CDC Kobrick Investment Trust – ‘N-1A EL’ on 10/10/97

As of:  Friday, 10/10/97   ·   Accession #:  1047469-97-479   ·   File #s:  333-37727, 811-08435

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Registration Statement of an Open-End Management Investment Company   —   Form N-1A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: N-1A EL     Form N-1A                                             74    261K 
 2: EX-99.1     Miscellaneous Exhibit                                 21     92K 
 3: EX-99.2     Miscellaneous Exhibit                                  6     20K 
 4: EX-99.3     Miscellaneous Exhibit                                  9     31K 
 5: EX-99.4     Miscellaneous Exhibit                                  2      7K 

N-1A EL   —   Form N-1A
Document Table of Contents

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     U.S. 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.

      and/or

      REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940  /x/

     Amendment No.

      (Check appropriate box or boxes)

      KOBRICK-HFS INVESTMENT TRUST

      (Exact Name of Registrant as Specified in Charter)

      101 Federal Street

     Boston, Massachusetts 02111

      (Address of Principal Executive Offices)

      Registrant's Telephone Number, including Area Code: (617) 342-3500

      Frederick R. Kobrick
     President
      Kobrick-HFS Investment Trust
      101 Federal Street
     Boston, Massachusetts 02111
     (Name and Address of Agent for Service)

      Copies to:

     Thomas J. Kelly, Esq.
     Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
      One Financial Center
     Boston, Massachusetts 02111

Title of Securities Being Offered: Shares of Beneficial Ownership               

Approximate Date of Proposed Public Offering: As soon as practicable after this 
Registration Statement becomes effective.                                       

Registrant hereby declares its intention to register an indefinite number of    
shares of beneficial interest pursuant to Rule  24f-2 under the Investment      
Company Act of 1940.                                                            

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration       
Statement shall thereafter become effective in accordance with Section 8(a) of  
the Securities Act of 1933 or until the Registration Statement shall become     
effective on such date as the Commission acting pursuant to said Section 8(a)   
may determine.                                                                  

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      KOBRICK-HFS INVESTMENT TRUST

     Cross Reference Sheet
     Pursuant to Rule 481(a)
      Under the Securities Act of 1933

PART A                                                                          

Item No.    Registration Statement Caption          Caption in Prospectus       

1.          Cover Page                              Cover Page                  

2.          Synopsis                                Expense Information         

3.          Condensed Financial Information         Performance Information     

4.          General Description of Registrant       Investment Objective,       
                                               Investment Policies and
                                            Risk Considerations;
                                             Operation of the Fund

5.          Management of the Fund                  Operation of the Fund       

6.          Capital Stock and Other Securities      Cover Page; Operation of    
                                               the Fund; Dividends and
                                            Distributions; Taxes

7.          Purchase of Securities Being Offered    How to Purchase Shares;     
                                             Shareholder Services;
                                           Exchange Privilege;
                                          Distribution Plan;
                                                   Calculation of Share Price;
                                   Application

8.          Redemption or Repurchase                How to Redeem Shares;       
                                             Shareholder Services;
                                          Exchange Privilege

9.          Legal Proceedings                       Inapplicable                

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PART B                                                                          
                                            Caption in Statement
                                     of Additional
Item No.    Registration Statement Caption          Information                 

10.         Cover Page                              Cover Page                  

11.         Table of Contents                       Table of Contents           

12.         General Information and History         The Trust                   

13.         Investment Objectives and Policies      Definitions, Policies and   
                                            Risk Considerations;
                                          Quality Ratings of
                                       Corporate Bonds
                                             and Preferred Stocks;
                                               Investment Limitations;
                                                Securities Transactions;
                                          Portfolio Turnover

14.         Management of the Fund                  Trustees and Officers       

15.         Control Persons and Principal Holders   Inapplicable                
of Securities                                           

16.         Investment Advisory and Other Services  The Investment Adviser;     
                                          Distribution Plan;
                                                Custodian; Auditors; ___
                                     Service Corp.

17.         Brokerage Allocation and Other          Securities Transactions     
Practices                                               

18.         Capital Stock and Other Securities      The Trust                   

19.         Purchase, Redemption and Pricing of     Calculation of Share        
         Securities Being Offered                Price; Redemption in Kind

20.         Tax Status                              Taxes                       

21.         Underwriters                            Inapplicable                

22.         Calculation of Performance Data         Historical Performance      
Information                                             

23.         Financial Statements                    Statements of Assets and    
                                   Liabilities

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PART C                                                                          

The information required to be included in Part C is set forth under the        
appropriate Item, so numbered, in Part C to this Registration Statement.        

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                                                        MLCFG&P Draft of 10-9-97

      KOBRICK-HFS CAPITAL FUND
      101 Federal Street
     Boston, Massachusetts 02111
      Prospectus
     _______________, 1997

The investment objective of Kobrick-HFS Capital Fund (the "Fund") is to 
seek maximum capital appreciation by investing primarily in common stocks (and  
preferred stocks and debt securities convertible into or carrying the right to  
acquire common stocks) of emerging growth companies and of companies considered 
to be undervalued special situations, as determined by the Fund's investment    
manager.                                                                        

 Kobrick-HFS, Inc. (the "Investment Manager") serves as investment adviser
to the Fund.  The Investment Manager was organized in October, 1997; and its    
principals are Frederick R. Kobrick and Michael T. Carmen.                      

Shareholders may have their shares redeemed directly by the fund at net 
asset value; redemptions processed through securities dealers may be subject to 
processing charges.                                                             

 There are risks in any investment program, including the risk of changing
economic and market conditions, and there is no assurance that the Fund will    
achieve its investment objective. The net asset value of the Fund's shares      
fluctuates as market conditions change.                                         

Because of the Fund's investment policies, the Fund is subject to       
above-average risks.  The Fund generally is designed for investors who want     
an aggressive investment and can tolerate volatility and possible losses.  An   
investment in the Fund should be part of a balanced investment program which    
includes more conservative investments.                                         

   This Prospectus sets forth concisely the information a prospective investor
ought to know about the fund before investing.  It should be retained for future
reference.  A Statement of Additional Information about the Fund dated          
______________, 1997 has been filed with the Securities and Exchange Commission 
and is incorporated by reference into this Prospectus. It is available at no    
charge upon request to the fund at the address indicated on the cover or by     
calling 1-800-______________.                                                   

The Fund is a diversified series of Kobrick-HFS Investment Trust (the   
"Trust"), an open-end management investment company.                            

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                                       

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STATE SECURITIES COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF THIS          
PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.          

THE FUND MAY ENGAGE IN SHORT-TERM TRADING, WHICH MAY BE CONSIDERED A    
SPECULATIVE ACTIVITY AND INVOLVE GREATER RISK AND ADDITIONAL COST TO THE FUND.  

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR 
ENDORSED BY, ANY FINANCIAL INSTITUTION, ARE NOT INSURED BY THE FEDERAL DEPOSIT  
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND       
INVOLVE INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL AMOUNT        
INVESTED.                                                                       

TABLE OF CONTENTS                                                               

Table of Expenses                                                               
The Fund's Investments                                                          
Limiting Investment Risk                                                        
How to Purchase Shares                                                          
Shareholder Services                                                            
How to Redeem Shares                                                            
Dividends and Distributions                                                     
The Fund and its Shares                                                         
Management of the Fund                                                          
Taxes                                                                           
Distribution Plan                                                               
Calculation of Share Price                                                      
Calculation of Performance Data                                                 

     TABLE OF EXPENSES

Shareholder Transaction Expenses                                                

  Sales Charge Imposed on Purchases. . . . . . . . . . . . . .          None
  Sales Charge Imposed on Reinvested Dividends . . . . . . . .          None
  Deferred Sales Charge. . . . . . . . . . . . . . . . . . . .          None
                                                                        ----
  Redemption Fees (a). . . . . . . . . . . . . . . . . . . . .          None
                                                                        ----
  Exchange Fee . . . . . . . . . . . . . . . . . . . . . . . .          None
                                                                        ----

Annual Fund Operating Expenses (estimated as a percentage of average net assets)

   Management Fees. . . . . . . . . . . . . . . . . . . . . . .          1.00%
   12b-1 Fees . . . . . . . . . . . . . . . . . . . . . . . . .          0.25%
   Other Expenses . . . . . . . . . . . . . . . . . . . . . . .          0.50%
                                                                         -----
        Total Fund Operating Expenses . . . . . . . . . . . . .          1.75%
                                                                         -----
                                                                         -----
_____________                                                                   
(a) Remittance of redemption proceeds by wire is subject to a $8.00 fee.        

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EXAMPLE                                                                         

  THE EXAMPLE SHOULD NOT BE CONSIDERED AS A REPRESENTATION OF PAST OR FUTURE
RETURN OR EXPENSES.  ACTUAL RETURN AND EXPENSES MAY BE GREATER OR LESS THAN     
SHOWN.                                                                          

                     1 Year     3 Years     5 Years     10 Years
You would pay the                                                               
following expenses on                                                           
a $1,000 investment                                                             
assuming 5%                                                                     
annual return:               $18        $57         $98         $212            

 The purpose of the table above is to assist the investor in understanding
the various costs and expenses that an investor will bear directly or           
indirectly.  The percentage expense level shown in the table as "Other Expenses"
is based on projected expenses for the current fiscal year ending December 31,  
1998.  Actual expense levels for the current fiscal year or for future years may
vary from the amounts shown.                                                    

      THE FUND'S INVESTMENTS

  The Fund's investment objective is to seek maximum capital appreciation by
investing primarily in common stocks (and preferred stocks and debt securities  
convertible into or carrying the right to acquire common stocks) of emerging    
growth companies and of companies determined to be undervalued special          
situations, as determined by the Fund's investment manager. The investment      
objective is a fundamental policy that may not be changed without approval of   
the Fund's shareholders.                                                        

 In seeking to achieve its investment objective, the Fund invests at least
65% of its total assets under normal circumstances in the common stock (and     
preferred stocks and debt securities convertible into or carrying the right to  
acquire common stocks) of emerging growth companies and companies considered to 
be undervalued special situations.  The Investment Manager considers emerging   
growth companies to be those companies which are less mature and have the       
potential to grow substantially faster than the economy.  The Investment Manager
considers undervalued special situations to include common stocks of companies, 
such as larger, more mature companies, which trade at prices believed by the    
Investment Manager to be below the companies' intrinsic values and which        
therefore offer the potential for above-average investment returns.  A special  
situation company is one which, because of unique circumstances such as, for    
example, a particular business niche it fills, is an attractive investment even 
through it is not in the emerging growth stage.  In selecting such investments, 
the Investment Manager considers a variety of factors, any one of which may be  
determinative.  These include a company's expected growth in earnings, relative 
financial condition and cash flow, competitive position, management and business
strategy, overall potential as an enterprise, entrepreneurial character, and new
or innovative products, services or processes.  The capitalization of the       
companies in which the Fund invests can range across the full spectrum from     
small to large capitalization, with varying or high proportions from time to    
time in different capitalization segments.                                      

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   Under normal circumstances, the Fund expects to by fully invested in equity
securities as described above.  However, the Fund may, consistent with its      
investment objective, invest at any time up to 35% of its total assets in other 
equity securities and debt securities, such as those issued by more mature      
companies, and U.S. Government securities.  The Fund will purchase investment   
grade debt (i.e., rated at the time of purchase AAA, AA, A or BBB categories by 
Standard & Poor's Corporation ("S&P") or Aaa, Aa, A or Baa categories by Moody's
Investors Service, Inc. ("Moody's")), or securities that are not rated but      
considered by the Investment Manager to be of equivalent investment quality.    
The debt securities, which may have differing maturites and fixed or floating   
interest rates, will be U.S. Government securities or issued by larger          
capitalization issuers.  For more information on debt ratings, see the Statement
of Additional Information.                                                      

INVESTMENT PRACTICES                                                            

FOREIGN INVESTMENTS                                                             

 The Fund reserves the right to invest without limitation in securities of
non-U.S. issuers directly, or indirectly in the form of American Depositary     
Receipts ("ADRs"), European Depositary Receipts ("EDRs") or similar securities  
representing interests in the securities of foreign issuers.  Under current     
policy, however, the Fund limits such investments, including ADRs and EDRs, to a
maximum of 35% of its total assets.                                             

  ADRs are receipts, typically issued by a U.S. bank or trust company, which
evidence ownership of underlying securities issued by a foreign corporation or  
other entity.  EDRs are receipts issued in Europe which evidence a similar      
ownership arrangement.  Generally, ADRs in registered form are designed for use 
in U.S. securities markets and EDRs are designed for use in European securities 
markets.  The underlying securities are not always denominated in the same      
currency as the ADRs or EDRs.  Although investment in the form of ADRs or EDRs  
facilities trading in foreign securities, it does not mitigate all the risks    
associated with investing in foreign securities.                                

ADRs are available through facilities which may be either "sponsored" or
"unsponsored."  In a sponsored arrangement, the foreign issuer establishes the  
facility, pays some or all of the depository's fees, and usually agrees to      
provide shareholder communications.  In an unsponsored arrangement, the foreign 
issuer is not involved, and the ADR holders pay the fees of the depository.     
Sponsored ADRs are generally more advantageous to the ADR holders and the issuer
than are unsponsored ADRs.  More and higher fees are generally charged in an    
unsponsored program compared to a sponsored facility.  Only sponsored ADRs may  
be listed on the New York or American Stock Exchanges.  Unsponsored ADRs may    
prove to be more risky, due to (a) the additional costs involved to the Fund;   
(b) the relative illiquidity of the issue in U.S. markets ; and (c) the         
possibility of higher trading costs in the over-the-counter market as opposed to
exchange based trading.  The Fund will take these and other risk considerations 
into account before making an investment in an unsponsored ADR.                 

 The risks associated with investments in foreign securities include those
resulting from fluctuations in currency exchange rates, revaluation of          
currencies, future political and economic developments, including the risks of  
nationalization or expropriation, the possible imposition of                    

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currency exchange blockages, higher operating expenses, foreign withholding and 
other taxes which may reduce investment return, reduced availability of public  
information concerning issuers, the difficulties in obtaining and enforcing a   
judgment against a foreign issuer and the fact that foreign issuers are not     
generally subject to uniform accounting, auditing and financial reporting       
standards or to other regulatory practices and requirements comparable to those 
applicable to domestic issuers.  Moreover, securities of many foreign issuers   
may be less liquid and their prices more volatile than those of securities of   
comparable domestic issuers.                                                    

It is anticipated that a majority of the foreign investments by the Fund
will consist of securities of issuers in countries with developed economies.    
However, the Fund may also invest in the securities of issuers in countries with
less developed economies as deemed appropriate by the Investment Manager,       
although the Fund does not presently expect to invest more than 5% of its total 
assets in issuers in such less developed countries.  Such countries include     
countries that have any emerging stock market that trades a small number of     
securities; countries with low-to middle-income economies; and/or countries with
economies that are based on only a few industries.  Eastern European countries  
are considered to have less developed capital markets.                          

   For further information regarding foreign investments, see the Statement of
Additional Information.                                                         

CURRENCY TRANSACTIONS                                                           

 In order to protect against the effect of uncertain future exchange rates
on securities denominated in foreign currencies, the Fund may engage in currency
exchange transactions either on a spot (i.e., cash) basis at the rate prevailing
in the currency exchange market or by entering into forward contracts to        
purchase or sell currencies.  Although such contracts tend to minimize the risk 
of loss resulting from a correctly predicted decline in value of hedged         
currency, they tend to limit any potential gain that might result should the    
value of such currency increase.  In entering a forward currency transaction,   
the Fund is dependent upon the creditworthiness and good faith of the           
counterparty.  The Fund will attempt to reduce the risks of nonperformance by a 
counterparty by dealing only with established, large institutions.  For further 
information, see the Statement of Additional Information.                       

OTHER INVESTMENT POLICIES                                                       

The Fund may lend portfolio securities with a value of up to 33 1/3 % of
its total assets.  The Fund will receive cash or cash equivalents (e.g., U.S.   
Government obligations) as collateral in an amount equal to at least 100% of the
current market value of the loaned securities plus accrued interest.  Collateral
received by the Fund will generally be held in the form tendered, although cash 
may be invested in securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, irrevocable stand-by letters of credit issued by 
a bank, or any combination thereof.  The investing of cash collateral received  
from loaning portfolio securities involves leverage which magnifies the         
potential for gain or loss on monies invested and, therefore, results in an     
increase in the volatility of the Fund's outstanding securities.  Such loans may
be terminated at any time.                                                      

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The Fund will retain most rights of ownership including rights to       
dividends, interest or other distributions on the loaned securities.  Voting    
rights pass with the lending, although the Fund may call loans to vote proxies  
if desired.  Should the borrower of the securities fail financially, there is a 
risk of delay in recovery of the securities or loss of rights in the collateral.
Loans are made only to borrowers which are deemed by the Investment Manager to  
be of good financial standing.                                                  

   The Fund may, subject to certain limitations, buy and sell options, futures
contracts and options on futures contracts on securities and securities         
indicies, enter into repurchase agreements and purchase securities on a "when   
issued" or forward commitment basis.  The Fund may not establish a position in a
commodity futures contract or purchase or sell a commodity option contract for  
other than bona fide hedging purposes if immediately thereafter the sum of the  
amount of initial margin deposits and premiums on open positions with respect to
futures and options used for such nonhedging purposes would exceed 5% of the    
market value of the Fund's net assets; similar policies apply to options which  
are not commodities.  The Fund may enter various forms of swap arrangements,    
which have simultaneously the characteristics of a security and futures         
contract, although the Fund does not presently expect to invest more than 5% of 
its total assets in such items.  These swap arrangements include interest rate  
swaps, currency swaps and index swaps.  See the Statement of Additional         
Information.                                                                    

 The Fund may invest in restricted securities in accordance with Rule 144A
under the Securities Act of 1933, which allows for the resale of such securities
among certain qualified institutional buyers.  Because the market for such      
securities is still developing, such securities could possibly become illiquid  
in particular circumstances.  See the Statement of Additional Information.      

 The Fund may engage in short-term trading of securities and reserves full
freedom with respect to portfolio turnover.  In periods when there are rapid    
changes in economic conditions or security price levels or when investment      
strategy changes significantly, portfolio turnover may be higher than during    
times of economic and market price stability or when investment strategy remains
relatively constant.  The Fund's portfolio turnover rate involves greater       
transaction costs, relative to other funds in general, and may have tax and     
other consequences as well.  See the Statement of Additional Information.       

   Because the Fund invests primarily in emerging growth and special situation
companies, an investment in the Fund involves greater than average risks and the
value of the Fund's shares may fluctuate more widely than the value of shares of
a fund that invests in more established companies.  Securities held by the Fund,
particularly those traded over-the-counter, may have limited marketability and  
may be subject to more abrupt or erratic market movements over time than        
securities of larger, more seasoned companies or the market as a whole.  The    
issuers of the over-the-counter securities may have limited product lines,      
markets and financial resources, may be dependent on entrepreneurial management,
typically reinvest most of their net income in the enterprise and typically do  
not pay dividends                                                               

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      LIMITING INVESTMENT RISK

In seeking to lessen investment risk, the Fund operates under certain   
fundamental and nonfundamental investment restrictions.  Under the fundamental  
restrictions the Fund may not (a) purchase a security of any one issuer (other  
than the United States or its instrumentalities) if such purchase at the time   
would cause more than 5% of the Fund's total assets to be invested in the       
securities of such issuer; (b) purchase for its portfolio a security of any one 
issuer if such purchase at the time thereof would cause more than 10% of any    
class of securities of such issuer to be held by the Fund; or (c) invest more   
than 25% of the Fund's total assets in securities of issues principally engaged 
in any one industry with certain designated exceptions such as in the case of   
the U.S. Government.                                                            

   The foregoing fundamental investment restrictions may not be changed except
by vote of the holders of a majority of the outstanding voting securities of the
Fund.  The vote of a majority of the outstanding voting securities of the Fund  
means the vote (A) of 67 per centum or more of the voting securities present at 
a meeting, if the holders of more than 50 per centum of the outstanding voting  
securities of the Trust are present or represented by proxy; or (B) of more than
50 per centum of the outstanding voting securities of the Trust, whichever is   
less.                                                                           

 Under the nonfundamental investment restrictions, the Fund may not invest
more than 15% of the Fund's net assets in illiquid securities including         
repurchase agreements extending for more than seven days and may not invest more
than 10% of the Fund's net assets in restricted securities (excluding securities
eligible for resale under Rule 144A under the Securities Act of 1933).  Although
many illiquid securities may also be restricted, and vice versa, compliance with
each of these policies will be determined independently.  The foregoing         
nonfundamental investment restrictions may be changed without a shareholder     
vote.                                                                           

For further information on the above and other fundamental and          
nonfundamental investment restrictions, see the Statement of Additional         
Information.                                                                    

The Fund may hold up to 100% of its assets in cash or certain short-term
securities for temporary defensive purposes.  The Fund will adopt a temporary   
defensive position when, in the opinion of the Investment Manager, such a       
position is more likely to provide protection against adverse market conditions 
than adherence to the Fund's other investment policies.  To the extent that the 
Fund's assets are held in a temporary defensive position the Fund will not be   
achieving its investment goals.  The types of short-term instruments in which   
the Fund may invest for such purposes are, as more fully described in the       
Statement of Additional Information: securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities, (U.S. Treasury bills, notes,   
bonds, Government National Mortgage Association certificates), custodial        
receipts, certificates of deposit, time deposits and banker's acceptances of    
certain qualified financial institutions and corporate commercial paper rated at
least "A" by S&P or "Prime" by Moody's (or, if not rated, issued by companies   
having an outstanding long-term unsecured debt issue rated at least "A" by S&P  
or Moody's).  See the Statement of Additional Information.                      

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      HOW TO PURCHASE SHARES

Your initial investment in the Fund ordinarily must be at least $2,000  
($1,000 for tax-deferred retirement plans).  The Fund may, in the Investment    
Manager's sole discretion, accept certain accounts with less than the stated    
minimum initial investment.  Shares of the Fund are sold on a continuous basis  
at the net asset value next determined after receipt of a purchase order by the 
Trust.  Purchase orders received by dealers prior to 4:00 p.m., Eastern time, on
any business day and transmitted to the Trust's transfer agent, ___ Service     
Corp., by 5:00 p.m., Eastern time, that day are confirmed at the net asset value
determined as of the close of the regular session of trading on the New York    
Stock Exchange on that day.  It is the responsibility of dealers to transmit    
properly completed orders so that they will be received by ___ Service Corp. by 
5:00 p.m., Eastern time.  Dealers may charge a fee for effecting purchase       
orders.  Direct purchase orders received by ___ Service Corp. by 4:00 p.m.,     
Eastern time, are confirmed at that day's net asset value.  Direct investments  
received by ___ Service Corp. after 4:00 p.m., Eastern time, and orders received
from dealers after 5:00 p.m., Eastern time, are confirmed at the net asset value
next determined on the following business day.                                  

You may open an account and make an initial investment in the Fund by   
sending a check and a completed account application form to ___ Service         
Corp.,________.   Checks should be made payable to the "Kobrick-HFS Capital     
Fund".  An account application is included in this Prospectus.                  

 The Trust mails you confirmations of all purchases or redemptions of Fund
shares.  Certificates representing shares are not issued.  The Trust reserves   
the rights to limit the amount of investments and to refuse to sell to any      
person.                                                                         

Investors should be aware that the Fund's account application contains  
provisions in favor of the Trust, ___ Service Corp. and certain of their        
affiliates, excluding such entities from certain liabilities (including, among  
others, losses resulting from authorized shareholder transactions) relating to  
the various services (for example, telephone exchanges) made available to       
investors.                                                                      

  Should an order to purchase shares be canceled because your check does not
clear, you will be responsible for any resulting losses or fees incurred by the 
Trust or ___ Service Corp. in the transaction.                                  

You may also purchase shares of the Fund by wire.  Please telephone ___ 
Service Corp. (Nationwide call toll-free 800-___-____) for instructions.  You   
should be prepared to give the name in which the account is to be established,  
the address, telephone number and taxpayer identification number for the        
account, and the name of the bank which will wire the money.                    

 Your investment will be made at the net asset value next determined after
your wire is received together with the account information indicated above.  If
the Trust does not receive timely and complete account information, there may be
a delay in the investment of your money and any accrual of dividends.  To make  
your initial wire purchase, you are required to mail a completed account        
application to ___ Service Corp..  Your bank may impose a charge for            

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sending your wire.  There is presently no fee for receipt of wired funds, but   
___ Service Corp. reserves the right to charge shareholders for this service    
upon thirty days' prior notice to shareholders.                                 

You may purchase and add shares to your account by mail or by bank wire.
Checks should be sent to ___ Service Corp., ____________________.  Checks should
be made payable or endorsed to the "Kobrick-HFS Capital Fund".  Bank wires      
should be sent as outlined above.  Each additional purchase request must contain
the name of your account and your account number to permit proper crediting to  
your account.  While there is no minimum amount required for subsequent         
investments, the Trust reserves the right to impose such a requirement.         

      SHAREHOLDER SERVICES

Contact ___ Service Corp. (Nationwide call toll-free 800-___-____) for  
additional information about the shareholder services described below.          

AUTOMATIC WITHDRAWAL PLAN                                                       

If the shares in your account have a value of at least $5,000, you may  
elect to receive, or may designate another person to receive, monthly or        
quarterly payments in a specified amount of not less than $50 each.  There is no
charge for this service.                                                        

TAX-DEFERRED RETIREMENT PLANS                                                   

Shares of the Fund are available for purchase in connection with the    
following tax-deferred retirement plans:                                        

--   Keogh Plans for self-employed individuals                          

--   Individual retirement account (IRA) plans for                      
individuals and their non-employed spouses                    

--   Qualified pension and profit-sharing plans for                     
employees, including those profit-sharing plans               
with a 401(k) provision                                       

--   403(b)(7) custodial accounts for employees of                      
public school systems, hospitals, colleges and                
other non-profit organizations meeting certain                
requirements of the Internal Revenue Code                     

DIRECT DEPOSIT PLANS                                                            

   Shares of the Fund may be purchased through direct deposit plans offered by
certain employers and government agencies.  These plans enable a shareholder to 
have all or a portion of his or her payroll or social security checks           
transferred automatically to purchase shares of the Fund.                       

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AUTOMATIC INVESTMENT PLAN                                                       

You may make automatic monthly investments in the Fund from your bank,  
savings and loan or other depository institution account. The minimum initial   
and subsequent investments must be $50 under the plan. ___ Service Corp. pays   
the costs associated with these transfers, but reserves the right, upon thirty  
days' written notice, to make reasonable charges for this service. Your         
depository institution may impose its own charge for debiting your account which
would reduce your return from an investment in the Fund.                        

      HOW TO REDEEM SHARES

You may redeem shares of the Fund on each day that the Trust is open for
business by sending a written request to the Fund. The request must state the   
number of shares or the dollar amount to be redeemed and your account number.   
The request must be signed exactly as your name appears on the Trust's account  
records. If the shares to be redeemed have a value of $25,000 or more, your     
signature must be guaranteed by any eligible guarantor institution, including   
banks, brokers and dealers, municipal securities brokers and dealers, government
securities brokers and dealers, credit unions, national securities exchanges,   
registered securities associations, clearing agencies and savings associations. 

  Redemption requests may direct that the proceeds be wired directly to your
existing account in any commercial bank or brokerage firm in the United States. 
If your instructions request a redemption by wire, you will be charged an $8    
processing fee by the Trust's Custodian. The Trust reserves the right, upon     
thirty days' written notice, to change the processing fee. All charges will be  
deducted from your account by redemption of shares in your account. Your bank or
brokerage firm may also impose a charge for processing the wire. In the event   
that wire transfer of funds is impossible or impractical, the redemption        
proceeds will be sent by mail to the designated account.                        

 You may also redeem shares by placing a wire redemption request through a
securities broker or dealer. Unaffiliated broker-dealers may impose a fee on the
shareholder for this service. You will receive the net asset value per share    
next determined after receipt by the Trust or its agent of your wire redemption 
request. It is the responsibility of broker-dealers to properly transmit wire   
redemption orders.                                                              

You will receive the net asset value per share next determined after    
receipt by ___ Service Corp. of your redemption request in the form described   
above. Payment is made within three business days after tender in such form,    
provided that payment in redemption of shares purchased by check will be        
effected only after the check has been collected, which may take up to fifteen  
days from the purchase date. To eliminate this delay, you may purchase shares of
the Fund by certified check or wire. At the discretion of the Trust or ___      
Service Corp., corporate investors and other associations may be required to    
furnish an appropriate certification authorizing redemptions to ensure proper   
authorization.                                                                  

The Trust reserves the right to suspend the right of redemption or to   
postpone the date of payment for more than three business days under unusual    
circumstances as determined by the Securities and Exchange Commission.          

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EXCHANGE PRIVILEGE                                                              

 Shares of the Fund may be exchanged for shares of the other series of the
Trust, the Kobrick-HFS Emerging Growth Fund, at net asset value [Shares of the  
Fund may also be exchanged for shares at net asset value of the Short Term      
Government Income Fund (a series of _________________), which invests in        
short-term U.S. Government obligations backed by the "full faith and credit" of 
the United States and seeks high current income consistent with protection of   
capital. Shares of the Short Term Government Income Fund acquired via exchange  
may be re-exchanged for shares of the Fund at net asset value.]                 

You may request an exchange by sending a written request to ___ Service 
Corp.  The request must be signed exactly as your name appears on the Trust's   
account records. Exchanges may also be requested by telephone. An exchange will 
be effected at the next determined net asset value after receipt of a request by
___ Service Corp.                                                               

Exchanges may only be made for shares of funds then offered for sale in 
your state of residence and are subject to the applicable minimum initial       
investment requirements. The exchange privilege may be modified or terminated by
the Board of Trustees upon 60 days' prior notice to shareholders. An exchange   
results in a sale of fund shares, which may cause you to recognize a capital    
gain or loss. Before making an exchange, contact ___ Service Corp. to obtain a  
current prospectus and more information about exchanges among the funds.        

     DIVIDENDS AND DISTRIBUTIONS

The Fund expects to distribute any net realized capital gains and net   
investment income at least once each year. Management will determine the timing 
and frequency of the distributions of any net realized short-term capital gains.

Distributions are paid according to one of the following options:       

Share Option -     income distributions and capital gains distributions         
reinvested in additional shares.          

Income Option -    income distributions and short-term capital gains            
         distributions paid in cash; long-term capital gains
    distributions reinvested in additional shares.

Cash Option        income distributions and capital gains distributions paid in 
cash.                                     

   You should indicate your choice of option on your application. If no option
is specified on your application, distributions will automatically be reinvested
in additional shares. All distributions will be based on the net asset value in 
effect on the payable date.                                                     

If you select the Income Option or the Cash Option and the U.S. Postal  
Service cannot deliver your checks or if your checks remain uncashed for six    
months, your dividends may be reinvested in your account at the then current net
asset value and your account will be converted to the Share Option.             

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SHAREHOLDER ACCOUNT INQUIRIES:                                                  

PLEASE CALL 1-800-____________                                          

   Call this number for assistance in answering general servicing questions on
your account, including account balance, available shareholder services and     
statement information.  Account inquiries may also be made in writing to        
________________.                                                               

     THE FUND AND ITS SHARES

The Fund was organized in October 1997 as a series of Kobrick-HFS       
Investment Trust, a Massachusetts business trust and is registered with the     
Securities and Exchange Commission under the Investment Company Act of 1940 as  
an open-end management investment company.  Kobrick-HFS Investment Trust was    
organized on _______, 1997.  The Fund's fiscal year ends on December 31.        

Shortly prior to the effective time of this Prospectus, a share         
distribution of four shares for each then outstanding share was declared.       
Shares of the Trust have equal dividend, redemption and liquidation rights and  
when issued are fully paid and nonassessable by the Master Trust.  Each share   
has one vote (with proportionate voting for fractional shares) irrespective of  
net asset value.                                                                

  Under the Master Trust Agreement of the Master Trust, no annual or regular
meeting of shareholders is required.  Thus, there will ordinarily be no         
shareholder meetings unless required by the Investment Company Act of 1940.     
Except as otherwise provided under said Act, the Board of Trustees will be a    
self-perpetuating body until fewer than 50% of the Trustees serving as such are 
Trustees who were elected by shareholders of the Master Trust.  At that time    
another meeting of shareholders will be called to elect Trustees. Under the     
Master Trust Agreement, any Trustee may be removed by vote of two-thirds of the 
outstanding Master Trust shares; holders of 10% or more of the outstanding      
shares of the Master Trust can require that the Trustees call a meeting of      
shareholders for purposes of voting on the removal of one or more Trustees.  In 
connection with such meetings called by shareholders, shareholders will be      
assisted in shareholder communications.                                         

  Under Massachusetts law, the shareholders of the Master Trust could, under
certain circumstances, be held personally liable for the obligations of the     
Master Trust.  However, the Master Trust Agreement of the Master Trust disclaims
shareholder liability for acts or obligations of the Master Trust and provides  
for indemnification for all losses and expenses of any shareholder of the Trust 
held personally liable for the obligations of the Master Trust.  Thus, the risk 
of a shareholder's incurring financial loss on account of shareholder liability 
is limited to circumstances in which the Trust would be unable to meet its      
obligations.  The Investment Manager believes that, in view of the above, the   
risk of personal liability to shareholders is remote.                           

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      MANAGEMENT OF THE FUND

Under the provisions of the Master Trust Agreement and the laws of      
Massachusetts, primary responsibility for the management and supervision of the 
Fund rests with the Trustees.                                                   

The Fund's investment manager is Kobrick-HFS, Inc., 101 Federal Street, 
Boston, Massachusetts 02111.  Kobrick-HFS, Inc. was founded in October, 1997    
principally by Frederick R. Kobrick and Michael T. Carmen.  HFS Incorporated of 
Parsippany, New Jersey, also has an interest in non-voting preferred stock of   
the Investment Manager.  Messrs Kobrick and Carmen have combined over 30 years  
of experience in the management of investments under objective similar to those 
of the Fund.  The Fund's portfolio manager is Frederick R. Kobrick, who for 12  
years was an equity portfolio manager at State Street Research & Management     
Company where he served as Senior Vice President and a member of the firm's     
Equity Investment Committee.                                                    

   Under the Investment Advisory Contract between the Trust and the Investment
Manager, the Fund pays a quarterly advisory fee to the Investment Manager.  The 
advisory fee is computed as a percentage of the average of the values of the net
assets of the Fund as determined at the close of each business day during the   
quarter at the following annual rates:                                          

1% of the first $1,000,000,000 of such assets;                          
3/4% of the next $500,000,000 of such assets;                           
1/2% of the next $1,000,000,000 of such assets; and                     
3/8% of the average market value of such assets in                      
excess of $2,500,000,000.                                               
The Investment Advisory Contract provides that the Investment Manager shall     
furnish the Trust with suitable office space and facilities and such management,
investment advisory, statistical and research facilities and services as may be 
required from time to time by the Trust and the Fund is responsible for its     
other expenses and services.  In view of the requirements for management of the 
Fund's particular investment program, this fee is higher than those charges for 
many other funds.                                                               

As of the date of this Prospectus, Kobrick-HFS, Inc. is the sole        
shareholder of the Fund.                                                        

     TAXES

The Fund intends to qualify as a regulated investment company under   
Subchapter M of the Internal Revenue Code, however, it cannot give complete     
assurance that it will do so.  As long as it so qualifies, it will not be       
subject to federal income taxes on its taxable income (including realized       
capital gains, if any) distributed to its shareholders.  Consequently, the      
Fund intends to distribute annually to its shareholders substantially all of    
its net investment income and any capital gain net income (capital gains net    
of capital losses).                                                             

 The Fund declares dividends from net investment income quarterly and pays
such dividends, if any, two times each year. Distributions of capital gain net  
income will generally be made after the end of the fiscal year or as otherwise  
required for compliance with applicable tax                                     

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regulations.  Both dividends from net investment income and distributions of    
capital gain net income will be declared and paid to shareholders in additional 
shares of the Fund at net asset value on the record date of that dividend or    
distribution, except in the case of shareholders who elect a different available
distribution method.                                                            

  The Fund will provide its shareholders with annual information on a timely
basis concerning the federal tax status of dividends and distributions during   
the preceding calendar year.                                                    

Dividends paid by the Fund from taxable net investment income and       
distributions of net short-term capital gains, whether paid in cash or          
reinvested in additional shares, will be taxable for federal income tax purposes
to shareholders as ordinary income, and a portion may be eligible for the 70%   
dividends-received deduction for corporations.  The percentage of the Fund's    
dividends eligible for such tax treatment may be less than 100% to the extent   
that less than 100% of the Trust's gross income consist of qualified dividends  
of domestic corporations.  Distributions of net capital gains (the excess of net
long-term capital gains over short-term capital losses) which are designated as 
capital gains distributions, whether paid in cash or reinvested in additional   
shares, will be taxable for federal income tax purposes to shareholders as      
long-term or mid-term capital gains, regardless of how long shareholders have   
held their shares, and are not eligible for the dividends-received deduction.   
If shares of the Fund which are sold at a loss have been held six months or     
less, the loss will be considered as a long-term capital loss to the extent of  
any capital gains distributions received.                                       

Dividends and other distributions and proceeds of redemptions of Fund   
shares paid to individuals and other nonexempt payees will be subject to a 31%  
federal backup withholding tax if the Transfer Agent is not provided with the   
shareholder's correct taxpayer identification number and certification that the 
shareholder is not subject to such backup withholding.                          

The foregoing discussion relates only to generally applicable federal   
income tax provisions in effect as of the date of this Prospectus.  Therefore,  
prospective shareholders are urged to consult their own tax advisors regarding  
tax matters, including state and local tax consequences.                        

     DISTRIBUTION PLAN

 Pursuant to Rule 12b-1 under the Investment Company Act of 1940, the Fund
has adopted a plan of distribution (the "Plan") under which the Fund may        
directly incur or reimburse the Adviser for certain distribution-related        
expenses, including: payments to securities dealers and others who are engaged  
in the sale of shares of the Fund and who may be advising investors regarding   
the purchase, sale or retention of such shares; expenses of maintaining         
personnel who engage in or support distribution of shares or who render         
shareholder support services not otherwise provided by _____ Service Corp.;     
expenses of formulating and implementing marketing and promotional activities,  
including direct mail promotions and mass media advertising; expenses of        
preparing, printing and distributing sales literature and prospectuses and      
statements of additional information and reports for recipients other than      
existing shareholders of the Fund; expenses of obtaining such information,      
analyses and reports with respect to marketing                                  

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and promotional activities as the Trust may, from time to time, deem advisable; 
and, any other expenses related to the distribution of the Fund's shares.       

  The annual limitation for payment of expenses pursuant to the Plan is .25%
of the Fund's average daily net assets.  Unreimbursed expenditures will not be  
carried over from year to year.  In the event the Plan is terminated by the Fund
in accordance with its terms, the Fund will not be required to make any payments
for expenses incurred by the Adviser after the date the Plan terminates.        

Pursuant to the Plan, the Fund may also make payments to banks or other 
financial institutions that provide shareholder services and administer         
shareholder accounts.  The Glass-Steagall Act prohibits banks from engaging in  
the business of underwriting, selling or distributing securities.  Although the 
scope of this prohibition under the Glass-Steagall Act has not been clearly     
defined by the courts or appropriate regulatory agencies, management of the     
Trust believes that the Glass-Steagall Act should not preclude a bank from      
providing such services.  However, state securities laws on this issue may      
differ from the interpretations of federal law expressed herein and banks and   
financial institutions may be required to register as dealers pursuant to state 
law.  If a bank were prohibited from continuing to perform all or a part of such
services, management of the Trust believes that there would be no material      
impact on the Fund or its shareholders.  Banks may charge their customers fees  
for offering these services to the extent permitted by regulatory authorities,  
and the overall return to those shareholders availing themselves of the bank    
services will be lower than to those shareholders who do not.  The Fund may from
time to time purchase securities issued by banks which provide such services;   
however, in selecting investments for the Fund, no preference will be shown for 
such securities.                                                                

      CALCULATION OF SHARE PRICE

   On each day that the Trust is open for business, the share price (net asset
value) of the shares of the Fund is determined as of the close of the regular   
session of trading on the New York Stock Exchange, currently 4:00 p.m., Eastern 
time.  The Trust is open for business on each day the New York Stock Exchange is
open for business and on any other day when there is sufficient trading in the  
Fund's investments that its net asset value might be materially affected.  The  
net asset value per share of the Fund is calculated by dividing the sum of the  
value of the securities held by the Fund plus cash or other assets minus all    
liabilities (including estimated accrued expenses) by the total number of shares
outstanding of the Fund, rounded to the nearest cent.                           

Portfolio securities are valued as follows:  (i) securities which are   
traded on stock exchanges or are quoted by NASDAQ are valued at the last        
reported sale price as of the close of the regular session of trading on the New
York Stock Exchange on the day the securities are being valued, or, if not      
traded on a particular day, at the closing bid price, (ii) securities traded in 
the over-the-counter market, and which are not quoted by NASDAQ, are valued at  
the last sale price (or, if the last sale price is not readily available, at the
last bid price as quoted by brokers that make markets in the securities) as of  
the close of the regular session of trading on the New York Stock Exchange on   
the day the securities are being valued, (iii) securities which are traded      

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both in the over-the-counter market and on a stock exchange are valued according
to the broadest and most representative market, and (iv) securities (and other  
assets) for which market quotations are not readily available are valued at     
their fair value as determined in good faith in accordance with consistently    
applied procedures established by and under the general supervision of the Board
of Trustees.  The net asset value per share of the Fund will fluctuate with the 
value of the securities it holds.                                               

     CALCULATION OF PERFORMANCE DATA

 From time to time, in advertisements or in communications to shareholders
or prospective investors, the Fund may compare its performance to that of other 
mutual funds with similar investment objectives, to rankings or averages such as
those compiled by Lipper Analytical Services, Inc. for the capital appreciation 
category and/or to other financial alternatives.                                

The Fund's average annual total return ("standard total return") is     
computed by determining the average annual compounded rate of return for a      
designated period that, if applied to a hypothetical $1,000 initial investment  
would produce the redeemable value of that investment at the end of the period, 
assuming reinvestment of all dividends and distributions and with recognition of
all recurring charges.  Standard total return would be calculated for the       
periods specified in applicable regulations and may be accompanied by           
nonstandard total return information for differing periods computed in the same 
manner with or without annualizing the total return or taking sales charges into
account.                                                                        

 The Fund's yield is computed by dividing the net investment income, after
recognition of all recurring charges, per share earned during the most recent   
month or other specified thirty-day period by the applicable maximum offering   
price per share on the last day of such period and annualizing the result.      

The standard total return and yield results do not take into account    
recurring and nonrecurring charges for optional services which only certain     
shareholders elect and which involve nominal fees, such as the $8 fee for wire  
redemptions.                                                                    

The Fund's distribution rate is calculated by annualizing the latest    
distribution and dividing the result by the maximum offering price per share as 
of the end of the period to which the distribution relates.  The distribution   
rate is not computed in the same manner as the above described yield, and       
therefore can be significantly different from it.  In its supplemental sales    
literature, the Fund may quote its distribution rate together with the above    
described standard total return and yield information. The use of such          
distribution rates would be subject to an appropriate explanation of how the    
components of the distribution rate differ from the above described yield.      

Performance information may be useful in evaluating the Fund and for    
providing a basis for comparison with other financial alternatives.  Since the  
performance of the Fund changes in response to fluctuations in economic and     
market conditions, interest rates and Fund expenses, among other things, no     
performance quotation should be considered a representation as to the Fund's    
performance for any future period.  In addition, the net asset value of shares  
of the Fund                                                                     

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will fluctuate so that shares of the Fund, when redeemed, may be worth more or  
less than their original cost.                                                  

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                                                        MLCFG&P Draft of 10-9-97

      KOBRICK-HFS EMERGING GROWTH FUND
      101 Federal Street
     Boston, Massachusetts 02111

      Prospectus

     _______________, 1997

 The investment objective of Kobrick-HFS Emerging Growth Fund (the "Fund")
is to provide growth in capital.  In seeking to achieve its investment          
objectives, the Fund invests primarily in equity securities of emerging growth  
and small capitalization companies.                                             

 Kobrick-HFS, Inc. (the "Investment Manager") serves as investment adviser
to the Fund.  The Investment Manager was organized in October, 1997; and its    
principals are Frederick R. Kobrick and Michael T. Carmen.                      

Shareholders may have their shares redeemed directly by the fund at net 
asset value; redemptions processed through securities dealers may be subject to 
processing charges.                                                             

 There are risks in any investment program, including the risk of changing
economic and market conditions, and there is no assurance that the Fund will    
achieve its investment objective. The net asset value of the Fund's shares      
fluctuates as market conditions change.                                         

Because of the Fund's investment policies, the Fund is subject to       
above-average risks.  The Fund generally is designed for investors who want an  
aggressive investment and can tolerate volatility and possible losses.  An      
investment in the Fund should be part of a balanced investment program which    
includes more conservative investments.                                         

   This Prospectus sets forth concisely the information a prospective investor
ought to know about the fund before investing.  It should be retained for future
reference.  A Statement of Additional Information about the Fund dated          
______________, 1997 has been filed with the Securities and Exchange Commission 
and is incorporated by reference into this Prospectus. It is available at no    
charge upon request to the fund at the address indicated on the cover or by     
calling 1-800-______________.                                                   

The Fund is a diversified series of Kobrick-HFS Investment Trust (the   
"Trust"), an open-end management investment company.                            

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 ON 
THE ACCURACY OR ADEQUACY OF                                                     

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THIS PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.     

THE FUND MAY ENGAGE IN SHORT-TERM TRADING, WHICH MAY BE CONSIDERED A    
SPECULATIVE ACTIVITY AND INVOLVE GREATER RISK AND ADDITIONAL COST TO THE FUND.  

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR 
ENDORSED BY, ANY FINANCIAL INSTITUTION, ARE NOT INSURED BY THE FEDERAL DEPOSIT  
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND       
INVOLVE INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL AMOUNT        
INVESTED.                                                                       

TABLE OF CONTENTS                                                               

Table of Expenses                                                               
The Fund's Investments                                                          
Limiting Investment Risk                                                        
How to Purchase Shares                                                          
Shareholder Services                                                            
How to Redeem Shares                                                            
Dividends and Distributions                                                     
The Fund and its Shares                                                         
Management of the Fund                                                          
Taxes                                                                           
Distribution Plan                                                               
Calculation of Share Price                                                      
Calculation of Performance Data                                                 

TABLE OF EXPENSES 
Shareholder Transaction Expenses                                                

  Sales Charge Imposed on Purchases. . . . . . . . . . . . . . . . . .  None
  Sales Charge Imposed on Reinvested Dividends . . . . . . . . . . . .  None
  Deferred Sales Charge. . . . . . . . . . . . . . . . . . . . . . . .  None
  Redemption Fees (a). . . . . . . . . . . . . . . . . . . . . . . . .  None
  Exchange Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . .  None

Annual Fund Operating Expenses (estimated as a percentage of average net assets)

   Management Fees. . . . . . . . . . . . . . . . . . . . . . . . . . .  1.00%
   12b-1 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  0.25%
   Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .  0.50%
                                                                         -----
      Total Fund Operating Expenses . . . . . . . . . . . . . . . . . .  1.75%
                                                                         -----
                                                                         -----
_____________                                                                   
(a) Remittance of redemption proceeds by wire is subject to a $8.00 fee.        

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EXAMPLE                                                                         

  THE EXAMPLE SHOULD NOT BE CONSIDERED AS A REPRESENTATION OF PAST OR FUTURE
RETURN OR EXPENSES.  ACTUAL RETURN AND EXPENSES MAY BE GREATER OR LESS THAN     
SHOWN.                                                                          

                  1 Year    3 Years   5 Years   10 Years
You would pay the                                                               
following expenses on                                                           
a $1,000 investment                                                             
assuming 5%                                                                     
annual return:                $18       $57       $98       $212                

   The purpose of the table above is to assist the investor in understanding
the various costs and expenses that an investor will bear directly or           
indirectly.  The percentage expense level shown in the table as "Other Expenses"
is based on projected expenses for the current fiscal year ending December 31,  
1998.  Actual expense levels for the current fiscal year or for future years may
vary from the amounts shown.                                                    

      THE FUND'S INVESTMENTS

The Fund's investment objective is to provide growth of capital.  The 
investment objective is a fundamental policy that may not be changed without    
approval of the Fund's shareholders.                                            

   In seeking to achieve its investment objective, the Fund invests at least
65% of its total assets under normal circumstances in equity securities of small
capitalization companies and companies in the emerging growth stage of          
development.  A company's market capitalization is the total market value of its
publicly traded equity securities.  The Fund invests in companies with market   
capitalization ranging as high as those included in the Russell 2000 Growth     
Index, although the capitalizations or index could vary over time because of    
market conditions, changes in the parameters of indices, etc.  While a company's
market capitalization may be small at the time the Fund first invests in the    
Company the Fund may continue to hold and acquire shares of a company after its 
market capitalization increases.                                                

The Investment Manager considers emerging growth companies to be those
companies which are less mature and have the potential to grow substantially    
faster than the economy.  In selecting such investments, the Investment Manager 
considers a variety of factors, any one of which may be determinative.  These   
include a company's expected growth in earnings, relative financial condition   
and cash flow, competitive position, management and business strategy, overall  
potential as an enterprise, entrepreneurial character, and new or innovative    
products, services or processes.                                                

The equity securities in which the Fund will invest consist of common 
stocks, or securities (preferred stock, bond and debentures) convertible into   
common stocks, or which carry the right to acquire equity securities (warrants).
The Fund anticipates that more than half of the                                 

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total value, at the time of investment, of the equity securities held by the    
Fund will be included on the National Association of Securities Dealers         
Automated Quotation ("NASDAQ") system or listed on a major securities exchange. 

     Under normal circumstances, the Fund expects to by fully invested in equity
securities as described above.  However, the Fund may, consistent with its      
investment objective, invest at any time up to 35% of its total assets in other 
equity and debt securities, such as those issued by larger capitalization, more 
mature, or special situation companies, and U.S. Government securities.  A      
special situation company is one which, because of unique circumstances such as,
for example, a particular business niche it fills, is an attractive investment  
even though it is not a small capitalization issuer or in the emerging growth   
stage.  The Fund will purchase investment grade debt (i.e., rated at the time of
purchase AAA, AA, A or BBB categories by Standard & Poor's Corporation ("S&P")  
or Aaa, Aa, A or Baa categories by Moody's Investors Service, Inc. ("Moody's")),
or securities that are not rated but considered by the Investment Manager to be 
of equivalent investment quality.  The debt securities, which may have differing
maturites and fixed or floating interest rates, will be U.S. Government         
securities or issued by larger capitalization issuers.  For more information on 
debt ratings, see the Statement of Additional Information.                      

 Because the Fund invests primarily in small capitalization and emerging
growth companies, an investment in the Fund involves greater than average risks 
and the value of the Fund's shares may fluctuate more widely than the value of  
shares of a fund that invests in larger, more established companies.  Securities
held by the Fund, particularly those traded over-the-counter, may have limited  
marketability and may be subject to more abrupt or erratic market movements over
time than securities of larger, more seasoned companies or the market as a      
whole.  The issuers of over-the-counter securities may have limited product     
lines, markets and financial resources, may be dependent on entrepreneurial     
management, typically reinvest most of their net income in the enterprise and   
typically do not pay dividends.                                                 

INVESTMENT PRACTICES                                                            

FOREIGN INVESTMENTS                                                             

   The Fund reserves the right to invest without limitation in securities of
non-U.S. issuers directly, or indirectly in the form of American Depositary     
Receipts ("ADRs"), European Depositary Receipts ("EDRs") or similar securities  
representing interests in the securities of foreign issuers.  Under current     
policy, however, the Fund limits such investments, including ADRs and EDRs, to a
maximum of 35% of its total assets.                                             

    ADRs are receipts, typically issued by a U.S. bank or trust company, which
evidence ownership of underlying securities issued by a foreign corporation or  
other entity.  EDRs are receipts issued in Europe which evidence a similar      
ownership arrangement.  Generally, ADRs in registered form are designed for use 
in U.S. securities markets and EDRs are designed for use in European securities 
markets.  The underlying securities are not always denominated in the same      
currency as the ADRs or EDRs.  Although investment in the form of ADRs or EDRs  
facilities trading in foreign securities, it does not mitigate all the risks    
associated with investing in foreign securities.                                

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  ADRs are available through facilities which may be either "sponsored" or
"unsponsored."  In a sponsored arrangement, the foreign issuer establishes the  
facility, pays some or all of the depository's fees, and usually agrees to      
provide shareholder communications.  In an unsponsored arrangement, the foreign 
issuer is not involved, and the ADR holders pay the fees of the depository.     
Sponsored ADRs are generally more advantageous to the ADR holders and the issuer
than are unsponsored ADRs.  More and higher fees are generally charged in an    
unsponsored program compared to a sponsored facility.  Only sponsored ADRs may  
be listed on the New York or American Stock Exchanges.  Unsponsored ADRs may    
prove to be more risky, due to (a) the additional costs involved to the Fund;   
(b) the relative illiquidity of the issue in U.S. markets ; and (c) the         
possibility of higher trading costs in the over-the-counter market as opposed to
exchange based trading.  The Fund will take these and other risk considerations 
into account before making an investment in an unsponsored ADR.                 

   The risks associated with investments in foreign securities include those
resulting from fluctuations in currency exchange rates, revaluation of          
currencies, future political and economic developments, including the risks of  
nationalization or expropriation, the possible imposition of currency exchange  
blockages, higher operating expenses, foreign withholding and other taxes which 
may reduce investment return, reduced availability of public information        
concerning issuers, the difficulties in obtaining and enforcing a judgment      
against a foreign issuer and the fact that foreign issuers are not generally    
subject to uniform accounting, auditing and financial reporting standards or to 
other regulatory practices and requirements comparable to those applicable to   
domestic issuers.  Moreover, securities of many foreign issuers may be less     
liquid and their prices more volatile than those of securities of comparable    
domestic issuers.                                                               

  It is anticipated that a majority of the foreign investments by the Fund
will consist of securities of issuers in countries with developed economies.    
However, the Fund may also invest in the securities of issuers in countries with
less developed economies as deemed appropriate by the Investment Manager,       
although the Fund does not presently expect to invest more than 5% of its total 
assets in issuers in such less developed countries.  Such countries include     
countries that have any emerging stock market that trades a small number of     
securities; countries with low-to middle-income economies; and/or countries with
economies that are based on only a few industries.  Eastern European countries  
are considered to have less developed capital markets.                          

     For further information regarding foreign investments, see the Statement of
Additional Information.                                                         

CURRENCY TRANSACTIONS                                                           

   In order to protect against the effect of uncertain future exchange rates
on securities denominated in foreign currencies, the Fund may engage in currency
exchange transactions either on a spot (i.e., cash) basis at the rate prevailing
in the currency exchange market or by entering into forward contracts to        
purchase or sell currencies.  Although such contracts tend to minimize the risk 
of loss resulting from a correctly predicted decline in value of hedged         
currency, they tend to limit any potential gain that might result should the    
value of such currency increase.  In entering a forward currency transaction,   
the Fund is dependent upon the                                                  

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creditworthiness and good faith of the counterparty.  The Fund will attempt to  
reduce the risks of nonperformance by a counterparty by dealing only with       
established, large institutions.  For further information, see the Statement of 
Additional Information.                                                         

OTHER INVESTMENT POLICIES                                                       

  The Fund may lend portfolio securities with a value of up to 33 1/3 % of
its total assets.  The Fund will receive cash or cash equivalents (e.g., U.S.   
Government obligations) as collateral in an amount equal to at least 100% of the
current market value of the loaned securities plus accrued interest.  Collateral
received by the Fund will generally be held in the form tendered, although cash 
may be invested in securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, irrevocable stand-by letters of credit issued by 
a bank, or any combination thereof.  The investing of cash collateral received  
from loaning portfolio securities involves leverage which magnifies the         
potential for gain or loss on monies invested and, therefore, results in an     
increase in the volatility of the Fund's outstanding securities.  Such loans may
be terminated at any time.                                                      

The Fund will retain most rights of ownership including rights to     
dividends, interest or other distributions on the loaned securities.  Voting    
rights pass with the lending, although the Fund may call loans to vote proxies  
if desired.  Should the borrower of the securities fail financially, there is a 
risk of delay in recovery of the securities or loss of rights in the collateral.
Loans are made only to borrowers which are deemed by the Investment Manager to  
be of good financial standing.                                                  

     The Fund may, subject to certain limitations, buy and sell options, futures
contracts and options on futures contracts on securities and securities         
indicies, enter into repurchase agreements and purchase securities on a "when   
issued" or forward commitment basis.  The Fund may not establish a position in a
commodity futures contract or purchase or sell a commodity option contract for  
other than bona fide hedging purposes if immediately thereafter the sum of the  
amount of initial margin deposits and premiums on open positions with respect to
futures and options used for such nonhedging purposes would exceed 5% of the    
market value of the Fund's net assets; similar policies apply to options which  
are not commodities.  The Fund may enter various forms of swap arrangements,    
which have simultaneously the characteristics of a security and futures         
contract, although the Fund does not presently expect to invest more than 5% of 
its total assets in such items.  These swap arrangements include interest rate  
swaps, currency swaps and index swaps.  See the Statement of Additional         
Information.                                                                    

   The Fund may invest in restricted securities in accordance with Rule 144A
under the Securities Act of 1933, which allows for the resale of such securities
among certain qualified institutional buyers.  Because the market for such      
securities is still developing, such securities could possibly become illiquid  
in particular circumstances.  See the Statement of Additional Information.      

   The Fund may engage in short-term trading of securities and reserves full
freedom with respect to portfolio turnover.  In periods when there are rapid    
changes in economic conditions or security price levels or when investment      
strategy changes significantly, portfolio turnover may                          

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be higher than during times of economic and market price stability or when      
investment strategy remains relatively constant.  The Fund's portfolio turnover 
rate involves greater transaction costs, relative to other funds in general, and
may have tax and other consequences as well.  See the Statement of Additional   
Information.                                                                    

     Because the Fund invests primarily in emerging growth and special situation
companies, an investment in the Fund involves greater than average risks and the
value of the Fund's shares may fluctuate more widely than the value of shares of
a fund that invests in more established companies.  Securities held by the Fund,
particularly those traded over-the-counter, may have limited marketability and  
may be subject to more abrupt or erratic market movements over time than        
securities of larger, more seasoned companies or the market as a whole.  The    
issuers of the over-the-counter securities may have limited product lines,      
markets and financial resources, may be dependent on entrepreneurial management,
typically reinvest most of their net income in the enterprise and typically do  
not pay dividends                                                               

LIMITING INVESTMENT RISK

In seeking to lessen investment risk, the Fund operates under certain 
fundamental and nonfundamental investment restrictions.  Under the fundamental  
restrictions the Fund may not (a) purchase a security of any one issuer (other  
than the United States or its instrumentalities) if such purchase at the time   
would cause more than 5% of the Fund's total assets to be invested in the       
securities of such issuer; (b) purchase for its portfolio a security of any one 
issuer if such purchase at the time thereof would cause more than 10% of any    
class of securities of such issuer to be held by the Fund; or (c) invest more   
than 25% of the Fund's total assets in securities of issues principally engaged 
in any one industry with certain designated exceptions such as in the case of   
the U.S. Government.                                                            

     The foregoing fundamental investment restrictions may not be changed except
by vote of the holders of a majority of the outstanding voting securities of the
Fund.  The vote of a majority of the outstanding voting securities of the Fund  
means the vote (A) of 67 per centum or more of the voting securities present at 
a meeting, if the holders of more than 50 per centum of the outstanding voting  
securities of the Trust are present or represented by proxy; or (B) of more than
50 per centum of the outstanding voting securities of the Trust, whichever is   
less.                                                                           

   Under the nonfundamental investment restrictions, the Fund may not invest
more than 15% of the Fund's net assets in illiquid securities including         
repurchase agreements extending for more than seven days and may not invest more
than 10% of the Fund's net assets in restricted securities (excluding securities
eligible for resale under Rule 144A under the Securities Act of 1933).  Although
many illiquid securities may also be restricted, and vice versa, compliance with
each of these policies will be determined independently.  The foregoing         
nonfundamental investment restrictions may be changed without a shareholder     
vote.                                                                           

For further information on the above and other fundamental and        
nonfundamental investment restrictions, see the Statement of Additional         
Information.                                                                    

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  The Fund may hold up to 100% of its assets in cash or certain short-term
securities for temporary defensive purposes.  The Fund will adopt a temporary   
defensive position when, in the opinion of the Investment Manager, such a       
position is more likely to provide protection against adverse market conditions 
than adherence to the Fund's other investment policies.  To the extent that the 
Fund's assets are held in a temporary defensive position the Fund will not be   
achieving its investment goals.  The types of short-term instruments in which   
the Fund may invest for such purposes are, as more fully described in the       
Statement of Additional Information: securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities, (U.S. Treasury bills, notes,   
bonds, Government National Mortgage Association certificates), custodial        
receipts, certificates of deposit, time deposits and banker's acceptances of    
certain qualified financial institutions and corporate commercial paper rated at
least "A" by S&P or "Prime" by Moody's (or, if not rated, issued by companies   
having an outstanding long-term unsecured debt issue rated at least "A" by S&P  
or Moody's).  See the Statement of Additional Information.                      

      HOW TO PURCHASE SHARES

Your initial investment in the Fund ordinarily must be at least $2,000
($1,000 for tax-deferred retirement plans).  The Fund may, in the Investment    
Manager's sole discretion, accept certain accounts with less than the stated    
minimum initial investment.  Shares of the Fund are sold on a continuous basis  
at the net asset value next determined after receipt of a purchase order by the 
Trust.  Purchase orders received by dealers prior to 4:00 p.m., Eastern time, on
any business day and transmitted to the Trust's transfer agent, ___ Service     
Corp., by 5:00 p.m., Eastern time, that day are confirmed at the net asset value
determined as of the close of the regular session of trading on the New York    
Stock Exchange on that day.  It is the responsibility of dealers to transmit    
properly completed orders so that they will be received by ___ Service Corp. by 
5:00 p.m., Eastern time.  Dealers may charge a fee for effecting purchase       
orders.  Direct purchase orders received by ___ Service Corp. by 4:00 p.m.,     
Eastern time, are confirmed at that day's net asset value.  Direct investments  
received by ___ Service Corp. after 4:00 p.m., Eastern time, and orders received
from dealers after 5:00 p.m., Eastern time, are confirmed at the net asset value
next determined on the following business day.                                  

You may open an account and make an initial investment in the Fund by 
sending a check and a completed account application form to ___ Service Corp.,  
___________________.  Checks should be made payable to the "Kobrick-HFS Emerging
Growth Fund".  An account application is included in this Prospectus.           

   The Trust mails you confirmations of all purchases or redemptions of Fund
shares.  Certificates representing shares are not issued.  The Trust reserves   
the rights to limit the amount of investments and to refuse to sell to any      
person.                                                                         

Investors should be aware that the Fund's account application contains
provisions in favor of the Trust, ___ Service Corp. and certain of their        
affiliates, excluding such entities from certain liabilities (including, among  
others, losses resulting from authorized shareholder                            

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transactions) relating to the various services (for example, telephone          
exchanges) made available to investors.                                         

    Should an order to purchase shares be canceled because your check does not
clear, you will be responsible for any resulting losses or fees incurred by the 
Trust or ___ Service Corp. in the transaction.                                  

 You may also purchase shares of the Fund by wire.  Please telephone ___
Service Corp. (Nationwide call toll-free 800-___-____) for instructions.  You   
should be prepared to give the name in which the account is to be established,  
the address, telephone number and taxpayer identification number for the        
account, and the name of the bank which will wire the money.                    

   Your investment will be made at the net asset value next determined after
your wire is received together with the account information indicated above.  If
the Trust does not receive timely and complete account information, there may be
a delay in the investment of your money and any accrual of dividends.  To make  
your initial wire purchase, you are required to mail a completed account        
application to ___ Service Corp..  Your bank may impose a charge for sending    
your wire.  There is presently no fee for receipt of wired funds, but ___       
Service Corp. reserves the right to charge shareholders for this service upon   
thirty days' prior notice to shareholders.                                      

  You may purchase and add shares to your account by mail or by bank wire.
Checks should be sent to ___ Service Corp., ____________________.  Checks should
be made payable or endorsed to the "Kobrick-HFS Emerging Growth Fund".  Bank    
wires should be sent as outlined above.  Each additional purchase request must  
contain the name of your account and your account number to permit proper       
crediting to your account.  While there is no minimum amount required for       
subsequent investments, the Trust reserves the right to impose such a           
requirement.                                                                    

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      SHAREHOLDER SERVICES

Contact ___ Service Corp. (Nationwide call toll-free 800-___-____) for
additional information about the shareholder services described below.          

AUTOMATIC WITHDRAWAL PLAN                                                       

If the shares in your account have a value of at least $5,000, you may
elect to receive, or may designate another person to receive, monthly or        
quarterly payments in a specified amount of not less than $50 each.  There is no
charge for this service.                                                        

TAX-DEFERRED RETIREMENT PLANS                                                   

Shares of the Fund are available for purchase in connection with the  
following tax-deferred retirement plans:                                        

--   Keogh Plans for self-employed individuals                        

  --   Individual retirement account (IRA) plans for individuals and their
non-employed spouses                                        

  --   Qualified pension and profit-sharing plans for employees, including
those profit-sharing plans with a 401(k) provision          

   --   403(b)(7) custodial accounts for employees of public school systems,
          hospitals, colleges and other non-profit organizations meeting certain
requirements of the Internal Revenue Code                   

DIRECT DEPOSIT PLANS                                                            

     Shares of the Fund may be purchased through direct deposit plans offered by
certain employers and government agencies.  These plans enable a shareholder to 
have all or a portion of his or her payroll or social security checks           
transferred automatically to purchase shares of the Fund.                       

AUTOMATIC INVESTMENT PLAN                                                       

You may make automatic monthly investments in the Fund from your bank,
savings and loan or other depository institution account. The minimum initial   
and subsequent investments must be $50 under the plan. ___ Service Corp. pays   
the costs associated with these transfers, but reserves the right, upon thirty  
days' written notice, to make reasonable charges for this service. Your         
depository institution may impose its own charge for debiting your account which
would reduce your return from an investment in the Fund.                        

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HOW TO REDEEM SHARES                                                            

  You may redeem shares of the Fund on each day that the Trust is open for
business by sending a written request to the Fund. The request must state the   
number of shares or the dollar amount to be redeemed and your account number.   
The request must be signed exactly as your name appears on the Trust's account  
records. If the shares to be redeemed have a value of $25,000 or more, your     
signature must be guaranteed by any eligible guarantor institution, including   
banks, brokers and dealers, municipal securities brokers and dealers, government
securities brokers and dealers, credit unions, national securities exchanges,   
registered securities associations, clearing agencies and savings associations. 

    Redemption requests may direct that the proceeds be wired directly to your
existing account in any commercial bank or brokerage firm in the United States. 
If your instructions request a redemption by wire, you will be charged an $8    
processing fee by the Trust's Custodian. The Trust reserves the right, upon     
thirty days' written notice, to change the processing fee. All charges will be  
deducted from your account by redemption of shares in your account. Your bank or
brokerage firm may also impose a charge for processing the wire. In the event   
that wire transfer of funds is impossible or impractical, the redemption        
proceeds will be sent by mail to the designated account.                        

   You may also redeem shares by placing a wire redemption request through a
securities broker or dealer. Unaffiliated broker-dealers may impose a fee on the
shareholder for this service. You will receive the net asset value per share    
next determined after receipt by the Trust or its agent of your wire redemption 
request. It is the responsibility of broker-dealers to properly transmit wire   
redemption orders.                                                              

You will receive the net asset value per share next determined after  
receipt by ___ Service Corp. of your redemption request in the form described   
above. Payment is made within three business days after tender in such form,    
provided that payment in redemption of shares purchased by check will be        
effected only after the check has been collected, which may take up to fifteen  
days from the purchase date. To eliminate this delay, you may purchase shares of
the Fund by certified check or wire. At the discretion of the Trust or ___      
Service Corp., corporate investors and other associations may be required to    
furnish an appropriate certification authorizing redemptions to ensure proper   
authorization.                                                                  

The Trust reserves the right to suspend the right of redemption or to 
postpone the date of payment for more than three business days under unusual    
circumstances as determined by the Securities and Exchange Commission.          

EXCHANGE PRIVILEGE                                                              

   Shares of the Fund may be exchanged for shares of the other series of the
Trust, the Kobrick-HFS Capital Fund, at net asset value [Shares of the Fund may 
also be exchanged for shares at net asset value of the Short Term Government    
Income Fund (a series of _________________), which invests in short-term U.S.   
Government obligations backed by the "full faith and credit" of the United      
States and seeks high current income consistent with                            

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protection of capital. Shares of the Short Term Government Income Fund acquired 
via exchange may be re-exchanged for shares of the Fund at net asset value.]    

 You may request an exchange by sending a written request to ___ Service
Corp.  The request must be signed exactly as your name appears on the Trust's   
account records. Exchanges may also be requested by telephone. An exchange will 
be effected at the next determined net asset value after receipt of a request by
___ Service Corp.                                                               

 Exchanges may only be made for shares of funds then offered for sale in
your state of residence and are subject to the applicable minimum initial       
investment requirements. The exchange privilege may be modified or terminated by
the Board of Trustees upon 60 days' prior notice to shareholders. An exchange   
results in a sale of fund shares, which may cause you to recognize a capital    
gain or loss. Before making an exchange, contact ___ Service Corp. to obtain a  
current prospectus and more information about exchanges among the funds.        

     DIVIDENDS AND DISTRIBUTIONS

The Fund expects to distribute any net realized capital gains and net 
investment income at least once each year. Management will determine the timing 
and frequency of the distributions of any net realized short-term capital gains.

Distributions are paid according to one of the following options:     

Share Option -      income distributions and capital gains distributions        
reinvested in additional shares.        

Income Option -     income distributions and short-term capital gains           
           distributions paid in cash; long-term capital gains
      distributions reinvested in additional shares.

Cash Option         income distributions and capital gains distributions paid in
cash.                                   

You should indicate your choice of option on your application. If no  
option is specified on your application, distributions will automatically be    
reinvested in additional shares. All distributions will be based on the net     
asset value in effect on the payable date.                                      

If you select the Income Option or the Cash Option and the U.S. Postal
Service cannot deliver your checks or if your checks remain uncashed for six    
months, your dividends may be reinvested in your account at the then current    
net asset value and your account will be converted to the Share Option.         

SHAREHOLDER ACCOUNT INQUIRIES:                                                  

PLEASE CALL 1-800-____________                                        

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     Call this number for assistance in answering general servicing questions on
your account, including account balance, available shareholder services and     
statement information.  Account inquiries may also be made in writing to        
________________.                                                               

     THE FUND AND ITS SHARES

The Fund was organized in October 1997 as a series of Kobrick-HFS     
Investment Trust, a Massachusetts business trust and is registered with the     
Securities and Exchange Commission under the Investment Company Act of 1940 as  
an open-end management investment company.  Kobrick-HFS Investment Trust was    
organized on _______, 1997.  The Fund's fiscal year ends on December 31.        

Shortly prior to the effective time of this Prospectus, a share       
distribution of four shares for each then outstanding share was declared.       
Shares of the Trust have equal dividend, redemption and liquidation rights and  
when issued are fully paid and nonassessable by the Master Trust.  Each share   
has one vote (with proportionate voting for fractional shares) irrespective of  
net asset value.                                                                

    Under the Master Trust Agreement of the Master Trust, no annual or regular
meeting of shareholders is required.  Thus, there will ordinarily be no         
shareholder meetings unless required by the Investment Company Act of 1940.     
Except as otherwise provided under said Act, the Board of Trustees will be a    
self-perpetuating body until fewer than 50% of the Trustees serving as such are 
Trustees who were elected by shareholders of the Master Trust.  At that time    
another meeting of shareholders will be called to elect Trustees. Under the     
Master Trust Agreement, any Trustee may be removed by vote of two-thirds of the 
outstanding Master Trust shares; holders of 10% or more of the outstanding      
shares of the Master Trust can require that the Trustees call a meeting of      
shareholders for purposes of voting on the removal of one or more Trustees.  In 
connection with such meetings called by shareholders, shareholders will be      
assisted in shareholder communications.                                         

    Under Massachusetts law, the shareholders of the Master Trust could, under
certain circumstances, be held personally liable for the obligations of the     
Master Trust.  However, the Master Trust Agreement of the Master Trust disclaims
shareholder liability for acts or obligations of the Master Trust and provides  
for indemnification for all losses and expenses of any shareholder of the Trust 
held personally liable for the obligations of the Master Trust.  Thus, the risk 
of a shareholder's incurring financial loss on account of shareholder liability 
is limited to circumstances in which the Trust would be unable to meet its      
obligations.  The Investment Manager believes that, in view of the above, the   
risk of personal liability to shareholders is remote.                           

      MANAGEMENT OF THE FUND

Under the provisions of the Master Trust Agreement and the laws of    
Massachusetts, primary responsibility for the management and supervision of the 
Fund rests with the Trustees.                                                   

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 The Fund's investment manager is Kobrick-HFS, Inc., 101 Federal Street,
Boston, Massachusetts 02111.  Kobrick-HFS, Inc. was founded in October, 1997    
principally by Frederick R. Kobrick and Michael T. Carmen.  HFS Incorporated of 
Parsippany, New Jersey, also has an interest in non-voting preferred stock of   
the Investment Manager.  Messrs Kobrick and Carmen have combined over 30 years  
of experience in the management of investments under objective similar to those 
of the Fund.  The Fund's portfolio manager is Frederick R. Kobrick, who for 12  
years was an equity portfolio manager at State Street Research & Management     
Company where he served as Senior Vice President and a member of the firm's     
Equity Investment Committee.                                                    

     Under the Investment Advisory Contract between the Trust and the Investment
Manager, the Fund pays a quarterly advisory fee to the Investment Manager.  The 
advisory fee is computed as a percentage of the average of the values of the net
assets of the Fund as determined at the close of each business day during the   
quarter at the following annual rates:                                          

1% of the first $1,000,000,000 of such assets;              
3/4% of the next $500,000,000 of such assets;               
1/2% of the next $1,000,000,000 of such assets; and         
3/8% of the average market value of such assets in          
excess of $2,500,000,000.                                   

The Investment Advisory Contract provides that the Investment Manager shall     
furnish the Trust with suitable office space and facilities and such management,
investment advisory, statistical and research facilities and services as may be 
required from time to time by the Trust and the Fund is responsible for its     
other expenses and services.  In view of the requirements for management of the 
Fund's particular investment program, this fee is higher than those charges for 
many other funds.                                                               

As of the date of this Prospectus, Kobrick-HFS, Inc. is the sole      
shareholder of the Fund.                                                        

     TAXES

The Fund intends to qualify as a regulated investment company under   
Subchapter M of the Internal Revenue Code, however, it cannot give complete     
assurance that it will do so.  As long as it so qualifies, it will not be       
subject to federal income taxes on its taxable income (including realized       
capital gains, if any) distributed to its shareholders.  Consequently, the Fund 
intends to distribute annually to its shareholders substantially all of its net 
investment income and any capital gain net income (capital gains net of capital 
losses).                                                                        

   The Fund declares dividends from net investment income quarterly and pays
such dividends, if any, two times each year. Distributions of capital gain net  
income will generally be made after the end of the fiscal year or as otherwise  
required for compliance with applicable tax regulations.  Both dividends from   
net investment income and distributions of capital gain net income will be      
declared and paid to shareholders in additional shares of the Fund at net asset 
value on the record date of that dividend or distribution, except in the case of
shareholders who elect a different available distribution method.               

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The Fund will provide its shareholders with annual information on a   
timely basis concerning the federal tax status of dividends and distributions   
during the preceding calendar year.                                             

Dividends paid by the Fund from taxable net investment income and     
distributions of net short-term capital gains, whether paid in cash or          
reinvested in additional shares, will be taxable for federal income tax purposes
to shareholders as ordinary income, and a portion may be eligible for the 70%   
dividends-received deduction for corporations.  The percentage of the Fund's    
dividends eligible for such tax treatment may be less than 100% to the extent   
that less than 100% of the Trust's gross income consist of qualified dividends  
of domestic corporations.  Distributions of net capital gains (the excess of net
long-term capital gains over short-term capital losses) which are designated as 
capital gains distributions, whether paid in cash or reinvested in additional   
shares, will be taxable for federal income tax purposes to shareholders as      
long-term or mid-term capital gains, regardless of how long shareholders have   
held their shares, and are not eligible for the dividends-received deduction.   
If shares of the Fund which are sold at a loss have been held six months or     
less, the loss will be considered as a long-term capital loss to the extent of  
any capital gains distributions received.                                       

Dividends and other distributions and proceeds of redemptions of Fund 
shares paid to individuals and other nonexempt payees will be subject to a 31%  
federal backup withholding tax if the Transfer Agent is not provided with the   
shareholder's correct taxpayer identification number and certification that the 
shareholder is not subject to such backup withholding.                          

The foregoing discussion relates only to generally applicable federal 
income tax provisions in effect as of the date of this Prospectus.  Therefore,  
prospective shareholders are urged to consult their own tax advisors regarding  
tax matters, including state and local tax consequences.                        

 DISTRIBUTION PLAN

Pursuant to Rule 12b-1 under the Investment Company Act of 1940, the  
Fund has adopted a plan of distribution (the "Plan") under which the Fund may   
directly incur or reimburse the Adviser for certain distribution-related        
expenses, including: payments to securities dealers and others who are          
engaged in the sale of shares of the Fund and who may be advising investors     
regarding the purchase, sale or retention of such shares; expenses of           
maintaining personnel who engage in or support distribution of shares or who    
render shareholder support services not otherwise provided by _____ Service     
Corp.; expenses of formulating and implementing marketing and promotional       
activities, including direct mail promotions and mass media advertising;        
expenses of preparing, printing and distributing sales literature and           
prospectuses and statements of additional information and reports for           
recipients other than existing shareholders of the Fund; expenses of            
obtaining such information, analyses and reports with respect to marketing      
and promotional activities as the Trust may, from time to time, deem            
advisable; and, any other expenses related to the distribution of the Fund's    
shares.                                                                         

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The annual limitation for payment of expenses pursuant to the Plan is 
.25% of the Fund's average daily net assets.  Unreimbursed expenditures will  
not be carried over from year to year.  In the event the Plan is terminated     
by the Fund in accordance with its terms, the Fund will not be required to      
make any payments for expenses incurred by the Adviser after the date the       
Plan terminates.                                                                

 Pursuant to the Plan, the Fund may also make payments to banks or other
financial institutions that provide shareholder services and administer         
shareholder accounts.  The Glass-Steagall Act prohibits banks from engaging     
in the business of underwriting, selling or distributing securities.            
Although the scope of this prohibition under the Glass-Steagall Act has not     
been clearly defined by the courts or appropriate regulatory agencies,          
management of the Trust believes that the Glass-Steagall Act should not         
preclude a bank from providing such services.  However, state securities laws   
on this issue may differ from the interpretations of federal law expressed      
herein and banks and financial institutions may be required to register as      
dealers pursuant to state law.  If a bank were prohibited from continuing to    
perform all or a part of such services, management of the Trust believes that   
there would be no material impact on the Fund or its shareholders.  Banks may   
charge their customers fees for offering these services to the extent           
permitted by regulatory authorities, and the overall return to those            
shareholders availing themselves of the bank services will be lower than to     
those shareholders who do not.  The Fund may from time to time purchase         
securities issued by banks which provide such services; however, in selecting   
investments for the Fund, no preference will be shown for such securities.      

CALCULATION OF SHARE PRICE

On each day that the Trust is open for business, the share price (net 
asset value) of the shares of the Fund is determined as of the close of the     
regular session of trading on the New York Stock Exchange, currently 4:00       
p.m., Eastern time.  The Trust is open for business on each day the New York    
Stock Exchange is open for business and on any other day when there is          
sufficient trading in the Fund's investments that its net asset value might     
be materially affected.  The net asset value per share of the Fund is           
calculated by dividing the sum of the value of the securities held by the       
Fund plus cash or other assets minus all liabilities (including estimated       
accrued expenses) by the total number of shares outstanding of the Fund,        
rounded to the nearest cent.                                                    

Portfolio securities are valued as follows:  (i) securities which are 
traded on stock exchanges or are quoted by NASDAQ are valued at the last        
reported sale price as of the close of the regular session of trading on the    
New York Stock Exchange on the day the securities are being valued, or, if      
not traded on a particular day, at the closing bid price, (ii) securities       
traded in the over-the-counter market, and which are not quoted by NASDAQ,      
are valued at the last sale price (or, if the last sale price is not readily    
available, at the last bid price as quoted by brokers that make markets in      
the securities) as of the close of the regular session of trading on the New    
York Stock Exchange on the day the securities are being valued, (iii)           
securities which are traded both in the over-the-counter market and on a        
stock exchange are valued according to the broadest and most representative     
market, and (iv) securities (and other assets) for which market quotations      
are not readily available are valued at their fair value as determined in       
good faith in accordance                                                        

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with consistently applied procedures established by and under the general       
supervision of the Board of Trustees.  The net asset value per share of the Fund
will fluctuate with the value of the securities it holds.                       

     CALCULATION OF PERFORMANCE DATA

   From time to time, in advertisements or in communications to shareholders
or prospective investors, the Fund may compare its performance to that of other 
mutual funds with similar investment objectives, to rankings or averages such as
those compiled by Lipper Analytical Services, Inc. for the small capitalization 
category and/or to other financial alternatives.                                

The Fund's average annual total return ("standard total return") is   
computed by determining the average annual compounded rate of return for a      
designated period that, if applied to a hypothetical $1,000 initial investment  
would produce the redeemable value of that investment at the end of the period, 
assuming reinvestment of all dividends and distributions and with recognition of
all recurring charges.  Standard total return would be calculated for the       
periods specified in applicable regulations and may be accompanied by           
nonstandard total return information for differing periods computed in the same 
manner with or without annualizing the total return or taking sales charges into
account.                                                                        

   The Fund's yield is computed by dividing the net investment income, after
recognition of all recurring charges, per share earned during the most recent   
month or other specified thirty-day period by the applicable maximum offering   
price per share on the last day of such period and annualizing the result.      

The standard total return and yield results do not take into account  
recurring and nonrecurring charges for optional services which only certain     
shareholders elect and which involve nominal fees, such as the $8 fee for wire  
redemptions.                                                                    

The Fund's distribution rate is calculated by annualizing the latest  
distribution and dividing the result by the maximum offering price per share as 
of the end of the period to which the distribution relates.  The distribution   
rate is not computed in the same manner as the above described yield, and       
therefore can be significantly different from it.  In its supplemental sales    
literature, the Fund may quote its distribution rate together with the above    
described standard total return and yield information. The use of such          
distribution rates would be subject to an appropriate explanation of how the    
components of the distribution rate differ from the above described yield.      

Performance information may be useful in evaluating the Fund and for  
providing a basis for comparison with other financial alternatives.  Since the  
performance of the Fund changes in response to fluctuations in economic and     
market conditions, interest rates and Fund expenses, among other things, no     
performance quotation should be considered a representation as to the Fund's    
performance for any future period.  In addition, the net asset value of shares  
of the Fund will fluctuate so that shares of the Fund, when redeemed, may be    
worth more or less than their original cost.                                    

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                                                                Draft of 10-9-97

      KOBRICK-HFS INVESTMENT TRUST

     STATEMENT OF ADDITIONAL INFORMATION

     _______, 1997

      Kobrick-HFS Capital Fund
      Kobrick-HFS Emerging Growth Fund

    This Statement of Additional Information is not a prospectus.  It should
    be read in conjunction with the Prospectus of the applicable Fund of
     Kobrick-HFS Investment Trust dated _______, 1997.  A copy of a Fund's
    Prospectus can be obtained by writing the Trust at 101 Federal Street,
     Boston, Massachusetts 02111, or by calling the Trust nationwide
     toll-free 800-___-____.

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       STATEMENT OF ADDITIONAL INFORMATION

      Kobrick-HFS Investment Trust
      101 Federal Street
     Boston, Massachusetts 02111

     TABLE OF CONTENTS
                                                                        PAGE

THE TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1      
ADDITIONAL INFORMATION CONCERNING                                               
CERTAIN INVESTMENT TECHNIQUES. . . . . . . . . . . . . . . . . . . . . . .      
DEBT INSTRUMENTS AND PERMITTED CASH INVESTMENTS. . . . . . . . . . . . . .      
QUALITY RATINGS OF CORPORATE BONDS AND PREFERRED STOCKS. . . . . . . . . .      
INVESTMENT LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . .      
TRUSTEES AND OFFICERS. . . . . . . . . . . . . . . . . . . . . . . . . . .      
THE INVESTMENT ADVISER . . . . . . . . . . . . . . . . . . . . . . . . . .      
DISTRIBUTION PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . .      
SECURITIES TRANSACTIONS. . . . . . . . . . . . . . . . . . . . . . . . . .      
PORTFOLIO TURNOVER . . . . . . . . . . . . . . . . . . . . . . . . . . . .      
CALCULATION OF SHARE PRICE . . . . . . . . . . . . . . . . . . . . . . . .      
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      
REDEMPTION IN KIND . . . . . . . . . . . . . . . . . . . . . . . . . . . .      
HISTORICAL PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . . . .      
CUSTODIAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      
AUDITORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      
___ SERVICE CORP . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      
STATEMENTS OF ASSETS AND LIABILITIES . . . . . . . . . . . . . . . . . . .      

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THE TRUST                                                             

     Kobrick-HFS Investment Trust (the "Trust") was organized as a Massachusetts
business trust on _________, 1997.  The Trust currently offers two series of    
shares to investors: the Kobrick-HFS Capital Fund and the Kobrick-HFS Emerging  
Growth Fund (referred to individually as a "Fund" and collectively as the       
"Funds").  Each Fund has its own investment objective and policies.             

Each share of a Fund represents an equal proportionate interest in the
assets and liabilities belonging to that Fund with each other share of that Fund
and is entitled to such dividends and distributions out of the income belonging 
to the Fund as are declared by the Trustees.  The shares do not have cumulative 
voting rights or any preemptive or conversion rights, and the Trustees have the 
authority from time to time to divide or combine the shares of any Fund into a  
greater or lesser number of shares of that Fund so long as the proportionate    
beneficial interest in the assets belonging to that Fund and the rights of      
shares of any other Fund are in no way affected.  In case of any liquidation of 
a Fund, the holders of shares of the Fund being liquidated will be entitled to  
receive as a class a distribution out of the assets, net of the liabilities,    
belonging to that Fund.  Expenses attributable to any Fund are borne by that    
Fund.  Any general expenses of the Trust not readily identifiable as belonging  
to a particular Fund are allocated by or under the direction of the Trustees in 
such manner as the Trustees determine to be fair and equitable.  Generally, the 
Trustees allocate such expenses on the basis of relative net assets or number of
shareholders.  No shareholder is liable to further calls or to assessment by the
Trust without his express consent.                                              

 Under Massachusetts law, under certain circumstances, shareholders of a
Massachusetts business trust could be deemed to have the same type of personal  
liability for the obligations of the Trust as does a partner of a partnership.  
However, numerous investment companies registered under the Investment Company  
Act of 1940 have been formed as Massachusetts business trusts and the Trust is  
not aware of any instance where such result has occurred.  In addition, the     
Master Trust Agreement disclaims shareholder liability for acts or obligations  
of the Trust and requires that notice of such disclaimer be given in each       
agreement, obligation or instrument entered into or executed by the Trust or the
Trustees.  The Master Trust Agreement also provides for the indemnification out 
of the Trust property for all losses and expenses of any shareholder held       
personally liable for the obligations of the Trust.  Moreover, it provides that 
the Trust will, upon request, assume the defense of any claim made against any  
shareholder for any act or obligation of the Trust and satisfy any judgment     
thereon.  As a result, and particularly because the Trust assets are readily    
marketable and ordinarily substantially exceed liabilities, management believes 
that the risk of shareholder liability is slight and limited to circumstances in
which the Trust itself would be unable to meet its obligations.  Management     
believes that, in view of the above, the risk of personal liability is remote.  

ADDITIONAL INFORMATION CONCERNING                                     
CERTAIN INVESTMENT TECHNIQUES                                         

Among other investments described below, each Fund may buy and sell   
domestic and foreign options, futures contracts, and options on futures         
contracts with respect to securities,                                           

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securities indices, and currencies, and may enter into closing transactions with
respect to each of the foregoing, and invest in other derivatives, under        
circumstances in which such instruments and techniques are expected by          
Kobrick-HFS, Inc. (the "Investment Manager") to aid in achieving the investment 
objective of the Funds.  Each Fund on occasion may also purchase instruments    
with characteristics of both futures and securities (e.g., debt instruments with
interest and principal payments determined by reference to the value of a       
commodity or a currency at a future time) and which, therefore, possess the     
risks of both futures and securities investments.                               

Futures Contracts                                                               

   Futures contracts are publicly traded contracts to buy or sell underlying
assets, such as certain securities, currencies, or an index of securities, at a 
future time at a specified price.  A contract to buy establishes a "long"       
position while a contract to sell establishes a "short" position.               

    The purchase of a futures contract on securities or an index of securities
normally enables a buyer to participate in the market movement of underlying    
asset or index after paying a transaction charge and posting margin in an amount
equal to a small percentage of the value of the underlying asset or index.  Each
Fund will initially be required to deposit with the Trust's custodian or the    
broker effecting the futures transaction an amount of "initial margin" in cash  
or U.S. Treasury obligations.                                                   

Initial margin in futures transactions is different from margin in    
securities transactions in that the former does not involve the borrowing of    
funds by the customer to finance the transaction.  Rather, the initial margin is
like a performance bond or good faith deposit on the contract.  Subsequent      
payments (called "maintenance margin") to and from the broker will be made on a 
daily basis as the price of the underlying assets fluctuates.  This process is  
known as "marking to market."  For example, when a Fund has taken a long        
position in a futures contract and the value of the underlying asset has risen, 
that position will have increased in value and the applicable Fund will receive 
from the broker a maintenance margin payment equal to the increase in value of  
the underlying asset.  Conversely, when a Fund has taken a long position in a   
futures contract and the value of the underlying instrument has declined, the   
position would be less valuable, and the applicable Fund would be required to   
make a maintenance margin payment to the broker.                                

     At any time prior to expiration of the futures contract, the Fund may elect
to close the position by taking an opposite position which will terminate the   
Fund's position in the futures contract.  A final determination of maintenance  
margin is then made, additional cash is required to be paid by or released to   
the Fund, and the Fund realizes a loss or a gain.  While futures contracts with 
respect to securities do provide for the delivery and acceptance of such        
securities, such delivery and acceptance are seldom made.                       

Futures contracts will be executed primarily (a) to establish a short 
position, and thus protect the Fund from experiencing the full impact of an     
expected decline in market value of portfolio holdings without requiring the    
sale of holdings, or (b) to establish a long position, and                      

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thus to participate in an expected rise in market value of securities or        
currencies which the Fund intends to purchase.  Subject to the limitations      
described below, each Fund may also enter into futures contracts for purposes of
enhancing return.  In transactions establishing a long position in a futures    
contract, money market instruments equal to the face value of the futures       
contract will be identified by the Fund to the Trust's custodian for maintenance
in a separate account to insure that the use of such futures contracts is       
unleveraged.  Similarly, a representative portfolio of securities having a value
equal to the aggregate face value of the futures contract will be identified    
with respect to each short position.  Each Fund will employ any other           
appropriate method of cover which is consistent with applicable regulatory and  
exchange requirements.                                                          

Options on Securities                                                           

Each Fund may use options on securities to implement its investment   
strategy.  A call option on a security, for example, gives the purchaser of the 
option the right to buy, and the writer the obligation to sell, the underlying  
asset at the exercise price during the option period.  Conversely, a put option 
on a security gives the purchaser the right to sell, and the writer the         
obligation to buy, the underlying asset at the exercise price during the option 
period.                                                                         

     Purchased options have defined risk, i.e., the premium paid for the option,
no matter how adversely the price of the underlying asset moves, while affording
an opportunity for gain corresponding to the increase or decrease in the value  
of the optioned asset.                                                          

  Written options have varying degrees of risk.  An uncovered written call
option theoretically carries unlimited risk, as the market price of the         
underlying asset could rise far above the exercise price before its expiration. 
This risk is tempered when the call option is covered, i.e., when the option    
writer owns the underlying asset.  In this case, the writer runs the risk of the
lost opportunity to participate in the appreciation in value of the asset rather
than the risk of an out-of-pocket loss.  A written put option has defined risk, 
i.e., the difference between the agreed-upon price that a Fund must pay to the  
buyer upon exercise of the put and the value, which could be zero, of the asset 
at the time of exercise.                                                        

The obligation of the writer of an option continues until the writer  
effects a closing purchase transaction or until the option expires.  To secure  
his obligation to deliver the underlying asset in the case of a call option, or 
to pay for the underlying asset in the case of a put option, a covered writer is
required to deposit in escrow the underlying security or other assets in        
accordance with the rules of the' applicable clearing corporation and exchanges.

Options on Securities Indices                                                   

    Each Fund may engage in transactions in call and put options on securities
indices.  For example, a Fund may purchase put options on indices of securities 
in anticipation of or during a market decline to attempt to offset the decrease 
in market value of its securities that might otherwise result.                  

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Put options on indices of securities are similar to put options on the
securities themselves except that the delivery requirements are different.      
Instead of giving the right to make delivery of a security at a specified price,
a put option on an index of securities gives the holder the right to receive an 
amount of cash upon exercise of the option if the value of the underlying index 
has fallen below the exercise price.  The amount of cash received will be equal 
to the difference between the closing price of the index and the exercise price 
of the option expressed in dollars times a specified multiple.  As with options 
on securities, a Fund may offset its position in index options prior to         
expiration by entering into a closing transaction on an exchange or it may let  
the option expire unexercised.                                                  

  A securities index assigns relative values to the securities included in
the index and the index options are based on a broad market index.  Although    
there are at present few available options on indices of fixed income           
securities, other than tax-exempt securities, or futures and related options    
based on such indices, such instruments may become available in the future.  In 
connection with the use of such options, a Fund may cover its position by       
identifying a representative portfolio of securities having a value equal to the
aggregate face value of the option position taken.  However, a Fund may employ  
any appropriate method to cover its positions that is consistent with applicable
regulatory and exchange requirements.                                           

Options on Futures Contracts                                                    

  An option on a futures contract gives the purchaser the right, in return
for the premium paid, to assume a position in a futures contract (a long        
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the period of the option.         

Options Strategy                                                                

A basic option strategy for protecting a Fund against a decline in    
securities prices could involve (a) the purchase of a put - - thus "locking in" 
the selling price of the underlying securities or securities indices -- or (b)  
the writing of a call on securities or securities indices held by the Fund -    
-thereby generating income (the premium paid by the buyer) by giving the holder 
of such call the option to buy the underlying asset at a fixed price.  The      
premium will offset, in whole or in part, a decline in portfolio value; however,
if prices of the relevant securities or securities indices rose instead of      
falling, the call might be exercised, thereby resulting in a potential loss of  
appreciation in the underlying securities or securities indices.                

    A basic option strategy when a rise in securities prices is anticipated is
the purchase of a call - - thus "locking in" the purchase price of the          
underlying security or other asset.  In transactions involving the purchase of  
call options by a Fund, money market instruments equal to the aggregate exercise
price of the options will be identified by the Fund to the Trust's custodian to 
insure that the use of such investments is unleveraged.                         

    Each Fund may write options in connection with buy-and-write transactions;
that is, the Fund may purchase a security and concurrently write a call option  
against that security.  If the                                                  

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call option is exercised in such a transaction, the Fund's maximum gain will be 
the premium received by it for writing the option, adjusted upward or downward  
by the difference between the Fund's purchase price of the security and the     
exercise price of the option.  If the option is not exercised and the price of  
the underlying security declines, the amount of such decline will be offset in  
part, or entirely, by the premium received.                                     

The writing of covered put options is similar in terms of risk/return 
characteristics to buy-and-write transactions.  If the market price of the      
underlying security rises or otherwise is above the exercise price, the put     
option will expire worthless and the Fund's gain will be limited to the premium 
received.  If the market price of the underlying security declines or otherwise 
is below the exercise price, the Fund's return will be the premium received from
writing the put option minus the amount by which the market price of the        
security is below the exercise price.                                           

Limitations and Risks of Options and Futures Activity                           

    Each Fund will engage in transactions in futures contracts or options only
as a hedge against changes resulting from market conditions which produce       
changes in the values of its securities or the securities which it intends to   
purchase (e.g., to replace portfolio securities which will mature in the near   
future) or subject to the limitations described below, to enhance return.  No   
Fund will purchase any futures contract or purchase any call option if,         
immediately thereafter, more than one third of such Fund's net assets would be  
represented by long futures contracts or call options.  No Fund will write a    
covered call or put option if, immediately thereafter, the aggregate value of   
the assets (securities in the case of written calls and cash or cash equivalents
in the case of written puts) underlying all such options, determined as of the  
dates such options were written, would exceed 25% of such Fund's net assets.  In
addition, no Fund may establish a position in a commodity futures contract or   
purchase or sell a commodity option contract for other than bona fide hedging   
purposes if immediately thereafter the sum of the amount of initial margin      
deposits and premiums required to establish such positions for such nonhedging  
purposes would exceed 5% of the market value of such Fund's net assets.         

     Although effective hedging can generally capture the bulk of a desired risk
adjustment, no hedge is completely effective.  A Fund's ability to hedge        
effectively through transactions in futures and options depends on the degree to
which price movements in its holdings correlate with price movements of the     
futures and options.                                                            

     Some positions in futures and options may be closed out only on an exchange
which provides a secondary market therefor.  There can be no assurance that a   
liquid secondary market will exist for any particular futures contract or option
at any specific time.  Thus, it may not be possible to close such an option or  
futures position prior to maturity.  The inability to close options and futures 
positions also could have an adverse impact on the Fund's ability to effectively
hedge its securities and might in some cases require the Fund to deposit cash to
meet applicable margin requirements.  The Funds will enter into an option or    
futures position only if it appears to be a liquid investment.                  

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 Each Fund has undertaken with a state securities authority that, for so
long as its shares are required to be registered for sale in such state, the    
Fund will invest only in options and futures that are issued by the Options     
Clearing Corporation or offered through the facilities of a national securities 
association or listed on a national securities or commodities exchange, except  
that a Fund may invest in unlisted options or futures when the desired options  
or futures are unavailable on a national securities or commodities exchange.    
Furthermore, each Fund will engage in such transactions in unlisted options or  
futures only with dealers who have high credit standing as determined by the    
Investment Manager.                                                             

Foreign Investments                                                             

 To the extent a Fund invests in securities of issuers in less developed
countries or emerging foreign markets, it will be subject to a variety of       
additional risks, including risks associated with political instability,        
economies based on relatively few industries, lesser market liquidity, high     
rates of inflation, significant price volatility of portfolio holdings and high 
levels of external debt in the relevant country.                                

Although each Fund may invest in securities denominated in foreign    
currencies, each Fund values its securities and other assets in U.S. dollars.   
As a result, the net asset value of a Fund's shares may fluctuate with U.S.     
dollar exchange rates as well as with price changes of the Fund's securities in 
the various local markets and currencies.  Thus, an increase in the value of the
U.S. dollar compared to the currencies in which a Fund makes its investments    
could reduce the effect of increases and magnify the effect of decreases in the 
prices of the Fund's securities in their local markets.  Conversely, a decrease 
in the value of the U.S. dollar will have the opposite effect of magnifying the 
effect of increases and reducing the effect of decreases in the prices of a     
Fund's securities in the local markets.                                         

Currency Transactions                                                           

     Each Fund's dealings in forward currency exchange contracts will be limited
to hedging involving either specific transactions or aggregate portfolio        
positions.  A forward currency contract involves an obligation to purchase or   
sell a specific currency at a future date, which may be any fixed number of days
from the date of the contract agreed upon by the parties, at a price set at the 
time of the contract.  These contracts are not commodities and are entered into 
in the interbank market conducted directly between currency traders (usually    
large commercial banks) and their customers.  Although spot and forward         
contracts will be used primarily to protect the Fund from adverse currency      
movements, they also involve the risk that anticipated currency movements will  
not be accurately predicted, which may result in losses to each Fund.  This     
method of protecting the value of a Fund's portfolio securities against a       
decline in the value of a currency does not eliminate fluctuations in the       
underlying prices of the securities.  It simply establishes a rate of exchange  
that can be achieved at some future point in time.  Although such contracts tend
to minimize the risk of loss due to a decline in the value of hedged currency,  
they tend to limit any potential gain that might result should the value of such
currency increase.                                                              

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Repurchase Agreements                                                           

Each Fund may enter into repurchase agreements.  Repurchase agreements
occur when a Fund acquires a security and the seller, which may be either (i) a 
primary dealer in U.S. Government securities or (ii) an FDIC-insured bank having
gross assets in excess of $500 million, simultaneously commits to repurchase it 
at an agreed-upon price on an agreed-upon date within a specified number of days
(usually not more than seven) from the date of purchase.  The repurchase price  
reflects the purchase price plus an agreed-upon market rate of interest which is
unrelated to the coupon rate or maturity of the acquired security.  A Fund will 
only enter into repurchase agreements involving U.S. Government securities.     
Repurchase agreements could involve certain risks in the event of default or    
insolvency of the other party, including possible delays or restrictions upon   
the Fund's ability to dispose of the underlying securities.  Repurchase         
agreements will be limited to 30% of each Fund's total assets, except that      
repurchase agreements extending for more than seven days when combined with     
other illiquid securities will be limited to 10% of each Fund's total assets.   

Reverse Repurchase Agreements                                                   

  Each Fund may enter into reverse repurchase agreements.  However, a Fund
may not engage in reverse repurchase agreements in excess of 5% of the          
applicable Fund's total assets.  In a reverse repurchase agreement the Fund     
transfers possession of a portfolio instrument to another person, such as a     
financial institution, broker or dealer, in return for a percentage of the      
instrument's market value in cash, and agrees that on a stipulated date in the  
future the Fund will repurchase the portfolio instrument by remitting the       
original consideration plus interest at an agreed-upon rate.  The ability to use
reverse repurchase agreements may enable, but does not ensure the ability of, a 
Fund to avoid selling portfolio instruments at a time when a sale may be deemed 
to be disadvantageous.                                                          

     When effecting reverse repurchase agreements, assets of the applicable Fund
in a dollar amount sufficient to make payment of the obligations to be purchased
are segregated on the applicable Fund's records at the trade date and maintained
until the transaction is settled.                                               

Swap Arrangements                                                               

Each Fund may enter into various forms of swap arrangements with      
counterparties with respect to interest rates, currency rates or indices,       
including purchase of caps, floors and collars as described below.  In an       
interest rate swap a Fund could agree for a specific period to pay a bank or    
investment banker the floating rate of interest on a so-called notional         
principal amount (i.e., an assumed figure selected by the parties for this      
purpose) in exchange for agreement by the bank or investment banker to pay the  
Fund a fixed rate of interest on the notional principal amount.  In a currency  
swap a Fund would agree with the other party to exchange cash flows based on the
relative differences in values of a notional amount of two (or more) currencies;
in an index swap, a Fund would agree to exchange cash flows on a notional amount
based on changes in the values of the selected indices.  Purchase of a cap      
entitles the purchaser to receive payments from the seller on a notional amount 
to the extent that the selected index exceeds an agreed upon                    

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interest rate or amount whereas purchase of a floor entitles the purchaser to   
receive such payments to the extent the selected index falls below an agreed    
upon interest rate or amount.  A collar combines a cap and a floor.             

   Most swaps entered into by a Fund will be on a net basis; for example, in
an interest rate swap, amounts generated by application of the fixed rate and   
the floating rate to the notional principal amount would first offset one       
another, with the Fund either receiving or paying the difference between such   
amounts.  In order to be in a position to meet any obligations resulting from   
swaps, the applicable Fund will set up a segregated custodial account to hold   
appropriate liquid assets, including cash; for swaps entered into on a net      
basis, assets will be segregated having a daily net asset value equal to any    
excess of the applicable Fund's accrued obligations over the accrued obligations
of the other party, while for swaps on other than a net basis assets will be    
segregated having a value equal to the total amount of the applicable Fund's    
obligations.                                                                    

     These arrangements will be made primarily for hedging purposes, to preserve
the return on an investment or on a portion of the applicable Fund's portfolio. 
However, a Fund may enter into such arrangements for income purposes to the     
extent permitted by the Commodities Futures Trading Commission for entities     
which are not commodity pool operators, such as the Fund.  In entering a swap   
arrangement, a Fund is dependent upon the creditworthiness and good faith of the
counterparty.  Each Fund attempts to reduce the risks of nonperformance by the  
counterparty by dealing only with established, reputable institutions.  The swap
market is still relatively new and emerging; positions in swap arrangements may 
become illiquid to the extent that nonstandard arrangements with one            
counterparty are not readily transferable to another counterparty or if a market
for the transfer of swap positions does not develop.  The use of interest rate  
swaps is a highly specialized activity which involves investment techniques and 
risks different from those associated with ordinary portfolio securities        
transactions.  If the Investment Manager is incorrect in its forecasts of market
values, interest rates and other applicable factors, the investment performance 
of the applicable Fund would diminish compared with what it would have been if  
these investment techniques were not used.  Moreover, even if the Investment    
Manager is correct in its forecast, there is a risk that the swap position may  
correlate imperfectly with the price of the asset or liability being hedged.    

When-Issued Securities                                                          

     Each Fund may purchase "when-issued" equity securities, which are traded on
a price basis prior to actual issuance.  Such purchases will be made only to    
achieve a Fund's investment objective and not for leverage.  The when-issued    
trading period generally lasts from a few days to months, or over a year or     
more; during this period dividends on equity securities are not payable.  No    
income accrues to the Fund prior to the time it takes delivery.  A frequent form
of when-issued trading occurs when corporate securities to be created by a      
merger of companies are traded prior to the actual consummation of the merger.  
Such transactions may involve a risk of loss if the value of the securities fall
below the price committed to prior to the actual issuance.  The Trust's         
custodian will establish a segregated account for each Fund when it purchases   
securities on a when- issued basis consisting of cash or liquid securities equal
to the amount of the when-issued commitments.  Securities transactions involving
delayed deliveries or forward                                                   

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commitments are frequently characterized as when-issued transactions and are    
similarly treated by each Fund.                                                 

Rule 144A Securities                                                            

    Subject to the percentage limitation on illiquid and restricted securities
noted above, each Fund may buy or sell restricted securities in accordance with 
Rule 144A under the Securities Act of 1933 ("Rule 144A Securities").  Securities
may be resold pursuant to Rule 144A under certain circumstances only to         
qualified institutional buyers as defined in the rule, and the markets and      
trading practices for such securities are relatively new and still developing;  
depending on the development of such markets, such Rule 144A Securities may be  
deemed to be liquid as determined by or in accordance with methods adopted by   
the Trustees.  Under such methods the following factors are considered, among   
others: the frequency of trades and quotes for the security, the number of      
dealers and potential purchasers in the market, marketmaking activity, and the  
nature of the security and marketplace trades.  Investments in Rule 144A        
Securities could have the effect of increasing the level of a Fund's illiquidity
to the extent that qualified institutional buyers become, for a time,           
uninterested in purchasing such securities.  Also, a Fund may be adversely      
impacted by the possible illiquidity and subjective valuation of such securities
in the absence of a market for them.                                            

 Each Fund has undertaken with a state securities authority that, for so
long as the Fund's shares are required to be registered for sale in such state, 
the Fund's investments in restricted securities, excluding restricted securities
eligible for resale pursuant to Rule 144A or Regulation S under the Securities  
Act of 1933, will be limited to 5% of total assets of the applicable Fund.      

     DEBT INSTRUMENTS AND PERMITTED CASH INVESTMENTS

    As indicated in each Fund's Prospectus, a Fund may invest in long-term and
short-term debt securities.  Each Fund may invest in cash and short-term        
securities for temporary defensive purposes when, in the opinion of the         
Investment Manager, such a position is more likely to provide protection against
unfavorable market conditions than adherence to other investment policies.      
Certain debt securities and money market instruments in which a Fund may invest 
are described below.                                                            

U.S. Government and Related Securities. U.S. Government securities are
securities which are issued or guaranteed as to principal or interest by the    
U.S. Government, a U.S. Government agency or instrumentality, or certain        
mixed-ownership Government corporations as described herein.  The U.S.          
Government securities in which each Fund invests include, among others:         

  -    direct obligations of the U.S. Treasury, i.e., U.S. Treasury bills,
notes, certificates and bonds;                              

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   -    obligations of U.S. Government agencies or instrumentalities such as
   the Federal Home Loan Banks, the Federal Farm Credit Banks, the
  Federal National Mortgage Association, the Government National
        Mortgage Association and the Federal Home Loan Mortgage Corporation;
and                                                         

-    obligations of mixed-ownership Government corporations such as   
Resolution Funding Corporation.                             

    U.S. Government securities which each Fund may buy are backed in a variety
of ways by the U.S. Government, its agencies or instrumentalities.  Some of     
these obligations, such as Government National Mortgage Association             
mortgage-backed securities, are backed by the full faith and credit of the U.S. 
Treasury.  Other obligations, such as those of the Federal National Mortgage    
Association, are backed by the discretionary authority of the U.S. Government to
purchase certain obligations of agencies or instrumentalities, although the U.S.
Government has no legal obligation to do so.  Obligations such as those of the  
Federal Home Loan Banks, the Federal Farm Credit Banks, the Federal National    
Mortgage Association and the Federal Home Loan Mortgage Corporation are backed  
by the credit of the agency or instrumentality issuing the obligations.  Certain
obligations of Resolution Funding Corporation, a mixed-ownership Government     
corporation, are backed with respect to interest payments by the U.S. Treasury, 
and with respect to principal payments by U.S. Treasury obligations held in a   
segregated account with a Federal Reserve Bank.  Except for certain             
mortgage-related securities, each Fund will only invest in obligations issued by
mixed-ownership Government corporations where such securities are guaranteed as 
to payment of principal or interest by the U.S. Government or a U.S. Government 
agency or instrumentality, and any unguaranteed principal or interest is        
otherwise supported by U.S. Government obligations held in a segregated account.

U.S. Government securities may be acquired by each Fund in the form of
separately traded principal and interest components of securities issued or     
guaranteed by the U.S. Treasury.  The principal and interest components of      
selected securities are traded independently under the Separate Trading of      
Registered Interest and Principal of Securities ("STRIPS") program.  Under the  
STRIPS program, the principal and interest components are individually numbered 
and separately issued by the U.S. Treasury at the request of depository         
financial institutions, which then trade the component parts independently.     
Obligations of Resolution Funding Corporation are similarly divided into        
principal and interest components and maintained as such on the book entry      
records of the Federal Reserve Banks.                                           

In addition, each Fund may invest in custodial receipts that evidence 
ownership of future interest payments, principal payments or both on certain    
U.S. Treasury notes or bonds in connection with programs sponsored by banks and 
brokerage firms.  Such notes and bonds are held in custody by a bank on behalf  
of the owners of the receipts. These custodial receipts are known by various    
names, including "Treasury Receipts" ("TRs"), "Treasury Investment Growth       
Receipts" ("TIGRs") and "Certificates of Accrual on Treasury Securities"        
("CATS") , and may not be deemed U.S. Government securities.                    

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Each Fund may also invest from time to time in collective investment  
vehicles, the assets of which consist principally of U.S. Government securities 
or other assets substantially collateralized or supported by such securities,   
such as Government trust certificates.                                          

     Bank Money Investments.  Bank money investments include but are not limited
to certificates of deposit, bankers' acceptances and time deposits.             
Certificates of deposit are generally short-term (i.e., less than one year),    
interest-bearing negotiable certificates issued by commercial banks or savings  
and loan associations against funds deposited in the issuing institution.  A    
banker's acceptance is a time draft drawn on a commercial bank by a borrower,   
usually in connection with an international commercial transaction (to finance  
the import, export, transfer or storage of goods).  A banker's acceptance may be
obtained from a domestic or foreign bank, including a U.S. branch or agency of a
foreign bank.  The borrower is liable for payment as well as the bank, which    
unconditionally guarantees to pay the draft at its face amount on the maturity  
date.  Most acceptances have maturities of six months or less and are traded in 
secondary markets prior to maturity.  Time deposits are nonnegotiable deposits  
for a fixed period of time at a stated interest rate.  The Funds will not invest
in any such bank money investment unless the investment is issued by a U.S. bank
that is a member of the Federal Deposit Insurance Corporation ("FDIC"),         
including any foreign branch thereof, a U.S. branch or agency of a foreign bank,
a foreign branch of a foreign bank, or a savings bank or savings and loan       
association that is a member of the FDIC and which at the date of investment has
capital, surplus and undivided profits (as of the date of its most recently     
published financial statements) in excess of $50 million.  The Funds will not   
invest in time deposits maturing in more than seven days and will not invest    
more than 10% of the total assets of the applicable Fund in time deposits       
maturing in two to seven days.                                                  

  U.S. branches and agencies of foreign banks are offices of foreign banks
and are not separately incorporated entities.  They are chartered and regulated 
either federally or under state law.  U.S. federal branches or agencies of      
foreign banks are chartered and regulated by the Comptroller of the Currency,   
while state branches and agencies are chartered and regulated by authorities of 
the respective states or the District of Columbia.  U.S. branches of foreign    
banks may accept deposits and thus are eligible for FDIC insurance; however, not
all such branches elect FDIC insurance.  Unlike U.S. branches of foreign banks, 
U.S. agencies of foreign banks may not accept deposits and thus are not eligible
for FDIC insurance.  Both branches and agencies can maintain credit balances,   
which are funds received by the office incidental to or arising out of the      
exercise of their banking powers and can exercise other commercial functions,   
such as lending activities.                                                     

Short-Term Corporate Debt Instruments.  Short-term corporate debt     
instruments include commercial paper to finance short-term credit needs (i.e.,  
short-term, unsecured promissory notes) issued by corporations including but not
limited to (a) domestic or foreign bank holding companies or (b) their          
subsidiaries or affiliates where the debt instrument is guaranteed by the bank  
holding company or an affiliated bank or where the bank holding company or the  
affiliated bank is unconditionally liable for the debt instrument.  Commercial  
paper is usually sold on a discounted basis and has a maturity at the time of   
issuance not exceeding nine months.                                             

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Commercial Paper Ratings.  Commercial paper investments at the time of
purchase will be rated A by Standard & Poor's Corporation ("S&P") or Prime by   
Moody's Investor's Service, Inc. ("Moody's"), or, if not rated, issued by       
companies having an outstanding long-term unsecured debt issue rated at least A 
by S&P or by Moody's.  The money market investments in corporate bonds and      
debentures (which must have maturities at the date of settlement of one year or 
less) must be rated at the time of purchase at least A by S&P or by Moody's.    
Commercial paper rated A (highest quality) by S&P is issued by entities which   
have liquidity ratios which are adequate to meet cash requirements.  Long-term  
senior debt is rated A or better, although in some cases BBB credits may be     
allowed.  The issuer has access to at least two additional channels of borrowing
Basic earnings and cash flow have an upward trend with allowance made for       
unusual circumstances.  Typically, the issuer's industry is well established and
the issuer has a strong position within the industry.  The reliability and      
quality of management are unquestioned.  The relative strength or weakness of   
the above factors determines whether the issuer's commercial paper is rated A-l,
A-2 or A-3.  (Those A-l issues determined to possess overwhelming safety        
characteristics are denoted with a plus (+) sign: A-l+.)                        

The rating Prime is the highest commercial paper rating assigned by   
Moody's.  Among the factors considered by Moody's in assigning ratings are the  
following: evaluation of the management of the issuer; economic evaluation of   
the issuer's industry or industries and an appraisal of speculative-type risks  
which may be inherent in certain areas; evaluation of the issuer's products in  
relation to competition and customer acceptance; liquidity; amount and quality  
of long-term debt; trend of earnings over a period of 10 years; financial       
management of obligations which may be present or may arise as a result of      
public interest questions and preparations to meet such obligations.  These     
factors are all considered in determining whether the commercial paper is rated 
Prime-l, Prime-2 or Prime-3.                                                    

QUALITY RATINGS OF CORPORATE BONDS AND PREFERRED STOCKS               

The ratings of Moody's Investors Service, Inc. and Standard & Poor's  
Ratings Group for corporate bonds in which the Funds may invest are as follows: 

Moody's Investors Service, Inc.                                       

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

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

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

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

Standard & Poor's Ratings Group                                       

     AAA - Bonds rated AAA have the highest rating assigned by Standard & Poor's
to a debt obligation.  Capacity to pay interest and repay principal is extremely
strong.                                                                         

   AA - Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.        

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

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

The ratings of Moody's Investors Service, Inc. and Standard & Poor's  
Ratings Group for preferred stocks in which the Funds may invest are as follows:

Moody's Investors Service, Inc.                                       

aaa - An issue which is rated aaa is considered to be a top-quality   
preferred stock.  This rating indicates good asset protection and the least risk
of dividend impairment within the universe of preferred stocks.                 

     aa - An issue which is rated aa is considered a high-grade preferred stock.
This rating indicates that there is reasonable assurance that earnings and asset
protection will remain relatively well maintained in the foreseeable future.    

 a - An issue which is rated a is considered to be an upper-medium grade
preferred stock.  While risks are judged to be somewhat greater than in the     
"aaa" and "aa" classifications, earnings and asset protection are, nevertheless,
expected to be maintained at adequate levels.                                   

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     baa - An issue which is rated baa is considered to be medium grade, neither
highly protected nor poorly secured.  Earnings and asset protection appear      
adequate at present but may be questionable over any great length of time.      

Standard & Poor's Ratings Group                                       

    AAA - This is the highest rating that may be assigned by Standard & Poor's
to a preferred stock issue and indicates an extremely strong capacity to pay the
preferred stock obligations.                                                    

AA - A preferred stock issue rated AA also qualifies as a high-quality
fixed income security.  The capacity to pay preferred stock obligations is very 
strong, although not as overwhelming as for issues rated AAA.                   

 A - An issue rated A is backed by a sound capacity to pay the preferred
stock obligations, although it is somewhat more susceptible to the diverse      
effects of changes in circumstances and economic conditions.                    

   BBB - An issue rated BBB is regarded as backed by an adequate capacity to
pay the preferred stock obligations.  Whereas it normally exhibits adequate     
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to make payments for a preferred     
stock in this category than for issues in the A category.                       

INVESTMENT LIMITATIONS                                                

   The Trust has adopted certain fundamental investment limitations designed
to reduce the risk of an investment in the Funds.  These limitations may not be 
changed with respect to either Fund without the affirmative vote of a majority  
of the outstanding shares of that Fund.                                         

The limitations applicable to each Fund are:                          

    1.   Borrowing Money.    The Fund will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is asset coverage of 
300% for all borrowings of the Fund; or (b) from a bank or other persons for    
temporary purposes only, provided that, when made, such temporary borrowings are
in an amount not exceeding 5% of the Fund's total assets.                       

  2.   Pledging. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any security owned or held by the
Fund except as may be necessary in connection with borrowings described in      
limitation (1) above.  The Fund will not mortgage, pledge or hypothecate more   
than one-third of its assets in connection with borrowings.  Deposit of payment 
by the Fund of initial or maintenance margin in connection with futures         
contracts and related options is not considered a pledge or hypothecation of    
assets.                                                                         

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3.   Margin Purchases.   The Fund will not purchase any securities on 
"margin" (except such short-term credits as are necessary for the clearance of  
transactions).  The deposit of funds in connection with transactions in options,
futures contracts, and options on such contracts will not be considered a       
purchase on "margin."                                                           

  4.   Short Sales.   The Fund will not make short sales of securities, or
maintain a short position, other than short sales "against the box,"            

    5.   Commodities; Put or Call Options.  The Fund will not purchase or sell
commodities or commodity contracts including futures, or purchase or write put  
or call options, except that the Fund may purchase or sell financial futures    
contracts and related options.                                                  

6.   Underwriting.  The Fund will not act as underwriter of securities
issued by other persons.  This limitation is not applicable to the extent that, 
in connection with the disposition of portfolio securities, a Fund may be deemed
an underwriter under certain federal securities laws.                           

     7.   Real Estate.   The Fund will not purchase, hold or deal in real estate
or real estate mortgage loans, including real estate limited partnership        
interests, except that the Fund may purchase (a) securities of companies (other 
than limited partnerships) which deal in real estate or (b) securities which are
secured by interests in real estate or by interests in mortgage loans including 
securities secured by mortgage-backed securities.                               

     8.   Loans.    The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, or (b) by engaging in repurchase agreements.  For 
purposes of this limitation, the term "loans" shall not include the purchase of 
bonds, debentures, commercial paper or corporate notes, and similar marketable  
evidences of indebtedness.                                                      

     9.   Industry Concentration.  The Fund will not invest more than 25% of its
total assets in any particular industry.                                        

10.  Senior Securities.  The Fund will not issue or sell any senior   
security as defined by the Investment Company Act of 1940 except in so far as   
any borrowing that the Fund may engage in may be deemed to be an issuance of a  
senior security.                                                                

    The Trust does not intend to pledge, mortgage or hypothecate the assets of
either Fund.  The Trust does not intend to make short sales of securities       
"against the box" as described in investment limitation 4.  The statements of   
intention in this paragraph reflect nonfundamental policies which may be changed
by the Board of Trustees without shareholder approval.                          

Other current investment policies of each of the Funds, which are not 
fundamental and which may be changed by action of the Board of Directors without
shareholder approval, are as follows:                                           

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 1.   Illiquid Investments.    The Fund will not purchase securities for
which no readily available market exists or engage in a repurchase agreement    
maturing in more than seven days if, as a result thereof, more than 15% of the  
value of the net assets of the Fund would be invested in such securities and the
Fund will not purchase restricted securities (excluding securities eligible for 
resale under Rule 144A under the Securities Act of 1933) if, as a result        
thereof, more than 5% of the value of the net assets of the Fund would be       
invested in such securities.                                                    

     2.   Investing for Control.   The Fund will not invest in companies for the
purpose of exercising control or management.                                    

    3.   Other Investment Companies.        The Fund will not invest more than
10% of its total assets in securities of other investment companies.  The Fund  
will not invest more than 5% of its total assets in the securities of any single
investment company.  The Fund will not hold more than 3% of the outstanding     
voting stock of any single investment company.                                  

 4.   Voting Securities of Any Issuer.   The Fund will not purchase more
than 10% of the outstanding voting securities of any one issuer.                

     With respect to the percentages adopted by the Trust as maximum limitations
on a Fund's investment policies and restrictions, an excess above the fixed     
percentage (except for the percentage limitations relative to the borrowing of  
money and the holding of illiquid securities) will not be a violation of the    
policy or restriction unless the excess results immediately and directly from   
the acquisition of any security or the action taken.                            

TRUSTEES AND OFFICERS                                                 

The following is a list of the Trustees and executive officers of the 
Trust.  Each Trustee who is an "interested person" of the Trust, as defined by  
the Investment Company Act of 1940, is indicated by an asterisk.                

NAME             AGE           POSITION HELD      
*Frederick R. Kobrick      54          President/Trustee              
*Michael T. Carmen         35      Secretary-Treasurer/Trustee        

 The principal occupations of the Trustees and executive officers of the
Trust during the past five years are set forth below:                           

*Frederick R. Kobrick, 101 Federal Street, Boston, MA 02111, serves as
President of the Trust.  He is 54.  His principal occupation currently is       
President of Kobrick-HFS, Inc.  During the past five years he served as a senior
vice president of State Street Research & Management Company.                   

*Michael T. Carmen, 101 Federal Street, Boston, MA 02111, serves as   
Secretary-Treasurer of the Trust.  He is 35.  His principal occupation currently
is Secretary-Treasurer of                                                       

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Kobrick-HFS, Inc.  During the past five years he served as a vice president and 
analyst for State Street Research & Management Company and a portfolio manager  
for Montgomery Asset Management.                                                

*Messrs. Kobrick and Carmen, as principals of Kobrick-HFS, Inc., the  
Trust's investment adviser, are "interested persons" of the Trust within the    
meaning of Section 2(a)(19) of the Investment Company Act of 1940.              

     As of October __, 1997, Kobrick-HFS, Inc. was the record hold of all shares
of the Funds.  Ownership of 25% or more of a voting security is deemed "control"
as defined in the 1940 Act.  So long as 25% of each Funds shares are so owned,  
such owners will be presumed to be in control of such shares for purposes of    
voting on certain matters submitted to a vote of shareholders.                  

     Each non-interested Trustee will receive an annual retainer of $2,000 and a
$250 fee for each Board meeting attended and will be reimbursed for travel and  
other expenses incurred in the performance of their duties.                     

THE INVESTMENT ADVISER                                                

Kobrick-HFS, Inc. (the "Adviser") is the Trust's investment manager.  Messrs.   
Kobrick and Carmen, as principals of the Adviser, may directly or indirectly    
receive benefits from the advisory fees paid to the Adviser.  Under the terms of
the investment advisory agreement between the Trust and the Adviser, the Adviser
manages the Funds' investments.  Each Fund pays the Adviser a quarterly advisory
fee computed as a percentage of the average of the values of the net assets of  
the Fund as determined at the close of each business day during the quarter at  
the following annual rates:                                                     

1% of the first $1,000,000,000 of such assets;                        
3/4% of the next $500,000,000 of such assets;                         
1/2% of the next $1,000,000,000 of such assets; and                   
3/8% of the average market value of such assets in excess of          
$2,500,000,000.                                                   

The Funds are responsible for the payment of all expenses incurred in 
connection with the organization, registration of shares and operations of the  
Funds, including such extraordinary or non-recurring expenses as may arise, such
as litigation to which the Trust may be a party.  The Funds may have an         
obligation to indemnify the Trust's officers and Trustees with respect to such  
litigation, except in instances of willful misfeasance, bad faith, gross        
negligence or reckless disregard by such officers and Trustees in the           
performance of their duties.  The compensation and expenses of any officer,     
Trustee or employee of the Trust who is an officer, director or employee of the 
Adviser are paid by the Adviser.                                                

By its terms, the Trust's investment advisory agreement will remain in
force until ___________, 1999 and from year to year thereafter, subject to      
annual approval by (a) the Board of Trustees or (b) a vote of the majority of a 
Fund's outstanding voting securities; provided that                             

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in either event continuance is also approved by a majority of the Trustees who  
are not interested persons of the Trust, by a vote cast in person at a meeting  
called for the purpose of voting on such approval.  The Trust's investment      
advisory agreement may be terminated at any time, on sixty days' written notice,
without the payment of any penalty, by the Board of Trustees, by a vote of the  
majority of a Fund's outstanding voting securities, or by the Adviser.  The     
investment advisory agreement automatically terminates in the event of its      
assignment, as defined by the Investment Company Act of 1940 and the rules      
thereunder.                                                                     

   The name "Kobrick-HFS" is the property right of the Adviser.  The Adviser
may use the name "Kobrick-HFS" in other connections and for other purposes,     
including in the name of other investment companies.  The Trust has agreed to   
discontinue any use of the name "Kobrick-HFS" if the Adviser ceases to be       
employed as the Trust's investment manager.                                     

DISTRIBUTION PLAN                                                     

As stated in each Fund's Prospectus, the Funds have adopted a plan of 
distribution (the "Plan") pursuant to Rule 12b-1 under the Investment Company   
Act of 1940 which permits each Fund to pay for expenses incurred in the         
distribution and promotion of the Funds' shares, including but not limited to,  
the printing of prospectuses, statements of additional information and reports  
used for sales purposes, advertisements, expenses of preparation and printing of
sales literature, promotion, marketing and sales expenses and other             
distribution-related expenses, including any distribution fees paid to          
securities dealers or other firms who have executed a distribution or service   
agreement with the Trust.  The Plan expressly limits payment of the distribution
expenses listed above in any fiscal year to a maximum of .25% of the average    
daily net assets of each Fund.  Unreimbursed expenses will not be carried over  
from year to year.                                                              

Agreements implementing the Plan (the "Implementation Agreements"),   
including agreements with dealers wherein such dealers agree for a fee to act as
agents for the sale of the Funds' shares, are in writing and have been approved 
by the Board of Trustees.  All payments made pursuant to the Plan are made in   
accordance with written agreements.                                             

The continuance of the Plan and the Implementation Agreements must be 
specifically approved at least annually by a vote of the Trust's Board of       
Trustees and by a vote of the Trustees who are not interested persons of the    
Trust and have no direct or indirect financial interest in the Plan or any      
Implementation Agreement (the "Independent Trustees") at a meeting called for   
the purpose of voting on such continuance.  The Plan may be terminated at any   
time by a vote of a majority of the Independent Trustees or by a vote of the    
holders of a majority of the outstanding shares of a Fund.  In the event the    
Plan is terminated in accordance with its terms, the affected Fund will not be  
required to make any payments for expenses incurred by the Adviser after the    
termination date.  Each Implementation Agreement terminates automatically in the
event of its assignment and may be terminated at any time by a vote of a        
majority of the Independent Trustees or by a vote of the holders of a majority  
of the outstanding shares of a Fund on not more than 60 days' written notice to 
any other party to the Implementation Agreement.  The Plan may not be amended to
increase materially the amount to be spent for distribution                     

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without shareholder approval.  All material amendments to the Plan must be      
approved by a vote of the Trust's Board of Trustees and by a vote of the        
Independent Trustees.                                                           

  In approving the Plan, the Trustees determined, in the exercise of their
business judgment and in light of their fiduciary duties as Trustees, that there
is a reasonable likelihood that the Plan will benefit the Funds and their       
shareholders.  The Board of Trustees believes that expenditure of the Funds'    
assets for distribution expenses under the Plan should assist in the growth of  
the Funds which will benefit the Funds and their shareholders through increased 
economies of scale, greater investment flexibility, greater portfolio           
diversification and less chance of disruption of planned investment strategies. 
The Plan will be renewed only if the Trustees make a similar determination for  
each subsequent year of the Plan.  There can be no assurance that the benefits  
anticipated from the expenditure of the Funds' assets for distribution will be  
realized.  While the Plan is in effect, all amounts spent by the Funds pursuant 
to the Plan and the purposes for which such expenditures were made must be      
reported quarterly to the Board of Trustees for its review.  In addition, the   
selection and nomination of those Trustees who are not interested persons of the
Trust are committed to the discretion of the Independent Trustees during such   
period.                                                                         

   As principals of the Adviser, Messrs. Kobrick and Carmen may be deemed to
have a financial interest in the operation of the Plan and the Implementation   
Agreements.                                                                     

SECURITIES TRANSACTIONS                                               

   The Investment Manager's policy is to seek for its clients, including the
Funds, what in the Investment Manager's judgment will be the best overall       
execution of purchase or sale orders and the most favorable net prices in       
securities transactions consistent with its judgment as to the business         
qualifications of the various broker or dealer firms with whom the Investment   
Manager may do business, and the Investment Manager may not necessarily choose  
the broker offering the lowest available commission rate.  Decisions with       
respect to the market where the transaction is to be completed, to the form of  
transaction (whether principal or agency)  and to the allocation of orders among
brokers or dealers are made in accordance with this policy.  In selecting       
brokers or dealers to effect portfolio transactions, consideration is given to  
their proven integrity and financial responsibility, their demonstrated         
execution experience and capabilities both generally and with respect to        
particular markets or securities, the competitiveness of their commission rates 
in agency transactions (and their net prices in principal transactions), their  
willingness to commit capital, and their clearance and settlement capability.   
The Investment Manager makes every effort to keep informed of commission rate   
structures and prevalent bid/ask spread characteristics of the markets and      
securities in which transactions for the Funds occur.  Against this background, 
the Investment Manager evaluates the reasonableness of a commission or a net    
price with respect to a particular transaction by considering such factors as   
difficulty of execution or security positioning by the executing firm.  The     
Investment Manager may or may not solicit competitive bids based on its judgment
of the expected benefit or harm to the execution process for that transaction.  

     When it appears that a number of firms could satisfy the required standards
in respect of a particular transaction, consideration may also be given to      
services other than execution services                                          

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which certain of such firms have provided in the past or may provide in the     
future.  Negotiated commission rates and prices, however, are based upon the    
Investment Manager's judgment of the rate which reflects the execution          
requirements of the transaction without regard to whether the broker provides   
services in addition to execution.  Among such other services are the supplying 
of supplemental investment research; general economic, political and business   
information; analytical and statistical data; relevant market information,      
quotation equipment and services; reports and information about specific        
companies, industries and securities; purchase and sale recommendations for     
stocks and bonds; portfolio strategy services; historical statistical           
information; market data services providing information on specific issues and  
prices; financial publications; proxy voting data and analysis services;        
technical analysis of various aspects of the securities markets, including      
technical charts; computer hardware used for brokerage and research purposes;   
computer software and databases, including those used for portfolio analysis and
modeling; and portfolio evaluation services and relative performance of         
accounts.                                                                       

 Certain nonexecution services provided by broker-dealers may in turn be
obtained by the broker-dealers from third parties who are paid for such services
by the broker-dealers.                                                          

The Investment Manager regularly reviews and evaluates the services   
furnished by broker-dealers.  Some services may be used for research and        
investment decision-making purposes, and also for marketing or administrative   
purposes.  Under these circumstances, the Investment Manager allocates the cost 
of such services to determine the appropriate proportion of the cost which is   
allocable to purposes other than research or investment decision-making and is  
therefore paid directly by the Investment Manager.  Some research and execution 
services may benefit the Investment Manager's clients as a whole, while others  
may benefit a specific segment of clients.  Not all such services will          
necessarily be used exclusively in connection with the accounts which pay the   
commissions to the broker-dealer producing the services.                        

  The Investment Manager has no fixed agreements or understanding with any
broker-dealer as to the amount of brokerage business which that firm may expect 
to receive for services supplied to the Investment Manager or otherwise.  There 
may be, however, understandings with certain firms that in order for such firms 
to be able to continuously supply certain services, they need to receive        
allocation of a specified amount of brokerage business.  These understandings   
are honored to the extent possible in accordance with the policies set forth    
above.                                                                          

 It is not the Investment Manager's policy to intentionally pay a firm a
brokerage commission higher that that which another firm would charge for       
handling the same transaction in recognition of services (other than execution  
services) provided, however, the Investment Manager is aware that this is an    
area where differences of opinion as to fact and circumstances may exist, and in
such circumstances, if any, the Investment Manager relies on the provisions of  
Section 28(e) of the Securities Act of 1934, to the extent applicable.          

In the case of the purchase of fixed income securities in underwriting
transactions, the Investment Manager follows any instructions received from its 
clients as to the allocation of new issue discounts, selling concessions and    
designations to brokers or dealers which provide the client with research,      
performance evaluation, master trustee and other services.  In the absence of   

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instructions from the client, the Investment Manager may make such allocations  
to broker-dealers which have provided the Investment Manager with research and  
brokerage services.                                                             

  When more than one client of the Investment Manager is seeking to buy or
sell the same security, the sale or purchase is carried out in a manner which is
considered fair and equitable to all accounts.  In allocating investments among 
various clients (including in what sequence orders for trades are placed), the  
Investment Manager will use its best business judgment and will take into       
account such factors as the investment objectives of the clients, the amount of 
investment funds available to each, the amount already committed for each client
to a specific investment and the relative risks of the investments, all in order
to provide on balance a fair and equitable result to each client over time.     
Although sharing in large transactions may sometimes affect price or volume of  
shares acquired or sold, overall it is believed there may be an advantage in    
execution.  The Investment Manager may follow the practice of grouping orders of
various clients for execution to get the benefit of lower prices or commission  
rates.  In certain cases where the aggregate order may be executed in a series  
of transactions at various prices, the transactions are allocated as to amount  
and price in a manner considered equitable to each so that each receives, to the
extent practicable, the average price of such transactions.  Exceptions may be  
made based on such factors as the size of the account and the size of the trade.
For example, the Investment Manager may not aggregate trades where it believes  
that it is in the best interests of clients not to do so, including situations  
where aggregation might result in a large number of small transactions with     
consequent increased custodial and other transactional costs which may          
disproportionately impact smaller accounts.  Such disaggregation, depending on  
the circumstances, may or may not result in such accounts receiving more or less
favorable execution relative to other clients.                                  

   Code of Ethics.     The Trust and the Adviser have each adopted a Code of
Ethics under Rule 17j-1 of the Investment Company Act of 1940.  The Code        
significantly restricts the personal investing activities of all employees of   
the Adviser and, as described below, imposes additional, more onerous,          
restrictions on investment personnel of the Adviser.  The Code requires that all
employees of the Adviser preclear any personal securities (with limited         
exceptions, such as U.S. Government obligations).  The preclearance requirement 
and associated procedures are designed to identify any substantive prohibition  
or limitation applicable to the proposed investment.  In addition, no employee  
may purchase or sell any security which, at that time, is being purchased or    
sold (as the case may be), or to the knowledge of the employee is being         
considered for purchase or sale, by either Fund.  The substantive restrictions  
applicable to investment personnel of the Adviser include a ban on acquiring any
securities in an initial public offering.  Furthermore, the Code provides for   
trading "blackout periods" which prohibit trading by investment personnel of the
Adviser within periods of trading by either Fund in the same (or equivalent)    
security.                                                                       

PORTFOLIO TURNOVER                                                    

  A Fund's portfolio turnover rate is calculated by dividing the lesser of
purchases or sales of portfolio securities for the fiscal year by the monthly   
average of the value of the portfolio securities owned by the Fund during the   
fiscal year.  High portfolio turnover involves                                  

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correspondingly greater brokerage commissions and other transaction costs, which
will be borne directly by the Funds.  The Adviser anticipates that the portfolio
turnover rate for each Fund normally will not exceed 100%.  A 100% turnover rate
would occur if all of a Fund's portfolio securities were replaced once within a 
one year period.                                                                

  Generally, each Fund intends to invest for long-term purposes.  However,
the rate of portfolio turnover will depend upon market and other conditions, and
it will not be a limiting factor when the Adviser believes that portfolio       
changes are appropriate.                                                        

CALCULATION OF SHARE PRICE                                            

    The share price (net asset value) of the shares of each Fund is determined
as of the close of the regular session of trading on the New York Stock Exchange
(currently 4:00 p.m., Eastern time) on each day the Trust is open for business. 
The Trust is open for business on every day except Saturdays, Sundays and the   
following holidays:  New Year's Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.  The Trust may also be 
open for business on other days in which there is sufficient trading in either  
Fund's portfolio securities that its net asset value might be materially        
affected.  For a description of the methods used to determine the share price,  
see "Calculation of Share Price" in the Prospectus.                             

TAXES                                                                 

Each Fund's Prospectus describes generally the tax treatment of       
distributions by the Funds.  This section of the Statement of Additional        
Information includes additional information concerning federal taxes.           

Each Fund intends to qualify annually for the special tax treatment   
afforded a "regulated investment company" under Subchapter M of the Internal    
Revenue Code so that it does not pay federal taxes on income and capital gains  
distributed to shareholders.  To so qualify a Fund must, among other things, (i)
derive at least 90% of its gross income in each taxable year from dividends,    
interest, payments with respect to securities loans, gains from the sale or     
other disposition of stock, securities or foreign currency, or certain other    
income (including but not limited to gains from options, futures and forward    
contracts) derived with respect to its business of investing in stock,          
securities or currencies; (ii) derive less than 30% of its gross income in each 
taxable year from the sale or other disposition of the following assets held for
less than three months: (a) stock or securities, (b) options, futures or forward
contracts not directly related to its principal business of investing in stock  
or securities; and (iii) diversify its holdings so that at the end of each      
quarter of its taxable year the following two conditions are met: (a) at least  
50% of the value of the Fund's total assets is represented by cash, U.S.        
Government securities, securities of other regulated investment companies and   
other securities (for this purpose such other securities will qualify only if   
the Fund's investment is limited in respect to any issuer to an amount not      
greater than 5% of the Fund's assets and 10% of the outstanding voting          
securities of such issuer) and (b) not more than 25% of the value of the Fund's 
assets is invested in securities of any one issuer (other than U.S. Government  
securities or securities of other regulated investment companies).              

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  A Fund's net realized capital gains from securities transactions will be
distributed only after reducing such gains by the amount of any available       
capital loss carryforwards.  Capital losses may be carried forward to offset any
capital gains for eight years, after which any undeducted capital loss remaining
is lost as a deduction.                                                         

  A federal excise tax at the rate of 4% will be imposed on the excess, if
any, of a Fund's "required distribution" over actual distributions in any       
calendar year.  Generally, the "required distribution" is 98% of a Fund's       
ordinary income for the calendar year plus 98% of its net capital gains         
recognized during the one year period ending on November 30 of the calendar year
plus undistributed amounts from prior years.  The Funds intend to make          
distributions sufficient to avoid imposition of the excise tax.                 

    The Trust is required to withhold and remit to the U.S. Treasury a portion
(31%) of dividend income on any account unless the shareholder provides a       
taxpayer identification number and certifies that such number is correct and    
that the shareholder is not subject to backup withholding or demonstrates an    
exemption from withholding.                                                     

REDEMPTION IN KIND                                                    

 Under unusual circumstances, when the Board of Trustees deems it in the
best interests of a Fund's shareholders, the Fund may make payment for shares   
repurchased or redeemed in whole or in part in securities of the Fund taken at  
current value.  If any such redemption in kind is to be made, each Fund intends 
to make an election pursuant to Rule 18f-1 under the Investment Company Act of  
1940.  This election will require the Funds to redeem shares solely in cash up  
to the lesser of $250,000 or 1% of the net asset value of each Fund during any  
90 day period for any one shareholder.  Should payment be made in securities,   
the redeeming shareholder will generally incur brokerage costs in converting    
such securities to cash.  Portfolio securities which are issued in an in-kind   
redemption will be readily marketable.                                          

HISTORICAL PERFORMANCE INFORMATION                                    

 From time to time, each Fund may advertise average annual total return.
Average annual total return quotations will be computed by finding the average  
annual compounded rates of return over 1, 5 and 10 year periods that would      
equate the initial amount invested to the ending redeemable value, according to 
the following formula:                                                          

P (1 + T)n = ERV                                            
Where:                                                                

P =  a hypothetical initial payment of $1,000                         
T =  average annual total return                                      
n =  number of years                                                  

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    ERV =     ending redeemable value of a hypothetical $1,000 payment made at
             the beginning of the 1, 5 and 10 year periods at the end of the
     1, 5 or 10 year periods (or fractional portion thereof)

    The calculation of average annual total return assumes the reinvestment of
all dividends and distributions.  If a Fund has been in existence less than one,
five or ten years, the time period since the date of the initial public offering
of shares will be substituted for the periods stated.  Each Fund may also       
advertise total return (a "nonstandardized quotation") which is calculated      
differently from average annual total return.  A nonstandardized quotation of   
total return may be a cumulative return which measures the percentage change in 
the value of an account between the beginning and end of a period, assuming no  
activity in the account other than reinvestment of dividends and capital gains  
distributions.  A nonstandardized quotation may also indicate average annual    
compounded rates of return over periods other than those specified for average  
annual total return.  A nonstandardized quotation of total return will always be
accompanied by a Fund's average annual total return as described above.         

     From time to time, each of the Funds may also advertise its yield.  A yield
quotation is based on a 30-day (or one month) period and is computed by dividing
the net investment income per share earned during the period by the maximum     
offering price per share on the last day of the period, according to the        
following formula:                                                              

Yield = 2[(a-b/cd + 1)6 - 1]                                
Where:                                                                

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

     Solely for the purpose of computing yield, dividend income is recognized by
accruing 1/360 of the stated dividend rate of the security each day that a Fund 
owns the security.  Generally, interest earned (for the purpose of "a" above) on
debt obligations is computed by reference to the yield to maturity of each      
obligation held based on the market value of the obligation (including actual   
accrued interest) at the close of business on the last business day prior to the
start of the 30-day (or one month) period for which yield is being calculated,  
or, with respect to obligations purchased during the month, the purchase price  
(plus actual accrued interest).  With respect to the treatment of discount and  
premium on mortgage or other receivables-backed obligations which are expected  
to be subject to monthly paydowns of principal and interest, gain or loss       
attributable to actual monthly paydowns is accounted for as an increase or      
decrease to interest income during the period and discount or premium on the    
remaining security is not amortized.                                            

     The performance quotations described above are based on historical earnings
and are not intended to indicate future performance.                            

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     To help investors better evaluate how an investment in a Fund might satisfy
their investment objective, advertisements regarding each Fund may discuss      
various measures of Fund performance, including current performance ratings     
and/or rankings appearing in financial magazines, newspapers and publications   
which track mutual fund performance.  Advertisements may also compare           
performance (using the calculation methods set forth in the Prospectus) to      
performance as reported by other investments, indices and averages.  When       
advertising current ratings or rankings, the Funds may use the following        
publications or indices to discuss or compare Fund performance:                 

Lipper Mutual Fund Performance Analysis and Lipper Fixed Income Fund  
Performance Analysis measure total return and average current yield for the     
mutual fund industry and rank individual mutual fund performance over specified 
time periods assuming reinvestment of all distributions, exclusive of sales     
loads.  The Capital Fund may provide comparative performance information        
appearing in the Capital Appreciation Funds category and the Emerging Growth    
Fund may provide comparative performance information appearing in the Small     
Capitalization Funds category.  In addition, the Funds may use comparative      
performance information of relevant indices, including the S&P 500 Index and the
Dow Jones Industrial Average.  The S&P 500 Index is an unmanaged index of 500   
stocks, the purpose of which is to portray the pattern of common stock price    
movement.  The Dow Jones Industrial Average is a measurement of general market  
price movement for 30 widely held stocks listed on the New York Stock Exchange. 

 In assessing such comparisons of performance an investor should keep in
mind that the composition of the investments in the reported indices and        
averages is not identical to the Fund's portfolio, that the averages are        
generally unmanaged and that the items included in the calculations of such     
averages may not be identical to the formula used by the Fund to calculate its  
performance.  In addition, there can be no assurance that the Fund will continue
this performance as compared to such other averages.                            

CUSTODIAN                                                             

___________ Bank, ________________________, __________, ____, has been
retained to act as Custodian for the Funds' investments.  The ___________ Bank  
acts as each Fund's depository, safekeeps its portfolio securities, collects all
income and other payments with respect thereto, disburses funds as instructed   
and maintains records in connection with its duties.                            

AUDITORS                                                              

The firm of Ernst & Young LLP has been selected as independent public 
accountants for the Trust for the fiscal year ending December 31, 1998.  Ernst &
Young LLP, 200 Clarendon Street, Boston, Massachusetts 02116, performs an annual
audit of the Trust's financial statements and advises the Funds as to certain   
accounting matters.                                                             

___ SERVICE CORP.                                                     

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The Trust's transfer agent, ___ Service Corp. ("___"), maintains the  
records of each shareholder's account, answers shareholders' inquiries          
concerning their accounts, processes purchases and redemptions of the Funds'    
shares, acts as dividend and distribution disbursing agent and performs other   
shareholder service functions.  ___ receives for its services as transfer agent 
a fee payable monthly at an annual rate of $__ per account from the Capital Fund
and $__ per account from the Emerging Growth Fund, provided, however, that the  
minimum fee is $_,000 per month for each Fund.  In addition, the Funds pay      
out-of-pocket expenses, including but not limited to, postage, envelopes,       
checks, drafts, forms, reports, record storage and communication lines.         

___ also provides accounting and pricing services to the Funds.  For  
calculating daily net asset value per share and maintaining such books and      
records as are necessary to enable ___ to perform its duties, each Fund pays ___
a fee in accordance with the following schedule:                                

Average Monthly Net Assets                Monthly Fee       

0 - $ 50,000,000                        $_,000    
50 -  100,000,000                                   
100 -  250,000,000                                    
Over   250,000,000                                    

In addition, each Fund pays all costs of external pricing services.   

In addition, ___ is retained to provide administrative services to the
Funds.  In this capacity, ___ supplies non-investment related statistical and   
research data, internal regulatory compliance services and executive and        
administrative services.  ___ supervises the preparation of tax returns, reports
to shareholders of the Funds, reports to and filings with the Securities and    
Exchange Commission and state securities commissions, and materials for meetings
of the Board of Trustees.  For the performance of these administrative services,
each Fund pays ___ a fee at the annual rate of .15% of the average value of its 
daily net assets up to $50,000,000, .125% of such assets from $50,000,000 to    
$100,000,000 and .10% of such assets in excess of $100,000,000; provided,       
however, that the minimum fee is $1,000 per month for each Fund.                

STATEMENTS OF ASSETS AND LIABILITIES                                  

  The Funds' Statements of Assets and Liabilities as of ___________, 1997,
which have been audited by Ernst & Young LLP, are attached to this Statement of 
Additional Information.                                                         

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      KOBRICK-HFS INVESTMENT TRUST

PART C.  OTHER INFORMATION                                                      

Item 24. Financial Statements and Exhibits                                      

(a)  (i)  Financial Statements included in Part A:                      

None                                                

(ii) Financial Statements included in Part B:                 

    Statements of Assets and Liabilities, ___________, 1997*

Notes to Financial Statements*                      

Report of Independent Accountants*                  

(b)  Exhibits                                                           

(1)  Agreement and Declaration of Trust                       

(2)  Bylaws                                                   

(3)  Inapplicable                                             

(4)  Inapplicable                                             

(5)  Form of Advisory Agreement with Kobrick-HFS, Inc.        

(6)  Inapplicable                                             

(7)  Inapplicable                                             

(8)  Form of Custody Agreement with ___________*              

       (9)  (i)   Form of Administrative Services Agreement with ___ Service
Corp.*                                  

        (ii)  Form of Accounting Services Agreement with ___ Service
Corp.*                                  

            (iii) Form of Transfer, Dividend Disbursing, Shareholder Service
         and Plan Agency Agreement with ___ Service Corp.*

(10) Opinion and Consent of Counsel*                          

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(11) Consent of Independent Public Accountants*               

(12) Inapplicable                                             

(13) Form of Agreement Relating to Initial Capital            

(14) Inapplicable                                             

(15) Inapplicable                                             

(16) Financial Data Schedule*                                 

(17) Inapplicable                                             
_________________                                                               
* To be filed by Amendment                                                      

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

       As of October 10, 1997, Kobrick-HFS, Inc. was the recordholder of all
      shares of the Registrant.  After commencement of the public offering
        of the Registrant's shares, the Registrant expects that no person will
      be directly or indirectly controlled by or under common control with
the Registrant.                                               

Item 26. Number of Holders of Securities                                        

  As of October 10, 1997, all shares of beneficial interest of the
Registrant were held by Kobrick-HFS, Inc.                     

Item 27. Indemnification                                                        

   Article VI of the Registrant's Agreement and Declaration of Trust
   provides for indemnification of officers and Trustees as follows:

      "Section 6.4   INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC.
         Subject to and except as otherwise provided in the Securities
         Exchange Act of 1933, as amended, and the 1940 Act, the Trust
        shall indemnify each of its Trustees and officers (including
           persons who serve at the Trust's request as directors, officers
          or trustees of another organization in which the Trust has any
         interest as a shareholder, creditor or otherwise (hereinafter
        referred to as a "Covered Person")) against all liabilities,
        including but not limited to amounts paid in satisfaction of
             judgments, in compromise or as fines and penalties, and expenses,
           including reasonable accountants' and counsel fees, incurred by
            any Covered Person in connection with the defense or disposition
     of any action, suit or other proceeding, whether civil or
criminal,                                           

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            before any court or administrative or legislative body, in which
           such Covered Person may be or may have been involved as a party
          or otherwise or with which such person may be or may have been
            threatened, while in office or thereafter, by reason of being or
       having been such a Trustee or officer, director or trustee,
     except with respect to any matter as to which it has been
      determined that such Covered Person had acted with willful
             misfeasance, bad faith, gross negligence or reckless disregard of
       the duties involved in the conduct of such Covered Person's
    office (such conduct referred to hereafter as "Disabling
           Conduct").  A determination that the Covered Person is entitled
         to indemnification may be made by (i) a final decision on the
          merits by a court or other body before whom the proceeding was
       brought that the person to be indemnified was not liable by
            reason of Disabling Conduct, (ii) dismissal of a court action or
     an administrative proceeding against a Covered Person for
      insufficiency of evidence of Disabling Conduct, or (iii) a
            reasonable determination, based upon a review of the facts, that
           the indemnitee was not liable by reason of Disabling Conduct by
            (a) a vote of a majority of a quorum of Trustees who are neither
             "interested persons" of the Trust as defined in section 2(a) (19)
    of the 1940 Act nor parties to the proceeding, or (b) an
      independent legal counsel in a written opinion.  Expenses,
           including accountants' and counsel fees so incurred by any such
         Covered Person (but excluding amounts paid in satisfaction of
           judgments, in compromise or as fines or penalties), may be paid
  from time to time by the Trust in advance of the final
             disposition of any such action, suit or proceeding, provided that
            the Covered Person shall have undertaken to repay the amounts so
 paid to the Trust if it is ultimately determined that
         indemnification of such expenses is not authorized under this
     Article VI and (i) the Covered Person shall have provided
          security for such undertaking, (ii) the Trust shall be insured
             against losses arising by reason of any lawful advances, or (iii)
            a majority of a quorum of the disinterested Trustees who are not
           a party to the proceeding, or an independent legal counsel in a
        written opinion, shall have determined, based on a review of
    readily available facts (as opposed to a full trial-type
             inquiry), that there is reason to believe that the Covered Person
 ultimately will be found entitled to indemnification.

            Section 6.5    COMPROMISE PAYMENT.  As to any matter disposed of
             by a compromise payment by any such Covered Person referred to in
           Section 6.4, pursuant to a consent decree or otherwise, no such
             indemnification either for said payment or for any other expenses
           shall be provided unless such indemnification shall be approved
       (a) by a majority of the disinterested Trustees who are not
            parties to the proceeding or (b) by an independent legal counsel
       in a written opinion.  Approval by the Trustees pursuant to
             clause (a) or by independent legal counsel pursuant to clause (b)
         shall not prevent the recovery from any Covered Person of any
             amount paid to such Covered Person in accordance with any of such
clauses as indemnification if such                  

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    Covered Person is subsequently adjudicated by a court of
          competent jurisdiction to have been liable to the Trust or its
           Shareholders by reason of willful misfeasance, bad faith, gross
          negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office.            

            Section 6.6    INDEMNIFICATION NOT EXCLUSIVE, ETC.  The right of
    indemnification provided by this Article VI shall not be
             exclusive of or affect any other rights to which any such Covered
         Person may be entitled.  As used in this Article VI, "Covered
    Person" shall include such person's heirs, executors and
         administrators, an "interested Covered Person" is one against
            whom the action, suit or other proceeding in question or another
           action, suit or other proceeding on the same or similar grounds
            is then or has been pending or threatened, and a "disinterested"
          person is a person against whom none of such actions, suits or
            other proceedings or another action, suit or other proceeding on
      the same or similar grounds is then or has been pending or
           threatened.  Nothing contained in this Article shall affect any
            rights to indemnification to which personnel of the Trust, other
            than Trustees and officers, and other persons may be entitled by
          contract or otherwise under law, nor the power of the Trust to
           purchase and maintain liability insurance on behalf of any such
person."                                            

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

The Registrant expects to maintain a standard mutual fund and 
       investment advisory professional and directors and officers liability
  policy.  The policy will provide coverage to the Registrant, its
Trustees and officers, and Kobrick-HFS, Inc. (the "Adviser"). 
     Coverage under the policy will include losses by reason of any act,
        error, omission, misstatement, misleading statement, neglect or breach
of duty.                                                      

   The Advisory Agreement with the Adviser provides that the Adviser
     shall not be liable for any action taken, omitted or suffered to be
taken by it in its reasonable                                 

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       judgment, in good faith and believed by it to be authorized or within
      the discretion or rights or powers conferred upon it by the Advisory
  Agreement, or in accordance with (or in the absence of) specific
    directions or instructions from the Trust, provided, however, that
   such acts or omissions shall not have resulted from the Adviser's
        willful misfeasance, bad faith or gross negligence, a violation of the
      standard of care established by and applicable to the Adviser in its
      actions under the Advisory Agreement or breach of its duty or of its
obligations under the Advisory Agreement.                     

Item 28. Business and Other Connections of the Investment Adviser               

 (a)  The Adviser is a recently formed independent counsel firm.

        (b)  The directors and officers of the Adviser and any other business,
      profession, vocation or employment of a substantial nature
engaged in at any time during the past two years:   

 (i)   Frederick R. Kobrick - President of the Adviser
               President and Chief Executive Officer of the Registrant

          (ii)  Michael T. Carmen - Secretary - Treasurer of the Adviser
               Treasurer and Chief Financial Officer of the Registrant

Item 29. Principal Underwriters                                                 

(a)  Inapplicable                                                       

(b)  Inapplicable                                                       

(c)  Inapplicable                                                       

Item 30. Location of Accounts and Records                                       

  Accounts, books and other documents required to be maintained by
   Section 31(a) of the Investment Company Act of 1940 and the Rules
    promulgated thereunder will be maintained by the Registrant at its
      offices located at One Financial Center, Boston, Massachusetts 02111
      as well as at the offices of the Registrant's transfer agent located
at ____________, _________, _____ _______.                    

Item 31. Management Services Not Discussed in Parts A or B                      

Inapplicable                                                  

Item 32. Undertakings                                                           

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(a)  Inapplicable                                                       

(b)  The Registrant undertakes to file a post-effective amendment, using
      financial statements which need not be certified, within four to six
months from the effective date of this Registration Statement.

(c)  Inapplicable                                                       

(d)  The Registrant undertakes to call a meeting of shareholders, if    
requested to do so by holders of at least 10% of the Fund's   
    outstanding shares, for the purpose of voting upon the question of
       removal of a trustee or trustees and to assist in communications with
   other shareholders as required by Section 16(c) of the Investment
Company Act of 1940.                                          

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      SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the      
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed below on its behalf by the undersigned, thereunto duly   
authorized, in the City of Boston and Commonwealth of Massachusetts, on the 10th
day of October, 1997.                                                           

      KOBRICK-HFS INVESTMENT TRUST

       By:  \s\ Frederick R. Kobrick
               -------------------------------
        Frederick R. Kobrick
       President

Pursuant to the requirements of the Securities Act of 1933, this        
Registration Statement has been signed below by the following persons in the    
capacities and on the dates indicated.                                          

Signature                        Title                      Date

 \s\ Frederick R. Kobrick        President and Trustee        October 10, 1997
----------------------------                                                    
Frederick R. Kobrick                                                            

 \s\ Michael T. Carmen           Secretary -Treasurer         October 10, 1997
----------------------------      and Trustee                                   
Michael T. Carmen                                                               

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     INDEX TO EXHIBITS

(1)      Agreement and Declaration of Trust                                     

(2)      Bylaws                                                                 

(3)      Inapplicable                                                           

(4)      Inapplicable                                                           

(5)      Form of Advisory Agreement                                             

(6)      Inapplicable                                                           

(7)      Inapplicable                                                           

(8)      Form of Custody Agreement*                                             

(9)(i)   Form of Administrative Services Agreement*                             

(9)(ii)  Form of Accounting Services Agreement*                                 

(9)(iii) Form of Transfer, Dividend Disbursing, Shareholder Service and Plan    
Agency Agreement*                                             

(10)     Opinion and Consent of Counsel*                                        

(11)     Consent of Independent Public Accountants*                             

(12)     Inapplicable                                                           

(13)     Form of Agreement Relating to Initial Capital                          

(14)     Inapplicable                                                           

(15)     Inapplicable                                                           

(16)     Financial Data Schedule*                                               

(17)     Inapplicable                                                           
-----------------------------                                                   
*        To be filed by Amendment                                               

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Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘N-1A EL’ Filing		Date		First		Last			Other Filings
		12/31/98		7		65
Filed on:		10/10/97		68		73			N-8A
									List all Filings