payments received with
respect to loans of stock and securities, and gains from the sale or other
disposition of stock or securities and certain related income; and (b) diversify
its holdings so that at the end of each fiscal quarter (i) 50% of the market
value of the Fund's assets is represented by cash, Government Securities,
securities of other regulated investment companies, and other securities
limited, in respect of any one issuer, to an amount not greater than 5% of the
Fund's assets or 10% of the voting securities of any issuer, and (ii) not more
than 25% of the value of its assets is invested in the securities of any one
issuer (other than Government Securities). The Portfolio has elected to be
treated as a partnership for federal income tax purposes and therefore believes
that it will not be required to pay any federal or state income or excise taxes.

The Code requires regulated investment companies to pay a nondeductible
4% excise tax to the extent they do not distribute 98% of their ordinary income,
determined on a calendar year basis, and 98% of their capital gains, determined
on an October 31 year end. The Trust intends to distribute the income and
capital gains of the Funds in the manner necessary to avoid imposition of the 4%
excise tax by the end of each calendar year.

Dividends of the Funds declared in October, November or December and
paid the following January will be taxable to shareholders as if received on
December 31 of the year in which they are declared.

INVESTMENT ADVISORY AND OTHER SERVICES

The Investment Adviser, a Delaware corporation, with offices at 905
Marconi Avenue, Ronkonkoma, New York 11779, is a wholly-owned subsidiary of
Ambac Capital Corporation which, in turn, is a wholly-owned subsidiary of Ambac
Financial Group, Inc. ("Ambac"). Through its subsidiaries, Ambac is a leading
insurer of municipal and structured finance obligations and a provider of
investment contracts, and investment advisory and administration services to
state municipalities, and municipal authorities. Ambac is a publicly held
company whose shares are traded on the New York Stock Exchange.

8
<PAGE> 43
sale of investments for the Portfolio. The Investment Adviser also provides or
furnishes, at its own expense, such office space, facilities, equipment,
clerical help, and other personnel and services as may reasonably be necessary
to render the services under the Agreement. In addition, the Investment Adviser
provides all necessary administrative services to the Portfolio, and pays the
salaries of officers of the Trust and any fees and expenses of Trustees of the
Trust who are also officers, directors or employees of the Investment Adviser,
or who are officers or employees of any company affiliated with the Investment
Adviser, and bears the cost of telephone service, heat, light, power and other
utilities associated with the services it provides. As compensation for services
rendered and expenses assumed by the Investment Adviser, the Agreement provides
for the payment by the Portfolio of a monthly fee to the Investment Adviser,
which fee is calculated daily and computed at the annual rate of 0.06% of the
net assets of the Portfolio. As investors in the Portfolio, the Funds and their
shareholders indirectly bear this fee.

Prior to ________, 1998, the Liquid Asset Fund invested its assets
directly and did not invest in the Portfolio. For the period April 24, 1996
(commencement of operations of Liquid Asset Fund) through October 31, 1996, fees
payable to the Investment Adviser by Liquid Asset Fund pursuant to the then
effective investment advisory agreement were $48,338, all of which were waived.
In addition, the Investment Adviser reimbursed expenses of Liquid Asset Fund in
the amount of $129,216 during such period. For the year ended October 31, 1997,
fees payable by Liquid Asset Fund to the Investment Adviser pursuant to that
advisory agreement were $157,391, a portion of which was waived. During such
year, the Investment Adviser reimbursed expenses of Liquid Asset Fund of
$70,147. Institutional Cash Fund commenced its operations on the date of this
Statement of Additional Information.

The Agreement provides that in the absence of willful misfeasance, bad
faith, negligence or reckless disregard of its obligations thereunder, the
Investment Adviser is not liable to the Trust, the Portfolio or shareholders of
the Funds for any act or omission by the Investment Adviser or for any omission
by the Investment Adviser. The Agreement in no way restricts the Investment
Adviser from acting as investment adviser to others.

The Agreement was approved by the Board of Trustees of the Trust,
including a majority of the Independent Trustees, who are not parties to the
Agreement or interested persons of the Investment Adviser, for an initial term
expiring ____________, 2000 at a meeting held in person on _____________, 1998.
The Agreement was also approved by the shareholders of Liquid Asset Fund, the
then sole operating series of the Trust, on __________, 1998. The Agreement may
be continued in effect from year to year after its initial term upon the
approval of the holders of shares of the Portfolio or the approval of the Board
of Trustees. In seeking such approval by the holders of shares of the Portfolio,
each of the Funds will seek instructions from its shareholders as to how that
Fund's shares of the Portfolio will be voted and will vote its shares of the
Portfolio in accordance with those instructions. Similar instructions will also
be sought by any other series of the Trust and by each other registered
investment company that may invest its assets in the Portfolio. In the case of
certain other investment funds that invest in the Portfolio, such funds may vote
their shares of the Portfolio either in accordance with the same procedures or
in the same proportion as the shares of other holders of shares of the Portfolio
are voted. Each annual continuance of the Agreement also requires approval by a
vote of a majority of the Independent Trustees cast in person at a meeting
called for the purpose of voting on such continuance. The Agreement may be
terminated at any time, without penalty, on sixty days' written notice by the
Board of Trustees of the Trust, by vote of the holders of a majority (as defined
in the 1940 Act) of the outstanding securities of the Portfolio, or by the
Investment Adviser. The Agreement provides for its automatic termination in the
event of its assignment (as defined in the 1940 Act and the rules thereunder).

The Trust has acknowledged that the name "Cadre" is a property right of
the Investment Adviser and other affiliates of Ambac Financial Group, Inc., and
has agreed that the Investment Adviser and its affiliated companies may use and
permit others to use that name. If the Agreement is terminated, the Trust may be
required to cease using the name Cadre as part of its name or the name of any
series of the Trust unless otherwise permitted by Ambac Financial Group, Inc. or
any successor to its interest in such name.

Administration Agreement. The Investment Adviser provides
administration services to the Funds, pursuant to an administration agreement
with the Trust dated August 1, 1997 (the "Administration Agreement"). Prior to
that date, an organization which is not affiliated with the Investment Adviser
served as the Trust's administrator. Pursuant to the Administration Agreement,
the Investment Adviser provides the Funds with various administrative services
required in connection with the operations of the Trust and the Funds. These
services include, among other things: accounting services and the maintenance of
required books and records, valuation of assets and the calculation of the net
asset values per share of the Funds, preparation of financial statements,
regulatory filings and tax returns, monitoring of investment compliance and the
preparation of materials for meetings of the Board of Trustees and shareholders.
Under the Administration Agreement, the Investment Adviser is required to
provide persons affiliated with the Investment Adviser to serve as officers of
the Trust and to maintain such office facilities as necessary to provide the
administrative

9
<PAGE> 44
services it furnishes to the Trust. The Prospectus contains a description of the
fees payable to the Investment Adviser under the Administration Agreement.

The Administration Agreement has an initial term of two years, and
continues in effect from year to year thereafter if such continuance is approved
annually by the Board of Trustees, including the vote of a majority of the
Independent Trustees. The Administration Agreement terminates automatically in
the event of its "assignment," as defined by the 1940 Act and the rules
thereunder, and may be terminated by either party without penalty on not less
than 60 days' written notice. The agreement also provides that neither the
Investment Adviser nor its personnel shall be liable for any error of judgment
or mistake of law or for any loss suffered by the Trust in connection with the
Investment Adviser's performance of its obligations and duties under the
agreement, except for those resulting from its willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of reckless
disregard of its duties.

Liquid Asset Fund paid the former administrator for the Trust $47,686
for the period April 24, 1996 (commencement of operations) through October 31,
1996 and $44,753 for the period November 1, 1996 through July 31, 1997. For the
period August 1, 1997 through October 31, 1997, fees payable by Liquid Asset
Fund to the Investment Adviser for administrative services were $36,303, a
portion of which were waived. In addition, during the period August 1, 1997
through October 31, 1997, fees payable by Liquid Asset Fund to the Investment
Adviser for transfer agent services were $18,152, a portion of which was waived.

TRUSTEES AND OFFICERS

The Board of Trustees of the Trust has the overall responsibility for
monitoring the operations of the Trust, the Funds and the Portfolio and for
supervising the services provided by the Investment Adviser and other
organizations. The officers of the Trust are responsible for managing the
day-to-day operations of the Trust and the Fund.

Set forth below is information with respect to each of the Trustees and
officers of the Trust, including their principal occupations during the past
five years.

10
<PAGE> 45

<TABLE>
<CAPTION>
NAME, POSITION WITH TRUST, AGE PRINCIPAL OCCUPATIONS
AND ADDRESS DURING LAST FIVE YEARS
----------- ----------------------

<S> <C>
*William T. Sullivan, Jr. Chairman and Chief Executive Officer,
Trustee, Chairman, CEO and Cadre Financial Services, Inc. and
Cadre Securities, Inc. (brokerage services)
President, 52

*David L. Boyle Vice Chairman of Ambac Financial
Trustee, 51 Group, Inc. Prior to joining Ambac,
Ambac Financial Group, Inc. Managing Director
One State Street of Worldwide Services,
New York, New York 10004 Citibank, N.A.

Donald Gray Director of Finance, City of New London
Trustee, 48 Executive Director, New England
Director of Finance States Government
City of New London Finance Officers Association
181 State St.
New London, CT 06320

Donald W. Green Chief Financial Officer, Managing Director
Trustee, 54 and Director, PlanEcon, Inc. (economic
305 Hartford Road consulting and publications); formerly, from
South Orange, New Jersey 1988 to 1991, Executive Vice President
07079 and Director, The Mercator Corporation
(financial advisory and merchant
banking)

*C. Roderick O'Neil Chairman, O'Neil Associates (investment
Trustee, 67 and financial consulting firm); Director,
375 Park Avenue Ambac Financial Group, Inc., AMBAC
Suite 2602 Assurance Corporation, Fort Dearborn
New York, New York 10152 Income Securities, Inc. and Beckman
Instruments, Inc.; Trustee, Memorial
Drive Trust (finance)

Russell E. Galipo Vice President and Manager of Shawmut
Trustee, 65 Bank CT., N.A. from 1973 to 1994
4538 Alpine Drive
Lakeland, Florida 33801-0502

William J. Reynolds Retired
Trustee, 74
51 Fox Run Court
Newington, CT 06111

Brian G. Clarke Vice President and Controller of Cadre
Treasurer, 37 Financial Services, Inc.; formerly, from
1994 to 1995, Group Manager, Kidder
Peabody & Co., Inc.; prior thereto, from
1991 to 1994 Controller, Swiss Bank
Investment Banking, Inc.

William M. Sullivan, Esq. General Counsel of Cadre Financial
Secretary, 30 Services, Inc. and Cadre
Securities, Inc.

Linda Cassesse Registration Manager of Cadre Financial
Assistant Secretary, 45 Services, Inc. and Cadre Securities
Inc.; from 1995 to 1997 assisted New
York City Marshall Henry Daley; 1990 to
1995 Registration Manager Lanborn Asset
Management.
</TABLE>

- --------------------
* Trustee who is an "interested person" of the Trust, as defined in the 1940
Act.

11
<PAGE> 46
Except as otherwise indicated above, the address of each Trustee and
officer of the Trust is 905 Marconi Avenue, Ronkonkoma, New York 11779. Mr.
Sullivan, Mr. Boyle, and Mr. O'Neil are Trustees who are "interested persons" of
the Trust, as defined in the 1940 Act, by virtue of their affiliations with the
Investment Adviser and/or companies affiliated with the Investment Adviser.

Trustees, other than Independent Trustees who are affiliated with
investors in the Funds or with investors in other series of the Trust (which
investors are not other series of the Trust) who are not employees of the
Investment Adviser or one of its affiliated companies are paid fees by the
Trust. Such Trustees are paid an annual retainer of $5,000 and receive an
attendance fee of $750 for each meeting of the Board of Trustees they attend. If
such Trustees serve as members of the Audit Committee they receive an attendance
fee of $750 for each Audit Committee meeting they attend, with the Chairman of
the Audit Committee receiving an additional $1,000 annual fee. The Audit
Committee is comprised of the Independent Trustees. Officers of the Trust
receive no compensation from the Trust. All Trustees who are not employees of
the Investment Adviser or its affiliated companies are reimbursed for reasonable
out-of-pocket expenses incurred in connection with the performance of their
responsibilities, including travel related expenses. As of the date of this
Statement of Additional Information, the Trustees and officers of the Trust, as
a group, owned less than 1% of the outstanding shares of the Trust and the Fund.

The following table sets forth certain information regarding the
compensation received by the Trustees of the Trust for the fiscal year ended
October 31, 1997.

COMPENSATION TABLE*

<TABLE>
<CAPTION>
NAME OF PERSON AGGREGATE
COMPENSATION PENSION OR RETIREMENT TOTAL COMPENSATION
FROM TRUST BENEFITS ACCRUED FROM TRUST PAID
AS PART OF FUND EXPENSES TO TRUSTEES
<S> <C> <C> <C>
William T. Sullivan, Jr. $ 0 $ 0 $ 0

Donald W. Green $ 8,750 $ 0 $ 8,750

Eugene J. McDonald* $ 6,750 $ 0 $ 6,750

C. Roderick O'Neil $ 8,750 $ 0 $ 8,750

W. Dayle Nattress* $ 0 $ 0 $ 0

Stephen A. Attanasio* $ 0 $ 0 $ 0

Russell E. Galipo $ 6,250 $ 0 $ 6,250
</TABLE>

*Eugene J. McDonald resigned as a Trustee, effective September 18, 1997, W.
Dayle Nattress resigned as a Trustee, effective February 26, 1997, and Stephen
A. Attanasio resigned as a Trustee, effective May 27, 1997. Mr. Attanasio, who
was appointed to replace Mr. Nattress as a Trustee, was replaced by William T.
Sullivan, Jr., who was appointed on May 27, 1997 by the Board of Trustees to
fill the vacancy created by Mr. Attanasio's resignation.

EXPENSES

All expenses of the Trust, the Funds and the Portfolio not expressly assumed
by the Investment Adviser or the Distributor are paid by the Trust. The Funds
bear pro rata portions of the expenses of the Trust and the Portfolio. Expenses
borne by the Trust, the Funds and the Portfolio include, but are not limited to:
fees for investment advisory and administration services, the fees and expenses
of any registrar, custodian, accounting agent, transfer agent or dividend
disbursing agent; brokerage commissions; taxes; registration costs of the Trust
and its shares under federal and state securities laws; the cost and expense of
printing, including typesetting, and distributing prospectuses and supplements
thereto to shareholders; all expenses of shareholders' and Trustees' meetings
and of preparing, printing and mailing of proxy statements and reports to
shareholders; fees and travel expenses of Trustees or members of any advisory
board or committee who are not employees of the Investment Adviser or any
affiliate of the Investment Adviser; all expenses incident to any dividend,
withdrawal or redemption options; charges and expenses of any outside service
used for pricing shares of the Trust; fees and expenses of legal counsel; fees
and expenses of the Trust's independent auditors; membership dues of industry
associations; interest on Trust borrowings; postage; insurance premiums on
property or personnel (including officers and Trustees) of the Trust which inure
to its benefit; and extraordinary expenses (including, but not limited to, legal
claims and liabilities and litigation costs and any indemnification relating
thereto). Certain of the expenses of organizing the Trust and the of the initial
registration and qualification of

12
<PAGE> 47
its shares under federal and state securities laws are being charged to the
operations of Liquid Asset Fund, as an expense, over a period not exceeding five
years from the date of commencement of the Trust's operations. [How are expenses
of new series handled?]

PERFORMANCE INFORMATION

Calculation of Yield. The Funds may publish quotations of "current
yield" and "effective yield" in advertisements, sales materials and shareholder
reports. Current yield is the simple annualized yield for an identified seven
calendar day period. This yield calculation is based on a hypothetical account
having a balance of exactly one share of a Fund at the beginning of the
seven-day period. The base period return is the net change in the value of the
hypothetical account during the seven-day period, including dividends declared
on any shares purchased with dividends on the shares but excluding any capital
changes. Yield will vary as interest rates and other conditions change. The
yield of Liquid Asset Fund for the seven-day period ended October 31, 1997, was
5.26%, which is equivalent to an effective yield of 5.40%. Yields also depend on
the quality, length of maturity and type of instruments held and operating
expenses of the Fund. For the fiscal year ended October 31, 1997, the Investment
Adviser had voluntarily agreed to waive its fees and to reimburse certain
expenses of Liquid Asset Fund. The yield of Liquid Asset Fund quoted above
reflects the effect of this fee waiver and reimbursement of expenses without
which the yield would have been lower.

Effective yield is computed by compounding the unannualized seven-day
period return as follows: by adding 1 to the unannualized seven-day base period
return, raising the sum to a power equal to 365 divided by 7, and subtracting 1
from the result.

365/7
Effective yield = [(base period return + 1) ]-1

Calculation of Total Return. The Funds may also disseminate quotations
of their average annual total return and other total return data from time to
time. Average annual total return quotations for the specified periods are
computed by finding the average annual compounded rates of return (based on net
investment income and any realized and unrealized capital gains or losses on
investments over such periods) that would equate the initial amount invested to
the redeemable value of such investment at the end of each period. In making
these computations, all dividends and distributions are assumed to be reinvested
and all applicable recurring and non-recurring expenses are taken into account.
The Funds also may quote annual, average annual and annualized total return and
aggregate total return performance data, both as a percentage and as a dollar
amount based on a hypothetical investment amount, for various periods.

Total return quotations will be computed in accordance with the
following formula, except that as required by the periods of the quotations,
actual annual, annualized or aggregate data, rather than average annual data,
may be quoted:

n
P (1+T) = ERV

Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1,000
payment made at the beginning of the period.

Actual annual or annualized total return data generally will be lower than
average annual total return data because the average rates of return reflect
compounding of return. Aggregate total return data, which is calculated
according to the following formula, generally will be higher than average annual
total return data because the aggregate rates of return reflect compounding over
longer periods of time:

ERV - P
-------
P

Where: P = a hypothetical initial payment of $1,000.
ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period.

13
<PAGE> 48
Yield and total return quotations are based upon the historical
performance of the Funds and are not intended to indicate future performance.
The yield and total return of the Funds fluctuate and will depend upon not only
changes in prevailing interest rates, but also upon any realized gains and
losses and changes in the Funds' expenses.

GENERAL INFORMATION

Description Of Shares. Interests in the Funds are represented by shares
of beneficial interest, $.001 par value. The Trust is authorized to issue an
unlimited number of shares, and may issue shares in series, with each series
representing interests in a separate portfolio of investments (a "series"). As
of the date of this Statement of Additional Information, there were four series
of the Trust: Liquid Asset Fund; Institutional Cash Fund; U.S. Government Money
Market Portfolio; and Money Market Portfolio. Shares of the U.S. Government
Money Market Portfolio and the Money Market Portfolio may be held only by other
series of the Trust (including the Funds) and by other investment funds.

Each share of each Fund represents an equal proportionate interest in
that Fund with each other share of that Fund, without any priority or preference
over other shares. All consideration received for the sales of a particular
Fund, all assets in which such consideration is invested, and all income,
earnings and profits derived therefrom are allocated to and belong to that Fund.
As such, the interest of shareholders in each Fund is separate and distinct from
the interest of shareholders of the other Fund, and shares of a Fund are
entitled to dividends and distributions only out of the net income and gains, if
any, of that Fund as declared by the Board of Trustees. The assets of each Fund
and each other series of the Trust (including the Portfolio) are segregated on
the Trust's books and are charged with: the expenses and liabilities of that
Fund or series; a pro rata share of the general expenses and liabilities of the
Trust not attributable solely to any particular series; and, in the case of the
Funds which invest in the Portfolio, a pro rata share of the expenses and
liabilities of the Portfolio. The Board of Trustees determines those expenses
and liabilities deemed to be general expenses and liabilities of the Trust, and
these items are allocated among Funds and other series of the Trust in a manner
deemed fair and equitable by the Board of Trustees in its sole discretion.

As of March 31, 1998, shares of Liquid Asset Fund were the only shares
of the Trust outstanding. The following entities owned of record or are known by
the Trust to own beneficially 5% or more of the outstanding shares of Liquid
Asset Fund as of such date:

Ambac Financial Group, Inc. 3.84%(1)
One State Street Plaza
New York, New York

City of New Britain 21.64%
7 West Main Street
New Britain, Connecticut 06051

City of Waltham 6.21%
610 Main Street
Waltham, Massachusetts 02154

City of Quincy 9.87%
1305 Hancock Street
Quincy, Massachusetts 02169

Town of Suffield 7.5%
83 Mountain Road
Suffield, CT 06078

City of Fort Walton Beach 5.66%
P.O. Box 4009
Fort Walton Beach, FL
32549-4009

(1) Shares held by subsidiaries, including Ambac Capital Corporation.

14
<PAGE> 49
The Portfolio. The Portfolio is organized as a series of the Trust.
Investors in the Portfolio may include the Funds and other series of the Trust,
other registered investment companies (or series thereof), and other types of
investment funds. Each investor in the Portfolio, including the Funds, may add
to or reduce its investment in the Portfolio on each Business Day. At 4:00 p.m.
(Eastern time) on each such Business Day, the net asset value per share of the
Portfolio is determined. On days for which the Public Securities Association
recommends an early closing of the U.S. government securities markets, the
computation of net asset value per share will be made as of such earlier closing
time, rather than as of 4:00 p.m.

Trustee and Officer Liability. Under the Trust's Declaration of Trust
and its By-Laws, and under Delaware law, the Trustees, officers, employees and
agents of the Trust are entitled to indemnification under certain circumstances
against liabilities, claims and expenses arising from any threatened, pending or
completed action, suit or proceeding to which they are made parties by reason of
the fact that they are or were such Trustees, officers, employees or agents of
the Trust, subject to the limitations of the 1940 Act which prohibit
indemnification which would protect such persons against liabilities to the
Trust or its shareholders to which they would otherwise be subject by reason of
their own bad faith, willful misfeasance, gross negligence or reckless disregard
of duties.

Independent Auditors. KPMG Peat Marwick LLP, 345 Park Avenue, New York,
New York 10154, are the independent auditors of the Trust. The independent
auditors are responsible for auditing the financial statements and prepare the
tax returns of the Funds and the other series of the Trust (including the
Portfolio). The selection of the independent auditors is approved annually by
the Board of Trustees.

Custodian. U.S. Bank National Association, U.S. Bank Place, 601 Second
Avenue South, Minneapolis, Minnesota 55402, serves as custodian of the Trust's
assets and maintains custody of the cash and investments of the Funds and the
Portfolio. Cash held by the custodian, which may at times be substantial, is
insured by the Federal Deposit Insurance Corporation up to the amount of
available insurance coverage limits (presently, $100,000).

Shareholder Reports. Shareholders of the Trust are kept fully informed
through annual and semi-annual reports showing diversification of investments,
securities owned and other information regarding the activities of the Funds.
The financial statements of the Funds and the Portfolio are audited each year by
the Trust's independent auditors.

Legal Counsel. Schulte Roth & Zabel LLP, New York, New York, serves as
counsel to the Trust.

Registration Statement. This Statement of Additional Information and
the Prospectuses of the Funds do not contain all of the information set forth in
the Registration Statement the Trust has filed with the SEC. The complete
Registration Statement may be obtained from the SEC upon payment of the fee
prescribed by the rules and regulations of the SEC.

Financial Statements. The statement of assets and liabilities of Liquid
Asset Fund and the portfolio of its investments as of October 31, 1997, and the
related statements of operations and changes in net assets, together with the
notes to financial statements and the report of independent auditors, all as set
forth in the Trust's 1997 Annual Report to Shareholders, are incorporated by
reference into this Statement of Additional Information. No other information or
statement contained in the Annual Report, other than those referred to above, is
incorporated by reference or is a part of this Statement of Additional
Information.

A copy of the most recent annual report of the Trust accompanies this
Statement of Additional Information.

15
<PAGE> 50
U.S. GOVERNMENT MONEY MARKET PORTFOLIO
MONEY MARKET PORTFOLIO

NOTE:

The following portions of this Post-Effective Amendment to the
Registration Statement (Part A and Part B) relate to two new series of
Registrant known as the U.S. Government Money Market Portfolio and the Money
Market Portfolio and are being filed by Registrant pursuant to Section 8(b) of
the Investment Company Act of 1940, as amended, and not pursuant to the
Securities Act of 1933 (the "1933 Act"). Shares of the U.S. Government Money
Market Portfolio and the Money Market Portfolio (collectively, the "Portfolios")
are issued solely in private placement transactions that do not involve any
"public offering" within the meaning of Section 4(2) of the 1933 Act. This
Registration Statement does not constitute an offer to sell, or the solicitation
of an offer to buy, shares of the Portfolios.

PART A

Responses to Items 1, 2, 3 and 5A of this Part A have been omitted
pursuant to paragraph 4 of Instruction F of the General Instructions to Form
N-1A.

Item 1. Not applicable.

Item 2. Not applicable.

Item 3. Not applicable.

Item 4. General Description of Registrant.

Cadre Institutional Investors Trust (the "Trust") is a diversified,
open-end management investment company that was organized as a trust under the
laws of the State of Delaware pursuant to a Certificate of Trust dated June 27,
1995, as amended June 30, 1997. The Trust is authorized to issue an unlimited
number of shares of beneficial interest, $0.001 par value. The Trust currently
has four authorized series of shares representing shares of the following
investment portfolios: Liquid Asset Portfolio; Institutional Cash Portfolio;
U.S. Government Money Market Portfolio; and Money Market Portfolio.

Shares of the U.S. Government Money Market Portfolio and the Money
Market Portfolio (collectively, the "Portfolios") will be issued solely in
private placement transactions that do not involve any "public offering" within
the meaning of Section 4(2) of the Securities Act of 1933 (the "1933 Act").
Investments in the Portfolios may be made only by other series of the Trust,
other registered investment companies and other collective investment vehicles
which are authorized under their investment policies and applicable laws and
regulations to purchase shares of the Portfolios. Such investors must be
"accredited investors" within the meaning of Regulation D under the 1933 Act.
This Registration Statement does not constitute an offer to sell, or the
solicitation of an offer to buy, shares of the Portfolios.

-5-
<PAGE> 51
Information regarding each Portfolio's investment objective, the kinds
of securities in which it principally invests, other investment practices, and
risk factors associated with an investment in that Portfolio is set forth below.
Additional information concerning other investment techniques and features and
limitations concerning the Portfolios' investment programs is contained in Part
B.

The Portfolios. The investment objective of each Portfolio is to seek
high current income, consistent with preservation of capital and maintenance of
liquidity. The Portfolios pursue this objective in the manner described below.
Each Portfolio maintains a dollar-weighted average maturity of 90 days or less,
and invests only in securities having remaining maturities of 397 days or less.
All investments of the Portfolios will be U.S. dollar denominated. In addition,
all securities purchased by the Portfolios, including repurchase agreements,
must be of high quality and be determined by the Cadre Financial Services, Inc.,
the Portfolios' investment adviser (the "Investment Adviser"), to present
minimal credit risks pursuant to procedures adopted by the Board of Trustees of
the Trust.

The Portfolios may invest in certain variable and floating rate
securities, as described below, but do not invest in any other securities
commonly known as derivatives.

The investment objective of each Portfolio may be changed without the
approval of investors in the Portfolio, but not without written notice thereof
to the investors in the Portfolio at least 30 days prior to implementing the
change. No assurance can be given that a Portfolio will achieve its investment
objective.

Money Market Portfolio. The Money Market Portfolio invests in
short-term debt securities, including: debt obligations issued or guaranteed by
the U.S. government or an agency or instrumentality of the U.S. government
("Government Securities"); certificates of deposit, time deposits, bankers'
acceptances and other obligations issued by domestic banks; commercial paper and
other obligations of domestic corporations; and repurchase agreements with
respect to the foregoing types of securities. The Portfolio may invest more than
25% of the value of its net assets in obligations of domestic banks. The
Portfolio does not invest in obligations of foreign banks or their U.S.
branches.

Investments purchased by the Money Market Portfolio must be rated in
the highest rating category for debt obligations by at least two nationally
recognized statistical rating organizations ("NRSROs") (or by one NRSRO if the
instrument is rated by only one such organization), or, if unrated, be of
comparable quality as determined in accordance with procedures established by
the Trust's Board of Trustees. NRSROs currently rating instruments of the type
the Money Market Portfolio may purchase are Moody's Investors Services, Inc.,
Standard & Poor's Ratings Group, Duff & Phelps Crediting Rating Co., Fitch
Investors Service, L.P., IBCA Limited and IBCA Inc., and Thomson Bank Watch,
Inc.

U.S. Government Money Market Portfolio. The U.S. Government Money
Market Portfolio invests in Government Securities and repurchase agreements
collateralized by Government Securities.

-6-
<PAGE> 52
Government Securities. Government Securities include obligations that
are issued by the U.S. Treasury. These obligations, which include Treasury
bills, notes and bonds, are backed by the full faith and credit of the U.S.
government. Government Securities also include obligations issued by federal
agencies and instrumentalities ("Agency Securities"). Certain Agency Securities,
such as the Export-Import Bank of the United States, the General Services
Administration, the Government National Mortgage Association, and the Small
Business Administration, are backed by the full faith and credit of the U.S.
government. Other Agency Securities, such as obligations of the Federal Farm
Credit Banks, Federal Home Loan Banks, Federal Home Loan Mortgage Corporation,
Federal National Mortgage Association and Student Loan Marketing Association,
are backed by the right of the issuer to borrow from the U.S. Treasury under
certain circumstances or are backed by the credit of the agency or
instrumentality issuing the obligation. These types of Agency Securities are not
deemed direct obligations of the United States, and therefore involve more risk
than obligations which are backed by the full faith and credit of the U.S.
government.

Repurchase Agreements. A repurchase agreement involves the purchase of
a security by a Portfolio with an agreement by the seller of the security to
repurchase it from the Portfolio at a mutually agreed upon day and price,
frequently the next business day. The resale price is in excess of the purchase
price and reflects the rate of return earned by the Portfolio. The maturities of
repurchase agreements entered into by a Portfolio normally do not exceed seven
days. However, a Portfolio may enter into a repurchase agreement maturing in
more than seven days provided that not more than 10% of the Portfolio's net
assets would, as a result, be invested in repurchase agreements having
maturities in excess of seven days and under which the Portfolio also does not
have the right to repayment within seven days. Repurchase agreements will at all
times be fully collateralized by their underlying securities ("collateral") in
an amount at least equal to the purchase price plus accrued interest, marked to
market daily. The collateral for repurchase agreements is held by the Trust's
custodian (or a subcustodian) and is required to consist of investments of the
type in which the Portfolio is authorized to invest (without regard to the
maturity of such obligations). If the seller defaults and the value of the
collateral securing a repurchase agreement declines, a Portfolio may incur a
loss. The Portfolios, however, enter into repurchase agreements only with banks
or primary dealers designated as such by the Federal Reserve Bank of New York
and which have been determined by the Investment Adviser to present minimal
credit risk in accordance with guidelines established by the Board of Trustees
of the Trust.

Variable and Floating Rate Securities. Securities purchased by the
Portfolios may include variable and floating rate securities. The interest rates
payable on these securities are adjusted either at predesignated intervals or
whenever there is a change in an established benchmark rate of interest, and,
upon reset, the market value approximates par. These securities may also have a
demand feature under which the Portfolio can demand repayment of principal on
specified dates or after giving specified notice. The Portfolios only purchase
variable and floating rate securities that are eligible for purchase by money
market funds under applicable regulations, and therefore do not purchase
securities such as inverse floaters, range floaters, COFI floaters, capped
floaters or dual index floaters. In determining the maturities of securities and
calculating a Portfolio's dollar-weighted average portfolio maturity, variable
rate

-7-
<PAGE> 53

Government Securities are deemed to have a maturity equal to the period
remaining until the next readjustment of the interest rate. Floating rate
Government Securities with demand features are deemed to have a maturity equal
to the period remaining until the principal amount can be recovered through
demand. Although all securities purchased the Portfolios will have stated
maturities of 397 days or less, adjustable rate securities and securities
subject to a demand feature, may be deemed to have maturities which are shorter
than their stated maturity dates, pursuant to procedures adopted by the Board of
Trustees of the Trust.

When-Issued and Delayed Delivery Securities. The Portfolios may
purchase or sell securities on a when-issued or delayed delivery basis. In these
transactions, securities are purchased or sold with payment and delivery taking
place as much as a month or more in the future. The transactions are used to
secure an advantageous price and yield at the time of entering into the
transactions. However, the value of securities purchased on a when-issued basis
is subject to market fluctuation and no interest accrues to the purchaser during
the period between purchase and settlement.

Borrowings. The Portfolios do not borrow for purposes of making
investments (a practice known as "leverage"). However, they each may borrow
money from banks in an amount not exceeding one-third of the value of the
Portfolio's total assets (calculated at the time of the borrowing), for
temporary extraordinary or emergency purposes. The Portfolios may pledge their
assets to secure these borrowings. Additional investments will not be made by a
Portfolio while it has any borrowings outstanding.

Bank Obligations (Money Market Portfolio Only). The Money Market
Portfolio may purchase certificates of deposit, time deposits, bankers'
acceptances and other obligations issued by domestic banks. Certificates of
deposit are negotiable certificates evidencing the obligation of a bank to repay
funds deposited with it for a specified period of time. Time deposits are
non-negotiable deposits maintained in a banking institution for a specified
period of time (in no event longer than seven days) at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the obligation of a bank
to pay a draft drawn on it by a customer. These instruments reflect the
obligation both of the bank and of the drawer to pay the face amount of the
instrument upon maturity. Bank obligations also include obligations that are
uninsured, direct obligations bearing fixed, floating or variable interest
rates.

Banks are subject to extensive governmental regulation which may limit
both the amounts and types of loans and the financial commitments which may be
made and interest rates and fees which may be charged. The profitability of this
industry is largely dependent upon the availability and cost of capital funds
for the purpose of financing lending obligations under prevailing money market
conditions. Also, general economic conditions play an important part in the
operation of this industry and exposure to credit losses arising from possible
financial difficulties of borrowers might affect a bank's ability to meet its
obligations under a letter of credit or guarantee.

To the extent the investments of the Money Market Portfolio may be
concentrated in bank obligations, the Portfolio will have correspondingly
greater exposure to these risk factors.

COMMERCIAL PAPER AND OTHER CORPORATE OBLIGATIONS (MONEY MARKET
PORTFOLIO ONLY). The Money Market Portfolio may purchase commercial paper and
other short-term

-8-
<PAGE> 54
obligations of domestic corporations. Commercial Paper is an unsecured
promissory note issued to finance short-term credit needs of a corporation. The
other corporate obligations in which the Portfolio may invest consist of bonds,
notes (including variable amount master demand notes) and other corporate debt
which has a remaining maturity of 397 days or less.

Participation Interests (Money Market Portfolio Only). The Money Market
Portfolio may purchase from financial institutions participation interests in
securities of the type in which the Portfolio may directly invest. A
participation interest gives the Portfolio an undivided interest in the security
in the proportion that the Portfolio's participation interest bears to the total
principal amount of the security. These instruments may have fixed, floating or
variable rates of interest, with remaining maturities of 13 months or less. If
the participation interest is unrated, or has been given a rating below that
which is permissible for purchase by the Portfolio, the participation interest
will be backed by an irrevocable letter of credit or guarantee of a bank, or the
payment obligation otherwise will be collateralized by Government Securities,
or, in the case of unrated participation interests, the Investment Adviser must
have determined that the instrument is of comparable quality to those
instruments in which the Portfolio may invest. For certain participation
interests, the Portfolio will have the right to demand payment, on not more than
seven days' notice, for all or any part of the Portfolio's participation
interest in the security, plus accrued interest. As to these instruments, the
Portfolio intends to exercise its right to demand payment only upon a default
under the terms of the security, as needed to provide liquidity to meet
redemptions, or to maintain or improve the quality of its investment portfolio.

Asset-Backed Securities (Money Market Portfolio Only). The Money Market
Portfolio may purchase asset-backed securities, which are securities issued by
special purpose entities whose primary assets consist of a pool of mortgages,
loans, receivables or other assets. Payment of principal and interest may depend
largely on the cash flows generated by the assets backing the securities and, in
certain cases, supported by letters of credit, surety bonds or other forms of
credit or liquidity enhancements. The value of these asset-backed securities
also may be affected by the creditworthiness of the servicing agent for the pool
of assets, the originator of the loans or receivables or the financial
institution providing the credit support.

Investment Restrictions. Each Portfolio is subject to various
additional restrictions on its investments. Certain of these restrictions are
deemed fundamental policies and cannot be changed without the approval of the
holders of a majority of the Portfolio's outstanding voting securities, as
defined in the Investment Company Act of 1940, as amended (the "1940 Act"). See
response to Item 13 of Part B. The Trust will provide written notice to
investors in a Portfolio of any change in the investment policies or
restrictions of that Portfolio at least 30 days prior to implementing the
change.

Illiquid Investments. The Money Market Portfolio may invest up to 10%
of its net assets in illiquid investments, including repurchase agreements
having maturities of more than seven days. The U.S. Government Money Market
Portfolio may not purchase any illiquid securities, except that it may invest up
to 10% of its net assets in repurchase agreements maturing in more than seven
days. Illiquid investments may include restricted securities which are issued

-9-
<PAGE> 55
in private placement transactions and may not be resold without registration
under the Securities Act of 1933 (the "1933 Act") or an applicable exemption
from such registration. The absence of a trading market for illiquid securities
can make it difficult to ascertain a market value for those investments.
Disposing of illiquid investments may involve time-consuming negotiation and
legal expenses, and it may be difficult or impossible to sell the promptly at an
acceptable price. Restricted securities eligible for resale in exempt
transactions pursuant to Rule 144A under the 1933 Act will not be considered to
be illiquid if the securities have been determined to be liquid by the
Investment Adviser pursuant to procedures adopted by the Board of Trustees.

Investment Characteristics. The U.S. Government Money Market Portfolio
invests solely in short-term Government Securities, and repurchase agreements
collateralized by such securities. The Money Market Portfolio invests in various
types of high quality short-term debt obligations. Shares of the Portfolios are
not insured or guaranteed by the U.S. government or any government agency. The
return on an investment in the Portfolios will increase or decrease in response
to changes in short-term market interest rates. The market value of a
Portfolio's investments will fluctuate, with investments increasing in value as
interest rates fall and decreasing in value as interest rates rise. However, the
Portfolios expect to value their investments at amortized cost. As a result, any
change in the market value of an investment will not generally be reflected in
the value at which a Portfolio carries the investment. Although the Money Market
Portfolio limits its purchases of investments to those that satisfy certain
credit quality standards, the issuer of an obligation held by the Portfolio
could default on its obligation to pay interest or to repay principal. In such
event, investors in the Portfolio could suffer a loss.

Virtually all portfolio transactions for the Portfolios will be
effected on a principal basis with issuers, underwriters or dealers serving as
primary market-makers.

Item 5. Management of the Trust.

The Board of Trustees of the Trust is responsible for supervising the
operations and affairs of the Trust and the Portfolios. The Trust's officers,
who are all officers or employees of the Investment Adviser, are responsible for
the daily management and administration of the operation of the Portfolios.

As of [ ], 1998, the Investment Adviser provided investment
management services to [20] investment accounts and had aggregate assets under
management in excess of $[2] billion. In addition, through its subsidiaries,
Ambac manages its own investment portfolios of approximately $[5] billion.

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<PAGE> 56
Subject to overall supervision of the Board of Trustees, the Investment
Adviser is responsible for managing the assets of the Portfolios in accordance
with their respective investment objectives and policies. The Investment Adviser
formulates a continuing investment program and makes all decisions regarding
securities to be purchased or sold for each Portfolio. In addition, the
Investment Adviser provides all necessary administrative services to the
Portfolios, and furnishes, without expense to the Portfolios, the services of
its personnel to serve as officers and Trustees of the Trust. The Portfolios
each pay the Investment Adviser a monthly fee generally computed at the annual
rate of 0.06% of the Portfolio's average daily net assets during the month.

Shareholder Accounting and Custody Services. The Investment Adviser is
responsible for maintaining records of the ownership of shares of the Portfolios
and for determining the daily net asset values of the Portfolios. U.S. Bank
National Association, U.S. Bank Place, 601 Second Avenue, Minneapolis, Minnesota
55402, maintains custody of the investments of the Portfolios.

Portfolio Expenses. Each Portfolio pays all of its expenses, including
but not limited to: the fees of the Investment Adviser; the fees and expenses of
the Trust's independent auditors, legal counsel and custodian; taxes; brokerage
fees and commissions; interest; costs incident to meetings of Trustees and the
filing of reports with regulatory bodies and the maintenance of the Trust's
legal existence; the fees and expenses of non-interested Trustees of the Trust;
and any extraordinary expenses of a non-recurring nature. General expenses
incurred by the Trust which are not allocable to any specific series of the
Trust, including certain of the expenses noted above, are allocated to all
series of the Trust, including the Portfolios, in a manner deemed fair and
equitable by the Board of Trustees in its sole discretion.

Item 5A. Not applicable.

Item 6. Capital Stock and Other Securities.

As noted above, the Trust is a Delaware business trust organized
pursuant to a Certificate of Trust dated June 27, 1995, as amended June 30,
1997, and is authorized to issue an unlimited number of shares of beneficial
interest, $.001 par value. The Board of Trustees has the power to establish
additional series of shares, representing interests in separate investment
portfolios and, subject to applicable laws and regulations, to issue two or more
classes of shares of each series. Shares of each class and series, including
shares of the Portfolios, are issued fully paid and non-assessable, and have no
preemptive or conversion rights.

Shareholders of the Trust are entitled to vote on the election of
Trustees and the ratification of the Trust's independent auditors when those
matters are voted upon at a meeting of shareholders of the Trust. Investors in
each Portfolio are entitled to vote, as a separate class, on certain other
matters affecting that Portfolio. Each share of a Portfolio is entitled to that
number of votes which equals the net asset value of such share when and to the
extent a matter is voted on by investors in the Portfolio as a separate class.
Shares of a Portfolio held by another series of the Trust will not be entitled
to vote on matters being voted on by all shareholders of the Trust as a single
class (such as the election of Trustees) because the shareholders of the other
series will

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have the right to vote with respect to such matters. All shares of the Trust
have non-cumulative voting rights, meaning that shareholders entitled to cast
more than 50% of the votes for the election of Trustees can elect all of the
Trustees standing for election if they choose to do so.

Under Delaware law, an investor in the Portfolios could, under certain
circumstances, be held personally liable for the obligations of the Trust but
only to the extent of the investor's investment. However, the Trust's
Declaration of Trust disclaims liability of such persons and the Trustees and
officers of the Trust for acts or obligations of the Trust, which are binding
only on the assets and property of the Trust. The risk of an investor in a
Portfolio incurring financial loss on account of being an investor is limited to
circumstances in which the Trust itself would be unable to meet its obligations
and should be considered remote.

Annual meetings of shareholders of the Trust will not be held except as
required by the 1940 Act or other applicable law. A meeting will be held on the
removal of a Trustee or Trustees of the Trust if requested in writing by holders
of not less than 10% of the outstanding shares of the Trust.

Investor inquiries should be directed to the Investment Adviser.

The net income of each Portfolio is determined each day on which both
the New York Stock Exchange is open for trading and the Federal Reserve Bank of
New York is open (each, a "Business Day"). This determination is made once each
day as of 4:00 p.m. (Eastern time), except on days for which the Public
Securities Association (the "PSA") recommends an early closing of the U.S.
government securities markets when the net asset value will be computed as of
such earlier closing time. All the net income of each Portfolio is allocated pro
rata and distributed as dividends to investors in the Portfolio at the time of
this determination.

For this purpose, the net income of each Portfolio consists of (i) all
income accrued, less amortization of any premium, on the Portfolio's assets,
less (ii) all actual and accrued expenses of the Portfolio, in each case
determined from the time of the immediately preceding net income determination
and computed in accordance with generally accepted accounting principles.
Interest income includes discount earned (including original issue discount and
market discount) on discount paper, accrued ratably to the date of maturity and
any net realized gains or losses on the assets of the Portfolio.

The assets, income and distributions of the Portfolios will be managed
so that an investor in the Portfolio that is subject to taxation under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), and
invests all of its investable assets in a Portfolio, will be able to meet the
requirements of Subchapter M.

The Portfolios will elect to be taxed as partnerships for federal
income tax purposes and therefore will not be subject to any income tax.
However, each investor in a Portfolio will be deemed to have received its share
(as determined in accordance with the governing instruments of the Trust) of the
Portfolio's ordinary income and capital gains in determining its own federal
income tax liability, if any. The determination of such share will be made in
accordance with the Code.

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Item 7. Purchase of Securities.

Shares of the Portfolios are issued solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. Investments in the Portfolios may only be made by
other series of the Trust, other registered investment companies and other
collective investment vehicles which are authorized under their investment
policies and applicable laws and regulations to purchase shares of the
Portfolios. Shares may be purchased only by "accredited investors" as defined by
Regulation D under the 1933 Act.

No sales load or other charge is imposed in connection with investments
in the Portfolios. All investments in a Portfolio are made at the net asset
value of per share of that Portfolio next determined after an order to purchase
shares is received by the Portfolio. Net asset value is computed as of 4:00 p.m.
(Eastern time) on each Business Day, except on days for which the PSA recommends
an early closing of the U.S. government securities markets when the net asset
value will be computed as of such earlier closing time. Investments must be made
in federal funds (i.e., monies credited to its custodian bank by a Federal
Reserve bank).

There are no minimum initial or subsequent investment requirements
imposed by the Portfolios. However, each Portfolio reserves the right to reject
any purchase order and to modify or suspend the continuous offering of its
shares.

Each Portfolio's net asset value per share is determined by subtracting
the Portfolio's liabilities (including accrued expenses) from the total value of
its investments and other assets and dividing the result by the total number of
shares of the Portfolio outstanding. For purposes of calculating net asset value
and net asset value per share, each Portfolio's investments are valued using the
"amortized cost" method of valuation. This method involves valuing each
investment at cost and thereafter assuming a constant amortization to maturity
of any discount or premium, regardless of the impact of fluctuating interest
rates on the market value of the investment. Amortized cost valuation provides
certainty in valuation, but may result in periods during which the value of an
investment, as determined by amortized cost, is higher or lower than the price a
Portfolio would receive if it sold the investment. Use of this valuation method
is designed to permit the Portfolios to maintain stable net assets values per
share of $1.00. There can be no assurance, however, that either Portfolio will
be able to maintain a stable net asset value per share. The amortized cost
method of valuation will not be used to value an investment held by a Portfolio
if the Board of Trustees determines that such method does not constitute the
"fair value" of such investment.

Item 8. Redemption or Repurchase

An investor may redeem all or any portion of its shares of a Portfolio
at any time at the net asset value per share of the Portfolio next computed
after the receipt by the Portfolio of a redemption request in proper form.
Redemption proceeds will be paid in federal funds normally on the day the
redemption request is received, but in any event within seven days, absent
certain unusual circumstances as described below in Item 19 of Part B.

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Item 9. Pending Legal Proceedings

Not applicable.

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PART B

Item 10. Cover Page

Not applicable

Item 11. Table of Contents

Page

General Information and History......................................... 15
Investment Objectives and Policies...................................... 15
Management of the Trust................................................. 22
Control Persons and Principal Holders of Securities..................... 25
Investment Advisory and Other Services.................................. 25
Brokerage Allocation and Other Practices................................ 27
Capital Stock and Other Securities...................................... 28
Purchase, Redemption and Pricing of Securities Being Offered............ 29
Tax Status.............................................................. 31
Underwriters............................................................ 32
Calculation of Performance Data......................................... 32
Financial Statements.................................................... 33

Item 12. General Information and History

Not applicable.

Item 13. Investment Objectives and Policies.

The investment objective of each Portfolio is high current income,
consistent with preservation of capital and maintenance of liquidity. This
section provides additional information regarding the types of investments that
may be made by the Portfolios and the investment practices in which each
Portfolio may engage.

Bank Obligations (Money Market Portfolio Only). Domestic commercial
banks organized under federal law are supervised and examined by the Comptroller
of the Currency and are required to be members of the Federal Reserve System and
to have their deposits insured by the Federal Deposit Insurance Corporation (the
"FDIC"). Domestic banks organized under state law are supervised and examined by
state banking authorities but are members of the Federal Reserve System only if
they elect to join. In addition, state banks whose certificates of deposit
("CDs") may be purchased by the Money Market Portfolio are insured by the FDIC
(although such insurance may not be of material benefit to the Portfolio,
depending upon the principal amount of the CDs of each bank held by the
Portfolio) and are subject to federal examination and to a substantial body of
federal law and regulation. As a result of federal or state laws and
regulations, domestic banks, among other things, generally are required to

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maintain specified levels of reserves, limited in the amounts which they can
loan to a single borrower and subject to other regulations designed to promote
financial soundness.

Government, Treasury and Agency Securities. Each Portfolio invests in
short-term debt securities that are issued or guaranteed by the U.S. government
or an agency or instrumentality of the U.S. government ("Government
Securities"), and repurchase agreements collateralized by Government Securities.

These securities include obligations issued by the U.S. Treasury
("Treasury Securities"), including Treasury bills, notes and bonds. These are
direct obligations of the U.S. government and differ primarily in their rates of
interest and the length of their original maturities. Treasury Securities are
backed by the full faith and credit of the U.S. government. Government
Securities include Treasury Securities as well as securities issued or
guaranteed by the U.S. government or its agencies and instrumentalities ("Agency
Securities"). As described in Part A, Agency Securities are in some cases backed
by the full faith and credit of the U.S. government. In other cases, Agency
Securities are backed solely by the credit of the governmental issuer. Certain
issuers of Agency Securities have the right to borrow from the U.S. Treasury,
subject to certain conditions. Government Securities purchased by a Portfolio
may include variable and floating rate securities, which are described in Part
A.

Repurchase Agreements. As discussed in Part A, the Portfolios may enter
into repurchase agreements. A repurchase agreement, which may be viewed as a
type of secured lending by a Portfolio, involves the acquisition by the
Portfolio of a security from a selling financial institution such as a bank or
broker-dealer. The agreement provides that the Portfolio will sell back to the
institution, and that the institution will repurchase, the underlying security
("collateral") at a specified price and at a fixed time in the future. The
Portfolio will receive interest from the institution until the time when the
repurchase is to occur. Although such date is deemed to be the maturity date of
a repurchase agreement, the maturities of securities that are purchased by the
Portfolio through repurchase agreements are not subject to any limitation as to
maturity. A Portfolio may enter into repurchase agreements maturing in more than
seven days. However, a Portfolio may not enter into such a repurchase agreement
if, as a result, more than 10% of the value of its net assets would be invested
in (i) repurchase agreements under which the Portfolio does not have the right
to obtain repayment in seven days or less, and (ii) in the case of the Money
Market Portfolio, which may purchase illiquid investments, other illiquid
investments.

Because repurchase agreements involve certain risks not associated with
direct investment in securities, the Trust follows procedures designed to
minimize these risks. These procedures include requirements that the Investment
Adviser effect repurchase transactions only with banks or primary dealers
designated as such by the Federal Reserve Bank of New York, and that the bank or
dealer has been determined by the Investment Adviser to present minimal credit
risk in accordance with guidelines established and monitored by the Board of
Trustees of the Trust. In addition, the collateral underlying a repurchase
agreement is required to be held by the Trust's custodian (or a subcustodian) in
a segregated account on behalf of the respective Portfolio. The collateral is
marked to market daily and required to be maintained in an amount at

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least equal to the repurchase price plus accrued interest. In the event of a
default or bankruptcy by a selling financial institution, the Trust will seek to
liquidate the collateral. However, the exercise of the Trust's right to
liquidate collateral could involve certain costs or delays and, to the extent
that proceeds from any sale upon a default of the obligation to repurchase are
less than the repurchase price, a Portfolio will suffer a loss.

When-Issued and Delayed Delivery Securities. As noted in Part A, the
Portfolios may purchase and sell securities on a when-issued or delayed delivery
basis. These transactions arise when a Portfolio purchases or sells a security,
with payment and delivery taking place in the future beyond the normal
settlement period. A transaction of this type will be effected in order to
secure for the Portfolio an attractive price or yield at the time of entering
into the transaction. When purchasing securities on a when-issued or delayed
delivery basis, a Portfolio assumes the rights and risks of ownership, including
the risk of price and yield fluctuations. Because the Portfolio is not required
to pay for securities until the delivery date, these risks are in addition to
the risks associated with the Portfolio's other investments. If the Portfolio
remains fully invested at a time during which when-issued or delayed delivery
purchases are outstanding, such purchases will result in a form of leverage.
When a Portfolio enters into purchase transactions of this type, the Trust's
custodian maintains, in a segregated account for the Portfolio, cash and debt
obligations held by the Portfolio and having a value equal to or greater than
the Portfolio's purchase commitments. When a Portfolio has sold a security on a
when-issued or delayed delivery basis, the Portfolio does not participate in
further gains or losses with respect to the security. If the counterparty fails
to deliver or pay for the securities, the Portfolio could miss a favorable price
or yield opportunity, or could suffer a loss. When a Portfolio enters into a
sales transaction of this type, the Trust's custodian segregates the securities
sold on a delayed delivery basis to cover the Portfolio's settlement
obligations.

Asset-Backed Securities (Money Market Portfolio Only). Asset-backed
securities may be purchased by the Money Market Portfolio. These securities may
include securities such as Certificates for Automobile Receivables ("CARS") and
Credit Card Receivable Securities in "(CARDS"), as well as other asset-backed
securities that may be developed in the future. CARS represent fractional
interests in pools of car installment loans, and CARDS represent fractional
interests in pools of revolving credit card receivables. The rate of return on
asset-backed securities may be affected by early prepayment of principal on the
underlying loans or receivables. Prepayment rates vary widely and may be
affected by changes in market interest rates. It is not possible to accurately
predict the average life of a particular pool of loans or receivables.
Reinvestment of principal may occur at higher or lower rates than the original
yield. Therefore, the actual maturity and realized yield on asset-backed
securities will vary based upon the prepayment experience of the underlying pool
of loans or receivables.

Asset-backed securities represent fractional interest in pools of
retail installment loans, both secured (such as CARS) and unsecured, or leases
or revolving credit receivables, both secured and unsecured (such as CARDS).
These assets are generally held by a trust and payments or principal and
interest or interest only are passed through monthly or quarterly to certificate
holders and may be guaranteed up to certain amounts by letters of credit issued
by a financial institution affiliated or unaffiliated with the trustee or
originator of the trust.

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Underlying automobile sales contracts, leases or credit card
receivables are subject to prepayment, which may reduce the overall return to
certificate holders. Nevertheless, principal repayment rates tend not to vary
much with interest rates and the short-term nature of the underlying loans,
leases or receivables tends to dampen the impact of any change in the prepayment
level. Certificate holders may also experience delays in payment on the
certificates if the full amounts due on underlying loans, leases or receivables
are not realized by the Money Market Portfolio because of unanticipated legal or
administrative costs of enforcing the contracts or because of depreciation or
damage to the collateral (usually automobiles) securing certain contracts, or
other factors. If consistent with its investment objective and policies, the
Money Market Portfolio may invest in other asset-backed securities that may be
developed in the future.

Investment Characteristics. In managing each Portfolio, the Investment
Adviser attempts to balance the Portfolio's goal of seeking high income with its
goal of seeking to preserve capital. For this reason, a Portfolio does not
necessarily invest in securities offering the highest available yields. The
maturities of the securities purchased by a Portfolio and a Portfolio's average
portfolio maturity will vary from time to time as the Investment Adviser deems
consistent with the Portfolio's investment objective and the Investment
Adviser's assessment of risks, subject to applicable limitations on the
maturities of investments and dollar-weighted average portfolio maturity.

When market rates of interest increase, the market value of debt
obligations held by a Portfolio will decline. Conversely, when market rates of
interest decrease, the market value of obligations held by a Portfolio will
increase. Debt obligations having longer maturities generally pay higher rates
of interest, but the market values of longer term obligations can be expected to
be subject to greater fluctuations from general changes in interest rates than
shorter term obligations. These changes will cause fluctuations in the daily
amount of a Portfolio's net income and, in extreme cases, changes in interest
rates could cause the net asset value per share of a Portfolio to decline. In
the event of unusually large redemption demands, securities may have to be sold
by a Portfolio at a loss prior to maturity or a Portfolio may have to borrow
money and incur interest expense. The Investment Adviser seeks to manage
investment risk by purchasing and selling investments for the Portfolios
consistent with its best judgment and expectations regarding anticipated changes
in interest rates. However, there can be no assurance that a Portfolio will
achieve its investment objective.

Investment Ratings (Money Market Portfolio Only). Corporate obligations
purchased by the Money Market Portfolio must at the time of purchase meet
certain ratings requirements, as described in Part A. The commercial paper, bond
and other short- and long-term rating categories that satisfy these ratings
requirements which have been established by Standard & Poor's Ratings Group
("S&P"), Moody's Investors Service, Inc. ("Moody's"), Fitch Investors Service,
L.P. ("Fitch"), Duff & Phelps Credit Rating Co. ("Duff"), IBCA Limited and IBCA
Inc. ("IBCA"), and Thomson Bank Watch, Inc. ("BankWatch"), are as follows:

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Commercial Paper and Short-Term Ratings:

The designation A-1 by S&P indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those issues
determined to possess overwhelming safety characteristics are denoted with a
plus sign (+) designation.

The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term promissory obligations, and ordinarily will be evidenced
by leading market positions in well established industries, high rates of return
on funds employed, conservative capitalization structures with moderate reliance
on debt and ample asset protection, broad margins in earnings coverage of fixed
financial charges and high internal cash generation, and well established access
to a range of financial markets and assured sources of alternate liquidity.

The rating Fitch-1 (Highest Grade) is the highest commercial paper
rating assigned by Fitch. Paper rated Fitch-1 is regarded as having the
strongest degree of assurance for timely payment.

The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of timely
payment with excellent liquidity factors which are supported by ample asset
protection. Risk factors are minor.

The designation A1 by IBCA indicates that the obligation is supported
by a very strong capacity for timely repayment. Those obligations rated A1+ are
supported by the highest capacity for timely repayment.

The rating TBW-1 is the highest short-term obligation rating assigned
by BankWatch. Obligations rated TBW-1 are regarded as having the strongest
capacity for timely repayment.

Bond and Long-Term Ratings:

Bonds rated AAA by S&P are considered by S&P to be the highest grade
obligations and possess an extremely strong capacity to pay principal and
interest.

Bonds rated Aaa by Moody's are judged by Moody's to be of the best
quality. Bonds rated Aa by Moody's are judged by Moody's to be of high quality
by all standards and, together with the Aaa group, they comprise what are
generally known as high-grade bonds.

Bonds rated AAA by Fitch are judged by Fitch to be strictly high-grade,
broadly marketable, suitable for investment by trustees and fiduciary
institutions and liable to but slight market fluctuation other than through
changes in the money rate. The prime feature of an AAA bond is a showing of
earnings several times or many times interest requirements, with such stability
of applicable earnings that safety is beyond reasonable question whatever
changes occur in conditions.

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Bonds rated AAA by Duff are considered by Duff to be of the highest
credit quality. The risk factors are negligible, being only slightly more than
U.S. Treasury debt.

Obligations rated AAA by IBCA have the lowest expectation of investment
risk. Capacity for timely repayment of principal and interest is substantial,
such that adverse changes in business, economic or financial conditions are
unlikely to increase investment risk significantly.

IBCA also assigns a rating to certain international and U.S. banks. An
IBCA bank rating represents IBCA's current assessment of the strength of the
bank and whether such bank would receive support should it experience
difficulties. In its assessment of a bank, IBCA uses a dual rating system
comprised of Legal Ratings and Individual Ratings. In addition, IBCA assigns
banks Long- and Short-Term Ratings as used in the corporate ratings discussed
above. Legal Ratings, which range in gradation from 1 through 5, address the
question of whether the bank would receive support provided by central banks or
shareholders if it experienced difficulties, and such ratings are considered by
IBCA to be a prime factor in its assessment of credit risk. Individual Ratings,
which range in gradations from A through E, represent IBCA's assessment of a
bank's economic merits and address the question of how the bank would be viewed
if it were entirely independent and could not rely on support from state
authorities or its owners.

In addition to its ratings of short-term obligations, BankWatch assigns
a rating to each issuer it rates, in gradations of A through E. BankWatch
examines all segments of the organization, including, where applicable, the
holding company, member banks or associations, and other subsidiaries. In those
instances where financial disclosure is incomplete or untimely, a qualified
rating (QR) is assigned to the institution. BankWatch also assigns, in the case
of foreign banks, a country rating which represents an assessment of the overall
political and economic stability of the country in which the bank is domiciled.

Investment Restrictions. Each Portfolio is subject to a variety of
investment restrictions. Certain of these restrictions are deemed fundamental,
and may not be changed without the approval of the holders of a majority of that
Portfolio's outstanding voting securities. A "majority of the outstanding voting
securities" of a Portfolio for this purpose means the lesser of (i) 67% of the
shares of the Portfolio represented at a meeting at which holders of more than
50% of the outstanding shares are present in person or represented by proxy or
(ii) more than 50% of the outstanding shares of the Portfolio. As fundamental
investment restrictions, a Portfolio may not:

(1) Purchase a security, other than a Government Security, if as a
result of such purchase, more than 5% of the value of the Portfolio's assets
would be invested in the securities of any one issuer, or the Portfolio would
own more than 10% of the voting securities, or of any class of securities, of
any one issuer. (For purposes of this restriction, all outstanding indebtedness
of an issuer is deemed to be a single class.)

(2) Purchase a security, other than a Government Security, if as a
result of such purchase 25% or more of the value of the Portfolio's total assets
would be invested in the

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securities of issuers engaged in any one industry; except that the Money Market
Portfolio may invest more than 25% of the value of its net assets in obligations
of domestic banks (and of U.S. branches of foreign banks, but only if the Money
Market Portfolio is permitted by its then current investment policies to
purchase obligations of U.S. branches of foreign banks).

(3) Issue senior securities as defined by the 1940 Act or borrow money,
except that the Portfolio may borrow from banks for temporary extraordinary or
emergency purposes (but not for investment) in an amount up to one-third of the
value of its total assets (calculated at the time of the borrowing). A Portfolio
may not make additional investments while it has any borrowings outstanding.
This restriction shall not be deemed to prohibit a Portfolio from purchasing or
selling securities on a when-issued or delayed delivery basis, or entering into
repurchase agreements.

(4) Purchase or sell commodities or commodity contracts, or real estate
or interests in real estate (including limited partnership interests), except
that the Portfolio, to the extent not prohibited by other investment policies,
may purchase and sell securities of issuers engaged in real estate activities
and may purchase and sell securities secured by real estate or interests
therein.

(5) Underwrite the securities of other issuers, except to the extent
that, in connection with the disposition of securities, the Portfolio may be
deemed to be an underwriter under the 1933 Act.

(6) Make loans of money or securities, except through the purchase of
permitted investments, including repurchase agreements and, if permitted under
the investment policies of the Portfolio then in effect, through loans of
portfolio securities in an amount not to exceed 33 1/3% of the value of the
Portfolio's total assets. (The investment policies of the Portfolios do not
currently permit loans of portfolio securities.)

(7) Make short sales of securities or purchase securities on margin,
except for such short-term credits as may be necessary for the clearance of
transactions.

(8) Pledge, hypothecate, mortgage or otherwise encumber the Portfolio's
assets, except as may be necessary to secure permitted borrowings. (Collateral
and other arrangements incident to permissible investment practices are not
deemed to be subject to this restriction.)

Each Portfolio has the following additional investment restrictions
which are not fundamental and may be changed by the Board of Trustees, without a
vote of investors. Under these restrictions, a Portfolio may not:

(1) Make investments for the purpose of exercising control or
management of another company.

(2) Participate on a joint or joint and several basis in any trading
account in securities.

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(3) With respect to U.S. Government Money Market Portfolio, purchase
any illiquid securities, except that the Portfolio may invest in repurchase
agreements maturing in more than seven days provided that the Portfolio may not
enter into such a repurchase agreement if more than 10% of the value of the
Portfolio's net assets would, as a result, be invested in repurchase agreements
under which the Portfolio does not have the right to obtain repayment in seven
days or less.

(4) With respect to the Money Market Portfolio, purchase any illiquid
securities, including repurchase agreements maturing in more than seven days, if
as a result more than 10% of the value of the Portfolio's net assets would be
invested in illiquid securities and such repurchase agreements under which the
Portfolio does not have the right to obtain repayment in seven days or less.

(5) Invest in oil, gas or other mineral leases, rights, royalty
contracts, or exploration or development programs.

(6) Invest in warrants or rights.

(7) Purchase the securities of another investment company, except in
connection with a merger, consolidation, reorganization or acquisition of
assets.

Unless otherwise specified, all percentage and other restrictions,
requirements and limitations on investments set forth above and elsewhere in
Part B, and those set forth in Part A, apply immediately after purchase of an
investment, and subsequent changes and events do not constitute a violation or
require the sale of any investment by a Portfolio.

Item 14. Management of the Trust.

The Board of Trustees of the Trust has the overall responsibility for
monitoring the operations of the Trust and the Portfolios and supervising the
services provided by the Investment Adviser and other organizations. The
officers of the Trust are responsible for managing the day-to-day operations of
the Trust and the Portfolios.

Set forth below is information with respect to each of the Trustees and
officers of the Trust, including their principal occupations during the past
five years.

NAME, POSITION WITH TRUST, AGE PRINCIPAL OCCUPATIONS
AND ADDRESS DURING LAST FIVE YEARS

*William T. Sullivan, Jr. Chairman and Chief Executive Officer,
Trustee, Chairman, CEO and Cadre Financial Services, Inc. and Cadre
President, 52 Securities, Inc. (brokerage services)

Donald Gray Director of Finance, City of New London
Trustee, 48 Executive Director, New England
Director of Finance States Government

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City of New London Finance Officers Association
181 State St.
New London, CT 06320

Russell E. Galipo Vice President and Manager of Shawmut
Trustee, 65 Bank CT., N.A. from 1973 to 1994
4538 Alpine Drive
Lakeland, Florida 33801-0502

William J. Reynolds Retired
Trustee, 74
51 Fox Run Court
Newington, CT 06111

Brian G. Clarke Vice President and Controller of Cadre
Treasurer, 37 Financial Services, Inc.; formerly, from
1994 to 1995, Group Manager, Kidder Peabody
& Co., Inc.; prior thereto, from 1991 to
1994 Controller, Swiss Bank Investment
Banking, Inc.

William M. Sullivan, Esq. General Counsel of Cadre Financial
Secretary, 30 Services, Inc. and Cadre
Securities, Inc.

Linda Cassesse Registration Manager of Cadre Financial
Assistant Secretary, 45 Services, Inc. and Cadre Securities
Inc.; from 1995 to 1997 assisted New York
City Marshall Henry Daley; 1990 to 1995
Registration Manager Lanborn Asset
Management.

- --------------------
* Trustee who is an "interested person" of the Trust, as defined in the 1940
Act.

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Except as otherwise indicated above, the address of each Trustee and
officer of the Trust is 905 Marconi Avenue, Ronkonkoma, New York 11779. Mr.
Sullivan, Mr. Boyle, and Mr. O'Neil are Trustees who are "interested persons" of
the Trust, as defined in the 1940 Act, by virtue of their affiliations with the
Investment Adviser and/or companies affiliated with the Investment Adviser.

Trustees, other than Independent Trustees who are affiliated with
investors in other series of the Trust or with investors in the Portfolios
(which investors are not other series of the Trust) and other than Trustees who
are employees of the Investment Adviser or one of its affiliated companies, are
paid fees by the Trust. Such Trustees are paid an annual retainer of $5,000 and
receive an attendance fee of $750 for each meeting of the Board of Trustees they
attend. If such Trustees serve as members of the Audit Committee they receive an
attendance fee of $750 for each Audit Committee meeting they attend, with the
Chairman of the Audit Committee receiving an additional $1,000 annual fee. The
Audit Committee is comprised of the Independent Trustees. Officers of the Trust
receive no compensation from the Trust. All Trustees who are not employees of
the Investment Adviser or its affiliated companies are reimbursed for reasonable
out-of-pocket expenses incurred in connection with the performance of their
responsibilities, including travel related expenses. As of the date of this
Statement of Additional Information, the Trustees and officers of the Trust, as
a group, owned less than 1% of the outstanding shares of the Trust and each
Portfolio.

The following table sets forth certain information regarding the
compensation received by the Trustees of the Trust for the fiscal year ended
October 31, 1997.

COMPENSATION TABLE*

<TABLE>
<CAPTION>
AGGREGATE PENSION OR RETIREMENT TOTAL COMPENSATION
COMPENSATION BENEFITS ACCRUED AS PART FROM TRUST PAID TO
NAME OF PERSON FROM TRUST OF FUND EXPENSES TRUSTEES

<S> <C> <C> <C>
William T. Sullivan, Jr. $ 0 $ 0 $ 0

Donald W. Green $ 8,750 $ 0 $ 8,750

Eugene J. McDonald* $ 6,750 $ 0 $ 6,750

C. Roderick O'Neil $ 8,750 $ 0 $ 8,750

W. Dayle Nattress* $ 0 $ 0 $ 0

Stephen A. Attanasio* $ 0 $ 0 $ 0

Russell E. Galipo $ 6,250 $ 0 $ 6,250
</TABLE>

-24-
<PAGE> 70
Trustee, was replaced by William T. Sullivan, Jr., who was appointed on May 27,
1997 by the Board of Trustees to fill the vacancy created by Mr. Attanasio's
resignation.

Item 15. Control Persons and Principal Holders of Securities.

As of the date of this Part B, no shares of either of the Portfolios
were outstanding. The following entities owned of record or are known by the
Trust to own beneficially 5% or more of the outstanding shares of the Trust as
of March 31, 1998, through the ownership of shares of the Liquid Asset Fund, the
only series of the Trust's shares outstanding on such date:

Ambac Financial Group, Inc. 3.84%(1)
One State Street Plaza
New York, New York

City of New Britain 21.64%
7 West Main Street
New Britain, Connecticut 06051

City of Waltham 6.21%
610 Main Street
Waltham, Massachusetts 02154

City of Quincy 9.87%
1305 Hancock Street
Quincy, Massachusetts 02169

Town of Suffield 7.5%
83 Mountain Road
Suffield, CT 06078

City of Fort Walton Beach 5.66%
P.O. Box 4009
Fort Walton Beach, FL 32549-4009

(1) Shares held by subsidiaries, including Ambac Capital Corporation.

(2) Shares held by subsidiaries.

Item 16. Investment Advisory and Other Services.

The Investment Adviser, a Delaware corporation, with offices at 905
Marconi Avenue, Ronkonkoma, New York 11779, is a wholly-owned subsidiary of
Ambac Capital

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<PAGE> 71
Corporation which, in turn, is a wholly-owned subsidiary of Ambac Financial
Group, Inc. ("Ambac"). Through its subsidiaries, Ambac is a leading insurer of
municipal and structured finance obligations and a provider of investment
contracts, and investment advisory and administration services to state
municipalities, and municipal authorities. Ambac is a publicly held company
whose shares are traded on the New York Stock Exchange.

Investment Advisory Agreement. Pursuant to an Investment Advisory
Agreement with the Trust dated _______________, 1998 (the "Agreement"), the
Investment Adviser manages the investment of each Portfolio's assets and places
orders for the purchase and sale of investments for the Portfolios. The
Investment Adviser also provides or furnishes, at its own expense, such office
space, facilities, equipment, clerical help, and other personnel and services as
may reasonably be necessary to render the services under the Agreement. In
addition, the Investment Adviser provides all necessary administrative services
to the Portfolio, and pays the salaries of officers of the Trust and any fees
and expenses of Trustees of the Trust who are also officers, directors or
employees of the Investment Adviser, or who are officers or employees of any
company affiliated with the Investment Adviser, and bears the cost of telephone
service, heat, light, power and other utilities associated with the services it
provides. As compensation for services rendered and expenses assumed by the
Investment Adviser, the Agreement provides for the payment by each Portfolio of
a monthly fee to the Investment Adviser, which fees are calculated daily and
computed at the annual rate of 0.06% of the net assets of each Portfolio.

The Agreement provides that in the absence of willful misfeasance, bad
faith, negligence or reckless disregard of its obligations thereunder, the
Investment Adviser is not liable to the Trust, the Portfolios or shareholders of
the Trust for any act or omission by the Investment Adviser or for any losses
sustained by the Trust, the Portfolios or shareholders of the Trust. The
Agreement in no way restricts the Investment Adviser from acting as investment
adviser to others.

The Agreement was approved by the Board of Trustees of the Trust,
including a majority of the Independent Trustees, who are not parties to the
Agreement or interested persons of the Investment Adviser, for an initial term
expiring ____________, 2000 at a meeting held in person on _____________, 1998.
The Agreement was also approved by the shareholders of Liquid Asset Fund on
__________, 1998. (Liquid Asset Fund was the sole operating series of the Trust
as of such date and intends to invest all of its investable assets in the U.S.
Government Money Market Portfolio.) The Agreement may be continued in effect
from year to year with respect to a Portfolio after its initial term upon the
approval of the holders of shares of that Portfolio or the approval of the Board
of Trustees. In seeking such approval by the holders of shares of a Portfolio,
each series of the Trust which is an investor in the Portfolio and each other
investment company or series thereof which is an investor in the Portfolio will
seek instructions from its shareholders as to how that series' or company's
interest in the Portfolio will be voted and will vote its interest in accordance
with those instructions. In the case of certain other investment funds that
invest in the Portfolio, such funds may vote their shares either in accordance
with the same procedures or in the same proportion as the shares of other
holders of shares of the Portfolio are voted. Each annual continuance of the
Agreement also requires approval by a vote of a majority of the Independent
Trustees cast in person at a meeting called

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<PAGE> 72
for the purpose of voting on such continuance. The Agreement may be terminated
with respect to a Portfolio at any time, without penalty, on sixty days' written
notice by the Board of Trustees of the Trust, by vote of the holders of a
majority (as defined in the 1940 Act) of the outstanding securities of the
Portfolio, or by the Investment Adviser. The Agreement provides for its
automatic termination in the event of its assignment (as defined in the 1940 Act
and the rules thereunder).

Custodian. U.S. Bank National Association, U.S. Bank Place, 601 Second
Avenue South, Minneapolis, Minnesota 55402, serves as custodian of the Trust's
assets and maintains custody of each Portfolio's cash and investments. Cash held
by the custodian, which may be substantial, is insured by the Federal Deposit
Insurance Corporation up to the amount of available insurance coverage limits
(presently $100,000).

Independent Accountants. KPMG Peat Marwick LLP, 345 Park Avenue, New
York, New York, 10154, are independent auditors of the Trust. The independent
auditors are responsible for auditing the financial statements and prepare tax
returns of each Portfolio. The selection of independent auditors is approved
annually by the Board of Trustees.

Item 17. Brokerage Allocation and Other Practices.

Subject to the general supervision of the Board of Trustees of the
Trust, the Investment Adviser is responsible for decisions to buy and sell
securities for the Portfolios and for the selection of dealers to effect those
transactions. Purchases of securities for the Portfolios will be made from
issuers, underwriters and dealers. Sales of securities will be made to dealers
and issuers. The Portfolios do not normally incur brokerage commissions on
transactions in the types of securities in which they invest. These transactions
are generally traded on a "net" basis, with dealers acting as principal in such
transactions. However, the price at which securities are purchased from and sold
to dealers will usually include a spread which represents a profit to the
dealer. Securities purchased in underwritten offerings include a fixed amount of
compensation to the underwriter (an underwriting concession).

In placing orders for the purchase and sale of investments for the
Portfolios, the Investment Adviser gives primary consideration to the ability of
dealers to provide the most favorable prices and efficient executions on
transactions. If such price and execution are obtainable from more than one
dealer, transactions may be placed with dealers who also furnish research
services to the Trust or the Investment Adviser. Such services may include, but
are not limited to, any one or more of the following: information as to the
availability of securities for purchase or sale; statistical or factual
information or opinions pertaining to investments; wire services; and appraisals
or evaluations of securities. These research services may be of benefit to

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<PAGE> 73
the Investment Adviser or its affiliates in the management of accounts of other
clients, or the accounts of the Investment Adviser and its affiliated companies,
and may not in all cases benefit the Portfolios. While such services are useful
and important in supplementing the Investment Adviser's own research and
facilities, the Investment Adviser believes the value of such services is not
determinable and does not significantly reduce its expenses.

The Investment Adviser serves as the investment adviser to other
clients, including other series of the Trust and other investment funds, and
follows a policy of allocating investment opportunities and purchase and sale
transactions equitably among its clients. In making such allocations, the
primary factors considered are the respective investment objectives, the
relative size of portfolio holdings of the same or comparable securities, and
the availability of cash for investment. This procedure may have an adverse
effect on a client, including the Portfolios, in a particular transaction, but
is expected to benefit all clients on a general basis.

The Investment Adviser and its affiliates may invest in the same
securities that are purchased for its clients. This at times may adversely
affect the prices that can be obtained in transactions for the Portfolios or the
availability of securities for purchase by the Portfolios. In the case of
simultaneous orders to purchase or sell the same securities being handled by the
Investment Adviser and involving a client account and the account of the
Investment Adviser or one of its affiliates, client orders will be given
preference so that client transactions will not be adversely affected by
transactions being placed by the Investment Adviser for its own account or for
the accounts of its affiliates. Investments made on behalf of the Investment
Adviser or its affiliates are effected in transactions which are separate from
any transactions for the accounts of clients in the same securities.

Item 18. Capital Stock and Other Securities.

Interests in each Portfolio are represented by shares of beneficial
interest, $.001 par value. The Trust is authorized to issue an unlimited number
of shares, and may issue shares in series, with each series representing
interests in a separate portfolio of investments (a "fund").

Each share of each fund represents an equal proportionate interest in
that fund with each other share of such fund, without any priority or preference
over other shares. All consideration received for the sales of a particular
fund, all assets in which such consideration is invested, and all income,
earnings and profits derived therefrom are allocated to and belong to that fund.
As such, the interest of shareholders in each fund are separate and distinct
from the interest of shareholders of the other funds, if any, comprising the
Trust, and shares of a fund are entitled to dividends and distributions only out
of the net income and gains, if any, of that fund as declared by the Board of
Trustees. The assets of each fund are segregated on the Trust's books and are
charged with the expenses and liabilities of that fund and with a share of the
general expenses and liabilities of the Trust not attributable to other funds.
The Board of Trustees determines those expenses and liabilities deemed to be
general, and these items are allocated among funds in a manner deemed fair and
equitable by the Board of Trustees in its sole discretion.

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<PAGE> 74
Investors in each Portfolio participate pro rata in the distribution of
taxable income, loss, gain and credit of that Portfolio. Upon liquidation of a
Portfolio, investors in that Portfolio are entitled to share pro rata in the
Portfolio's net assets available for distribution to investors.

Item 19. Purchase, Redemption and Pricing of Securities Being Offered.

Distribution of Shares. Shares of the Portfolios are issued solely in
private placement transactions which do not involve any "public offering" within
the meaning of Section 4(2) of the 1933 Act. An investment in the Portfolios may
be made only by other series of the Trust, other registered investment companies
and other collective investment vehicles which are authorized under their
investment policies and applicable laws and regulations to purchase shares of
the Portfolios. Such investors must be "accredited investors" within the meaning
of Regulation D under the 1933 Act.

As described in Item 7 of Part A, shares of the Portfolios are sold,
without a sales charge, at the net asset value next computed after receipt of a
purchase order by the Portfolio. Net asset value is computed once daily for each
Portfolio, on each day on which both the New York Stock Exchange is open for
trading and the Federal Reserve Bank of New York is open (each, a "Business
Day"), as described below.

Cadre Securities, Inc. ("CSI"), an affiliate of the Investment Adviser
with offices at 905 Marconi Avenue, Ronkonkoma, New York 11779, which is an
indirect subsidiary of Ambac, acts as placement agent for shares of the
Portfolios pursuant to the terms of a placement agency agreement with the Trust
(the "Placement Agreement"). The Portfolios do not pay any compensation to CSI
for its services as placement agent.

The Board of Trustees, including a majority of the Independent
Trustees, approved the Placement Agreement at a meeting held in person on [ ],
1998. The Placement Agreement will remain in effect until [ ], 2000, and may be
continued in effect from year to year thereafter if approved annually by the
Board of Trustees, including a majority of the Independent Trustees, by vote
cast in person at a meeting called for such purpose. The Placement Agreement may
be terminated at any time, without penalty, by either party upon 60 days written
notice and terminates automatically in the event of an "assignment" as defined
by the 1940 Act and the rules thereunder. Under the Placement Agreement, CSI is
required to bear all of the costs associated with distribution of shares to
investors in the Portfolios. The Trust has agreed to indemnify CSI to the extent
permitted by applicable law against certain liabilities under the Securities Act
of 1933, as amended.

Redemption of Shares. The proceeds of the redemption of shares of the
Portfolios are normally paid as described in the Part A. However, the payment of
redemption proceeds may be postponed by a Portfolio for more than seven days or
the right of redemption suspended at times (a) when the New York Stock Exchange
is closed for other than customary weekends and holidays, (b) when trading on
the New York Stock Exchange is restricted, (c) when an emergency exists as a
result of which disposal by the Portfolio of securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Portfolio to
determine fairly the

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<PAGE> 75
value of its net assets, or (d) during any other period when the SEC, by order,
so permits for the protection of investors. Applicable rules and regulations of
the SEC will govern as to whether the conditions described in (b) or (c) exist.
In addition, in the event that the Board of Trustees of the Trust determines
that it would be detrimental to the best interests of remaining investors of a
Portfolio to pay any redemption or redemptions in cash, a redemption payment may
be made in whole or in part by a distribution in kind of portfolio securities
held by the Portfolio, subject to applicable rules of the SEC. Any securities
distributed in kind will be readily marketable and will be valued, for purposes
of the redemption, in the same manner as such securities are normally valued by
the Portfolio in computing its net asset value. In the unlikely event that
shares of a Portfolio are redeemed in kind, the redeeming investor would incur
transaction costs in converting the distributed securities to cash. The Trust
has elected to be governed by Rule 18f-1 under the 1940 Act and is therefore
obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of
the net asset value of a Portfolio during any 90 day period for any one
investor.

Computation of Net Asset Value. Part A describes the days on which the
net asset values per share of the Portfolios are computed for purposes of
purchases and redemptions of shares by investors in the Portfolios, and also
sets forth the times as of which such computations are made. Net asset value is
computed once daily as of 4:00 p.m. (Eastern time) on each Business Day, except
as described below. The New York Stock Exchange currently observes the following
holidays: New Year's Day; Martin Luther King's Birthday (third Monday in
January); Presidents' Day (third Monday in February); Good Friday (Friday before
Easter); Memorial Day (last Monday in May); Independence Day; Labor Day (first
Monday in September); Thanksgiving Day (fourth Thursday in November); and
Christmas Day. The Federal Reserve Bank of New York currently observes all the
holidays listed above except Good Friday, and also observes Columbus Day (second
Monday in October) and Veterans Day.

Net asset value is computed as of the closing time of the U.S.
government securities markets on days when the PSA recommends an early closing
of such markets. Early closings may occur the Fridays preceding the following
holidays: Martin Luther King's Birthday, Presidents' Day, Memorial Day, Labor
Day and Columbus Day, and the business days preceding the following holidays:
Independence Day, Veterans Day, Thanksgiving Day, Christmas Day, and New Year's
Day, and the Friday succeeding Thanksgiving Day.

In accordance with rules adopted by the SEC, the amortized cost method
of valuation is used to determine the value of the investments held by each
Portfolio. Amortized cost involves valuing a security at its cost and amortizing
any discount or premium over the period remaining until the maturity of the
security. This method of valuation does not take into account unrealized capital
gains and losses resulting from changes in the market values of the securities.
The market values of debt securities purchased by a Portfolio will generally
fluctuate as a result of changes in prevailing interest rate level and other
factors.

In order to use the amortized cost method of valuation, a Portfolio is
required to maintain a dollar-weighted average maturity of 90 days or less, to
purchase securities with remaining maturities of 397 days or less and to invest
only in securities which have been

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<PAGE> 76

determined by the Investment Adviser, under procedures adopted by the Board of
Trustees, to present minimal credit risks and to be of eligible credit quality
under applicable regulations. In addition, procedures have been adopted by the
Board of Trustees which are designed to stabilize, to the extent reasonably
possible, the prices of shares of the Portfolios, as computed for purposes of
sales and redemptions of shares, at $1.00. These procedures include review by
the Board of Trustees, at such intervals as it deems appropriate, to determine
whether the net asset value per share of each Portfolio calculated by using
available market quotations for the investments of the Portfolio deviates from
the net asset value per share of $1.00 computed by using the amortized cost
method to value such investments. If such deviation exceeds 1/2 of 1%, the Board
will promptly consider what action, if any, should be taken. The Trustees will
take such action as they deem appropriate to eliminate or to reduce, to the
extent reasonably practicable, any material dilution or other unfair results
which might arise from differences between the two valuation methods. Such
action may include selling instruments prior to maturity to realize capital
gains or losses or to shorten average maturity, redeeming shares of the
Portfolio in kind, withholding dividends or the distribution of net income,
paying distributions from capital gains, or utilizing a net asset value per
share that is based upon available market quotations. Use of amortized cost
valuation by the Portfolios is subject to certain additional requirements
imposed by SEC rules.

Item 20. Tax Status.

The Trust is organized as a Delaware business trust. The Portfolios are
separate series of the Trust. Under the anticipated method of operation of each
Portfolio as a partnership for federal income tax purposes, each Portfolio will
not be subject to any income tax. However, each investor in a Portfolio that is
not a tax-exempt investor will be taxable on its share (as determined in
accordance with the governing instruments of the Trust) of that Portfolio's
ordinary income and capital gains in determining income tax liability. The
determination of such shares will be made in accordance with the Code and
regulations promulgated thereunder.

The taxable year-end of each Portfolio is October 31. Although, as
described above, the Portfolios will not be subject to federal income tax, the
Trust will file appropriate income tax returns with respect to the Portfolios.

The Trust believes that, in the case of an investor in a Portfolio that
seeks to qualify as a regulated investment company ("RIC") under the Code, the
investor should be treated for federal income tax purposes as an owner of an
undivided interest in the assets and operations of the Portfolio, and
accordingly, should be deemed to own a proportionate share of each of the assets
of the Portfolio and should be entitled to treat as earned by it the portion of
the Portfolio's gross income attributable to that share. The Trust also believes
that each such investor should be deemed to hold its proportionate share of a
Portfolio's assets for the period the Portfolio has held the assets or for the
period the investor has been a partner in the Portfolio, whichever is shorter.
Each investor in a Portfolio should consult its tax advisers regarding whether,
in light of its particular tax status and any special tax rules applicable to
it, this approach applies to its investment in the Portfolio, or whether the
investor has no direct interest in Portfolio assets or operations.

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<PAGE> 77
In order to enable an investor in a Portfolio that is otherwise
eligible to qualify as a RIC under the Code to so qualify, each Portfolio
intends to satisfy the requirements of Subchapter M of the Code relating to the
nature of the Portfolio's gross income and the composition (diversification) of
the Portfolio's assets as if those requirements were directly applicable to the
Portfolio, and to allocate and distribute its net investment income and any net
realized capital gains in a manner that will enable an investor in the Portfolio
that is a RIC to comply with the qualification requirements imposed by
Subchapter M.

Each Portfolio will allocate at least annually among its investors each
investor's distributive share of the Portfolio's net investment income
(including net investment income derived from interest on U.S. Treasury
obligations), net realized capital gains, and any other items of income, gain,
loss, deduction or credit in a manner intended to comply with the Code and
applicable regulations.

To the extent the cash proceeds of any redemption or distribution
exceed an investor's adjusted tax basis in shares of a Portfolio, the investor
will generally recognize gain for federal income tax purposes. If, upon a
complete redemption, the investor's adjusted tax basis in shares of a Portfolio
exceeds the proceeds of the redemption, the investor generally will recognize a
loss for federal income tax purposes. An investor's adjusted tax basis in shares
of a Portfolio will generally be the aggregate price paid therefor, increased by
the amounts of its distributive share of items of realized net income (including
income, if any, exempt from federal income tax) and gain, and reduced, but not
below zero, by the amounts of its distributive share of items of realized net
loss and the amounts of any distributions received by the investor.

Portfolio income allocated to investors that is derived from interest
on obligations of the U.S. government and certain of its agencies and
instrumentalities (but generally not from capital gains realized upon the
disposition of such obligations) may be exempt from state and local taxes. The
Trust will advise investors in the Portfolios of the extent, if any, to which a
Portfolio's income consists of such interest. Investors are urged to consult
their tax advisers regarding the possible exclusion of such portion of the
income allocated to them by a Portfolio for state and local income tax purposes.

The above discussion does not address the special tax rules applicable
to certain classes of investors, such as tax-exempt entities, or the state,
local or non-U.S. tax laws that may be applicable to certain investors.
Investors should consult their own tax advisers with respect to the special tax
rules that may apply to their particular situations, as well as the state, local
or foreign tax consequences of them investing in a Portfolio.

Item 21. Underwriters.

CSI acts as the placement agent for shares of the Portfolios. See
Item 19.

Item 22. Calculation of Performance Data.

Not applicable.

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<PAGE> 78
Item 23. Financial Statements.

As of the date of this Part B, the Portfolios had no assets and had not
yet commenced their operations. Accordingly, no financial statements of the
Portfolios are included herein.

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<PAGE> 79
PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits.

(a) Financial Statements:

Included in Part A:

Financial Highlights for the Liquid Asset Fund series
of Registrant.

Included in Part B:

The Financial Statements for the Liquid Asset Fund
series of Registrant contained in Registrant's Annual
Report for the fiscal year ended October 31, 1997 and
the Report of Independent Auditors thereon are
incorporated by reference to the Definitive 30b-2
filed (Edgar Form N-30D) on December 30, 1997, as
Accession #0000947562-97-00003.

Included in Part C:

Consent of Independent Auditors is filed as Exhibit
11 to this Post-Effective Amendment No. 3.

(b) Exhibits:

Exhibit Description
Number

1(a) Amended and Restated Certificate of Trust
dated June 30, 1997, previously filed as
Exhibit 1(a) to Post-Effective Amendment No.
3, March 2, 1998.

(b) Amended and Restated Declaration of Trust
dated June 30, 1997, previously filed as
Exhibit 1(b) to Post-Effective Amendment No.
3, March 2, 1998.

C-1
<PAGE> 80

2 By-Laws of Registrant, previously filed as
Exhibit 2 to Post-Effective Amendment No. 2,
February 28, 1997.

3 Not Applicable.

4 Instruments defining rights of holders of
the securities being offered, previously
filed as Exhibit 4 to Post-Effective
Amendment No. 2, February 28, 1997.

5 Form of Investment Advisory Agreement
between Registrant and Cadre Financial
Services, Inc.is filed herewith.

6(a) Distribution Agreement between Registrant
and Cadre Securities, Inc., previously filed
as Exhibit 6 to Post-Effective Amendment No.
3, March 2, 1998.

(b) Form of Placement Agency Agreement between
Registrant and Cadre Securities, Inc. is
filed herewith.

7 Not Applicable.

8 Custodian Agreement between Registrant and
First Trust National Association (now known
as U.S. Bank National Association), dated
March 16, 1998, is filed herewith.

9(a) Administration Agreement between Registrant
and CadreFinancial Services, Inc., dated
August 1, 1997, previously filed as Exhibit
9(a) to Post-Effective Amendment No. 3,
March 2, 1998.

Form of amendment to Schedules A and B of
Administration Agreement is filed herewith.

(b) Transfer Agent Agreement between Registrant
and Cadre Financial Services, Inc., dated
August 1, 1997, previously filed as Exhibit
9(b) to Post-Effective Amendment No. 3,
March 2, 1998).

10 Not Applicable.

C-2
<PAGE> 81
11 Consent of Independent Auditors is filed
herewith.

12 Not Applicable.

13 Agreement Regarding Initial Capital,
previously filed as Exhibit 13 to
Post-Effective Amendment No. 2, February 28,
1997.

14 Not applicable.

15 Not applicable.

16 Not applicable.

17 Not applicable.

18 Not applicable.

Item 25. Persons Controlled by or Under Common Control with Registrant.

None.

Item 26. Number of Holders of Securities.

Number of Record Holders

<TABLE>
<CAPTION>
<S> <C>
Number of Holders
Name of Fund (as of March 31, 1998)
------------ ----------------------
<S> <C>
Liquid Asset Fund 34
Institutional Reserves Fund None.
U.S. Government Money Market Portfolio None.
Money Market Portfolio None.
</TABLE>

Item 27. Indemnification.

As permitted by Section 17(h) and (i) of the Investment Company Act of
1940, as amended (the "Investment Company Act"), and pursuant to Article VI of
Registrant's By-Laws, officers, trustees, employees and agents of Registrant may
be indemnified against certain liabilities in connection with Registrant, and
pursuant to Section 1.10 of the Distribution Agreement (previous file as Exhibit
6), Cadre Securities, Inc. as principal underwriter of Registrant, may be
indemnified against certain liabilities which it may incur. Such Article VI of
the By-Laws and Section 1.10 of the Distribution Agreement are hereby
incorporated by reference in their entirety.

C-3
<PAGE> 82
Registrant intends to maintain an insurance policy insuring its
officers and trustees against certain liabilities, and certain costs of
defending claims against such officers and trustees, and to bear the costs of
such policy except for such costs as is determined to be attributable to
coverage protecting such persons against liabilities to which they may become
subject as a consequence of their own willful misfeasance, bad faith, gross
negligence or reckless disregard in the performance of their duties. The
insurance policy will also insure Registrant against the cost of indemnification
payments to officers and trustees under certain circumstances.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "1933 Act"), may be permitted to trustees, officers
and controlling persons of Registrant and the principal underwriter pursuant to
the foregoing provisions or otherwise, Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the 1933 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by Registrant of expenses incurred or paid
by a trustee, officer, or controlling person of Registrant and the principal
underwriter in connection with the successful defense of any action, suit or
proceeding) is asserted against Registrant by such trustee, officer or
controlling person or the principal underwriter in connection with the shares
being registered, Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.

Registrant hereby undertakes that it will apply the indemnification
provisions of its By-Laws in a manner consistent with Release No. 11330 of the
Securities and Exchange Commission under the Investment Company Act so long as
the interpretations of Sections 17(h) and 17(i) of the Investment Company Act
remain in effect and are consistently applied.

Item 28. Business and Other Connections of Investment Adviser.

See "Management of the Trust" in the Prospectus constituting Part A of
this Registration Statement and "Investment Advisory Arrangements" in the
Statement of Additional Information constituting Part B of this Registration
Statement.

Reference is made to the Form ADV (File No. 801-50048) and Schedules
thereto on file with the Commission of Cadre Financial Services, Inc., for a
description of the names and employments of the directors, officers and partners
of Cadre Financial Services, Inc., and other required information. Except as
otherwise indicated, the address of each such person is 905 Marconi Avenue,
Ronkonkoma, New York 11779.

Item 29. Principal Underwriters.

(a) In addition to Cadre Institutional Investors Trust, Cadre
Securities, Inc. (the "Distributor") currently acts as distributor for the
following registered invested companies: The Cadre Network Health Financial
Services Trust and Investment Services for Education Associations. The
Distributor is registered with the Securities and Exchange Commission as a

C-4
<PAGE> 83
broker-dealer and is a member of the National Association of Securities Dealers,
Inc. The Distributor is a wholly-owned subsidiary of Ambac Capital Corporation
which, in turn, is a wholly owned subsidiary of Ambac Financial Group, Inc.

(b) The information required by this Item 29 (b) with respect to each
director, officer, or partner of Cadre Securities, Inc. is incorporated by
reference to Schedule A of Form BD filed by Cadre Securities, Inc. with the
Securities and Exchange Commission pursuant to the Securities Act of 1934 (File
No. 8-49667).

Item 30. Location of Accounts and Records.

All accounts books and other documents required to be maintained by
Registrant by Section 31(a) of the Investment Company Act of 1940 and the rules
thereunder are maintained at the offices of Cadre Financial Services, Inc., 905
Marconi Avenue, Ronkonkoma, New York 11779

Item 31. Management Services.

Not Applicable.

Item 32. Undertakings.

(a) Not Applicable.

(b) Not Applicable.

(c) The Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest annual report to
shareholders, upon request, and without charge.

C-5
<PAGE> 84
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, as amended, the Registrant, Cadre Institutional
Investors Trust, has duly caused this Post-Effective Amendment No. 5 to its
Registration Statement to be signed on its behalf by the undersigned, thereto
duly authorized, in the County of Suffolk, and State of New York, on the 24th
day of April, 1998.

Cadre Institutional Investors Trust

By: /s/ William T. Sullivan, Jr.
-------------------------------
William T. Sullivan, Jr.
Chairman and President

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Amendment No.4 to the Registration Statement has been signed
below by the following persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ William T. Sullivan, Jr. Trustee, President April 24, 1998
- ---------------------------- (Principal Executive Officer)
William T. Sullivan, Jr.

/s/ David L. Boyle Trustee April 24, 1998
- ----------------------------
David L. Boyle

/s/ Russell E. Galipo Trustee April 24, 1998
- ----------------------------
Russell E. Galipo

/s/ Donald E. Gray Trustee April 24, 1998
- ----------------------------
Donald E. Gray

/s/ Donald W. Green Trustee April 24, 1998
- ----------------------------
Donald W. Green

/s/ C. Roderick O'Neil Trustee April 24, 1998
- ----------------------------
C. Roderick O'Neil

/s/ William J. Reynolds Trustee April 24, 1998
- ----------------------------
William J. Reynolds

/s/ Peter Poillon Treasurer April 24, 1998
- ---------------------------- (Principal Financial Officer)
Peter Poillon
</TABLE>

C-6
<PAGE> 85
INDEX TO EXHIBITS

5 Form of Investment Advisory Agreement

6(b) Form of Placement Agreement

8 Custodian Agreement

9(a) Form of amendment to Schedules A and B of Administration Agreement

11 Consent of Independent Auditors

<PAGE> 1

INVESTMENT ADVISORY AGREEMENT

AGREEMENT made the __ day of June, 1998 by and between Cadre
Institutional Investors Trust, a Delaware business trust (hereinafter called
the "Trust"), and Cadre Financial Services, Inc., a Delaware corporation
(hereinafter called the "Adviser"):

WHEREAS, the Trust engages in business as an open-end
management investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Act"); and the Adviser is registered as
an investment adviser under the Investment Advisers Act of 1940, and engages in
the business of acting as investment adviser; and

WHEREAS, the Trust desires to retain the Adviser to render
investment advisory with respect to certain series of the Trust and to provide
certain other services in the manner and on the terms and conditions
hereinafter set forth; and

WHEREAS, the Adviser desires to be retained to perform such
services on said terms and conditions:

NOW, THEREFORE, this Agreement

W I T N E S S E T H:
that in consideration of the premises and the mutual covenants hereinafter
contained, the Trust and the Adviser agree as follows:

1. The Trust hereby retains the Adviser to act as
investment adviser to the series of the Trust identified in Schedule A of this
Agreement (each, a "Portfolio" and collectively, the "Portfolios") and, subject
to the supervision of the Board of Trustees of the Trust, to manage the
investment activities of the Portfolios and to provide certain other services
as hereinafter set forth.

Without limiting the generality of the foregoing, the Adviser shall:
obtain and evaluate such information and advice relating to the economy,
securities and commodities markets, and securities and commodities as it deems
necessary or useful to discharge its duties hereunder; continuously manage the
assets of the Portfolios in a manner consistent with the investment objectives,
policies and restrictions of each Portfolio and applicable laws and
regulations; determine the securities and commodities to be purchased, sold or
otherwise disposed of by the Portfolios and the timing of such purchases, sales
and dispositions; and take such further action, including the placing of
purchase and sale orders and the voting of securities on behalf of the
Portfolios, as the Adviser shall deem necessary or appropriate. The Adviser
shall furnish to or place at the disposal of the Trust such of the information,
evaluations, analyses and opinions formulated or obtained by the Adviser in
the discharge of its duties as the Trust may, from time to time, reasonably
request.
<PAGE> 2
2. The Adviser shall also provide such administrative
services as may be necessary in connection with the operations of the
Portfolios, and including without limitation: maintenance of the accounting
books and records of the Portfolios; valuation of the assets of the Portfolios;
calculation of the net asset values per share; maintenance of records regarding
the ownership of shares of the Portfolios; preparation and filing of tax
returns of the Portfolios; and preparation of materials for meetings of the
Board of Trustees of the Trust and meetings of shareholders and preparation of
regulatory reports and filings, insofar as the foregoing relate to the
Portfolios, and the distribution and filing of such materials.

3. The Adviser shall, at its own expense, maintain such
staff and employ or retain such personnel and consult with such other persons
as may be necessary to render the services required to be provided or furnished
by it pursuant to this this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of the Adviser shall be deemed to include
persons employed or otherwise retained by the Adviser to furnish statistical
and other factual data, advice regarding economic factors and trends,
information with respect to technical and scientific developments, and such
other information, advice and assistance as the Adviser may desire.

4. The Trust will, from time to time, furnish or
otherwise make available to the Adviser such financial reports, proxy
statements, policies and procedures and other information relating to the
business and affairs of the Trust as the Adviser may reasonably require in
order to discharge its duties and obligations hereunder.

5. The Adviser shall bear the cost of rendering the
services to be performed by it under this Agreement, and shall provide the
Trust with such office space, facilities, equipment, clerical help, and other
personnel and services as the Trust shall reasonably require in connection with
the operations of the Portfolios. The salaries of officers of the Trust, and
the fees and expenses of Trustees of the Trust, who are also directors,
officers or employees of the Adviser, or who are officers or employees of any
company affiliated with the Adviser, shall be paid and borne by the Adviser or
such affiliated company.

6. The Trust assumes and shall pay or cause to be paid
all expenses of the Trust and the Portfolios not expressly assumed by the
Adviser under this Agreement, including without limitation: any payments
pursuant to any plan of distribution adopted by the Trust; the fees, charges
and expenses of any registrar, custodian, accounting agent, administrator,
stock transfer and dividend disbursing agent; brokerage commissions; taxes;
registration costs of the Trust and its shares under federal and state
securities laws; the costs and expenses of engraving and printing stock
certificates; the costs and expenses of preparing, printing, including
typesetting, and distributing prospectuses and statements of additional
information of the Trust and the Portfolios and supplements thereto to the
Trust's shareholders; all expenses of shareholders and Trustees meetings and of
preparing, printing and mailing proxy statements and reports to shareholders;
fees and travel expenses of Trustees and members of any advisory board or
committee who are not also officers, directors or employees of the Adviser or
who are not officers or employees of any company affiliated with the Adviser;
all expenses incident to any dividend, withdrawal or redemption options;
charges and expenses of any outside service used
<PAGE> 3
for pricing of the Trust's shares; fees and expenses of legal counsel to the
Trust and its Trustees; fees and expenses of the Trust's independent
accountants; membership dues of industry associations; interest payable on
Trust borrowings; postage; insurance premiums on property or personnel
(including officers and Trustees) of the Trust which inure to its benefit; and
extraordinary expenses (including but not limited to, legal claims and
liabilities and litigation costs and any indemnification related thereto).

7. As full compensation for the services and facilities
furnished to the Trust and the expenses assumed by the Adviser under this
Agreement, each Portfolio shall pay to the Adviser a fee with respect to such
Portfolio, calculated in accordance with Schedule B hereto. This fee shall be
paid monthly. Subject to the provisions of paragraph 8 hereof, payment of the
Adviser's compensation for the preceding month shall be made as promptly as
possible after completion of the computations contemplated by paragraph 8
hereof.

8. In the event the operating expenses of a Portfolio,
including amounts payable to the Adviser pursuant to paragraph 7 hereof, for
any fiscal year ending on a date on which this Agreement is in effect, exceed
the expense limitation applicable to the Portfolio under any state securities
laws or regulations that may then be applicable to the Trust (as such
limitations may be raised or lowered, or as they may be waived upon application
of the Trust or the Adviser from time to time), the Adviser shall reduce its
fee to the extent of such excess and, if required pursuant to any such laws or
regulations, will reimburse the Portfolio for annual operating expenses in
excess of such expense limitation; provided, however, that there shall be
excluded from expenses the amount of any interest, taxes, brokerage
commissions, distribution fees and extraordinary expenses (including but not
limited to legal claims and liabilities and litigation costs and any
indemnification relating thereto) paid or payable by the Trust or the
Portfolios to the extent permissible under applicable laws and regulations.
The amount of any such reduction in fee or reimbursement of expenses shall be
calculated and accrued daily and settled on a monthly basis, based upon the
expense limitation applicable as at the end of the last business day of the
month. Should two or more such expense limitations be applicable as at the end
of the last business day of the month, that expense limitation which results in
the largest reduction in the Adviser's fee shall be applicable.

For purposes of this provision, should any applicable expense
limitation be based upon the gross income of a Portfolio, such gross income
shall include, but not be limited to, interest on debt securities held by the
Portfolio accrued to and including the last day of the Portfolio's fiscal year,
and dividends declared on equity securities held by the Portfolio, the record
dates for which fall on or prior to the last day of such fiscal year, but shall
not include gains from the sale of securities.

9. The Adviser will use its best efforts in the
supervision and management of the investment activities of the Portfolios and
in providing services hereunder, but shall not be liable to the Trust, the
Portfolios or shareholders for any error in investment judgment, or in the
absence of willful misfeasance, bad faith, negligence or reckless disregard of
its obligations hereunder, for any mistake of law or for any act or omission by
the Adviser.
<PAGE> 4
10. Nothing contained in this Agreement shall prevent the
Adviser or any affiliated person of the Adviser from acting as investment
adviser or manager for any other person, firm or corporation and shall not in
any way bind or restrict the Adviser or any such affiliated person from buying,
selling or trading any securities or commodities for their own accounts or for
the account of others for whom they may be acting. Nothing in this Agreement
shall limit or restrict the right of any director, officer or employee of the
Adviser to engage in any other business or to devote his time and attention in
part to the management or other aspects of any other business whether of a
similar or dissimilar nature.

11. The Trust acknowledges and agrees, in accordance with
the provisions of Article VIII, Section 9 of the Trust's Declaration of Trust
dated June 27, 1995, as amended and restated June 30, 1997, that the name
"Cadre" and the Cadre logo and all rights to the use of such name or logo as
part of the name of the Trust and the Portfolios belong to the Adviser and
other affiliates of Ambac Financial Group, Inc.

12. This Agreement shall remain in effect as to each
Portfolio until June __, 2000, and shall continue in effect for each Portfolio
from year to year thereafter provided such continuance as to such Portfolio is
approved at least annually by the vote of a majority of the outstanding voting
securities of the Portfolio, as defined by the Act and the rules thereunder, or
by the Board of Trustees of the Trust; provided that in either event such
continuance is also approved by a majority of the Trustees of the Trust who are
not parties to this Agreement or "interested persons" (as defined in the Act)
of any such party (the "Independent Trustees"), by vote cast in person at a
meeting called for the purpose of voting on such approval; and provided,
however, that (a) the Trust may at any time, without payment of any penalty,
terminate this Agreement as to the Trust (or any Portfolio) upon sixty days
written notice to the Adviser, either by majority vote of the Trustees of the
Trust or by the vote of a majority of the outstanding voting securities of the
Trust (or such Portfolio) (as defined in the Act and the rules thereunder); (b)
this Agreement shall immediately terminate in the event of its assignment (to
the extent required by the Act and the rules thereunder) unless such automatic
termination shall be prevented by an exemptive order of the Securities and
Exchange Commission; and (c) the Adviser may terminate this Agreement as to the
Trust or any of the Portfolios without payment of penalty on sixty days written
notice to the Trust. The failure to approve a continuance of this Agreement as
to any Portfolio, or any termination of this Agreement as to any Portfolio,
shall not affect the continuation of the Agreement as to the Trust or any other
Portfolios which have approved a continuance and not terminated this Agreement.

13. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed post-paid, to the other party at
the principal office of such party.

14. This Agreement may be amended only by the written
agreement of the parties. Any amendment shall be required to be approved by
the Trustees of the Trust and by a majority of the Independent Trustees in
accordance with the provisions of Section 15(c) of the Act and the rules
thereunder. Any amendment shall also be required to be approved by a vote of
shareholders as, and to the extent, required by the Act and the rules
thereunder. Except as otherwise provided by the Act and the rules thereunder,
an amendment to this Agreement may be
<PAGE> 5
effected without the vote of shareholders: to reduce the fees payable hereunder
by any Portfolio; to amend Schedule A and Schedule B to reflect the addition of
a Portfolio which is newly formed and has not commenced it operations and the
fee initially payable hereunder by that Portfolio; to amend Schedule A and
Schedule B to reflect the deletion of a Portfolio; to supply any omission; to
cure, correct or supplement any ambiguous, defective of inconsistent provision
hereof; or if necessary, to conform this Agreement to the requirements of
applicable laws or regulations, but neither the Trust nor the Adviser shall be
liable for failing to do so.

15. This Agreement shall be construed in accordance with
the laws of the State of New York, without reference to conflict of law
principles, and the applicable provisions of the Act. To the extent the
applicable law of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Act, the latter shall control.

16. The Trust represents that this Agreement has been
duly approved by the Trustees, including a majority of the Independent
Trustees, and by shareholders of the Liquid Asset Fund series of the Trust
(which is the sole series of the Trust operating as of the date hereof and is
expected to be the initial investor in the U.S. Government Money Market
Portfolio), in accordance with the requirements of the Act and the rules
thereunder.

17. The Trust and the Adviser agree that the obligations
of the Trust under this Agreement shall not be binding upon any of the members
of the Board of Trustees, shareholders, nominees, officers, employees or
agents, whether past, present or future, of the Trust, individually, but are
binding only upon the assets and property of the Portfolios, as provided in the
Declaration of Trust.

IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement on the day and year first above written.

CADRE INSTITUTIONAL INVESTORS TRUST

By:
------------------------------
Title:

Attest:

- --------------------
Title:

CADRE FINANCIAL SERVICES, INC.

By:
------------------------------
Title:

Attest:

- --------------------
Title:
<PAGE> 6
SCHEDULE A

It is agreed by the parties hereto that the Adviser shall provide
services as set forth herein to the following Portfolios:

U.S. Government Money Market Portfolio
Money Market Portfolio

This Schedule A may be amended from time to time by the parties
hereto.
<PAGE> 7
SCHEDULE B

Fees

As full compensation for the services and facilities furnished to the
Trust and the expenses assumed by the Adviser under this Agreement, each of
U.S. Government Money Market Portfolio and Money Market Portfolio shall pay to
the Adviser monthly compensation calculated daily at the annual rate of 0.06%
of each such Portfolio's net assets. Such calculations shall be made by
applying 1/365th of the annual rate to the net assets of each Portfolio each
day determined as of the close of business on that day or the last previous
business day, if such day is not a business day. If this Agreement becomes
effective subsequent to the first day of a month or shall terminate before the
last day of a month, compensation for that part of the month this Agreement is
in effect shall be prorated in a manner consistent with the calculation of the
fees as set forth above.

<PAGE> 1
PLACEMENT AGENCY AGREEMENT

June __, 1998

Cadre Securities, Inc.
Ronkonkoma, New York 11779

Gentlemen:

This is to confirm that, in consideration of the agreements hereinafter
contained, Cadre Institutional Investors Trust, on behalf of the series of the
Trust named in Schedule A of this Agreement (each, a "Portfolio" and
collectively, the "Portfolios"), organized as a Delaware business trust and
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end diversified management investment company, agrees that
Cadre Securities, Inc. ("CSI") shall be the placement agent (the "Placement
Agent") of shares of each Portfolio ("Shares"), and to confirm that CSI agrees
to serve in such capacity, in accordance with the terms of this Agreement.

Services as Placement Agent.

1.1 CSI will act as Placement Agent of the Shares of the Portfolios. In
acting as Placement Agent under this Agreement, neither CSI nor its employees
nor any agents thereof shall make any offer or sale of Shares in a manner which
would require the Shares to be registered under the Securities Act of 1933, as
amended (the "1933 Act").

1.2 All activities by CSI and its agents and employees as Placement
Agent of Shares shall comply with all applicable laws, rules and regulations,
including, without limitation, all rules and regulations adopted pursuant to the
1940 Act by the Securities and Exchange Commission (the "Commission").

1.3 Nothing herein shall be construed to require the Trust to accept
any offer to purchase any Shares, all of which shall be subject to approval by
the Board of Trustees of the Trust.

1.4 The Trust shall furnish for use in connection with the sale of
Shares such information with respect to the Portfolios and Shares as CSI may
reasonably request from time to time. The Trust shall also furnish CSI upon
request with: (a) unaudited semi-annual and audited annual statements of the
books and accounts of each Portfolio prepared by the Trust, and (b) such
additional information regarding the financial or regulatory condition of the
Trust and the Portfolios as CSI may from time to time reasonably request.

1.5 The Trust represents to CSI that all registration statements filed
by the Trust with the Commission under the 1940 Act with respect to the
Portfolios have been prepared in conformity with the requirements of such
statute and the rules and regulations of the Commission thereunder. As used in
this Agreement the term "registration statement" shall mean
<PAGE> 2
any registration statement filed by the Trust with the Commission as modified by
any amendments thereto that at any time shall have been filed with the
Commission by or on behalf of the Trust Portfolio. The Trust represents and
warrants to CSI that any registration statement will contain all statements
required to be stated therein in conformity with both such statute and the rules
and regulations of the Commission; that all statements of fact contained in any
registration statement will be true and correct in all material respects at the
time of filing of such registration statements or amendments thereto; and that
no registration statement will include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading to a purchaser of Shares.

The Trust may but shall not be obligated to propose from time to time
such amendments to any registration statement as in the light of future
developments may, in the opinion of the Trust's counsel, be necessary or
advisable. If the Trust shall not propose such an amendment and/or supplement
within fifteen days after receipt by the Trust of a written request from CSI to
do so, CSI may, at its option, terminate this Agreement. The Trust shall not
file any amendment to any registration statement without giving CSI reasonable
notice thereof in advance; provided, however, that nothing contained in this
Agreement shall in any way limit the Trust's right to file at any time such
amendment to any registration statement as the Trust may deem advisable, such
right being in all respects absolute and unconditional.

1.6 The Trust agrees to indemnify, defend and hold CSI, its several
officers and directors, and any person who controls CSI within the meaning of
Section 15 of the 1933 Act or Section 20 of the Securities and Exchange Act of
1934 (the "1934 Act") (for purposes of this paragraph 1.6, collectively,
"Covered Persons") free and harmless from and against any and all claims,
demands, liabilities and expenses (including the cost of investigating or
defending such claims, demands or liabilities and any counsel fees incurred in
connection therewith) which any Covered Person may incur under the 1933 Act, the
1934 Act, common law or otherwise, arising out of or based on any untrue
statement of a material fact contained in any registration statement, private
placement memorandum or other offering material relating to the Portfolios
("Offering Material") or arising out of or based on any omission to state a
material fact required to be stated in any Offering Material or necessary to
make the statements in any Offering Material not misleading; provided, however,
that the Trust's agreement to indemnify Covered Persons shall not be deemed to
cover any claims, demands, liabilities or expenses arising out of any financial
and other statements as are furnished in writing to the Trust by CSI in its
capacity as Placement Agent for use in the answers to any items of any
registration statement or in any statements made in any Offering Material, or
arising out of or based on any omission or alleged omission to state a material
fact in connection with the giving by CSI of such information required to be
stated in such answers or necessary to make the answers not misleading; and
further provided that the Trust's agreement to indemnify CSI and the Trust's
representations and warranties herein before set forth in paragraph 1.5 shall
not be deemed to cover any liability to the Trust or its investors to which a
Covered Person would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of a
Covered Person's reckless disregard of its obligations and duties under this
Agreement.

-2-
<PAGE> 3
The Trust shall be notified of any action brought against a Covered
Person, such notification to be given by letter or by telegram addressed to the
Trust, c/o Kenneth S. Gerstein, Esq., Schulte Roth & Zabel LLP, 900 Third
Avenue, New York, NY 10022, with a copy to William M. Sullivan, 905 Marconi
Avenue, Ronkonkoma, NY 11779, promptly after the summons or other first legal
process shall have been duly and completely served upon such Covered Person. The
failure to so notify the Trust of any such action shall not relieve the Trust
from any liability except to the extent that the Trust shall have been
prejudiced by such failure, or from any liability that the Trust may have to the
Covered Person against whom such action is brought by reason of any such untrue
statement or omission, otherwise than on account of the Trust's indemnity
agreement contained in this paragraph.

The Trust will be entitled to assume the defense of any suit brought to
enforce any such claim, demand or liability, but in such case such defense shall
be conducted by counsel of good standing chosen by the Trust and approved by
CSI, which approval shall not be unreasonably withheld. In the event the Trust
elects to assume the defense of any such suit and retain counsel of good
standing approved by CSI, the defendant or defendants in such suit shall bear
the fees and expenses of any additional counsel retained by any of them; but in
case the Portfolio does not elect to assume the defense of any such suit, or in
case CSI reasonably does not approve of counsel chosen by the Trust, the Trust
will reimburse the Covered Person named as defendant in such suit, for the fees
and expenses of any counsel retained by CSI or such Covered Person.

The Trust's indemnification agreement contained in this paragraph and
the Trust's representations and warranties in this Agreement shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of Covered Persons, and shall survive the delivery of any Shares.
This agreement of indemnity will inure exclusively to Covered Persons and their
successors. The Trust agrees to notify CSI promptly of the commencement of any
litigation or proceedings against the Trust or any of its officers or Trustees
in connection with the issue and sale of any Shares.

1.7 CSI agrees to indemnify, defend and hold the Trust, its several
officers and Trustees, and any person who controls the Trust within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act (for purposes of
this paragraph 1.7, collectively, "Covered Persons") free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
costs of investigating or defending such claims, demands, liabilities and any
counsel fees incurred in connection therewith) that Covered Persons may incur
under the 1933 Act, the 1934 Act, or common law or otherwise, but only to the
extent that such liability or expense incurred by a Covered Person resulting
from such claims or demands shall arise out of or be based on any untrue
statement of a material fact contained in information furnished in writing by
CSI in its capacity as Placement Agent for use in the answers to any of the
items of any registration statement or in any statements in any Offering
Material or shall arise out of or be based on any omission to state a material
fact in connection with such information furnished in writing by CSI to the
Portfolio required to be stated in such answers or necessary to make such
information not misleading.

-3-
<PAGE> 4
CSI shall be notified of any action brought against a Covered Person,
such notification to be given by letter or telegram addressed to CSI at 905
Marconi Avenue, Ronkonkoma, NY 11779, Attention: William T. Sullivan, Jr.,
promptly after the summons or other first legal process shall have been duly and
completely served upon such Covered Person. CSI shall have the right of first
control of the defense of the action with counsel of its own choosing
satisfactory to the Trust if such action is based solely on such alleged
misstatement or omission on CSI's part, and in any other event each Covered
Person shall have the right to participate in the defense or preparation of the
defense of any such action. The failure to so notify CSI of any such action
shall not relieve CSI from any liability except to the extent that CSI shall
have been prejudiced by such failure, or from any liability that CSI may have to
Covered Persons by reason of any such untrue or alleged untrue statement, or
omission or alleged omission, otherwise than on account of CSI's indemnity
agreement contained in this paragraph.

1.8 No Shares shall be offered by either CSI or the Trust under any of
the provisions of this Agreement and no orders for the purchase or sale of
Shares hereunder shall be accepted by the Trust if and so long as the
effectiveness of the registration statement or any necessary amendments thereto
shall be suspended under any of the provisions of the 1940 Act; provided,
however, that nothing contained in this paragraph shall in any way restrict or
have an application to or bearing on the Trust's obligation to redeem Shares
from any investor in accordance with the provisions of the Trust's registration
statement or its Declaration of Trust, as amended from time to time.

1.9 The Trust agrees to advise CSI as soon as reasonably practical by a
notice in writing delivered to CSI or its counsel:

(a) of any request by the Commission for amendments to the
registration statement then in effect or for additional information;

(b) in the event of the issuance by the Commission or by a court of
any order suspending the effectiveness of the registration statement then in
effect or prohibiting the offering or sale of Shares, or the initiation by
service of process on the Trust of any proceeding for any such purposes;

(c) of the happening of any event that makes untrue any statement
of a material fact made in the registration statement then in effect or that
requires the making of a change in such registration statement in order to make
the statements therein not misleading; and

(d) of all action of the Commission with respect to any amendment
to any registration statement that may from time to time be filed with the
Commission.

For purposes of this paragraph 1.9, informal requests by or acts of the
Staff of the Commission shall not be deemed actions of or requests by the
Commission.

1.10 In addition to the services provided by CSI as Placement Agent
pursuant to this Agreement, CSI and its affiliates provide various other
services to the Trust and the Portfolios for which they receive compensation.
CSI therefore agrees to provide services

-4-
<PAGE> 5
pursuant to this Agreement without the payment by the Trust or the Portfolios of
any compensation therefor.

2. Term.

This Agreement shall become effective on the date first above written
and, unless sooner terminated as provided herein, shall continue until June __,
2000, and thereafter shall continue in effect with respect to a Portfolio
automatically for successive annual periods, provided such continuance is
specifically approved at least annually on behalf of such Portfolio by (i) the
Board of Trustees of the Trust or (ii) by a vote of a majority (as defined in
the 1940 Act) of the Portfolio's outstanding voting securities, provided that in
either event the continuance is also approved by the majority of the Trustees of
the Trust who are not interested persons (as defined in the 1940 Act) of the
Trust or CSI, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Agreement is terminable without penalty with
respect to the Trust or any Portfolio, on not less than 60 days' notice: by the
Board of Trustees of the Trust; by vote of a majority (as defined in the 1940
Act) of a Portfolio's outstanding voting securities (but only with respect to
such Portfolio); or by CSI. This Agreement will also terminate automatically in
the event of its assignment (as defined in the 1940 Act and the rules
thereunder). The provisions of paragraphs 1.6 and 1.7 shall survive the
termination of this Agreement.

3. Representations and Warranties.

CSI and the Trust each hereby represents and warrants to the other that
it has all requisite authority to enter into, execute, deliver and perform its
obligations under this Agreement and that, with respect to it, this Agreement is
legal, valid and binding, and enforceable in accordance with its terms.

4. Governing Law, etc.

This Agreement shall be governed and interpreted in accordance with the
laws of the State of New York (without reference to conflict of law principles)
and the applicable provisions of the 1940 Act. To the extent that any provisions
of New York law conflict with the 1940 Act, the latter shall control.

The Trust and CSI agree that the obligations of the Trust under this
Agreement shall not be binding upon any of the members of the Board of Trustees,
shareholders, nominees, officers, employees or agents, whether past, present or
future, of the Trust, individually, but are binding only upon the assets and
property of the Portfolios, as provided in the Declaration of Trust.

* * *

If the foregoing is acceptable to you, please so indicate by executing
the enclosed copy of this Agreement and returning the same to the undersigned,
whereupon this Agreement

-5-
<PAGE> 6
shall constitute a binding contract between the parties hereto effective upon
commencement of the operations of the Portfolios.

Yours very truly,

CADRE INSTITUTIONAL INVESTORS TRUST PORTFOLIO

By: ______________________________
William T. Sullivan, Jr.
President

Accepted:

CADRE SECURITIES, INC.

By: _________________________
Name:
Title:

-6-
<PAGE> 7
Schedule A

The Placement Agency Agreement between the Trust and CSI shall apply to
the offering of Shares of the following Portfolios:

U.S. Government Money Market Portfolio
Money Market Portfolio

This Schedule A may be amended from time to time upon the agreement of
the Trust and CSI.

<PAGE> 1

CUSTODIAN CONTRACT
BETWEEN

FIRST TRUST NATIONAL ASSOCIATION

CADRE INSTITUTIONAL INVESTORS TRUST
<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
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<S> <C>
1.Employment of Custodian and Property to be Held by It . . . . . . . . . . . . . . . . . . . . . . . . 1
2.Duties of the Custodian with Respect to Property of the Funds . . . . . . . . . . . . . . . . . . . . 1
2.1 Holding Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Delivery of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1) Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2) Repurchase Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3) Securities System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4) Tender Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
5) Redemption by Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
6) Transfer to Issuer, Nominee, Exchange . . . . . . . . . . . . . . . . . . . . . . . . . 2
7) Sale to Broker or Dealer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
8) Exchange or Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
9) Warrants, Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
10) Loans of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
11) Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
12) Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
13) Futures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
14) In-Kind Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
15) Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
16) Type of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 Registration of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.4 Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.5 Sale of Shares and Availability of Federal Funds . . . . . . . . . . . . . . . . . . . . . . . 4
2.6 Collection of Income, Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.7 Payment of Monies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1) Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2) Exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3) Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4) Expense and Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5) Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6) Short Sale Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7) Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
8) Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.8 Liability for Payment in Advance of Receipt of Securities Purchased . . . . . . . . . . . . . 6
2.9 Appointment of Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.10 Deposit of Securities in Securities Systems . . . . . . . . . . . . . . . . . . . . . . . . . 6
1) Account of Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2) Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
</TABLE>

<PAGE> 3

<TABLE>
<S> <C>
3) Payment of Monies, Delivery of Securities . . . . . . . . . . . . . . . . . . . . . . . 7
4) Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5) Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.11 Segregated Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.13 Ownership Certificates for Tax Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.14 Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.15 Communications Relating to Portfolio Securities . . . . . . . . . . . . . . . . . . . . . . 8
2.16 Reports to the Trust by Independent Public Accountants . . . . . . . . . . . . . . . . . . . 8
3. Duties of the Custodian with Respect to Property Held Outside of the United States . . . . . . . . . 9
4. Payments for Repurchases or Redemptions and Sales of Shares . . . . . . . . . . . . . . . . . . . . 9
5. Proper Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6. Actions Permitted without Express Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7. Evidence of Authority, Reliance on Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8. Duties of Custodian with Respect to the Books of Account and Calculation of Net Asset Value and
Net Income 10
9. Records, Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
10. Opinion of the Trust's Independent Accountant . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
11. Compensation of Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12. Responsibility of Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
13. Effective Period, Termination and Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
14. Successor Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
15. Interpretive and Additional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
16. Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
17. Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
18. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
19. Exemption from Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
20. New York Law to Apply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
21. Prior Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
22. The Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
23. Governing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
24. Directors and Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
25. Delaware Business Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
26. Successors of Parties, Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
27. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>

<PAGE> 4
CUSTODIAN CONTRACT

This Contract made as of the 16th day of March 1998, by and between
FIRST TRUST NATIONAL ASSOCIATION, a national banking association, having its
principal place of business at Minneapolis, Minnesota (hereinafter the
"Custodian"), and Cadre Institutional Investors Trust (the "Trust"), on behalf
of itself and each of the series of the Trust listed on Appendix A (as such
Appendix may be amended from time to time) (each such series, a "Fund").

WITNESSETH: That in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:

1. Employment of Custodian and Property to be Held by It

The Trust hereby employs the Custodian as the custodian of the assets
of each of the Funds, including securities and similar investments such as
money market instruments and futures contracts (collectively, "securities") to
be held in places within the United States pursuant to the Governing Documents
of the Fund. The Trust agrees to deliver to the Custodian all securities and
cash now or hereafter owned or acquired by each of the Funds, and all payments
of income, payments of principal or capital distributions received by the Funds
with respect to all securities owned by them from time to time, and the cash
consideration received by the Funds for such new or treasury shares of capital
stock ("Shares") of the Trust representing interests in the Funds as may be
issued or sold from time to time. The Custodian shall not be responsible for
any property of the Funds held or received by the Funds and not delivered to
the Custodian.

With respect to securities, upon receipt of "Proper Instructions"
(within the meaning of Article 5), the Custodian may from time to time employ
one or more sub-custodians located in the United States, but only in accordance
with an applicable vote by the Board of Trustees of the Trust (the "Board of
Trustees"), and provided that the Custodian shall have no more or less
responsibility or liability to the Trust on account of any actions or omissions
of any sub-custodian so employed than any such sub-custodian has to the
Custodian, and further provided that the Custodian shall not release the
sub-custodian from any responsibility or liability unless mutually agreed upon
by the parties in writing.

2. Duties of the Custodian with Respect to Property of the Funds

2.1 Holding Securities. The Custodian shall hold and physically
segregate for the account of each Fund all non-cash property, to be held by the
Custodian, including all securities owned by the Fund, other than securities
which are maintained pursuant to Section 2.10 in a clearing agency which acts
as a securities depository or in a book-entry system authorized by the U.S.
Department of the Treasury (each, a "Securities System")

2.2 Delivery of Securities. The Custodian shall release and
deliver securities owned by a Fund held by the Custodian or in a Securities
System account of the Custodian only upon receipt of Proper Instructions, which
may be continuing instructions when deemed appropriate by mutual agreement of
the parties, and only in the following cases:
<PAGE> 5

1) Sale. Upon sale of such securities for the account
of the Fund and receipt of payment therefor;

2) Repurchase Agreements. Upon the receipt of payment
in connection with any repurchase agreement related to such securities entered
into by the Trust on behalf of the Fund;

3) Securities System. In the case of a sale effected
through a Securities System, in accordance with the provisions of Section 2.10
hereof;

4) Tender Offer. To the depository agent or other
receiving agent in connection with tender or other similar offers for portfolio
securities of the Fund;

5) Redemption by Issuer. To the issuer thereof or its
agent when such securities are called, redeemed, retired or otherwise become
payable; provided that, in any such case, the cash or other consideration is to
be delivered to the Custodian;

6) Transfer to Issuer, Nominee, Exchange. To the issuer
thereof, or its agent, for transfer into the name of the Trust or into the name
of any nominee or nominees of the Custodian or into the name or nominee name of
any agent appointed pursuant to Section 2.9 or into the name or nominee name of
any sub-custodian appointed pursuant to Article 1; or for exchange for a
different number of bonds, certificates or other evidence representing the same
aggregate face amount or number of units and bearing the same interest rate,
maturity date and call provisions, if any; provided that, in any such case, the
new securities are to be delivered to the Custodian;

7) Sale to Broker or Dealer. Upon the sale of
certificated securities for the account of the Fund, to the broker or its
clearing agent or dealer, against a receipt, for examination in accordance with
"street delivery" custom; provided that in any such case, the Custodian shall
have no responsibility or liability for any loss arising from the delivery of
such securities prior to receiving payment for such securities except as may
arise from the Custodian's failure to act in accordance with its duties as set
forth in Section 12.

8) Exchange or Conversion. For exchange or conversion
pursuant to any plan of merger, consolidation, recapitalization,
reorganization, split-up of shares, change of par value or readjustment of the
securities of the issuer of such securities, or pursuant to provisions for
conversion contained in such securities, or pursuant to any deposit agreement
provided that, in any such case, the new securities and cash, if any, are to be
delivered to the Custodian;

9) Warrants, Rights. In the case of warrants, rights or
similar securities, the surrender thereof in the exercise of such warrants,
rights or similar securities or the surrender of interim receipts or temporary
securities for definitive securities; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the Custodian;

10) Loans of Securities. For delivery in connection with
any loans of securities made by the Fund, but only against receipt of adequate
collateral as agreed upon from

<PAGE> 6

time to time by the Custodian and the Trust, which may be in the form of cash,
obligations issued by the United States government, its agencies or
instrumentalities, or such other property as mutually agreed by the parties,
except that in connection with any loans for which collateral is to be credited
to the Custodian's account in the book-entry system authorized by the U.S.
Department of the Treasury, the Custodian will not be held liable or
responsible for the delivery of portfolio securities of the Fund prior to the
receipt of such collateral, unless the Custodian fails to act in accordance
with its duties set forth in Article 12;

11) Borrowings. For delivery as security in connection
with any borrowings by the Trust on behalf of the Fund requiring a pledge of
assets by the Fund, but only against receipt of amounts borrowed, except where
additional collateral is required to secure a borrowing already made, subject
to Proper Instructions, further securities may be released for that purpose;

12) Options. For delivery in accordance with the
provisions of any agreement among the Trust on behalf of the Fund, the
Custodian and a broker-dealer registered under the Securities Exchange Act of
1934 (the "Exchange Act") and a member of the National Association of
Securities Dealers, Inc. ("NASD"), relating to compliance with the rules of The
Options Clearing Corporation, any registered national securities exchange, any
similar organization or organizations, or the Investment Company Act of 1940,
as amended (the "1940 Act"), regarding escrow or other arrangements in
connection with transactions for the account of the Fund;

13) Futures. For delivery in accordance with the
provisions of any agreement among the Trust on behalf of the Fund, the
Custodian, and a Futures Commission Merchant registered under the Commodity
Exchange Act, relating to compliance with the rules of the Commodity Futures
Trading Commission and/or any Contract Market, any similar organization or
organizations, or the 1940 Act, regarding account deposits in connection with
transactions for the account of the Fund;

14) In-Kind Distributions. Upon receipt of instructions
from the transfer agent ("Transfer Agent") for the Trust, for delivery to such
Transfer Agent or to the holders of Shares in connection with distributions in
kind, as may be described from time to time in the Fund's currently effective
prospectus and statement of additional information (the "Prospectus"), in
satisfaction of requests by holders of Shares for repurchase or redemption;

15) Miscellaneous. For any other proper corporate
purpose, but only upon receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Board of Trustees signed by an officer of
the Trust and certified by the Secretary or an Assistant Secretary of the
Trust, specifying the securities to be delivered, setting forth the purpose for
which such delivery is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom delivery of such
securities shall be made; and

16) Type of Payment. In any or all of the above cases,
payments to the Trust shall be made in cash, by a certified check upon or a
treasurer's or cashier's check of a bank, by effective bank wire transfer
through the Federal Reserve Wire System or, if appropriate, outside of the
Federal Reserve Wire System and subsequent credit to the custodian account of
the

<PAGE> 7

applicable Fund, or, in case of delivery through a stock clearing company, by
book-entry credit by the stock clearing company in accordance with the then
current street custom, or such other form of payment as may be mutually agreed
by the parties, in all such cases collected funds to be promptly credited to
the Trust.

2.3 Registration of Securities. Securities held by the Custodian
(other than bearer securities) shall be registered in the name of the Trust on
behalf of the appropriate Fund or in the name of any nominee of the Trust, or
of any nominee of the Custodian which nominee shall be assigned exclusively to
a particular Fund, unless the Trust has authorized in writing the appointment
of a nominee to be used in common with other Funds or with other registered
investment companies having the same investment adviser as the Trust, or in the
name or nominee name of any agent appointed pursuant to Section 2.9 or in the
name or nominee name of any sub-custodian appointed pursuant to Article 1.

All securities accepted by the Custodian on behalf of the Funds under
the terms of this Contract shall be in "street name" or other good delivery
form.

2.4 Bank Accounts. The Custodian shall open and maintain a
separate bank account or accounts in the United States in the name of the
Trust, subject only to draft or order by the Custodian acting pursuant to the
terms of this Contract, and shall hold in such account or accounts, subject to
the provisions hereof all cash received by it from or for the account of the
Trust and each Fund, other than such cash, if any, maintained by the Trust in a
bank account established and used in accordance with Rule 17f-3 under the 1940
Act. Funds held by the Custodian for the Trust may be deposited for the
Trust's credit in the Banking Department of the Custodian or in such other
banks or trust companies as the Custodian may in its discretion deem necessary
or desirable; provided, however, that every such bank or trust company shall be
qualified to act as a custodian under the 1940 Act and that each such bank or
trust company and the funds to be deposited with each such bank or trust
company shall be approved by vote of a majority of the Board of Trustees. Such
funds shall be deposited by the Custodian in its capacity as Custodian and
shall be withdrawable by the Custodian only in that capacity.

2.5 Sale of Shares and Availability of Federal Funds. Upon mutual
agreement between the Trust and the Custodian, the Custodian shall make federal
funds available to the Trust as of specified times agreed upon from time to
time by the Trust and the Custodian in the amount of checks received in payment
for Shares which are deposited into the Trust's account, subject to collection.

2.6 Collection of Income, Dividends. The Custodian shall collect
on a timely basis all income and other payments with respect to United States
registered securities held hereunder to which each of the Funds shall be
entitled either by law or pursuant to custom in the securities business, and
shall collect on a timely basis all income and other payments with respect to
United States bearer securities if, on the date of payment by the issuer, such
securities are held by the Custodian or its agent pursuant to this Contract,
and shall credit such income or other payments, as collected, to the applicable
Fund's custodian account. The Custodian shall detach and present for payment
all coupons and other income items requiring presentation as and when they
become

<PAGE> 8

due and shall collect interest when due on securities held hereunder. The
Custodian will also receive and collect all stock dividends, rights and other
items of like nature as and when they become due or payable. Income due any of
the Funds on United States securities loaned pursuant to the provisions of
Section 2.2 (10) shall be the responsibility of the Trust. The Custodian will
have no duty or responsibility in connection therewith, other than to provide
the Trust with such information or data as may be necessary to assist the Trust
in arranging for the timely delivery to the Custodian of the income to which
any Fund is properly entitled.

2.7 Payment of Monies. Upon receipt of Proper Instructions, which
may be continuing instructions when deemed appropriate by mutual agreement of
the parties, the Custodian shall pay out monies for the account of a Fund in
the following cases only:

1) Purchases. Upon the purchase of securities, futures
contracts or options on futures contracts for the account of the Fund but only:
(a) against the delivery of such securities, or evidence of title to such
futures contracts or options on futures contracts, to the Custodian (or any
bank, banking firm or trust company doing business in the United States or
abroad which is qualified under the 1940 Act to act as a custodian and has been
designated by the Custodian as its agent for this purpose in accordance with
Section 2.9 hereof) registered in the name of the Trust or in the name of a
nominee of the Trust or of the Custodian referred to in Section 2.3 hereof or
in other proper form for transfer; (b) in the case of a purchase effected
through a Securities System, in accordance with the conditions set forth in
Section 2.10 hereof or (c) in the case of repurchase agreements entered into
between the Trust on behalf of a Fund and the Custodian, or another bank, or a
broker-dealer which is a member of NASD, (i) against delivery of the securities
either in certificate form or through an entry crediting the Custodian's
account at the Federal Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase by the Trust of securities owned by
the Custodian along with written evidence of the agreement by the Custodian to
repurchase such securities from the Trust. All coupon bonds accepted by the
Custodian shall have the coupons attached or shall be accompanied by a check
payable on coupon payable date for the interest due on such date.

2) Exchanges. In connection with conversion, exchange
or surrender of securities owned by the Trust as set forth in Section 2.2
hereof;

3) Redemptions. For the redemption or repurchase by the
Trust of Shares as set forth in Article 4 hereof;

4) Expense and Liability. For the payment of any
expense or liability incurred by the Trust or any Fund, including but not
limited to the following payments: interest, taxes, management, accounting,
transfer agent and legal fees, and operating expenses of the Fund whether or
not such expenses are to be in whole or part capitalized or treated as deferred
expenses;

5) Dividends. For the payment of any dividends or other
distributions to shareholders declared pursuant to the Governing Documents of
the Trust;

<PAGE> 9

6) Short Sale Dividend. For payment of the amount of
dividends received in respect of securities sold short;

7) Loan. For repayment of a loan upon redelivery of
pledged securities and upon surrender of the note(s), if any, evidencing the
loan;

8) Miscellaneous. For any other proper purpose, but
only upon receipt of, in addition to Proper Instructions, a certified copy of a
resolution of the Board of Trustees signed by an officer of the Trust and
certified by its Secretary or an Assistant Secretary, specifying the amount of
such payment, setting forth the purpose for which such payment is to be made,
declaring such purpose to be a proper purpose, and naming the person or persons
to whom such payment is to be made.

2.8 Liability for Payment in Advance of Receipt of Securities
Purchased. Except when the Custodian is acting in accordance with this
Contract or in accordance with customary securities practices, in any and every
case where payment for the purchase of securities for the account of a Fund is
made by the Custodian in advance of receipt of the securities purchased in the
absence of specific written instructions from the Trust to so pay in advance,
the Custodian shall be absolutely liable to the Fund for such securities to the
same extent as if the securities had been received by the Custodian.

2.9 Appointment of Agents. The Custodian may at any time or times
in its discretion appoint (and may at any time remove) any other bank or trust
company, which is itself qualified under the 1940 Act, to act as a custodian,
as its agent to carry out such of the provisions of this Article 2 as the
Custodian may from time to time direct; provided, however, that the appointment
of any agent shall not relieve the Custodian of its responsibilities or
liabilities hereunder.

2.10 Deposit of Securities in Securities Systems. The Custodian
may deposit and/or maintain securities owned by the Trust on behalf of any Fund
in a clearing agency registered with the Securities and Exchange Commission
under Section 17A of the Exchange Act, which acts as a securities depository,
or in the book-entry system authorized by the U.S. Department of the Treasury
and certain federal agencies, in accordance with applicable rules and
regulations of the Federal Reserve Board and the Securities and Exchange
Commission (the "SEC"), if any, and subject to the following provisions:

1) Account of Custodian. The Custodian may keep
securities owned by the Trust on behalf of any Fund in a Securities System
provided that such securities are represented in an account (the "Account") of
the Custodian in the Securities System which shall not include any assets of
the Custodian other than assets held as a fiduciary, custodian or otherwise for
customers;

2) Records. The records of the Custodian with respect
to securities which are maintained in the Account shall identify by book-entry
those securities belonging to the Trust and each Fund;

<PAGE> 10

3) Payment of Monies, Delivery of Securities. Subject
to Section 2.7, the Custodian shall pay for securities purchased for the
account of any Fund upon (i) receipt of advice from the Securities System that
such securities have been transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such payment and transfer for
the account of the Trust on behalf of such Fund. Subject to Section 2.2, the
Custodian shall transfer securities sold for the account of any Fund upon (i)
receipt of advice from the Securities System that payment for such securities
has been transferred to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such transfer and payment for the account
of the Trust on behalf of such Fund. Copies of all advices from the Securities
System of transfers of securities for the account of the Trust shall identify
the Trust and the applicable Fund, be maintained for the Trust by the Custodian
and be provided to the Trust at its request. The Custodian shall furnish the
Trust confirmation of each transfer to or from the account of the Trust in the
form of a written advice or notice and shall furnish to the Trust copies of
daily transaction sheets reflecting each day's transactions in the Securities
System for the account of each Fund;

4) Reports. The Custodian shall provide the Trust with
any report obtained by the Custodian on the Securities System's accounting
system, internal accounting controls and procedures for safeguarding securities
deposited in the Securities System, and further agrees to provide the Trust
with copies of any documentation it has relating to its arrangements with the
Securities Systems as set forth in this Contract or as otherwise required by
the SEC;

5) Indemnification. Anything to the contrary in this
Contract notwithstanding, the Custodian shall be liable to the Trust for any
loss or expense, including reasonable attorneys fees, or damage to the Trust or
any Fund resulting from use of the Securities System by reason of the
negligence or willful misconduct of the Custodian or any of its agents or of
any of its or their employees or agents or from the unreasonable failure of the
Custodian or any such agent to enforce effectively such rights as it may have
against the Securities System; at the election of the Trust, it shall be
entitled to be subrogated to the rights of the Custodian with respect to any
claim against the Securities System or any other person which the Custodian may
have as a consequence of any such loss, expense or damage if and to the extent
that the Trust or any Fund has not been made whole for any such loss, expense
or damage.

2.11 Segregated Account. The Custodian shall, upon receipt of
Proper Instructions, which may be of a continuing nature where deemed
appropriate by mutual agreement of the parties, establish and maintain a
segregated account or accounts for and on behalf each of the Funds, into which
account or accounts may be transferred cash and/or securities, including
securities maintained in an account by the Custodian pursuant to Section 2.10
hereof, (i) in accordance with the provisions of any agreement among the Trust,
the Custodian and a broker-dealer registered under the Exchange Act and a
member of the NASD (or any futures commission merchant registered under the
Commodity Exchange Act), relating to compliance with the rules of The Options
Clearing Corporation and of any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered contract market), or of
any similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Trust on behalf of the
Funds, (ii) for purposes of segregating cash or government securities in
connection with options purchased, sold or written by the Trust

<PAGE> 11

on behalf of a Fund or commodity futures contracts or options thereon purchased
or sold for the account of a Fund, (iii) for the purposes of compliance by the
Trust with the procedures required by 1940 Act Release No. 10666, or any
subsequent release, rule or policy, of the SEC relating to the maintenance of
segregated accounts by registered investment companies and (iv) for other
proper corporate purposes, but only, in the case of clause (iv), upon receipt
of, in addition to Proper Instructions, a certified copy of a resolution of the
Board of Trustees signed by an officer of the Trust and certified by its
Secretary or an Assistant Secretary, setting forth the purpose or purposes of
such segregated account and declaring such purposes to be proper corporate
purposes.

2.13 Ownership Certificates for Tax Purposes. The Custodian shall
execute ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other payments with
respect to portfolio securities of the Funds held by it and in connection with
transfers of such securities.

2.14 Proxies. If the securities are registered other than in the
name of the Trust or a nominee of the Trust, the Custodian shall, with respect
to the securities held hereunder, cause to be promptly executed by the
registered holder of such securities, all proxies, without indication of the
manner in which such proxies are to be voted, and shall promptly deliver to the
Trust such proxies, all proxy soliciting materials and all notices relating to
such securities.

2.15 Communications Relating to Portfolio Securities. The
Custodian shall transmit promptly to the Trust all written information
(including, without limitation, pendency of calls and maturities of securities
and expirations of rights in connection therewith and notices of exercise of
call and put options written by the Trust on behalf of each Fund and the
maturity of futures contracts purchased or sold by the Trust on behalf of each
Fund) received by the Custodian from issuers of the securities being held for
the Funds by the Custodian, an agent appointed under Section 2.9, or
sub-custodian appointed under Section 1. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Trust all written
information received by the Custodian, an agent appointed under Section 2.9, or
sub-custodian appointed under Section 1 from issuers of the securities whose
tender or exchange is sought and from the party (or his agents) making the
tender or exchange offer. If the Trust desires to take action with respect to
any tender offer, exchange offer or any other similar transaction, the Trust
shall notify the Custodian of such desired action at least 48 hours (excluding
holidays and weekends) prior to the time such action must be taken under the
terms of the tender, exchange offer, or other similar transaction, and it will
be the responsibility of the Custodian to timely transmit to the appropriate
person(s) the Trust's notice. Where the Trust does not notify the custodian of
its desired action within the aforesaid 48 hour period, the Custodian shall use
its best efforts to timely transmit the Trust's notice to the appropriate
person. It is expressly noted that the parties may negotiate and agree to
alternative procedures with respect to such 48 hour notice period on a
selective and individual basis.

2.16 Reports to the Trust by Independent Public Accountants. The
Custodian shall provide the Trust, at such times as the Trust may reasonably
require, with reports by independent public accountants on the accounting
system, internal accounting controls and procedures for

<PAGE> 12

safeguarding securities, futures contracts and options on futures contracts,
including securities deposited and/or maintained in a Securities System,
relating to the services provided by the Custodian under this Contract; such
reports shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Trust to provide reasonable assurance that any
material inadequacies existing or arising since the prior examination would be
disclosed by such examination. The reports must describe any material
inadequacies disclosed and, if there are no such inadequacies, the reports
shall so state.

3. Duties of the Custodian with Respect to Property Held Outside of the
United States

This Contract shall not apply to property of the Trust or any Fund
which is to be held outside of the United States. Accordingly, the Trust
agrees that no Fund shall purchase any securities or other assets the custody
of which are to be maintained outside of the United States, and the Custodian
shall have no responsibilities with respect thereto, unless this Contract is
amended to set forth the terms and conditions pursuant to which any such
securities shall be held.

4. Payments for Repurchases or Redemptions and Sales of Shares

From such funds as may be available for the purpose but subject to the
limitations of the Governing Documents of the Trust and any applicable votes of
the Board of Trustees pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available for payment to
holders of Shares who have delivered to the Transfer Agent a request for
redemption or repurchase of their Shares. In connection with the redemption or
repurchase of Shares, the Custodian is authorized upon receipt of instructions
from the Transfer Agent to wire funds to or through a commercial bank
designated by the redeeming shareholder. In connection with the redemption or
repurchase of Shares, the Custodian shall honor checks drawn on the Custodian
by a holder of Shares, which checks have been furnished by the Trust to the
holder of Shares, when presented to the Custodian in accordance with such
procedures and controls as are mutually agreed upon from time to time between
the Trust and the Custodian.

The Custodian shall receive from the distributor for Shares or from
the Transfer Agent, and deposit as received into the appropriate Fund's
account, such payments as are received for Shares issued or sold from time to
time. The Custodian will provide timely notification to the Trust and the
Transfer Agent of any receipt by it of payments for Shares.

5. Proper Instructions

Proper Instructions as used herein means a writing signed or initialed
by one or more person or persons as the Board of Trustees shall have from time
to time authorized. Each such writing shall set forth the specific transaction
or type of transaction involved, including a specific statement of the purpose
for which such action is requested, or shall be a blanket instruction
authorizing specific transactions of a repeated or routine nature. Oral
instructions will be considered Proper Instructions if the Custodian reasonably
and in good faith believes them to have been given by a person authorized to
give such instructions with respect to the transaction involved. The Trust
shall cause all oral instructions to be confirmed in writing. Upon receipt of
a certificate of the Secretary or an Assistant Secretary of the Trust as to the
authorization by the

<PAGE> 13

Board of Trustees accompanied by a detailed description of procedures approved
by the Board of Trustees, Proper Instructions may include communications
effected directly between electro-mechanical or electronic devices provided
that the Board of Trustees and the Custodian are satisfied that such procedures
afford adequate safeguards for the Trust's assets.

6. Actions Permitted without Express Authority

The Custodian may in its discretion, without express authority from
the Trust:

1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its duties under this
Contract, provided that all such payments shall be accounted for to the Trust;
provided that this provision shall not require the Custodian to expend or risk
its own funds or incur financial liability.

2) surrender securities in temporary form for securities in
definitive form;

3) endorse for collection, in the name of the Trust, checks,
drafts and other negotiable instruments on the same day as received; and

4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase, transfer and other
dealings with the securities and property of the Trust or any Fund except as
otherwise directed by the Board of Trustees.

7. Evidence of Authority, Reliance on Documents

The Custodian may conclusively rely, and shall be protected in acting,
upon any instructions, notice, request, consent, certificate or other
instrument or paper reasonably and in good faith believed by it to be genuine
and to have been properly executed by or on behalf of the Trust in accordance
with Article 5 hereof. The Custodian may receive and accept a certified copy
of a vote of the Board of Trustees as conclusive evidence (a) of the authority
of any person to act in accordance with such vote or (b) of any determination
or of any action by the Board of Trustees pursuant to the Governing Documents
of the Trust as described in such vote, and such vote may be considered as in
full force and effect until receipt by the Custodian of written notice to the
contrary. So long as and to the extent that it is in the exercise of the
standard of care set forth in Article 12 hereof, the Custodian shall not be
responsible for the title, validity or genuineness of any property or evidence
of title thereto received by it or delivered by it pursuant to this Contract
and shall be held harmless in acting upon any notice, request, consent,
certificate or other instrument reasonably believed by it to be genuine and to
be signed by the proper party or parties.

8. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income

The Custodian shall cooperate with and supply necessary information to
the person or persons appointed by the Board of Trustees to keep the books of
account of the Trust and the Funds and/or compute the net asset value per share
of the outstanding shares of the Funds or, if

<PAGE> 14

directed in writing to do so by the Trust, shall itself keep such books of
account and/or compute such net asset value per share. If so directed, the
Custodian shall also calculate daily the net income of the Funds as described
in each Fund's currently effective Prospectus (or in the then current
registration statement of the Trust in the event that shares of the Fund are
not being publicly offered) and shall advise the Trust and the Transfer Agent
daily of the total amounts of such net income and, if instructed in writing by
an officer of the Trust to do so, shall advise the Transfer Agent periodically
of the division of such net income among its various components. The
calculations of the net asset value per share and the daily income of each Fund
shall be made at the time or times and in the manner described from time to
time in the Fund's currently effective Prospectus (or in the then current
registration statement of the Trust in the event that shares of the Fund are
not being publicly offered).

9. Records, Inventory

The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of the Trust under the 1940 Act, with particular attention to
Section 31 thereof and Rules 31a-1 and 31a-2 thereunder, applicable federal and
state tax laws and any other law or administrative rules or procedures which
may be applicable to the Trust. All such records shall be the property of the
Trust and, upon reasonable notice, shall during the regular business hours of
the Custodian be open for inspection and audit by duly authorized officers,
employees or agents of the Trust and employees and agents of the SEC, and, in
the event of termination of this Contract, will be delivered in accordance with
Section 14 hereof. The Custodian shall, at the Trust's request, supply the
Trust with a tabulation of securities owned by each Fund and held by the
Custodian and shall, when requested to do so by the Trust and for such
compensation as shall be agreed upon between the Trust and the Custodian,
include certificate numbers in such tabulations. The Custodian shall conduct a
periodic inventory of all securities and other property subject to this
Contract and provide to the Trust a periodic reconciliation of the vaulted
position of each Fund to the appraised position of such Fund. The Custodian
will promptly report to the Trust the results of the reconciliation, indicating
any shortages or discrepancies uncovered thereby, and take appropriate action
to remedy any such shortages or discrepancies.

10. Opinion of the Trust's Independent Accountant

The Custodian shall cooperate with the Trust's independent public
accountants in connection with the annual and other audits of the books and
records of the Funds and take all reasonable action, as the Trust may from time
to time request, to provide from year to year the necessary information to such
accountants for the expression of their opinion without any qualification as to
the scope of their examination, including but not limited to, any opinion in
connection with the preparation of the Trust's Form N-lA, and Form N-SAR or
other annual reports to the SEC and with respect to any other requirements of
the SEC.

11. Compensation of Custodian

The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time by the
Trust and the Custodian.

<PAGE> 15

12. Responsibility of Custodian

Notwithstanding anything to the contrary in this Agreement, the
Custodian shall be held to the exercise of reasonable care in carrying out the
provisions of this Contract. Provided the Custodian has acted with such care,
it shall be kept indemnified by and shall be without liability to the Trust or
any Fund for any action taken or omitted by it in good faith without negligence
or willful misconduct. The Custodian shall not be liable for any failure or
delay in performance of its obligations under this Contract arising solely out
of or caused solely by any instruction, action or omission of the Trust, or by
circumstances beyond its reasonable control including, without limitation, loss
or malfunctions of utility, transportation, computer (hardware or software) or
communication service provided the Custodian has in place reasonable backup
facilities. In order for the indemnification provision contained in this
Section to apply, it is understood that if in any case the Trust may be asked
to indemnify or save the Custodian harmless, the Trust shall be fully and
promptly advised of all pertinent facts concerning the situation in question,
and it is further understood that the Custodian will use all reasonable care to
notify the Trust promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Trust. The Trust shall have the option to defend the Custodian against any
claim which may be the subject of this indemnification, and in the event that
the Trust so elects, it will so notify the Custodian, and thereupon the Trust
shall take over complete defense of the claim and the Custodian shall in such
situation initiate no further legal or other expenses for which it shall seek
indemnification under this Section. The Custodian shall in no case confess any
claim or make any compromise in any case in which the Trust will be asked to
indemnify the Custodian except with the Trust's prior written consent. Nothing
herein shall be construed to limit any right or cause of action on the part of
the Custodian under this Contract which is independent of any right or cause of
action on the part of the Trust. The Custodian shall be entitled to rely on
and may act upon advice of counsel (who may be counsel for the Trust or such
other counsel as may be agreed to by the parties) on all matters, and shall be
without liability for any action reasonably taken or omitted pursuant to such
advice. Notwithstanding the foregoing, the responsibility of the Custodian
with respect to redemptions effected by check shall be in accordance with a
separate agreement entered into between the Custodian and the Trust.

The Custodian shall only be responsible for the performance of such
duties as are expressly set forth herein or in instructions of the Trust which
are not contrary to the provisions of this Contract and, except to the extent
provided by this Contract, no representation, warranty, covenant or other
obligation of the Custodian shall be implied with respect to the Custodian's
services under this Contract. The Custodian shall not be responsible to any
person for recitals, statements, or warranties or representations of any person
or entity contained herein or in any other document other than those relating
to the Custodian or its personnel, agents or nominees. The Custodian shall
not be bound to ascertain or inquire as to the performance or observance of any
of the terms of any document on the part of the Trust or any other person,
except as may be necessary in providing services in accordance with the terms
of this Contract. Nothing in this Contract shall be deemed to impose upon the
Custodian any duty to qualify to do business or be licensed in any jurisdiction
other than the State of Minnesota.

<PAGE> 16

In performing its services hereunder, the Custodian is acting solely
on behalf of the Trust, as the Trust's agent. No agency relationship shall be
deemed to be established hereby between the Custodian and any other persons.
The Trust acknowledges that: the Custodian's duties hereunder do not include
any discretionary authority, control or responsibility with respect to the
management or disposition of any investments except as specifically set forth
herein; the Custodian has no authority or responsibility to render investment
advice; and the Custodian is not a fiduciary with respect to Trust or any other
person.

If the Trust requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned
to the Trust being liable for the payment of money or incurring liability of
some other form, the Trust, as a prerequisite to requiring the Custodian to
take such action, shall provide indemnity to the Custodian in an amount and
form satisfactory to the Custodian.

If the Trust requires the Custodian to advance cash or securities for
any purpose with respect to a Fund or in the event that the Custodian or its
nominee shall incur or be assessed any taxes, charges, expenses, assessments,
claims or liabilities in connection with the performance of this Contract with
respect to a Fund, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct, or if
custodian fees remain 60 days past due, the Trust hereby grants the Custodian
to the extent permissible under the 1940 Act a security interest in any
property at any time held for the account of the Trust on behalf of the
applicable Fund as security therefor and should the Trust fail to repay the
Custodian promptly, or to pay custodian fees within 60 days, the Custodian
shall be entitled to utilize available cash of such Fund and to dispose of such
Fund's assets to the extent necessary to obtain reimbursement, provided that
the Custodian gives the Trust reasonable notice to repay such cash or
securities advanced or to pay fees, however, such notice shall not preclude the
Custodian's right to assert any lien under this provision.

13. Effective Period, Termination and Amendment

This Contract shall become effective as of the date set forth above,
shall continue in full force and effect until terminated as hereinafter
provided, may be amended at any time by mutual agreement of the parties hereto
and may be terminated by either party by an instrument in writing delivered or
mailed, postage prepaid to the other party, such termination to take effect not
sooner than sixty (60) days after the date of such delivery or mailing in the
case of a termination by the Trust, and not sooner than 180 days after the date
of such delivery or mailing in the case of a termination by the Custodian;
provided, however, that the Custodian shall not act under Section 2.10 hereof
in the absence of receipt of an initial certificate of the Secretary or an
Assistant Secretary of the Trust that the Board of Trustees has approved the
initial use of a particular Securities System, as required by Rule 17f-4 under
the 1940 Act; provided further, however, that the Trust shall not amend or
terminate this Contract in contravention of any applicable federal or state
regulations, or any provision of the Governing Documents of the Trust; further
provided, that the Trust may at any time by action of its Board of Trustees (i)
substitute another bank or trust company for the Custodian by giving notice as
described above to the Custodian, or (ii)

<PAGE> 17

immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency or
upon the happening of a like event at the direction of an appropriate
regulatory agency or court of competent jurisdiction; and further provided,
that the Custodian may terminate this Contract if any amounts owed by the Trust
to the Custodian hereunder are 60 days or more overdue.

Upon termination of the Contract, the Trust shall pay to the Custodian
such compensation as may be due as of the date of such termination and shall
likewise reimburse the Custodian for its costs, expenses and disbursements.

14. Successor Custodian

If a successor custodian shall be appointed by the Board of Trustees,
the Custodian shall, upon termination and at the cost of the Trust, deliver to
such successor custodian at the office of the Custodian, duly endorsed and in
the form for transfer, all securities, funds and other properties then held by
it hereunder and shall transfer to an account of the successor custodian all of
the securities of the Funds held in Securities Systems.

If no such successor custodian shall be appointed, the Custodian
shall, in like manner and at the cost of the Trust, upon receipt of a certified
copy of a vote of the Board of Trustees, deliver at the office of the Custodian
and transfer, such securities, funds and other properties in accordance with
such vote.

In the event that no written order designating a successor custodian
or certified copy of a vote of the Board of Trustees shall have been delivered
to the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver at the cost of
the Trust to a bank or trust company, which is a "bank" as defined in the 1940
Act, of its own selection, having an aggregate capital, surplus, and undivided
profits, as shown by its last published report, of not less than $25,000,000,
all securities, funds and other properties held by the Custodian and all
instruments held by the Custodian relative thereto and all other property held
by it under this Contract and to transfer to an account of such successor
custodian all of the securities of the Funds held in Securities Systems.
Thereafter, such bank or trust company shall be the successor of the Custodian
under this Contract, and the Custodian shall have no further liability
hereunder, except as otherwise specifically provided by this Contract.

In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Trust to procure the certified copy of the vote referred to or
of the Board of Trustees to appoint a successor custodian, the Custodian shall
be entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect. If while this Contract is in
force the Trust or any Fund shall be liquidated pursuant to law, the Custodian
shall distribute, either in cash or (if the Trust so orders) in the portfolio
securities and other assets of the applicable Fund or Funds, pro rata among the
holders of Shares of the Trust as certified by the Transfer Agent, the property
of the Trust which remains after paying or satisfying all expenses and
liabilities of the Trust or any Fund.

<PAGE> 18

Section 12 hereof shall survive any termination of this Contract.

15. Interpretive and Additional Provisions

In connection with the operation of this Contract, the Custodian and
the Trust may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision
of the Governing Documents of the Trust. No interpretive or additional
provisions made as provided in the preceding sentence shall be deemed to be an
amendment of this Contract.

16. Notice

Any notice shall be sufficiently given when sent by registered or
certified mail, or by such other means as the parties shall agree, to the other
party at the address of such party set forth above or at such other address as
such party may from time to time specify in writing to the other party.

17. Bond

The Custodian shall, at all times, maintain a bond in such form and
amount as is reasonably acceptable to the Trust which shall be issued by a
reputable fidelity insurance company authorized to do business in the place
where such bond is issued against larceny and embezzlement, covering each
officer and employee of the Custodian who may, singly or jointly with others,
have access to securities or funds of the Trust and the Funds, either directly
or through authority to receive and carry out any certificate instruction,
order request, note or other instrument required or permitted by this
Agreement. The Custodian agrees that it shall not cancel, terminate or modify
such bond insofar as it adversely affects the Trust or any Fund except after
written notice given to the Trust not less than 10 days prior to the effective
date of such cancellation, termination or modification. The Custodian shall
furnish to the Trust a copy of each such bond and each amendment thereto.

18. Confidentiality

The Custodian agrees to treat all records and other information
relative to the Trust and the Funds and their prior, present or future
shareholders as confidential, and the Custodian, on behalf of itself and its
employees, agrees to keep confidential all such information except, after prior
notification to and approval in writing by the Trust, which approval shall not
be unreasonably withheld and may not be withheld where the Custodian may be
exposed to civil or criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities, or when
so requested by the Trust.

19. Exemption from Liens

<PAGE> 19

Except as specifically set forth in this Contract, the securities and
other assets held by the Custodian for the Trust and the Funds shall be subject
to no lien or charge of any kind in favor of the Custodian or any person
claiming through the Custodian, but nothing herein shall be deemed to deprive
the Custodian of its right to invoke any and all remedies available at law or
equity to collect amounts due it under this Agreement. Neither the Custodian
nor any sub-custodian appointed pursuant to Section 1 hereof shall have any
power or authority to assign, hypothecate, pledge or otherwise dispose of any
securities held by it for the Trust or any Fund, except upon the direction of
the Trust, duly given as herein provided, and only for the account of a Fund.

20. New York Law to Apply

This Contract shall be construed and the provisions thereof
interpreted under and in accordance with laws of the State of New York without
reference to the conflicts of laws principles thereof.

21. Prior Contracts

Without derogating any of the rights established by such contracts,
this Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Trust and the Custodian relating to the custody of the
assets of the Trust and the Funds.

22. The Parties

All references herein to a "Fund" are to each of the individual series
of the Trust which are listed on Appendix A individually, as if this Contract
were between such individual Fund and the Custodian. Any reference in this
Contract to "the parties" shall mean the Custodian and the Trust and such other
individual Funds as to which the matter pertains.

In providing services pursuant to this Contract, the Custodian shall
maintain separate custodian and other accounts for each Fund, and all
transactions for, and payments and receipts of funds for, each Fund shall be
applied to the accounts of the Fund to which they relate, and the rights,
obligations and liabilities of each Fund shall for all purposes under this
Contract be deemed separate from those of each other Fund.

23. Governing Documents

The term "Governing Documents" means the Certificate of Trust,
Declaration of Trust and By-Laws of the Trust, and the registration statement
filed by the Trust with the SEC, each as amended from time to time.

24. Directors and Trustees

It is understood and is expressly stipulated that neither the holders
of shares of the Trust representing interests in any Fund nor the Trustees of
the Trust shall be personally liable hereunder.

25. Delaware Business Trust

<PAGE> 20

The use of the term "Trust" herein refers to the trustees from time to
time serving under the Governing Documents of the Trust as the same may be
amended from time to time. It is expressly agreed that the obligations of the
Trust hereunder shall not be binding upon any of the trustees, shareholders,
nominees, officers, agents or employees of the Trust, personally, but shall
bind only the trust property of the Trust, as provided in the Declaration of
Trust of the Trust. The execution and delivery of this Contract has been
authorized by the Trustees and signed by an authorized officer of the Trust,
acting as such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made by any
of them but shall bind only the trust property of the Trust as provided in its
Declaration of Trust.

26. Successors of Parties, Assignment

This Contract shall be binding on and shall inure to the benefit of
the Trust and the Custodian and their respective successors; provided, however,
that this Contract may not be assigned by either party hereto without the
consent of the other party. If any party shall merge or consolidate with or
sell substantially all of its assets to another corporation or business entity,
provided that such other corporation or business entity shall assume without
qualification or limitation all obligations of that party hereunder either by
operation of law or by contract, such assumption shall not be considered a
prohibited assignment of this Contract.

27. Miscellaneous

If any provision of this Contract is held by a court of competent
jurisdiction to be invalid or unenforceable, the balance of the Contract shall
remain in effect, and if any provision is inapplicable to any person or
circumstances, it shall nevertheless remain applicable to all other persons and
circumstances. This Contract may be executed in any number of counterparts,
all of which taken together shall constitute one and the same instrument, and
either of the parties hereto may execute this Contract by signing any such
counterpart.

<PAGE> 21

IN WITNESS WHEREOF, the Trust and the Custodian have each caused this
instrument to be executed in its name and behalf by its duly authorized
representative and its seal to be hereunder affixed as of the date first
indicated above.

FIRST TRUST NATIONAL ASSOCIATION

By:
---------------------
Name:
Title:

ATTEST:

- --------------------
Name:
Title:

CADRE INSTITUTIONAL INVESTORS TRUST

By:
-------------------------
Name:
Title:

ATTEST:

- --------------------
Name:
Title:

<PAGE> 1
Appendix A

The following Funds constitute the separate series of the Trust:

Liquid Asset Fund

<PAGE> 2

SCHEDULE A
(AS AMENDED JUNE ___, 19980

The Administration Agreement shall be applicable to the following series of the
Trust:
Liquid Asset Fund
Institutional Cash Fund

Agreed to and accepted:

CADRE INSTITUTIONAL INVESTOR TRUST

By:__________________________
Name:________________________
Title:_______________________
Date:________________________

CADRE FINANCIAL SERVICES, INC.

By:__________________________
Name:________________________
Title:_______________________
Date:________________________
<PAGE> 3

SCHEDULE B
(AS AMENDED JUNE ___, 1998)

FEE SCHEDULE FOR FUND ADMINISTRATION SERVICES

Administration Charges*

Liquid Asset Fund
- -----------------

<S> <C>
First $250 million of Fund's average daily net assets 19 basis points per annum
Next $750 million of Fund's average daily net assets 16.5 basis points per annum
Over $1 billion of Fund's average daily net assets 14 basis points per annum
</TABLE>

Institutional Cash Fund
- -----------------------
<TABLE>
<CAPTION>

<S> <C>
First $250 million of Fund's average daily net assets 10 basis points per annum
Next %750 million of Fund's average daily net assets 7.5 basis points per annum
Over $1 billion of Fund's average daily net assets 5 basis points per annum
</TABLE>

*Based on average daily net assets of the applicable Fund.

Agreed to and accepted:

CADRE INSTITUTIONAL INVESTORS TRUST

By:_______________________________
Name:_____________________________
Title:____________________________
Date:_____________________________

CADRE FINANCIAL SERVICES, iNC.

By:_______________________________
Name:_____________________________
Title:____________________________
Date:_____________________________

<PAGE> 1

Exhibit 11

Independent Auditors' Consent

To the Shareholders and Board of Trustees of
Cadre Institutional Investors Trust:

We consent to the use of our report dated December 18, 1997 with respect to
Cadre Institutional Investors Liquid Asset Fund, a series of Cadre
Institutional Investors Trust, incorporated herein by reference and to the
references to our Firm under the headings "Financial Highlights" and "General
Information, Shareholder Reports" in the Prospectus and "General Information,
Independent Auditors" in the Statement of Additional Information.

KPMG Peat Marwick LLP

New York, New York
May 1, 1998