STATEMENT OF ADDITIONAL INFORMATION

  January 29, 2001
as amended on May 31, 2001


CENTURION FUNDS, INC.
__________________________
Centurion U.S. Equity Fund
Centurion International Equity Fund
Centurion U.S. Contra Fund
Centurion International Contra Fund
__________________________
Contents
Page
Organization of the Company	 2
Investment Goals and Policies	 2
Management of the Funds	26
Additional Purchase and Redemption Information	32
Exchange Privilege	33
Additional Information Concerning Taxes	33
Performance Data	38
Other Information	40
Financial Statements	41
Appendix ? Description of Ratings	A


This Statement of Additional Information ("SAI") is meant
to be read in conjunction with the Prospectus for Centurion
Funds, Inc. (the "Company") dated May 31, 2001, as amended or
supplemented from time to time (the "Prospectus"), and is
incorporated by reference in its entirety into the Prospectus.
The Company currently consists of four separately managed
portfolios: Centurion U.S. Equity Fund (the "U.S. Equity Fund"),
Centurion International Equity Fund (the "International Equity
Fund"), Centurion U.S. Contra Fund (the "U.S. Contra Fund") and
Centurion International Contra Fund (the "International Contra
Fund") (together, the "Funds," and each, a "Fund").  Because this
SAI is not itself a prospectus, no investment in shares of a Fund
should be made solely upon the information contained herein.
Copies of the Prospectus and information regarding the Funds'
current performance and the status of shareholder accounts may be
obtained by calling the Company at (800) 451-2010 or by writing
to the Company at 2425 East Camelback Road, Phoenix, Arizona
85016-4200.


ORGANIZATION OF THE COMPANY
The Company is a diversified open-end management investment
company that was organized as a corporation on August 20, 1998
under the laws of the State of Maryland.  The Company's Charter
authorizes the Board of Directors (the "Board") to issue
500,000,000 full and fractional shares of capital stock, $.001
par value, of which 100,000,000 shares are designated a series
called the "Centurion U.S. Equity Fund," 100,000,000 shares are
designated a series called the "Centurion International Equity
Fund," 150,000,000 shares are designated a series called the
"Centurion U.S. Contra Fund," and 150,000,000 shares are
designated a series called the "Centurion International Contra
Fund."
INVESTMENT GOALS AND POLICIES
As stated in the Prospectus, the investment goal of the
U.S. Equity Fund is to provide long-term growth consistent with
reasonable efforts to preserve capital. The investment goal of
the International Equity Fund (together with the U.S. Equity
Fund, the "Equity Funds") is to provide long-term growth
consistent with reasonable efforts to preserve capital.  The
investment goal of the U.S. Contra Fund is to provide protection
against declines in the value of the U.S. equity allocation of
certain assets custodied with Centurion Trust Company
("Centurion").  The investment goal of the International Contra
Fund is to provide protection against declines in the value of
the non-U.S. equity allocation of certain assets custodied with
Centurion.  The following information supplements the discussion
of each Fund's investment goal and policies in the Prospectus.
There are no assurances that a Fund will achieve its investment
goal.

Centurion serves as investment manager to each Fund.
Centurion has engaged Trainer, Wortham & Company Inc.
("Trainer"); and Credit Suisse Asset Management, LLC ("CSAM") as
sub-advisers to the U.S. Equity Fund, Friends Ivory & Sime, Inc.
("FISI") and CSAM as sub-advisers to the International Equity
Fund; and CSAM as sub-adviser to both the U.S. Contra Fund and
the International Contra Fund (together, the "Contra Funds"). The
term "Adviser," as used in this SAI, shall refer to Centurion,
Trainer, FISI and/or CSAM, as applicable.


Options, Futures and Currency Exchange Transactions
Securities Options.  Each Fund may write covered call
options on stock and debt securities and may purchase U.S.
exchanged-traded and over-the counter ("OTC") put and call
options.
A Fund realizes fees (referred to as "premiums") for
granting the rights evidenced by the options it has written.  A
put option embodies the right of its purchaser to compel the
writer of the option to purchase from the option holder an
underlying security at a specified price for a specified time
period or at a specified time.  In contrast, a call option
embodies the right of its purchaser to compel the writer of the
option to sell to the option holder an underlying security at a
specified price for a specified time period or at a specified
time.
The principal reason for writing covered options on a
security is to attempt to realize, through the receipt of
premiums, a greater return than would be realized on the securi-
ties alone.  In return for a premium, a Fund as the writer of a
covered call option forfeits the right to any appreciation in the
value of the underlying security above the strike price for the
life of the option (or until a closing purchase transaction can
be effected).  Nevertheless, a Fund as a call writer retains the
risk of a decline in the price of the underlying security.  The
size of the premiums that a Fund may receive may be adversely
affected as new or existing institutions, including other
investment companies, engage in or increase their option-writing
activities.
In the case of options written by a Fund that are deemed
covered by virtue of the Fund's holding convertible or
exchangeable preferred stock or debt securities, the time
required to convert or exchange and obtain physical delivery of
the underlying common stock with respect to which the Fund has
written options may exceed the time within which the Fund must
make delivery in accordance with an exercise notice.  In these
instances, a Fund may purchase or temporarily borrow the
underlying securities for purposes of physical delivery.  By so
doing, a Fund will not bear any market risk, since the Fund will
have the absolute right to receive from the issuer of the
underlying security an equal number of shares to replace the
borrowed securities, but the Fund may incur additional
transaction costs or interest expenses in connection with any
such purchase or borrowing.
Additional risks exist with respect to certain of the
securities for which a Fund may write covered call options.  For
example, if a Fund writes covered call options on mortgage-backed
securities, the mortgage-backed securities that it holds as cover
may, because of scheduled amortization or unscheduled
prepayments, cease to be sufficient cover.  If this occurs, a
Fund will compensate for the decline in the value of the cover by
purchasing an appropriate additional amount of mortgage-backed
securities.
Options written by a Fund will normally have expiration
dates between one and twelve months from the date written.  The
exercise price of the options may be below, equal to or above the
market values of the underlying securities at the times the
options are written.  In the case of call options, these exercise
prices are referred to as "in-the-money," "at-the-money" and
"out-of-the-money," respectively.  A Fund may write (i)
in-the-money call options when the Adviser expects that the price
of the underlying security will remain flat or decline moderately
during the option period, (ii) at-the-money call options when the
Adviser expects that the price of the underlying security will
remain flat or advance moderately during the option period and
(iii) out-of-the-money call options when the Adviser expects that
the premiums received from writing the call option plus the
appreciation in market price of the underlying security up to the
exercise price will be greater than the appreciation in the price
of the underlying security alone.  In any of the preceding
situations, if the market price of the underlying security
declines and the security is sold at this lower price, the amount
of any realized loss will be offset wholly or in part by the
premium received.  To secure its obligation to deliver the
underlying security when it writes a call option, a Fund will be
required to deposit in escrow the underlying security or other
assets in accordance with the rules of the Options Clearing
Corporation (the "Clearing Corporation") and of the securities
exchange on which the option is written.
Prior to their expirations, put and call options may be
sold in closing sale or purchase transactions (sales or purchases
by a Fund prior to the exercise of options that it has purchased
or written, respectively, of options of the same series) in which
a Fund may realize a profit or loss from the sale.  An option
position may be closed out only where there exists a secondary
market for an option of the same series on a recognized
securities exchange or in the over-the-counter market.  When a
Fund has purchased an option and engages in a closing sale
transaction, whether the Fund realizes a profit or loss will
depend upon whether the amount received in the closing sale
transaction is more or less than the premium the Fund initially
paid for the original option plus the related transaction costs.
Similarly, in cases where a Fund has written an option, it will
realize a profit if the cost of the closing purchase transaction
is less than the premium received upon writing the original
option and will incur a loss if the cost of the closing purchase
transaction exceeds the premium received upon writing the
original option.  A Fund may engage in a closing purchase
transaction to realize a profit, to prevent an underlying
security with respect to which it has written an option from
being called or put or, in the case of a call option, to unfreeze
an underlying security (thereby permitting its sale or the
writing of a new option on the security prior to the outstanding
option's expiration).  The obligation of a Fund under an option
it has written would be terminated by a closing purchase
transaction, but the Fund would not be deemed to own an option as
a result of the transaction.  So long as the obligation of a Fund
as the writer of an option continues, the Fund may be assigned an
exercise notice by the broker-dealer through which the option was
sold, requiring the Fund to deliver the underlying security
against payment of the exercise price.  This obligation
terminates when the option expires or a Fund effects a closing
purchase transaction.  A Fund can no longer effect a closing
purchase transaction with respect to an option once it has been
assigned an exercise notice.
There is no assurance that sufficient trading interest will
exist to create a liquid secondary market on a securities
exchange for any particular option or at any particular time, and
for some options no such secondary market may exist.  A liquid
secondary market in an option may cease to exist for a variety of
reasons.  In the past, for example, higher than anticipated
trading activity or order flow or other unforeseen events have at
times rendered certain of the facilities of the Clearing
Corporation and various securities exchanges inadequate and
resulted in the institution of special procedures, such as
trading rotations, restrictions on certain types of orders or
trading halts or suspensions in one or more options.  There can
be no assurance that similar events, or events that may otherwise
interfere with the timely execution of customers' orders, will
not recur.  In such event, it might not be possible to effect
closing transactions in particular options.  Moreover, a Fund's
ability to terminate options positions established in the
over-the-counter market may be more limited than for
exchange-traded options and may also involve the risk that
securities dealers participating in over-the-counter transactions
would fail to meet their obligations to the Fund.  Each Fund,
however, intends to purchase over-the-counter options only from
dealers whose debt securities, as determined by the Adviser, are
considered to be investment grade.  If, as a covered call option
writer, a Fund is unable to effect a closing purchase transaction
in a secondary market, it will not be able to sell the underlying
security until the option expires or it delivers the underlying
security upon exercise.  In either case, a Fund would continue to
be at market risk on the security and could face higher
transaction costs, including brokerage commissions.
Securities exchanges generally have established limitations
governing the maximum number of calls and puts of each class
which may be held or written, or exercised within certain time
periods by an investor or group of investors acting in concert
(regardless of whether the options are written on the same or
different securities exchanges or are held, written or exercised
in one or more accounts or through one or more brokers).  It is
possible that a Fund and other clients of the Adviser and certain
of its affiliates may be considered to be such a group.  A
securities exchange may order the liquidation of positions found
to be in violation of these limits and it may impose certain
other sanctions.  These limits may restrict the number of options
a Fund will be able to purchase on a particular security.
Stock Index Options.  Each Fund may purchase and write
exchange-listed and OTC put and call options on stock indexes.  A
stock index measures the movement of a certain group of stocks by
assigning relative values to the common stocks included in the
index, fluctuating with changes in the market values of the
stocks included in the index.  Some stock index options are based
on a broad market index, such as the NYSE Composite Index, or a
narrower market index such as the Standard & Poor's 100.  Indexes
may also be based on a particular industry or market segment.
Options on stock indexes are similar to options on stock
except that (i) the expiration cycles of stock index options are
monthly, while those of stock options are currently quarterly,
and (ii) the delivery requirements are different.  Instead of
giving the right to take or make delivery of stock at a specified
price, an option on a stock index gives the holder the right to
receive a cash "exercise settlement amount" equal to (a) the
amount, if any, by which the fixed exercise price of the option
exceeds (in the case of a put) or is less than (in the case of a
call) the closing value of the underlying index on the date of
exercise, multiplied by (b) a fixed "index multiplier."  Receipt
of this cash amount will depend upon the closing level of the
stock index upon which the option is based being greater than, in
the case of a call, or less than, in the case of a put, the
exercise price of the index and the exercise price of the option
times a specified multiple.  The writer of the option is
obligated, in return for the premium received, to make delivery
of this amount.  Stock index options may be offset by entering
into closing transactions as described above for securities
options.
OTC Options.  Each Fund may purchase OTC or dealer options
or sell OTC options.  Unlike exchange-listed options where an
intermediary or clearing corporation, such as the Clearing
Corporation, assures that all transactions in such options are
properly executed, the responsibility for performing all
transactions with respect to OTC options rests solely with the
writer and the holder of those options.  A listed call option
writer, for example, is obligated to deliver the underlying stock
to the clearing organization if the option is exercised, and the
clearing organization is then obligated to pay the writer the
exercise price of the option.  If a Fund were to purchase a
dealer option, however, it would rely on the dealer from whom it
purchased the option to perform if the option were exercised.  If
the dealer fails to honor the exercise of the option by a Fund,
the Fund would lose the premium it paid for the option and the
expected benefit of the transaction.
Listed options generally have a continuous liquid market
while dealer options have none.  Consequently, a Fund will
generally be able to realize the value of a dealer option it has
purchased only by exercising it or reselling it to the dealer who
issued it.  Similarly, when a Fund writes a dealer option, it
generally will be able to close out the option prior to its
expiration only by entering into a closing purchase transaction
with the dealer to which the Fund originally wrote the option.
Although a Fund will seek to enter into dealer options only with
dealers who will agree to and that are expected to be capable of
entering into closing transactions with the Fund, there can be no
assurance that the Fund will be able to liquidate a dealer option
at a favorable price at any time prior to expiration.  The
inability to enter into a closing transaction may result in
material losses to a Fund.  Until a Fund, as a covered OTC call
option writer, is able to effect a closing purchase transaction,
it will not be able to liquidate securities (or other assets)
used to cover the written option until the option expires or is
exercised.  This requirement may impair a Fund's ability to sell
portfolio securities or, with respect to currency options,
currencies at a time when such sale might be advantageous.  In
the event of insolvency of the other party, a Fund may be unable
to liquidate a dealer option.
Futures Activities.  Each Fund may enter into foreign
currency, interest rate and stock index futures contracts and
purchase and write (sell) related options traded on exchanges
designated by the Commodity Futures Trading Commission (the
"CFTC") or consistent with CFTC regulations on foreign exchanges.
These transactions may be entered into for "bona fide hedging"
purposes as defined in CFTC regulations and other permissible
purposes including hedging against changes in the value of
portfolio securities due to anticipated changes in currency
values, interest rates and/or market conditions and increasing
return.
A Fund will not enter into futures contracts and related
options for which the aggregate initial margin and premiums
(discussed below) required to establish positions other than
those considered to be "bona fide hedging" by the CFTC exceed 5%
of the Fund's net asset value after taking into account
unrealized profits and unrealized losses on any such contracts it
has entered into.  Each Fund reserves the right to engage in
transactions involving futures contracts and options on futures
contracts to the extent allowed by CFTC regulations in effect
from time to time and in accordance with the Fund's policies.
There is no overall limit on the percentage of Fund assets that
may be at risk with respect to futures activities.
The over the counter market in forward foreign currency
exchange contracts offers less protection against defaults by the
other party to such instruments than is available for currency
instruments traded on an exchange.  Such contracts are subject to
the risk that the counterparty to the contract will default on
its obligations.  Since these contracts are not guaranteed by an
exchange or clearinghouse, a default on the contract would
deprive a Fund of unrealized profits, transaction costs or the
benefits of a currency hedge or force the Fund to cover its
purchase or sale commitments, if any, at the current market
price.  Currency exchange rates may fluctuate significantly over
short periods of time.  They generally are determined by the
forces of supply and demand in the foreign exchange markets and
the relative merits of investments in different countries, actual
or perceived changes in interest rates and other complex factors
as seen from an international perspective.  Currency exchange
rates also can be affected unpredictably by intervention by U.S.
or foreign governments or central banks, or the failure to
intervene, or by currency controls or political developments in
the U.S. or abroad.
Futures Contracts.  A foreign currency futures contract
provides for the future sale by one party and the purchase by the
other party of a certain amount of a specified non-U.S. currency
at a specified price, date, time and place.  An interest rate
futures contract provides for the future sale by one party and
the purchase by the other party of a certain amount of a specific
interest rate sensitive financial instrument (debt security) at a
specified price, date, time and place.  Stock indexes are
capitalization weighted indexes which reflect the market value of
the stock listed on the indexes.  A stock index futures contract
is an agreement to be settled by delivery of an amount of cash
equal to a specified multiplier times the difference between the
value of the index at the close of the last trading day on the
contract and the price at which the agreement is made.
No consideration is paid or received by a Fund upon
entering into a futures contract.  Instead, a Fund is required to
deposit in a segregated account with its custodian an amount of
cash or liquid securities acceptable to the broker, equal to
approximately 1% to 10% of the contract amount (this amount
is subject to change by the exchange on which the contract is
traded, and brokers may charge a higher amount).  This amount is
known as "initial margin" and is in the nature of a performance
bond or good faith deposit on the contract which is returned to a
Fund upon termination of the futures contract, assuming all
contractual obligations have been satisfied.  The broker will
have access to amounts in the margin account if a Fund fails to
meet its contractual obligations.  Subsequent payments, known as
"variation margin," to and from the broker, will be made daily as
the currency, financial instrument or stock index underlying the
futures contract fluctuates, making the long and short positions
in the futures contract more or less valuable, a process known as
"marking-to-market."  A Fund will also incur brokerage costs in
connection with entering into futures transactions.
At any time prior to the expiration of a futures contract,
a Fund may elect to close the position by taking an opposite
position, which will operate to terminate the Fund's existing
position in the contract.  Positions in futures contracts and
options on futures contracts (described below) may be closed out
only on the exchange on which they were entered into (or through
a linked exchange).  No secondary market for such contracts
exists.  Although each Fund intends to enter into futures
contracts only if there is an active market for such contracts,
there is no assurance that an active market will exist at any
particular time.  Most futures exchanges limit the amount of
fluctuation permitted in futures contract prices during a single
trading day.  Once the daily limit has been reached in a
particular contract, no trades may be made that day at a price
beyond that limit or trading may be suspended for specified
periods during the day.  It is possible that futures contract
prices could move to the daily limit for several consecutive
trading days with little or no trading, thereby preventing prompt
liquidation of futures positions at an advantageous price and
subjecting a Fund to substantial losses.  In such event, and in
the event of adverse price movements, a Fund would be required to
make daily cash payments of variation margin.  In such
situations, if a Fund had insufficient cash, it might have to
sell securities to meet daily variation margin requirements at a
time when it would be disadvantageous to do so.  In addition, if
the transaction is entered into for hedging purposes, in such
circumstances a Fund may realize a loss on a futures contract or
option that is not offset by an increase in the value of the
hedged position.  Losses incurred in futures transactions and the
costs of these transactions will affect a Fund's performance.
Options on Futures Contracts.  Each Fund may purchase and
write put and call options on foreign currency, interest rate and
stock index futures contracts and may enter into closing
transactions with respect to such options to terminate existing
positions.  There is no guarantee that such closing transactions
can be effected; the ability to establish and close out positions
on such options will be subject to the existence of a liquid
market.
An option on a currency, interest rate or stock index
futures contract, as contrasted with the direct investment in
such a contract, gives the purchaser the right, in return for the
premium paid, to assume a position in a futures contract at a
specified exercise price at any time prior to the expiration date
of the option.  The writer of the option is required upon
exercise to assume an offsetting futures position (a short
position if the option is a call and a long position if the
option is a put).  Upon exercise of an option, the delivery of
the futures position by the writer of the option to the holder of
the option will be accompanied by delivery of the accumulated
balance in the writer's futures margin account, which represents
the amount by which the market price of the futures contract
exceeds, in the case of a call, or is less than, in the case of a
put, the exercise price of the option on the futures contract.
The potential loss related to the purchase of an option on
futures contracts is limited to the premium paid for the option
(plus transaction costs).  Because the value of the option is
fixed at the point of sale, there are no daily cash payments by
the purchaser to reflect changes in the value of the underlying
contract; however, the value of the option does change daily and
that change would be reflected in the net asset value of the
Fund.
Currency Exchange Transactions.  The value in U.S. dollars
of the assets of a Fund that are invested in foreign securities
may be affected favorably or unfavorably by changes in exchange
control regulations, and the Fund may incur costs in connection
with conversion between various currencies.  Currency exchange
transactions may be from any non-U.S. currency into U.S. dollars
or into other appropriate currencies.  A Fund will conduct its
currency exchange transactions (i) on a spot (i.e., cash) basis
at the rate prevailing in the currency exchange market,
(ii) through entering into futures contracts or options on such
contracts (as described above), (iii) through entering into
forward contracts to purchase or sell currency or (iv) by
purchasing exchange-traded currency options.
Forward Currency Contracts.   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 as agreed upon by the parties, at a price
set at the time of the contract.  These contracts are entered
into in the interbank market conducted directly between currency
traders (usually large commercial banks and brokers) and their
customers.  Forward currency contracts are similar to currency
futures contracts, except that futures contracts are traded on
commodities exchanges and are standardized as to contract size
and delivery date.
At or before the maturity of a forward contract, a Fund may
either sell a portfolio security and make delivery of the
currency, or retain the security and fully or partially offset
its contractual obligation to deliver the currency by negotiating
with its trading partner to purchase a second, offsetting
contract.  If a Fund retains the portfolio security and engages
in an offsetting transaction, the Fund, at the time of execution
of the offsetting transaction, will incur a gain or a loss to the
extent that movement has occurred in forward contract prices.
Currency Options.  Each Fund may purchase exchange-traded
put and call options on foreign currencies.  Put options convey
the right to sell the underlying currency at a price which is
anticipated to be higher than the spot price of the currency at
the time the option is exercised.  Call options convey the right
to buy the underlying currency at a price which is expected to be
lower than the spot price of the currency at the time the option
is exercised.
Currency Hedging.  A Fund's currency hedging will be
limited to hedging involving either specific transactions or
portfolio positions in the aggregate.  Transaction hedging is the
purchase or sale of forward currency with respect to specific
receivables or payables of a Fund generally accruing in
connection with the purchase or sale of its portfolio securities.
Position hedging is the sale of forward currency with respect to
portfolio security positions.  A Fund may not position hedge to
an extent greater than the aggregate market value (at the time of
entering into the hedge) of the hedged securities.
A decline in the U.S. dollar value of a foreign currency in
which a Fund's securities are denominated will reduce the U.S.
dollar value of the securities, even if their value in the
foreign currency remains constant.  The use of currency hedges
does not eliminate fluctuations in the underlying prices of the
securities, but it does establish a rate of exchange that can be
achieved in the future.  For example, in order to protect against
diminutions in the U.S. dollar value of securities it holds, a
Fund may purchase currency put options.  If the value of the
currency does decline, a Fund will have the right to sell the
currency for a fixed amount in dollars and will thereby offset,
in whole or in part, the adverse effect on the U.S. dollar value
of its securities that otherwise would have resulted.
Conversely, if a rise in the U.S. dollar value of a currency in
which securities to be acquired are denominated is projected,
thereby potentially increasing the cost of the securities, a Fund
may purchase call options on the particular currency.  The
purchase of these options could offset, at least partially, the
effects of the adverse movements in exchange rates.  The benefit
to a Fund derived from purchases of currency options, like the
benefit derived from other types of options, will be reduced by
premiums and other transaction costs.  Because transactions in
currency exchange are generally conducted on a principal basis,
no fees or commissions are generally involved.  Currency hedging
involves some of the same risks and considerations as other
transactions with similar instruments.  Although currency hedges
limit the risk of loss due to a decline in the value of a hedged
currency, at the same time, they also limit any potential gain
that might result should the value of the currency increase.  If
a devaluation is generally anticipated, a Fund may not be able to
contract to sell a currency at a price above the devaluation
level it anticipates.
While the values of currency futures and options on
futures, forward currency contracts and currency options may be
expected to correlate with exchange rates, they will not reflect
other factors that may affect the value of a Fund's investments
and a currency hedge may not be entirely successful in mitigating
changes in the value of the Fund's investments denominated in
that currency.  A currency hedge, for example, should protect a
Yen-denominated bond against a decline in the Yen, but will not
protect a Fund against a price decline if the issuer's
creditworthiness deteriorates.
Swaps.  Each Fund may enter into swaps relating to indexes,
currencies and equity interests of foreign issuers.  A swap
transaction is an agreement between a Fund and a counterparty to
act in accordance with the terms of the swap contract.  Index
swaps involve the exchange by a Fund with another party of the
respective amounts payable with respect to a notional principal
amount related to one or more indexes.  Currency swaps involve
the exchange of cash flows on a notional amount of two or more
currencies based on their relative future values.  An equity swap
is an agreement to exchange streams of payments computed by
reference to a notional amount based on the performance of a
basket of stocks or a single stock.  A Fund may enter into these
transactions to preserve a return or spread on a particular
investment or portion of its assets, to protect against currency
fluctuations, as a duration management technique or to protect
against any increase in the price of securities the Fund
anticipates purchasing at a later date.  A Fund may also use
these transactions for speculative purposes, such as to obtain
the price performance of a security without actually purchasing
the security in circumstances, for example, the subject security
is illiquid, is unavailable for direct investment or available
only on less attractive terms.  Swaps have risks associated with
them including possible default by the counterparty to the
transaction, illiquidity and, where swaps are used as hedges, the
risk that the use of a swap could result in losses greater than
if the swap had not been employed
A Fund will usually enter into swaps on a net basis (i.e.,
the two payment streams are netted out in a cash settlement on
the payment date or dates specified in the agreement, with the
Fund receiving or paying, as the case may be, only the net amount
of the two payments).  Swaps do not involve the delivery of
securities, other underlying assets or principal.  Accordingly,
the risk of loss with respect to swaps is limited to the net
amount of payments that a Fund is contractually obligated to
make.  If the counterparty to a swap defaults, a Fund's risk of
loss consists of the net amount of payments that the Fund is
contractually entitled to receive.  Where swaps are entered into
for good faith hedging purposes, the Adviser believes such
obligations do not constitute senior securities under the
Investment Company Act of 1940, as amended (the "1940 Act"), and,
accordingly, will not treat them as being subject to a Fund's
borrowing restrictions.  Where swaps are entered into for other
than hedging purposes, a Fund will segregate an amount of cash or
liquid securities having a value equal to the accrued excess of
its obligations over entitlements with respect to each swap on a
daily basis.
Hedging.  In addition to entering into options, futures and
currency exchange transactions for other purposes, including
generating current income to offset expenses or increase return,
a Fund may enter into these transactions as hedges to reduce
investment risk, generally by making an investment expected to
move in the opposite direction of a portfolio position.  A hedge
is designed to offset a loss in a portfolio position with a gain
in the hedged position; at the same time, however, a properly
correlated hedge will result in a gain in the portfolio position
being offset by a loss in the hedged position.  As a result, the
use of options, futures, contracts and currency exchange
transactions for hedging purposes could limit any potential gain
from an increase in the value of the position hedged.  In
addition, the movement in the portfolio position hedged may not
be of the same magnitude as movement in the hedge.  With respect
to futures contracts, since the value of portfolio securities
will far exceed the value of the futures contracts sold by a
Fund, an increase in the value of the futures contracts could
only mitigate, but not totally offset, the decline in the value
of the Fund's assets.
In hedging transactions based on an index, whether a Fund
will realize a gain or loss from the purchase or writing of
options on an index depends upon movements in the level of stock
prices in the stock market generally or, in the case of certain
indexes, in an industry or market segment, rather than movements
in the price of a particular stock.  The risk of imperfect
correlation increases as the composition of a Fund's portfolio
varies from the composition of the index.  In an effort to
compensate for imperfect correlation of relative movements in the
hedged position and the hedge, a Fund's hedge positions may be in
a greater or lesser dollar amount than the dollar amount of the
hedged position.  Such "over hedging" or "under hedging" may
adversely affect a Fund's net investment results if market
movements are not as anticipated when the hedge is established.
Stock index futures transactions may be subject to additional
correlation risks.  First, all participants in the futures market
are subject to margin deposit and maintenance requirements.
Rather than meeting additional margin deposit requirements,
investors may close futures contracts through offsetting
transactions which would distort the normal relationship between
the stock index and futures markets.  Secondly, from the point of
view of speculators, the deposit requirements in the futures
market are less onerous than margin requirements in the
securities market.  Therefore, increased participation by
speculators in the futures market also may cause temporary price
distortions.  Because of the possibility of price distortions in
the futures market and the imperfect correlation between
movements in the stock index and movements in the price of stock
index futures, a correct forecast of general market trends by the
Adviser still may not result in a successful hedging transaction.
A Fund will engage in hedging transactions only when deemed
advisable by the Adviser, and successful use by a Fund of hedging
transactions will be subject to the Adviser's ability to predict
trends in currency, interest rate or securities markets, as the
case may be, and to correctly predict movements in the directions
of the hedge and the hedged position and the correlation between
them, which predictions could prove to be inaccurate.  This
requires different skills and techniques than predicting changes
in the price of individual securities, and there can be no
assurance that the use of these strategies will be successful.
Even a well-conceived hedge may be unsuccessful to some degree
because of unexpected market behavior or trends.  Losses incurred
in hedging transactions and the costs of these transactions will
affect a Fund's performance.
Asset Coverage for Forward Contracts, Options, Futures and
Options on Futures.  Each Fund will comply with guidelines
established by the U.S. Securities and Exchange Commission (the
"SEC") with respect to coverage of forward currency contracts;
options written by a Fund on securities and indexes; and
currency, interest rate and index futures contracts and options
on these futures contracts.  These guidelines may, in certain
instances, require segregation by a Fund of cash or liquid
securities.
For example, a call option written by a Fund on securities
may require the Fund to hold the securities subject to the call
(or securities convertible into the securities without additional
consideration) or to segregate assets (as described above)
sufficient to purchase and deliver the securities if the call is
exercised.  A call option written by a Fund on an index may
require the Fund to own portfolio securities that correlate with
the index or to segregate assets (as described above) equal to
the excess of the index value over the exercise price on a
current basis.  A Fund could purchase a put option if the strike
price of that option is the same or higher than the strike price
of a put option sold by the Fund.  If a Fund holds a futures or
forward contract, the Fund could purchase a put option on the
same futures or forward contract with a strike price as high or
higher than the price of the contract held.  A Fund may enter
into fully or partially offsetting transactions so that its net
position, coupled with any segregated assets (equal to any
remaining obligation), equals its net obligation.  Asset coverage
may be achieved by other means when consistent with applicable
regulatory policies.
Additional Information on Other Investment Practices
Foreign Investments.  Investors should recognize that
investing in foreign companies involves certain risks, including
those discussed below, which are not typically associated with
investing in U.S. issuers.
Foreign Currency Exchange.  Since a Fund may invest in
securities denominated in currencies other than the U.S. dollar,
and since a Fund may temporarily hold funds in bank deposits or
other money market investments denominated in foreign currencies,
a Fund may be affected favorably or unfavorably by exchange
control regulations or changes in the exchange rate between such
currencies and the dollar.  A change in the value of a foreign
currency relative to the U.S. dollar will result in a
corresponding change in the dollar value of Fund assets
denominated in that foreign currency.  Changes in foreign
currency exchange rates may also affect the value of dividends
and interest earned, gains and losses realized on the sale of
securities and net investment income and gains, if any, to be
distributed to shareholders by a Fund.  The rate of exchange
between the U.S. dollar and other currencies is determined by the
forces of supply and demand in the foreign exchange markets.
Changes in the exchange rate may result over time from the
interaction of many factors directly or indirectly affecting
economic and political conditions in the United States and a
particular foreign country, including economic and political
developments in other countries.  Of particular importance are
rates of inflation, interest rate levels, the balance of payments
and the extent of government surpluses or deficits in the United
States and the particular foreign country, all of which are in
turn sensitive to the monetary, fiscal and trade policies pursued
by the governments of the United States and foreign countries
important to international trade and finance.  Governmental
intervention may also play a significant role.  National
governments rarely voluntarily allow their currencies to float
freely in response to economic forces.  Sovereign governments use
a variety of techniques, such as intervention by a country's
central bank or imposition of regulatory controls or taxes, to
affect the exchange rates of their currencies.  A Fund may use
hedging techniques with the objective of protecting against loss
through the fluctuation of the value of the yen against the U.S.
dollar, particularly the forward market in foreign exchange,
currency options and currency futures.  See "Currency Exchange
Transactions" and "Futures Activities" above.
Information.  There may be less publicly available
information about foreign securities and about the foreign
company or government issuing them than is available about a
domestic company or government entity.  Foreign companies are
generally not subject to uniform financial reporting standards,
practices and requirements comparable to those applicable to U.S.
companies.
Political Instability.  With respect to some foreign
countries, there is the possibility of expropriation or
confiscatory taxation, limitations on the removal of funds or
other assets of a Fund, political or social instability, or
domestic developments which could affect U.S. investments in
those and neighboring countries.
Delays.  Securities of some foreign companies are less
liquid and their prices are more volatile than securities of
comparable U.S. companies.  Certain foreign countries are known
to experience long delays between the trade and settlement dates
of securities purchased or sold.
Foreign Debt Securities.  The returns on foreign debt
securities reflect interest rates and other market conditions
prevailing in those countries and the effect of gains and losses
in the denominated currencies against the U.S. dollar, which have
had a substantial impact on investment in foreign fixed-income
securities.  The relative performance of various countries'
fixed-income markets historically has reflected wide variations
relating to the unique characteristics of each country's economy.
Year-to-year fluctuations in certain markets have been
significant, and negative returns have been experienced in
various markets from time to time.
The foreign government securities in which a Fund may
invest generally consist of obligations issued or backed by
national, state or provincial governments or similar political
subdivisions or central banks in foreign countries.  Foreign
government securities also include debt obligations of
supranational entities, which include international organizations
designated or backed by governmental entities to promote economic
reconstruction or development, international banking institutions
and related government agencies.  Examples include the
International Bank for Reconstruction and Development ("World
Bank"), the European Coal and Steel Community, the Asian
Development Bank and the InterAmerican Development Bank.
Foreign government securities also include debt securities
of "quasi-governmental agencies" and debt securities denominated
in multinational currency units of an issuer (including
supranational issuers).  Debt securities of quasi-governmental
agencies are issued by entities owned by either a national, state
or equivalent government or are obligations of a political unit
that is not backed by the national government's full faith and
credit and general taxing powers.
General.  Individual foreign economies may differ favorably
or unfavorably from the U.S. economy in such respects as growth
of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency, and balance of payments
positions.  A Fund may invest in securities of foreign
governments (or agencies or instrumentalities thereof), and many,
if not all, of the foregoing considerations apply to such
investments as well.
Depositary Receipts.  The assets of a Fund may be invested
in the securities of foreign issuers in the form of American
Depositary Receipts ("ADRs"), European Depositary Receipts
("EDRs") and International Depositary Receipts ("IDRs").  These
securities may not necessarily be denominated in the same
currency as the securities into which they may be converted.
ADRs are receipts typically issued by a U.S. bank or trust
company which evidence ownership of underlying securities issued
by a foreign corporation.  EDRs, which are sometimes referred to
as Continental Depositary Receipts, are receipts issued in
Europe, and IDRs, which are sometimes referred to as Global
Depositary Receipts, are issued outside the United States.  EDRs
and IDRs are typically issued by non-U.S. banks and trust
companies and evidence ownership of either foreign or domestic
securities.  Generally, ADRs in registered form are designed for
use in U.S. securities markets and EDRs and IDRs in bearer form
are designed for use in European and non-U.S. securities markets,
respectively.
U.S. Government Securities.  Each Fund may invest in debt
obligations of varying maturities issued or guaranteed by the
United States government, its agencies or instrumentalities
("U.S. Government Securities").  Direct obligations of the U.S.
Treasury include a variety of securities that differ in their
interest rates, maturities and dates of issuance.  U.S.
Government Securities also include securities issued or
guaranteed by the Federal Housing Administration, Farmers Home
Loan Administration, Export-Import Bank of the United States,
Small Business Administration, Government National Mortgage
Association ("GNMA"), General Services Administration, Central
Bank for Cooperatives, Federal Farm Credit Banks, Federal Home
Loan Banks, Federal Home Loan Mortgage Corporation ("FHLMC"),
Federal Intermediate Credit Banks, Federal Land Banks, Federal
National Mortgage Association ("FNMA"), Maritime Administration,
Tennessee Valley Authority, District of Columbia Armory Board and
Student Loan Marketing Association.  A Fund may also invest in
instruments that are supported by the right of the issuer to
borrow from the U.S. Treasury and instruments that are supported
by the credit of the instrumentality.  Because the U.S.
government is not obligated by law to provide support to an
instrumentality it sponsors, a Fund will invest in obligations
issued by such an instrumentality only if the Adviser determines
that the credit risk with respect to the instrumentality does not
make its securities unsuitable for investment by the Fund.
Below Investment Grade Securities.  The market values of
below investment grade securities and unrated securities of
comparable quality tend to react less to fluctuations in interest
rate levels than do those of investment grade securities and the
market values of certain of these securities also tend to be more
sensitive to individual corporate developments and changes in
economic conditions than below investment grade securities.  In
addition, these securities generally present a higher degree of
credit risk.  Issuers of these securities are often highly
leveraged and may not have more traditional methods of financing
available to them so that their ability to service their
obligations during an economic downturn or during sustained
periods of rising interest rates may be impaired.  The risk of
loss due to default by such issuers is significantly greater
because below investment grade securities generally are unsecured
and frequently are subordinated to prior payment of senior
indebtedness.
A Fund may have difficulty disposing of certain of these
securities because there may be a thin trading market.  Because
there is no established retail secondary market for many of these
securities, the Funds anticipate that these securities could be
sold only to a limited number of dealers or institutional
investors.  To the extent a secondary trading market for these
securities does exist, it generally is not as liquid as the
secondary market for investment grade securities.  The lack of a
liquid secondary market, as well as adverse publicity and
investor perception with respect to these securities, may have an
adverse impact on market price and a Fund's ability to dispose of
particular issues when necessary to meet liquidity needs or in
response to a specific economic event such as a deterioration in
the creditworthiness of the issuer.  The lack of a liquid
secondary market for certain securities also may make it more
difficult for a Fund to obtain accurate market quotations for
purposes of valuing the Fund and calculating net asset value.
The market value of securities rated below investment grade
is more volatile than that of investment grade securities.
Factors adversely impacting the market value of these securities
will adversely impact a Fund's net asset value.  A Fund will rely
on the judgment, analysis and experience of the Adviser in
evaluating the creditworthiness of an issuer.  In this
evaluation, the Adviser will take into consideration, among other
things, the issuer's financial resources, its sensitivity to
economic conditions and trends, its operating history, the
quality of the issuer's management and regulatory matters.
Normally, below investment grade securities and comparable
unrated securities are not intended for short-term investment.  A
Fund may incur additional expenses to the extent it is required
to seek recovery upon a default in the payment of principal or
interest on its portfolio holdings of such securities.
Securities of Other Investment Companies.  Each Fund may
invest in securities of other investment companies to the extent
permitted under the 1940 Act.  Presently, under the 1940 Act, a
Fund may hold securities of another investment company in amounts
which (i) do not exceed 3% of the total outstanding voting stock
of such company, (ii) do not exceed 5% of the value of the Fund's
total assets and (iii) when added to all other investment company
securities held by the Fund, do not exceed 10% of the value of
the Fund's total assets.
DIAMONDS, SPDRs and WEBS ("Equity Equivalents").  DIAMONDS
("Dow Jones Industrial Average Model New Depositary Shares") and
SPDRs ("Standard & Poor's Depositary Receipts") are exchange-
traded securities that represent ownership in long-term unit
investment trusts established to accumulate and hold a portfolio
of common stocks that is intended to track the price performance
and dividend yield of the Dow Jones Industrial Average and the
Standard & Poor's Composite Stock Price Index, respectively.
WEBS ("World Equity Benchmark Shares") are exchange-traded shares
of series of an investment company that are designed to replicate
the performance of a particular foreign equity market index.
Equity Equivalents may be used for several purposes,
including, to simulate full investment in the underlying index
while retaining a cash balance for fund management purposes, to
facilitate trading, to reduce transaction costs or to seek higher
investment returns where an Equity Equivalent is priced more
attractively than securities in the underlying index.  Because
the expense associated with an investment in Equity Equivalents
may be substantially lower than the expense of small investments
directly in the securities comprising the indices they seek to
track, investments in Equity Equivalents may provide a cost-
effective means of diversifying a Fund's assets across a broad
range of equity securities.
To the extent a Fund invests in securities of other
investment companies, Fund shareholders would indirectly pay a
portion of the operating costs of such companies in addition to
the expenses of its own operation.  These costs include
management, brokerage, shareholder servicing and other
operational expenses.  Indirectly, then, shareholders of a Fund
that invests in Equity Equivalents may pay higher operational
costs than if they owned the underlying investment companies
directly.  Additionally, a Fund's investments in such investment
companies are subject to limitations under the 1940 Act and
market availability.
The prices of Equity Equivalents are derived and based upon
the securities held by the particular investment company.
Accordingly, the level of risk involved in the purchase or sale
of an Equity Equivalent is similar to the risk involved in the
purchase or sale of traditional common stock, with the exception
that the pricing mechanism for such instruments is based on a
basket of stocks.  The market prices of Equity Equivalents are
expected to fluctuate in accordance with both changes in the net
asset values of their underlying indices and the supply and
demand for the instruments on the exchanges on which they are
traded.  Substantial market or other disruptions affecting an
Equity Equivalent could adversely affect the liquidity and value
of the shares of a Fund investing in such instruments.
Lending of Portfolio Securities.  Each Fund may lend
portfolio securities to brokers, dealers and other financial
organizations that meet capital and other credit requirements or
other criteria established by the Board.  These loans, if and
when made, may not exceed 33-1/3% of a Fund's total assets taken
at value.  A Fund will not lend portfolio securities to
affiliates of the Adviser unless they have applied for and
received specific authority to do so from the SEC.  Loans of
portfolio securities will be collateralized by cash, letters of
credit or U.S. Government Securities, which are maintained at all
times in an amount equal to at least 102% of the current market
value of the loaned securities.  Any gain or loss in the market
price of the securities loaned that might occur during the term
of the loan would be for the account of the Fund.  From time to
time, a Fund may return a part of the interest earned from the
investment of collateral received for securities loaned to the
borrower and/or a third party that is unaffiliated with the Fund
and that is acting as a "finder."
By lending its securities, a Fund can increase its income
by continuing to receive interest and any dividends on the loaned
securities as well as by either investing the collateral received
for securities loaned in short-term instruments or obtaining
yield in the form of interest paid by the borrower when U.S.
Government Securities are used as collateral.  Although the
generation of income is not the primary investment goal of the
Funds, income received could be used to pay a Fund's expenses and
would increase an investor's total return.  Each Fund will adhere
to the following conditions whenever its portfolio securities are
loaned:  (i) the Fund must receive at least 102% cash collateral
or equivalent securities of the type discussed in the preceding
paragraph from the borrower; (ii) the borrower must increase such
collateral whenever the market value of the securities rises
above the level of such collateral; (iii) the Fund must be able
to terminate the loan at any time; (iv) the Fund must receive
reasonable interest on the loan, as well as any dividends,
interest or other distributions on the loaned securities and any
increase in market value; (v) the Fund may pay only reasonable
custodian fees in connection with the loan; and (vi) voting
rights on the loaned securities may pass to the borrower,
provided, however, that if a material event adversely affecting
the investment occurs, the Board must terminate the loan and
regain the right to vote the securities.  Loan agreements involve
certain risks in the event of default or insolvency of the other
party including possible delays or restrictions upon a Fund's
ability to recover the loaned securities or dispose of the
collateral for the loan.
When-Issued Securities, Delayed-Delivery Transactions and
Forward Commitments.  Each Fund may purchase securities on a
"when-issued" basis, for delayed delivery (i.e., payment or
delivery occur beyond the normal settlement date at a stated
price and yield) or on a forward commitment basis.  Each Fund
does not intend to engage in these transactions for speculative
purposes, but only in furtherance of its investment goal.  These
transactions occur when securities are purchased or sold by a
Fund with payment and delivery taking place in the future to
secure what is considered an advantageous yield and price to a
Fund at the time of entering into the transaction.  The payment
obligation and the interest rate that will be received on
when-issued securities are fixed at the time the buyer enters
into the commitment.  Due to fluctuations in the value of
securities purchased or sold on a when-issued, delayed-delivery
basis or forward commitment basis, the prices obtained on such
securities may be higher or lower than the prices available in
the market on the dates when the investments are actually
delivered to the buyers.
When a Fund agrees to purchase when-issued, delayed-
delivery securities or securities on a forward commitment basis,
its custodian will set aside cash or liquid securities equal to
the amount of the commitment in a segregated account.  Normally,
the custodian will set aside portfolio securities to satisfy a
purchase commitment, and in such a case a Fund may be required
subsequently to place additional assets in the segregated account
in order to ensure that the value of the account remains equal to
the amount of the Fund's commitment.  The assets contained in the
segregated account will be marked-to-market daily.  It may be
expected that a Fund's net assets will fluctuate to a greater
degree when it sets aside portfolio securities to cover such
purchase commitments than when it sets aside cash.  When a Fund
engages in when-issued, delayed-delivery or forward commitment
transactions, it relies on the other party to consummate the
trade.  Failure of the seller to do so may result in a Fund's
incurring a loss or missing an opportunity to obtain a price
considered to be advantageous.
Repurchase Agreements.  Each Fund may agree to purchase
securities from a bank or recognized securities dealer and
simultaneously commit to resell the securities to the bank or
dealer at an agreed-upon date and price reflecting a market rate
of interest unrelated to the coupon rate or maturity of the
purchased securities ("repurchase agreements").  A Fund would
maintain custody of the underlying securities prior to their
repurchase; thus, the obligation of the bank or dealer to pay the
repurchase price on the date agreed to would be, in effect,
secured by such securities.  If the value of such securities were
less than the repurchase price, plus interest, the other party to
the agreement would be required to provide additional collateral
so that at all times the collateral is at least 102% of the
repurchase price plus accrued interest.  Default by or bankruptcy
of a seller would expose a Fund to possible loss because of
adverse market action, expenses and/or delays in connection with
the disposition of the underlying obligations.  The financial
institutions with which a Fund may enter into repurchase
agreements will be banks and non-bank dealers of U.S. Government
securities that are listed on the Federal Reserve Bank of New
York's list of reporting dealers, if such banks and non-bank
dealers are deemed creditworthy by the Fund's Adviser.  The
Adviser will continue to monitor creditworthiness of the seller
under a repurchase agreement, and will require the seller to
maintain during the term of the agreement the value of the
securities subject to the agreement to equal at least 102% of the
repurchase price (including accrued interest).  In addition, the
Adviser will require that the value of this collateral, after
transaction costs (including loss of interest) reasonably
expected to be incurred on a default, be equal to 102% or greater
than the repurchase price (including accrued premium) provided in
the repurchase agreement or the daily amortization of the
difference between the purchase price and the repurchase price
specified in the repurchase agreement.  The Adviser will mark-to-
market daily the value of the securities.  Repurchase agreements
are considered to be loans by a Fund under the 1940 Act.
Reverse Repurchase Agreements and Dollar Rolls.  Each Fund
may enter into reverse repurchase agreements with the same
parties with whom it may enter into repurchase agreements.
Reverse repurchase agreements involve the sale of securities held
by a Fund pursuant to its agreement to repurchase them at a
mutually agreed upon date, price and rate of interest.  At the
time a Fund enters into a reverse repurchase agreement, it will
establish and maintain a segregated account with an approved
custodian containing cash or liquid securities having a value not
less than the repurchase price (including accrued interest).  The
assets contained in the segregated account will be
marked-to-market daily and additional assets will be placed in
such account on any day in which the assets fall below the
repurchase price (plus accrued interest).  A Fund's liquidity and
ability to manage its assets might be affected when it sets aside
cash or portfolio securities to cover such commitments.  Reverse
repurchase agreements involve the risk that the market value of
the securities retained in lieu of sale may decline below the
price of the securities a Fund has sold but is obligated to
repurchase.  In the event the buyer of securities under a reverse
repurchase agreement files for bankruptcy or becomes insolvent,
such buyer or its trustee or receiver may receive an extension of
time to determine whether to enforce a Fund's obligation to
repurchase the securities, and the Fund's use of the proceeds of
the reverse repurchase agreement may effectively be restricted
pending such decision.
Each Fund also may enter into "dollar rolls," in which a
Fund sells fixed-income securities for delivery in the current
month and simultaneously contracts to repurchase similar but not
identical (same type, coupon and maturity) securities on a
specified future date.  During the roll period, the Fund would
forego principal and interest paid on such securities.  The Fund
would be compensated by the difference between the current sales
price and the forward price for the future purchase, as well as
by the interest earned on the cash proceeds of the initial sale.
At the time a Fund enters into a dollar roll transaction, it will
place in a segregated account maintained with an approved
custodian cash or liquid securities having a value not less than
the repurchase price (including accrued interest) and will
subsequently monitor the account to ensure that its value is
maintained.  Reverse repurchase agreements and dollar rolls that
are accounted for as financings are considered to be borrowings
under the 1940 Act.
Convertible Securities.  Convertible securities in which a
Fund may invest, including both convertible debt and convertible
preferred stock, may be converted at either a stated price or
stated rate into underlying shares of common stock.  Because of
this feature, convertible securities enable an investor to
benefit from increases in the market price of the underlying
common stock.  Convertible securities provide higher yields than
the underlying equity securities, but generally offer lower
yields than non-convertible securities of similar quality.  Like
bonds, the value of convertible securities fluctuates in relation
to changes in interest rates and, in addition, also fluctuates in
relation to the underlying common stock.
Structured Notes.  Each Fund may invest in structured
notes.  The distinguishing feature of a structured note is that
the amount of interest and/or principal payable on the notes is
based on the performance of a benchmark asset or market other
than fixed-income securities or interest rates.  Examples of a
benchmark include stock prices, currency exchange rates and
physical commodity prices.  Investing in a structured note allows
a Fund to gain exposure to the benchmark asset or market, such as
investments in certain emerging markets that restrict investment
by foreigners.  The structured note fixes the maximum loss that a
Fund may experience in the event that the market does not perform
as expected.  The performance tie can be a straight relationship
or leveraged, although the Adviser generally will not use
leverage in its structured note strategies.  Depending on the
terms of the note, a Fund may forego all or part of the interest
and principal that would be payable on a comparable conventional
note; a Fund's loss cannot exceed this foregone interest and/or
principal.  An investment in a structured note involves risks
similar to those associated with a direct investment in the
benchmark asset.  Structured notes will be treated as illiquid
securities for investment limitation purposes.
Non-Publicly Traded and Illiquid Securities.  Each Fund may
not invest more than 15% of its net assets in non-publicly traded
and illiquid securities, including securities that are illiquid
by virtue of the absence of a readily available market,
repurchase agreements which have a maturity of longer than seven
days, certain Rule 144A Securities (as described below) and time
deposits maturing in more than seven days.  Securities that have
legal or contractual restrictions on resale but have a readily
available market are not considered illiquid for purposes of this
limitation.  Repurchase agreements subject to demand are deemed
to have a maturity equal to the notice period.
Under current guidelines of the staff of the SEC, illiquid
securities are considered to include, among other securities,
purchased OTC options, certain cover for OTC options, securities
subject to contractual or legal restrictions on resale because
they have not been registered under the Securities Act of 1933,
as amended (the "Securities Act"), securities which are otherwise
not readily marketable and repurchase agreements having a
maturity of longer than seven days.  Securities which have not
been registered under the Securities Act are referred to as
private placements or restricted securities and are purchased
directly from the issuer or in the secondary market.  Limitations
on resale may have an adverse effect on the marketability of
portfolio securities and a mutual fund might be unable to dispose
of restricted or other illiquid securities promptly or at
reasonable prices and might thereby experience difficulty
satisfying redemptions within seven days without borrowing.  A
mutual fund might also have to register such restricted
securities in order to dispose of them resulting in additional
expense and delay.  Adverse market conditions could impede such a
public offering of securities.
In recent years, however, a large institutional market has
developed for certain securities that are not registered under
the Securities Act including repurchase agreements, commercial
paper, foreign securities, municipal securities and corporate
bonds and notes.  Institutional investors depend on an efficient
institutional market in which the unregistered security can be
readily resold or on an issuer's ability to honor a demand for
repayment.  The fact that there are contractual or legal
restrictions on resale to the general public or to certain
institutions may not be indicative of the liquidity of such
investments.
Rule 144A Securities.  Rule 144A under the Securities Act
adopted by the SEC allows for a broader institutional trading
market for securities otherwise subject to restriction on resale
to the general public.  Rule 144A establishes a "safe harbor"
from the registration requirements of the Securities Act for
resales of certain securities to qualified institutional buyers.
The Adviser anticipates that the market for certain restricted
securities such as institutional commercial paper will expand
further as a result of this regulation and use of automated
systems for the trading, clearance and settlement of unregistered
securities of domestic and foreign issuers, such as the PORTAL
System sponsored by the National Association of Securities
Dealers, Inc.
An investment in Rule 144A Securities will be considered
illiquid and therefore subject to the Fund's limit on the
purchase of illiquid securities unless the Board or its delegates
determines that the Rule 144A Securities are liquid.  In reaching
liquidity decisions, the Board and its delegates may consider,
inter alia, the following factors:  (i) the unregistered nature
of the security; (ii) the frequency of trades and quotes for the
security; (iii) the number of dealers wishing to purchase or sell
the security and the number of other potential purchasers; (iv)
dealer undertakings to make a market in the security and (v) the
nature of the security and the nature of the marketplace trades
(e.g., the time needed to dispose of the security, the method of
soliciting offers and the mechanics of the transfer).
Emerging Growth and Smaller Capitalization Companies;
Unseasoned Issuers.  Investments in securities of small- and
medium-sized, emerging growth companies and companies with
continuous operations of less than three years ("unseasoned
issuers") involve considerations that are not applicable to
investing in securities of established, larger-capitalization
issuers, including reduced and less reliable information about
issuers and markets, less stringent financial disclosure
requirements, illiquidity of securities and markets, higher
brokerage commissions and fees and greater market risk in
general.  Securities of these companies may also involve greater
risks since these securities may have limited marketability and,
thus, may be more volatile.  Because such companies normally have
fewer shares outstanding than larger, more established companies,
it may be more difficult for a Fund to buy or sell significant
amounts of such shares without an unfavorable impact on
prevailing prices.  These companies may have limited product
lines, markets or financial resources and may lack management
depth.  In addition, these companies are typically subject to a
greater degree of changes in earnings and business prospects than
are larger, more established companies.  Although investing in
securities of these companies offers potential for above-average
returns if the companies are successful, the risk exists that the
companies will not succeed and the prices of the companies'
shares could significantly decline in value.
Rights Offerings and Purchase Warrants.  Each Fund may
invest in rights and warrants to purchase newly created equity
securities consisting of common and preferred stock.  The equity
security underlying a right or warrant is outstanding at the time
the right or warrant is issued or is issued together with the
right or warrant.
Investing in rights and warrants can provide a greater
potential for profit or loss than an equivalent investment in the
underlying security, and, thus, can be a speculative investment.
The value of a right or warrant may decline because of a decline
in the value of the underlying security, the passage of time,
changes in interest rates or in the dividend or other policies of
the company whose equity underlies the warrant or a change in the
perception as to the future price of the underlying security, or
any combination thereof.  Rights and warrants generally pay no
dividends and confer no voting or other rights other than to
purchase the underlying security.
Borrowing.  Each Fund may borrow up to 33-1/3% of its total
assets for temporary or emergency purposes, including to meet
portfolio redemption requests so as to permit the orderly
disposition of portfolio securities or to facilitate settlement
transactions on portfolio securities.  Investments (including
roll-overs) will not be made when borrowings exceed 5% of a
Fund's net assets.  Although the principal of such borrowings
will be fixed, a Fund's assets may change in value during the
time the borrowing is outstanding.  Each Fund expects that some
of its borrowings may be made on a secured basis.  In such
situations, either the custodian will segregate the pledged
assets for the benefit of the lender or arrangements will be made
with a suitable subcustodian, which may include the lender.
Other Investment Limitations
The investment limitations numbered 1 through 8 may not be
changed without the affirmative vote of the holders of a majority
of the Fund's outstanding shares.  Such majority is defined as
the lesser of (i) 67% or more of the shares present at the
meeting, if the holders of more than 50% of the outstanding
shares of the Fund are present or represented by proxy, or (ii)
more than 50% of the outstanding shares.  Investment limitations
9 through 14 may be changed by a vote of the Board at any time.
Each Fund may not:
1. Borrow money except that a Fund may (a) borrow from
banks for temporary or emergency purposes and (b) enter into
reverse repurchase agreements; provided that reverse repurchase
agreements, dollar roll transactions that are accounted for as
financings and any other transactions constituting borrowing by
the Fund may not exceed 33-1/3% of the value of the Fund's total
assets at the time of such borrowing.  For purposes of this
restriction, the entry into currency transactions, options,
futures contracts, options on futures contracts, forward
commitment transactions and dollar roll transactions that are not
accounted for as financings (and the segregation of assets in
connection with any of the foregoing) shall not constitute
borrowing.
2. Purchase any securities which would cause 25% or more
of the value of the Fund's total assets at the time of purchase
to be invested in the securities of issuers conducting their
principal business activities in the same industry; provided that
to the extent the benchmark of the Equity Funds is concentrated
in a particular industry, these Funds will be concentrated in
that industry.  This limitation shall not apply to the purchase
of U.S. Government Securities.
3. Purchase the securities of any issuer if as a result
more than 5% of the value of the Fund's total assets would be
invested in the securities of such issuer, except that this 5%
limitation does not apply to U.S. Government Securities and
except that up to 25% of the value of the Fund's total assets may
be invested without regard to this 5% limitation.
4. Make loans, except that a Fund may purchase or hold
fixed-income securities, including structured securities, lend
portfolio securities and enter into repurchase agreements.
5. Underwrite any securities issued by others except to
the extent that investment in restricted securities and the sale
of securities in accordance with the Fund's investment goal,
policies and limitations may be deemed to be underwriting.
6. Purchase or sell real estate or invest in oil, gas or
mineral exploration or development programs, except that a Fund
may invest in (a) securities secured by real estate, mortgages or
interests therein and (b) securities of companies that invest in
or sponsor oil, gas or mineral exploration or development
programs.
7. Invest in commodities, except that a Fund may
purchase and sell futures contracts, including those relating to
securities, currencies and indices, and options on futures
contracts, securities, currencies or indices, and purchase and
sell currencies on a forward commitment or delayed-delivery
basis.
8. Issue any senior security except as permitted in the
Fund's investment limitations.
9. Purchase securities on margin, except that a Fund may
obtain any short-term credits necessary for the clearance of
purchases and sales of securities.  For purposes of this
restriction, the deposit or payment of initial or variation
margin in connection with transactions in currencies, options,
futures contracts or related options will not be deemed to be a
purchase of securities on margin.
10. Purchase securities of other investment companies
except in connection with a merger, consolidation, acquisition,
reorganization or offer of exchange, or as otherwise permitted
under the 1940 Act.
11. Pledge, mortgage or hypothecate its assets, except to
the extent necessary to secure permitted borrowings and to the
extent related to the deposit of assets in escrow and in
connection with the writing of covered put and call options and
purchase of securities on a forward commitment or delayed-
delivery basis and collateral and initial or variation margin
arrangements with respect to currency transactions, options,
futures contracts, and options on futures contracts.
12. Invest more than 15% of the Fund's net assets in
securities which may be illiquid because of legal or contractual
restrictions on resale or securities for which there are no
readily available market quotations.  For purposes of this
limitation, repurchase agreements with maturities greater than
seven days shall be considered illiquid securities.
13. Invest in rights and warrants (other than rights and
warrants acquired by the Fund as part of a unit or attached to
securities at the time of purchase) if, as a result, the
investments (valued at the lower of cost or market) would exceed
10% of the value of the Fund's net assets.
14. Make additional investments (including roll-overs) if
the Fund's borrowings exceed 5% of its net assets.
If a percentage restriction (other than the percentage
limitation set forth in No. 1 and No. 12) is adhered to at the
time of an investment, a later increase or decrease in the
percentage of assets resulting from a change in the values of
portfolio securities or in the amount of a Fund's assets will not
constitute a violation of such restriction.
Portfolio Valuation
The Prospectus discusses the time at which the net asset
value of each Fund is determined for purposes of sales and
redemptions.  The following is a description of the procedures
used by each Fund in valuing its assets.
Securities listed on a U.S. securities exchange (including
securities traded through the NASDAQ National Market System) or
foreign securities exchange or traded in an over-the-counter
market will be valued at the most recent sale as of the time the
valuation is made or, in the absence of sales, at the mean
between the bid and asked quotations.  If there are no such
quotations, the value of the securities will be taken to be the
highest bid quotation on the exchange or market.  Options or
futures contracts will be valued similarly. Stock index options
will be valued at the last price, but if that price does not fall
within the bid and ask price for the stock index option when the
market closes at 4:15 p.m. Eastern Time, then the stock index
option will be valued at the mean between the bid and asked
quotations. A security which is listed or traded on more than one
exchange is valued at the quotation on the exchange determined to
be the primary market for such security.  Short-term obligations
with maturities of 60 days or less are valued at amortized cost,
which constitutes fair value as determined by the Board.
Amortized cost involves valuing a portfolio instrument at its
initial cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument.
The amortized cost method of valuation may also be used with
respect to other debt obligations with 60 days or less remaining
to maturity.  Notwithstanding the foregoing, in determining the
market value of portfolio investments, a Fund may employ outside
organizations (a "Price Service") which may use a matrix, formula
or other objective method that takes into consideration market
indexes, matrices, yield curves and other specific adjustments.
The procedures of Pricing Services are reviewed periodically by
the officers of a Fund under the general supervision and
responsibility of the Board, which may replace a Pricing Service
at any time.  Securities, options and futures contracts for which
market quotations are not available and certain other assets of a
Fund will be valued at their fair value as determined in good
faith pursuant to consistently applied procedures established by
the Board.  In addition, the Board or its delegates may value a
security at fair value if it determines that such security's
value determined by the methodology set forth above does not
reflect its fair value.
Trading in securities in certain foreign countries is
completed at various times prior to the close of business on each
business day in New York (i.e., a day on which The New York Stock
Exchange, Inc. (the "NYSE") is open for trading).  In addition,
securities trading in a particular country or countries may not
take place on all business days in New York.  Furthermore,
trading takes place in various foreign markets on days which are
not business  days in New York and days on which a Fund's net
asset value is not calculated.  As a result, calculation of a
Fund's net asset value may not take place contemporaneously with
the determination of the prices of certain foreign portfolio
securities used in such calculation.  Events affecting the values
of portfolio securities that occur between the time their prices
are determined and the close of regular trading on the NYSE will
not be reflected in a Fund's calculation of net asset value
unless the Board or its delegates deems that the particular event
would materially affect net asset value, in which case an
adjustment may be made.  All assets and liabilities initially
expressed in foreign currency values will be converted into U.S.
dollar values at the prevailing rate as quoted by a Pricing
Service.  If such quotations are not available, the rate of
exchange will be determined in good faith pursuant to
consistently applied procedures established by the Board.
Portfolio Transactions
Each Fund's Adviser is responsible for establishing,
reviewing and, where necessary, modifying the Fund's investment
program to achieve its investment goal.  Purchases and sales of
newly issued portfolio securities are usually principal
transactions without brokerage commissions effected directly with
the issuer or with an underwriter acting as principal.  Other
purchases and sales may be effected on a securities exchange or
over-the-counter, depending on where it appears that the best
price or execution will be obtained.  The purchase price paid by
a Fund to underwriters of newly issued securities usually
includes a concession paid by the issuer to the underwriter, and
purchases of securities from dealers, acting as either principals
or agents in the after market, are normally executed at a price
between the bid and asked price, which includes a dealer's
mark-up or mark-down.  Transactions on U.S. stock exchanges and
some foreign stock exchanges involve the payment of negotiated
brokerage commissions.  On exchanges on which commissions are
negotiated, the cost of transactions may vary among different
brokers.  On most foreign exchanges, commissions are generally
fixed.  There is generally no stated commission in the case of
securities traded in domestic or foreign over-the-counter
markets, but the price of securities traded in over-the-counter
markets includes an undisclosed commission or mark-up.  U.S.
Government Securities are generally purchased from underwriters
or dealers, although certain newly issued U.S. Government
Securities may be purchased directly from the U.S. Treasury or
from the issuing agency or instrumentality.
 The Adviser will select specific portfolio investments and
effect transactions for a Fund and in doing so seeks to obtain
the overall best execution of portfolio transactions.  In
evaluating prices and executions, the Adviser will consider the
factors it deems relevant, which may include the breadth of the
market in the security, the price of the security, the financial
condition and execution capability of a broker or dealer and the
reasonableness of the commission, if any, for the specific
transaction and on a continuing basis.  The Adviser may, in its
discretion, effect transactions in portfolio securities with
dealers who provide brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act
of 1934) to a Fund and/or other accounts over which the Adviser
exercises investment discretion.  The Adviser may place portfolio
transactions with a broker or dealer with whom it has negotiated
a commission that is in excess of the commission another broker
or dealer would have charged for effecting the transaction if the
Adviser determines in good faith that the amount of commission
was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer viewed in
terms of either that particular transaction or of the overall
responsibilities of the Adviser.  Research and other services
received may be useful to the Adviser in serving both a Fund and
the Adviser's other clients and, conversely, research or other
services obtained by the placement of business of other clients
may be useful to the Adviser in carrying out its obligations to a
Fund.  Research may include furnishing advice, either directly or
through publications or writings, as to the value of securities,
the advisability of purchasing or selling specific securities and
the availability of securities or purchasers or sellers of
securities; furnishing seminars, information, analyses and
reports concerning issuers, industries, securities, trading
markets and methods, legislative developments, changes in
accounting practices, economic factors and trends and portfolio
strategy; access to research analysts, corporate management
personnel, industry experts, economists and government officials;
comparative performance evaluation and technical measurement
services and quotation services; and products and other services
(such as third party publications, reports and analyses, and
computer and electronic access, equipment, software, information
and accessories that deliver, process or otherwise utilize
information, including the research described above) that assist
the Adviser in carrying out its responsibilities.  Research
received from brokers or dealers is supplemental to the Adviser's
own research program.  The fees payable to Centurion under its
advisory agreement with each Fund, and the fees payable to the
sub-advisers under their respective sub-advisory agreements with
Centurion, are not reduced by reason of the Adviser receiving any
brokerage and research services.
Investment decisions for a Fund concerning specific port-
folio securities are made independently from those for other
clients advised by the Adviser.  Such other investment clients
may invest in the same securities as the applicable Fund.  When
purchases or sales of the same security are made at substantially
the same time on behalf of such other clients, transactions are
averaged as to price and available investments allocated as to
amount, in a manner which the Adviser believes to be equitable to
each client, including the applicable Fund.  In some instances,
this investment procedure may adversely affect the price paid or
received by the Fund or the size of the position obtained or sold
for the Fund.  To the extent permitted by law, the Adviser may
aggregate the securities to be sold or purchased for a Fund with
those to be sold or purchased for such other investment clients
in order to obtain best execution.  In no instance will portfolio
securities be purchased from or sold to the Adviser or its
affiliates.
Transactions for a Fund may be effected on foreign
securities exchanges. In transactions for securities not actively
traded on a foreign securities exchange, each Fund will deal
directly with the dealers who make a market in the securities
involved, except in those circumstances where more accurate
prices and execution are available elsewhere.  Such dealers
usually are acting as principal for their own account.  On
occasion, securities may be purchased directly from the issuer.
Such portfolio securities are generally traded on a net basis and
do not normally involve brokerage commissions.  Securities firms
may receive brokerage commissions on certain portfolio
transactions, including options, futures and options on futures
transactions and the purchase and sale of underlying securities
upon exercise of options.
Each Fund may participate, if and when practicable, in
bidding for the purchase of securities for its portfolio directly
from an issuer in order to take advantage of the lower purchase
price available to members of such a group.  A Fund will engage
in this practice, however, only when the Adviser, in its sole
discretion, believes such practice to be otherwise in the Fund's
interest.
 Each fund has paid the following in brokerage commissions for
portfolio transactions:



Fund

Fiscal
Year Ended
9/30/00
Fiscal
Year Ended
9/30/99
U.S. Equity Fund

$99,503
164,681
International Equity
Fund

$36,943
175,318
U.S. Contra Fund

$45,780
45,868
International Contra
Fund*

N/A

N/A

*The International Contra Fund had no outstanding shares as of
September 30, 2000 and as of September 30, 1999.

Portfolio Turnover
As discussed in the Prospectus, the Company anticipates
that investors in the Contra Funds, as part of a tactical or
strategic asset allocation strategy, may frequently redeem or
exchange shares of these Funds.  The Contra Funds may have to
dispose of certain portfolio investments to maintain sufficient
liquid assets to meet such redemption and exchange requests,
thereby resulting in higher portfolio turnover.  Because each
Contra Fund's portfolio turnover rate to a great extent will
depend on the purchase, redemption and exchange activity of the
Fund's investors, it is difficult to estimate what the Fund's
actual turnover rate will be in the future.  Additionally,
because of the investment techniques employed by the
International Equity Fund to reduce the realization of capital
gains, it is anticipated that the annual portfolio turnover rate
for the these Funds will not exceed 50% and 100%, respectively,
under normal market conditions.
A Fund's portfolio turnover rate is calculated by the value
of the securities purchased or sold, excluding all securities
whose maturities at the time of acquisition were one year or
less, divided by the average monthly value of such securities
owned during the year.  Based on this calculation, instruments,
including options and futures contracts, with remaining
maturities of less than one year are excluded from the portfolio
turnover rate.  In any given period, all of a Contra Fund's
investments may have a remaining maturity of less than one year;
in which case, the portfolio turnover rate for that period would
be equal to zero.
The portfolio turnover rates are as follows:



Fund

Fiscal
Year Ended
9/30/00
Fiscal
Year Ended
9/30/99
U.S. Equity Fund

141%
89%
International Equity
Fund

17%
102%
U.S. Contra Fund

0%
0%
International Contra
Fund*

N/A
N/A
*The International Contra Fund had no outstanding shares as of
September 30, 2000 and as of September 30, 1999.

MANAGEMENT OF THE FUNDS  TC "Management of the Funds" \f C \l "1"

Officers and Board of Directors
The business and affairs of each Fund is managed by the
Company's Board in accordance with the laws of the State of
Maryland.  The Board elects officers who are responsible for the
day-to-day operations of the Funds and who execute policies
formulated by the Board.  Under the Company's Charter, the Board
may classify or reclassify any unissued shares of the Company
into one or more additional classes by setting or changing in any
one or more respects their relative rights, voting powers,
restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption.  The Board may similarly
classify or reclassify any class of the Company's shares into one
or more series and, without shareholder approval, may increase
the number of authorized shares of the Company.
The names (and ages) of the Company's directors and
officers, their addresses, present positions and principal
occupations during the past five years and other affiliations are
set forth below.  An asterisk appears after the name of each
director who is an "interested person" of the Company, as defined
in the 1940 Act.

Name (Age) and Address
Position and Principal Occupation(s)

Charles P. Dickinson (62)
5219 N. Casa Blanca Dr. #54
Paradise Valley, AZ  85253
Director.  President of The Dickinson Co., a
farming company, since 1972.

Gerard P. Dipoto, Jr.* (54)
2425 E. Camelback Rd, Suite 530
Phoenix, AZ  85016-4200
Chairman of the Board, President and Chief
Executive Officer.  President of Centurion
since 1997; Executive Vice President of
Sales, Marketing and Relationship Management
at Investors Fiduciary Trust Company from
1987 to 1997.

Timothy E. Kloenne (56)
5730 E. Leith Lane
Scottsdale, AZ  85254
Director.  President of Klontech Industrial
Sales, Inc., a quality control and
inspection equipment sales company, since
1971.

Joseph F. Smith (52)
11301 Nall Ave.
Leawood, KS  66211
Director.  Executive Vice President and
Chief Technology Officer of Gold Banc
Corporation, Inc., since 1999; Owner of
Compunet Engineering, a computer networking
company, from 1995-1999; Executive Vice
President and Director at Investors
Fiduciary Trust Company from 1993 to 1995.

Thomas M. Smith (57)
2525 E. Camelback Rd., Suite
150
Phoenix, AZ  85016
Director. Realtor at Coldwell Banker Success
Realty since 1990.

Ron A. Link (36)
2425 E. Camelback Rd, Suite 530
Phoenix, AZ  85016-4200
Treasurer.  Information Systems Manager at
Centurion since March 1998; Senior Staff CPA
at Ferraro & McMurthy, P.C. from 1995 to
1998; Staff CPA at Zolondek, Blumenthal,
Green, Freed & Strossels, P.C. from 1993 to
1995.

Irving P. David (41)
125 Broad Street
New York, NY  10048
Controller.  A Director of Salomon Smith
Barney Inc. ("SSB") and Vice President of
Smith Barney Fund Management LLC ("SBFM")
(f/k/a SSB Citi Fund Management LLC) since
1994; Controller of several investment
companies associated with SSB Citi.

Paul A. Monroe (40)
2425 E. Camelback Rd, Suite 530
Phoenix, AZ  85016-4200
Vice President.  Operations Manager at
Centurion since 1997; Project Manager at
Bank One, NA from 1996 to 1997; Assistant
Vice President and Manager at First
Interstate Bank of Arizona, NA/Wells Fargo
from February 1996 to September 1996;
Assistant Vice President and Manager at Bank
One, NA from 1977 to 1996.

   Caryn Westman (49)
2425 E. Camelback Rd, Suite 530
Phoenix, AZ  85016-4200
Secretary.  Director of Compliance,
Compliance Consultant and Corporate
Secretary  of Centurion Capital Group Inc.
and its subsidiaries since 1992.


No employee of Centurion or any of its affiliates receives
compensation from the Company for acting as an officer or
director of the Company.  The Company pays each director who is
not an "affiliated person" (as defined in the 1940 Act) of the
Adviser, administrator or distributor an annual fee of $5,000 and
$1,250 for each meeting of the Board attended by him for his
services as director, and reimburses such director for expenses
incurred with his attendance at Board meetings.  For the fiscal
year ended September 30, 2000, such expenses totaled $3,651.
For the fiscal year ended September 30, 2000, the directors
were paid the following compensation as a director of the Company
and as trustees of other Centurion funds.


Name of Director

Aggregate
Compensation From
Fund
Pension or
Retirement
Benefits Accrued
as Part of Fund
Expenses
Total Compensation
From Fund and Fund
Complex Paid to
Directors
Charles P.
Dickinson
$8,750
$0
$10,000
Gerard P. DiPoto,
Jr.
$0
$0
$0
Timothy E. Kloenne
$10,000
$0
$10,000
Joseph F. Smith
$10,000
$0
$10,000
Thomas M. Smith
$10,000
$0
$10,000
*	Mr. Dipoto receives compensation as an affiliate of
Centurion and, accordingly, receives no compensation from
the Company.

As of January 22, 2001, the directors and officers as a group
owned less than 1% of the outstanding common stock of the trust.
To the best knowledge of the trustees, as of January 22, 2001,
the following shareholders or "groups" (as such term is defined
in Section 13(d) of the Securities Exchange Act of 1934) owned
beneficially or of record more than 5% of the shares of the
following classes:



Shareholder



Percent Ownership

A. U.S. Equity Fund*

Centurion Trust Company
2425 East Camelback Road
Suite 530
Phoenix, AZ 85016-4270
Owned 4,120,094.025 shares









100%



B. International Equity Fund*

Centurion Trust Company
2425 East Camelback Road
Suite 530
Phoenix, AZ 85016-4270
Owned 2,627,887.260 shares








100%



C. U.S. Contra Fund*

Centurion Trust Company
2425 East Camelback Road
Suite 530
Phoenix, AZ 85016-4270
Owned 2,157,004.650 shares








100%
The International Contra Fund had no outstanding shares as of
January 22, 2001.

*Centurion may be deemed to control each Fund because it has
complete investment discretion and voting authority with respect
to the shares of the Fund held by its clients.

Investment Advisers

Centurion, located at 2425 East Camelback Road, Suite 530,
Phoenix, AZ 85016-4200, serves as investment manager to the
Funds.  Centurion is a wholly-owned subsidiary of Centurion
Capital Group Inc., a holding company organized under the laws of
the State of Arizona.  Effective April 20, 2001, Centurion is
registered as an investment adviser under the Investment Advisers
Act of 1940. For a description of the fees paid to Centurion for
its services as investment manager to each of the Funds, see the
Prospectus.

Trainer, located at 845 Third Avenue, New York, New York
10022 serves as co-sub-adviser to the U.S. Equity Fund.  Trainer
is a wholly owned subsidiary of First Republic Bank, a San
Francisco-based, NYSE listed financial institution.  For its
services as co-sub-adviser to the U.S. Equity Fund, Centurion
pays Trainer 0.30% of the first $25 million of the average daily
net assets of the Fund allocated to Trainer and 0.25% of the
amount in excess of $25 million.

FISI, located at One World Trade Center, Suite 2101, New
York, NY 10048-0080, effectively serves as co-sub-adviser to the
International Equity Fund.  FISI is a wholly-owned subsidiary of
Friends Ivory & Sime plc ("Friends"), a global investment
management company, which in turn is majority-owned by Friends
Provident Life Office, a mutual life assurance company registered
in England.  As discussed in the Prospectus, FISI has entered
into a sub-advisory arrangement with Friends whereby Friends will
perform certain investment advisory and portfolio transaction
services for the International Equity Fund, as may be agreed upon
from time to time by FISI and Friends.  Currently, Friends is
responsible for the day-to-day management of the International
Equity Fund's assets allocated to FISI, and FISI reviews
investment performance, policies and guidelines, maintains
certain books and records, and facilitates communication between
Friends and Centurion.  For its services as co-sub-adviser to the
International Equity Fund, Centurion pays FISI 0.30% of the first
$50 million of the average daily net assets of the Fund allocated
to FISI, 0.275% of the next $50 million and 0.25% of the amount
in excess of $100 million.

CSAM, located at 466 Lexington Avenue, New York, NY 10017,
serves as sub-adviser to the Contra Funds and co-sub-adviser to
each of the Equity Funds.  CSAM is a limited liability company
that is wholly-owned by Credit Suisse Group.  For its services as
sub-adviser to the Contra Funds, Centurion pays CSAM 0.85% of the
average daily net assets of each Contra Fund.  For its services
as co-sub-adviser to the Equity Funds, Centurion pays CSAM 0.10%
of the average daily net assets of each Equity Fund.
Centurion serves as investment manager to the Funds
pursuant to separate investment management agreements
("Management Agreements").  Centurion, in turn, has entered into
separate sub-advisory agreements ("Sub-Advisory Agreements") with
each sub-adviser selected to manage all or a portion of a
particular Fund's portfolio according to its investment goal and
strategies.  Each Adviser bears all expenses in connection with
the performance of its services under the applicable Management
Agreement or Sub-Advisory Agreement.  Each Fund pays Centurion a
fee for services provided under the Management Agreement that is
computed daily and paid monthly based on the value of the Fund's
average net assets.  From this amount, Centurion pays the Fund's
sub-adviser(s) a fee for services provided under the Sub-Advisory
Agreement that is likewise computed daily and paid monthly based
on the value of the Fund's average net assets.  Centurion and/or
each Fund's sub-adviser may voluntarily waive a portion of its
fees from time to time and temporarily limit the expenses to be
borne by a Fund.

The advisory fees paid by each fund to Centurion for the
fiscal years ended September 30, 2000 and September 30, 1999
were:



Fund


Fiscal Year
Ended 9/30/00

Fiscal Year
Ended 9/30/99
Fee Waiver
And Expense
Reimbursement?


U.S. Equity Fund

$244,538
280,701
N/A


International Equity
Fund

$238,192
309,463
N/A


U.S. Contra Fund

$279,316
345,060
105,738
International Contra
Fund??

N/A
N/A
N/A
?Effective November 17, 2000, for the U.S. Contra Fund, the
voluntary cap on annual operating expenses is 1.75%.
??The International Contra Fund had no outstanding shares as of
September 30, 2000.


Administrator
SBFM, located at 7 World Trade Center, New York, NY 10048,
serves as administrator for the Company pursuant to an
administration agreement ("Administration Agreement").  As
administrator, SBFM generally oversees all aspects of the
Company's administration and operations.  SBFM furnishes the
Company with statistical and research data, clerical help,
accounting, data processing, bookkeeping, internal auditing and
legal services and certain other services required by the
Company; prepares tax returns and reports to the Company's
shareholders; and prepares reports to and filings with the SEC
and state blue sky authorities.  Each Fund pays SBFM a fee for
services provided under the Administration Agreement that is
computed daily and paid monthly at an annual rate of 0.20% of the
Fund's average daily net assets or $50,000, whichever amount is
greater.  SBFM may voluntarily waive a portion of its fees from
time to time and temporarily limit the expenses to be borne by a
Fund.
The administration fees paid to SBFM for the fiscal years
ended September 30, 2000 and September 30, 1999 for each fund
were:




Fund


Fiscal
Year
Ended
9/30/00

Fiscal
Year
Ended
9/30/99
U.S. Equity Fund

$67,825
79,196
International Equity
Fund

$63,518
86,450
U.S. Contra Fund

$50,000
57,510
International Contra
Fund*

N/A
N/A
*The International Contra Fund had no outstanding shares as of
September 30, 2000 and September 30, 1999.


Salomon Smith Barney Inc. ("SSB") acting through its
Consulting Group Division ("CGD") provides limited consulting
services to the funds.  CGD provides the Funds with (i) certain
statistical and other factual information and (ii) advice regarding
economic factors and trends.  These functions do not make SSB an
"investment adviser" to the Funds within the meaning of the 1940
Act.
The consultant fees paid to SSB for the fiscal years ended
September 30, 2000 and September 30, 1999 for each Fund were:


Fund


Fiscal Year
Ended 9/30/00

Fiscal Year
Ended
9/30/99
Fee Waiver
And Expense
Reimbursement
U.S. Equity Fund

$16,951
19,830
N/A
International Equity
Fund

$16,411
21,636
N/A
U.S. Contra Fund

$0
0
11,638
International Contra
Fund*

N/A
N/A
N/A
*The International Contra Fund had no outstanding shares as of
September 30, 2000 and as of September 30, 1999.


Distributor
Effective June 5, 2000, the Board of Directors of the
Company approved a Distribution Agreement with SSB, replacing the
Distribution Agreement with CFBDS, Inc.  SSB offers each Fund's
shares on a continuous basis.  SSB is located at 388 Greenwich
Street, New York, New York, 10013.


ADDITIONAL PURCHASE AND REDEMPTION
The offering price of each Fund's shares is equal to the
Fund's per share net asset value.  Information on how to purchase
and redeem Fund shares and how such shares are priced is included
in the Prospectus.
Under the 1940 Act, each Fund may suspend the right of
redemption or postpone the date of payment upon redemption for
any period during which the NYSE is closed, other than customary
weekend and holiday closings, or during which trading on the NYSE
is restricted, or during which (as determined by the SEC) an
emergency exists as a result of which disposal or fair valuation
of portfolio securities is not reasonably practicable, or for
such other periods as the SEC may permit.  (Each Fund may also
suspend or postpone the recordation of an exchange of its shares
upon the occurrence of any of the foregoing conditions.)
If the Board determines that conditions exist which make
payment of redemption proceeds wholly in cash unwise or
undesirable, a Fund may make payment wholly or partly in
securities or other investment instruments which may not
constitute securities as such term is defined in the applicable
securities laws.  If a redemption is paid wholly or partly in
securities or other property, a shareholder would incur
transaction costs in disposing of the redemption proceeds.  Each
Fund intends to comply with Rule 18f-1 promulgated under the 1940
Act with respect to redemptions in kind.


EXCHANGE PRIVILEGE
An exchange privilege among the Funds is available to
investors in each Fund. The exchange privilege enables
shareholders to acquire shares in a Fund with a different
investment goal when they believe that a shift between Funds is
an appropriate investment decision.  This privilege is available
to shareholders residing in any state in which the shares being
acquired may legally be sold.  Prior to any exchange,
shareholders should review a copy of the current prospectus of
each Fund into which an exchange is being considered.
Upon receipt of proper instructions and all necessary
supporting documents, shares submitted for exchange are redeemed
at the then-current net asset value of the Fund and the proceeds
are invested on the same day, at a price as described above, in
shares of the Fund being acquired.  The exchange privilege may be
modified or terminated at any time upon 30 days' notice to
shareholders.



ADDITIONAL INFORMATION CONCERNING TAXES
The following is a summary of the material United States
federal income tax considerations regarding the purchase,
ownership and disposition of shares of a Fund.  Each prospective
shareholder is urged to consult his own tax adviser with respect
to the specific federal, state, local and foreign tax
consequences of investing in a Fund.  The summary is based on the
laws in effect on the date of this SAI, which are subject to
change.


The Funds and Their Investments
Each Fund intends to qualify to be treated as a regulated
investment company each taxable year under the Internal Revenue
Code of 1986, as amended (the "Code").  To so qualify, a Fund
must, among other things: (a) derive at least 90% of its gross
income in each taxable year from dividends, interest, payments
with respect to securities, loans and gains from the sale or
other disposition of stock or securities or foreign currencies,
or other income (including, but not limited to, gains from
options, futures or forward contracts) derived with respect to
its business of investing in such stock, securities or
currencies; and (b) diversify its holdings so that, at the end of
each quarter of a Fund's taxable year, (i) at least 50% of the
market value of a Fund's assets is represented by cash,
securities of other regulated investment companies, United States
government securities and other securities, with such other
securities limited, in respect of any one issuer, to an amount
not greater than 5% of a Fund's assets and not greater than 10%
of the outstanding voting securities of such issuer and (ii) not
more than 25% of the value of its assets is invested in the
securities (other than United States government securities or
securities of other regulated investment companies) of any one
issuer or any two or more issuers that a Fund controls and are
determined to be engaged in the same or similar trades or
businesses or related trades or businesses.
 As a regulated investment company, each Fund will not be
subject to United States federal income tax on its investment
company taxable income (i.e., income other than any excess of its
net realized long-term capital gains over its net realized short-
term capital losses ("net-realized capital gains") and on its net
realized capital gains, if any, that it distributes to its
shareholders, provided that an amount equal to at least 90% of
the sum of its investment company taxable income plus or minus
certain other adjustments as specified in the Code) and its net
tax-exempt income for the taxable year is distributed, but will
be subject to tax at regular corporate rates on any taxable
income or gains that it does not distribute.  Furthermore, each
Fund will be subject to a United States corporate income tax with
respect to such distributed amounts in any year that it fails to
qualify as a regulated investment company or fails to meet this
distribution requirement.
The Code imposes a 4% nondeductible excise tax on each Fund
to the extent the Fund does not distribute by the end of any
calendar year at least 98% of its net investment income and 98%
of the net amount of its capital gains (both long-term and short-
term) for the one-year period ending, as a general rule, on
October 31 of that year.  For this purpose, however, any income
or gain retained by a Fund that is subject to corporate income
tax will be considered to have been distributed by year-end.  In
addition, the minimum amounts that must be distributed in any
year to avoid the excise tax will be increased or decreased to
reflect any underdistribution or overdistribution, as the case
may be, from the previous year.  Each Fund anticipates that it
will pay such dividends and will make such distributions as are
necessary in order to avoid the application of this tax.
With regard to a Fund's investments in foreign securities,
exchange control regulations may restrict repatriations of
investment income and capital or the proceeds of securities sales
by foreign investors such as a Fund and may limit a Fund's
ability to pay sufficient dividends and to make sufficient
distributions to satisfy the 90% and excise tax distribution
requirements.
If, in any taxable year, a Fund fails to qualify as a
regulated investment company under the Code or fails to meet the
distribution requirement, it would be taxed in the same manner as
an ordinary corporation and distributions to its shareholders
would not be deductible by the Fund in computing its taxable
income.  In addition, in the event of a failure to qualify, a
Fund's distributions, to the extent derived from the Fund's
current or accumulated earnings and profits, would constitute
dividends (eligible for the corporate dividends-received
deduction) which are taxable to shareholders as ordinary income,
even though those distributions might otherwise (at least in
part) have been treated in the shareholders' hands as long-term
capital gains.  If a Fund fails to qualify as a regulated
investment company in any year, it must pay out its earnings and
profits accumulated in that year in order to qualify again as a
regulated investment company.  In addition, if a Fund failed to
qualify as a regulated investment company for a period greater
than one taxable year, the Fund may be required to recognize any
net built-in gains with respect to certain of its assets (the
excess of the aggregate gains, including items of income, over
aggregate losses that would have been realized if the Fund had
been liquidated) in order to qualify as a regulated investment
company in a subsequent year.
A Fund's transactions in foreign currencies, forward
contracts, options and futures contracts (including options and
futures contracts on foreign currencies) will be subject to
special provisions of the Code (including provisions relating to
"hedging transactions" and "straddles") that, among other things,
may affect the character of gains and losses realized by the Fund
(i.e., may affect whether gains or losses are ordinary or
capital), accelerate recognition of income to a Fund and defer
Fund losses.  These rules could therefore affect the character,
amount and timing of distributions to shareholders.  These
provisions also (a) will require a Fund to mark-to-market certain
types of the positions in its portfolio (i.e., treat them as if
they were closed out) and (b) may cause a Fund to recognize
income without receiving cash with which to pay dividends or make
distributions in amounts necessary to satisfy the distribution
requirements for avoiding income and excise taxes.  Each Fund
will monitor its transactions, will make the appropriate tax
elections and will make the appropriate entries in its books and
records when it acquires any foreign currency, forward contract,
option, futures contract or hedged investment in order to
mitigate the effect of these rules and prevent disqualification
of a Fund as a regulated investment company.
A Fund's investment in Section 1256 contracts, such as
regulated futures contracts, most forward currency forward
contracts traded in the interbank market and options on most
stock indices, are subject to special tax rules.  All section
1256 contracts held by a Fund at the end of its taxable year are
required to be marked to their market value, and any unrealized
gain or loss on those positions will be included in the Fund's
income as if each position had been sold for its fair market
value at the end of the taxable year.  The resulting gain or loss
will be combined with any gain or loss realized by the Fund from
positions in section 1256 contracts closed during the taxable
year.  Provided such positions were held as capital assets and
were not part of a "hedging transaction" nor part of a
"straddle," 60% of the resulting net gain or loss will be treated
as long-term capital gain or loss, and 40% of such net gain or
loss will be treated as short-term capital gain or loss,
regardless of the period of time the positions were actually held
by the Fund.
At September 30, 2000, the unused capital loss carryovers of the
Funds were approximately $20,232,000.  For federal income tax
purposes, these amounts are available to be applied against
future realized capital gains, if any.  The carryovers expire as
follows:

Fund

September 30, 2008
U.S. Contra Fund

$19,655,000
U.S. Equity Fund

$577,000

As a result of entering into index swaps, a Fund may make
or receive periodic net payments.  A Fund may also make or
receive a payment when a swap is terminated prior to maturity
through an assignment of the swap or other closing transaction.
Periodic net payments will constitute ordinary income or
deductions, while termination of a swap will result in capital
gain or loss (which will be a long-term capital gain or loss if a
Fund has been a party to the swap for more than one year).
Passive Foreign Investment Companies.  If a Fund purchases
shares in certain foreign investment entities, called "passive
foreign investment companies" (a "PFIC"), it may be subject to
United States federal income tax on a portion of any "excess
distribution" or gain from the disposition of such shares even if
such income is distributed as a taxable dividend by a Fund to its
shareholders.  Additional charges in the nature of interest may
be imposed on a Fund in respect of deferred taxes arising from
such distributions or gains.  If a Fund were to invest in a PFIC
and elected to treat the PFIC as a "qualified electing fund"
under the Code, in lieu of the foregoing requirements, a Fund
might be required to include in income each year a portion of the
ordinary earnings and net capital gains of the qualified electing
fund, even if not distributed to the Fund, and such amounts would
be subject to the 90% and excise tax distribution requirements
described above.  In order to make this election, a Fund would be
required to obtain certain annual information from the PFICs in
which it invests, which may be difficult or not possible to
obtain.
Alternatively, a Fund may make a mark-to-market election
that would result in the Fund being treated as if it had sold and
repurchased all of the PFIC stock at the end of each year.  In
this case, a Fund would report gains as ordinary income and would
deduct losses as ordinary losses to the extent of previously
recognized gains.  The election, once made, would be effective
for all subsequent taxable years of the Fund, unless revoked with
the consent of the IRS.  By making the election, a Fund could
potentially ameliorate the adverse tax consequences with respect
to its ownership of shares in a PFIC, but in any particular year
may be required to recognize income in excess of the
distributions it receives from PFICs and its proceeds from
dispositions of PFIC stock.  A Fund may have to distribute this
"phantom" income and gain to satisfy its distribution requirement
and to avoid imposition of the 4% excise tax.
Each Fund will make the appropriate tax elections, if
possible, and take any additional steps that are necessary to
mitigate the effect of these rules.
Taxation of United States Shareholders
Dividends and Distributions.  Any dividend declared by a
Fund in October, November or December of any calendar year and
payable to shareholders of record on a specified date in such a
month shall be deemed to have been received by each shareholder
on December 31 of such calendar year and to have been paid by the
Fund not later than such December 31, provided that such dividend
is actually paid by the Fund during January of the following
calendar year.  Each Fund intends to distribute annually to its
shareholders substantially all of its investment company taxable
income, and any net realized long-term capital gains in excess of
net realized short-term capital losses (including any capital
loss carryovers).  Each Fund currently expects to distribute any
such excess annually to its shareholders.  However, if a Fund
retains for investment an amount equal to all or a portion of its
net long-term capital gains in excess of its net short-term
capital losses and capital loss carryovers, it will be subject to
a corporate tax (currently at a rate of 35%) on the amount
retained.  In that event, a Fund will designate such retained
amounts as undistributed capital gains in a notice to its
shareholders who (a) will be required to include in income for
United Stares federal income tax purposes, as long-term capital
gains, their proportionate shares of the undistributed amount,
(b) will be entitled to credit their proportionate shares of the
35% tax paid by the Fund on the undistributed amount against
their United States federal income tax liabilities, if any, and
to claim refunds to the extent their credits exceed their
liabilities, if any, and (c) will be entitled to increase their
tax basis, for United States federal income tax purposes, in
their shares by an amount equal to 65% of the amount of
undistributed capital gains included in the shareholder's income.
Organizations or persons not subject to federal income tax on
such capital gains will be entitled to a refund of their pro rata
share of such taxes paid by a Fund upon filing appropriate
returns or claims for refund with the Internal Revenue Service
(the "IRS").
Dividends of net investment income and distributions of net
realized short-term capital gains are taxable to a United States
shareholder as ordinary income, whether paid in cash or in
shares.  Distributions of net long-term capital gains, if any,
that a Fund designates as capital gains dividends are taxable as
long-term capital gains, whether paid in cash or in shares and
regardless of how long a shareholder has held shares of the Fund.
Dividends and distributions paid by a Fund (except for the
portion thereof, if any, attributable to dividends on stock of
U.S. corporations received by a Fund) will not qualify for the
deduction for dividends received by corporations.  Distributions
in excess of a Fund's current and accumulated earnings and
profits will, as to each shareholder, be treated as a tax-free
return of capital, to the extent of a shareholder's basis in his
shares of the Fund, and as a capital gain thereafter (if the
shareholder holds his shares of the Fund as capital assets).
Shareholders receiving dividends or distributions in the
form of additional shares should be treated for United States
federal income tax purposes as receiving a distribution in the
amount equal to the amount of money that the shareholders
receiving cash dividends or distributions will receive, and
should have a cost basis in the shares received equal to such
amount.
Investors considering buying shares just prior to a
dividend or capital gain distribution should be aware that,
although the price of shares just purchased at that time may
reflect the amount of the forthcoming distribution, such dividend
or distribution may nevertheless be taxable to them.
If a Fund is the holder of record of any stock on the
record date for any dividends payable with respect to such stock,
such dividends are included in the Fund's gross income not as of
the date received but as of the later of (a) the date such stock
became ex-dividend with respect to such dividends (i.e., the date
on which a buyer of the stock would not be entitled to receive
the declared, but unpaid, dividends) or (b) the date a Fund
acquired such stock.  Accordingly, in order to satisfy its income
distribution requirements, a Fund may be required to pay
dividends based on anticipated earnings, and shareholders may
receive dividends in an earlier year than would otherwise be the
case.
Sales of Shares.  Upon the sale or exchange of his shares,
a shareholder will realize a taxable gain or loss equal to the
difference between the amount realized and his basis in his
shares.  Such gain or loss will be treated as capital gain or
loss, if the shares are capital assets in the shareholder's
hands, and will be long-term capital gain or loss if the shares
are held for more than one year and short-term capital gain or
loss if the shares are held for one year or less.  Any loss
realized on a sale or exchange will be disallowed to the extent
the shares disposed of are replaced, including replacement
through the reinvesting of dividends and capital gains
distributions in a Fund, within a 61-day period beginning 30 days
before and ending 30 days after the disposition of the shares.
In such a case, the basis of the shares acquired will be
increased to reflect the disallowed loss.  Any loss realized by a
shareholder on the sale of a Fund share held by the shareholder
for six months or less will be treated for United States federal
income tax purposes as a long-term capital loss to the extent of
any distributions or deemed distributions of long-term capital
gains received by the shareholder with respect to such share.
Foreign Taxes.  A Fund may elect for U.S. income tax
purposes to treat foreign income taxes paid by it as paid by its
shareholders if: (i) the Fund qualifies as a regulated investment
company, (ii) certain asset and distribution requirements are
satisfied, and (iii) more than 50% of the Fund's total assets at
the close of its fiscal year consists of stock or securities of
foreign corporations.  A Fund may qualify for and make this
election in some, but not necessarily all, of its taxable years.
If a Fund were to make such an election, shareholders of the Fund
would be required to take into account an amount equal to their
pro rata portions of such foreign taxes in computing their
taxable income and then treat an amount equal to those foreign
taxes as a U.S. federal income tax deduction or as a foreign tax
credit against their U.S. federal income taxes.  Shortly after
any year for which it makes such an election, a Fund will report
to its shareholders the amount per share of such foreign income
tax that must be included in each shareholder's gross income and
the amount which will be available for the deduction or credit.
No deduction for foreign taxes may be claimed by a shareholder
who does not itemize deductions.  Certain limitations will be
imposed on the extent to which the credit (but not the deduction)
for foreign taxes may be claimed.
Backup Withholding.  Each Fund may be required to withhold,
for United States federal income tax purposes, 31% of the
dividends and distributions payable to shareholders who fail to
provide a Fund with their correct taxpayer identification number
or to make required certifications, or who have been notified by
the IRS that they are subject to backup withholding.  Certain
shareholders are exempt from backup withholding.  Backup
withholding is not an additional tax and any amount withheld may
be credited against a shareholder's United States federal income
tax liabilities.
 Notices.  Shareholders will be notified annually by a Fund
as to the United States federal income tax status of the
dividends, distributions and deemed distributions attributable to
undistributed capital gains (discussed above in "Dividends and
Distributions") made by the Fund to its shareholders.
Furthermore, shareholders will also receive, if appropriate,
various written notices after the close of a Fund's taxable year
regarding the United States federal income tax status of certain
dividends, distributions and deemed distributions that were paid
(or that are treated as having been paid) by the Fund to its
shareholders during the preceding taxable year.
Other Taxation
Distributions also may be subject to additional state,
local and foreign taxes depending on each shareholder's
particular situation.
The foregoing is only a summary of certain material tax
consequences affecting each Fund and its shareholders.
Shareholders are advised to consult their own tax advisers with
respect to the particular tax consequences to them of an
investment in the Funds.

PERFORMANCE DATA
From time to time, the Funds may quote their total return in
advertisements or in reports and other communications to
shareholders. The Funds may include comparative performance
information in advertising or other materials used to market
their shares. Such performance information may include the
following industry and financial publications: Barron's, Business
Week, CDA Investment Technologies, Inc., Changing Times, Forbes,
Fortune, Institutional Investor, Investor's Business Daily,
Money, Morningstar Mutual Fund Values, The New York Times, USA
Today and The Wall Street Journal.


Average Annual Total Return

A Fund's "average annual total return," as described below, is
computed according to a formula prescribed by the SEC.  The
formula can be expressed as follows:

P(1 + T)n = ERV

	Where:	P	= 	a hypothetical initial
payment of $1,000.

		T	= 	average annual total return.

		n	= 	number of years.

		ERV	=	Ending Redeemable Value of a
hypothetical $1,000
investment made at the
beginning of a 1-, 5- or 10-
year period at the end of a
1-, 5- or 10-year period (or
fractional portion thereof),
assuming reinvestment of all
dividends and distributions.

The ERV assumes complete redemption of the hypothetical
investment at the end of the measuring period.  A Fund's net
investment income changes in response to fluctuations in interest
rates and the expenses of the Fund.



Average Annual Total Return



Fund
1-Year
5-Year
10-
Year
Inception
1
U.S. Equity Fund
3.27%
N/A
N/A
   7.4%
International Equity Fund
12.37%
N/A
N/A
 20.57%
U.S. Contra Fund
(49.75)
%
N/A
N/A
(62.06%)
International Contra Fund
N/A
N/A
N/A
N/A
	1	With the exception of the International Contra Fund, which
is not currently offered, each of the above Funds commenced
operations on  December 7, 1998.

Performance will vary from time to time depending upon market
conditions, the composition of each Fund's portfolio and its
operating expenses.  Consequently, any given performance
quotation should not be considered representative of a Fund's
performance for any specified period in the future.  Because
performance will vary, it may not provide a basis for comparing
an investment in a Fund with certain bank deposits or other
investments that pay a fixed yield for a stated period of time.
Investors comparing a Fund's performance with that of other
mutual funds should give consideration to the quality and
maturity of the respective investment companies' portfolio
securities.

 OTHER INFORMATION

Capital Stock
Investors in a Fund are entitled to one vote for each full
share held and fractional votes for fractional shares held.
Shareholders of a Fund will vote in the aggregate except where
otherwise required by law.  There will normally be no meetings of
investors for the purpose of electing members of the Board unless
and until such time as less than a majority of the members
holding office have been elected by investors.  Any director of
the Company may be removed from office upon the vote of
shareholders holding at least a majority of the Company's
outstanding shares, at a meeting called for that purpose.  A
meeting will be called for the purpose of voting on the removal
of a Board member at the written request of holders of 10% of the
outstanding shares of the Company.
All shareholders of a Fund, upon liquidation, will
participate ratably in the Fund's net assets.  Shares do not have
cumulative voting rights, which means that holders of more than
50% of the shares voting for the election of directors can elect
all directors.  Shares are transferable but have no preemptive,
conversion or subscription rights.


Reverse Stock Split (U.S. Contra Fund)
On November 17, 2000, the Board of Directors of the Company
approved an amendment to the Company's charter to effect a one-
for-three reverse stock split of the Fund's common stock and the
related reduction in the Fund's stated capital pending approval
by the affirmative vote of a majority of the outstanding shares
of the Fund. The reverse stock split was approved by shareholders
at a shareholders meeting on December 15, 2000. The reverse stock
split became effective on December 18, 2000

The effect of the reverse stock split is to reduce the number of
shares outstanding of the Fund while maintaining the Fund's and
each shareholder's aggregate net asset value.  However, the
reverse stock split has the added effect of reducing the Fund's
stated capital.  Each shareholder's aggregate investment in the
Fund will remain unchanged as a result of the proposed Amendment.
The reverse stock split will have no effect on the number or par
value of the Fund's authorized shares.


Code of Ethics

Pursuant to Rule 17j-1 of  the 1940 Act, each fund, its
investment manager, each sub-adviser and principal underwriter
have adopted codes of ethics that permit personnel to invest in
securities for their own accounts, including securities that may
be purchased or held by the fund.  All personnel must place the
interests of clients first and avoid activities, interests and
relationships that might interfere with the duty to make
decisions in the best interests of the clients.  All personal
securities transactions by employees must adhere to the
requirements of the codes and must be conducted in such a manner
as to avoid any actual or potential conflict of interest, the
appearance of such a conflict, or the abuse of an employee's
position of trust and responsibility. A copy of the fund's Code
of Ethics is on file with the Securities and Exchange Commission.


Independent Accountant
KPMG LLP ("KPMG"), with principal offices located at 757
Third Avenue, New York, NY 10017, serves as the independent
accountant for the Company.  The Statements of Assets and
Liabilities, as of September 30, 2000, and the Statements of
Operations, Changes in Net Assets and the financial highlights
for the year ended September 30, 2000, of each Fund that are
incorporated by reference in this SAI have been audited by KPMG,
and have been included herein by reference in reliance upon the
report of such firm given upon their authority as experts in
accounting and auditing.


Counsel
Willkie Farr & Gallagher, located at 787 Seventh Avenue,
New York, New York 10019, serves as counsel for the Company, as
well as counsel to Centurion.
Custodians and Transfer Agent
PFPC Trust Company ("PFPC"), successor by assignment from
PNC Bank, N.A., located at 8800 Tinicum Boulevard, Philadelphia,
PA 19153, and The Chase Manhattan Bank ("Chase"), located at 4
Chase MetroTech Center, Brooklyn, NY 11245, serve as co-
custodians of each Fund's assets.  Under their respective custody
agreements with the Company, PFPC and Chase are authorized to
establish separate accounts for foreign securities owned by the
Funds to be held with foreign branches of U.S. banks as well as
certain foreign banks and securities depositories as sub-
custodians of assets owned by the Funds.
PFPC Global Fund Services, located at P.O. Box 9699,
Providence, RI 02940-9699, serves as the Company's transfer
agent.
FINANCIAL STATEMENTS
The fund's annual report for the fiscal year ended September 30,
2000 is incorporated herein by reference in its entirety.  The
annual report was filed on December 8, 2000, Accession Number
950130-00-006544.







 .



APPENDIX
DESCRIPTION OF RATINGS
Commercial Paper Ratings
Commercial paper rated A-1 by Standard and Poor's Ratings
Services ("S&P") indicates that the degree of safety regarding
timely payment is strong.  Those issues determined to possess
extremely strong safety characteristics are denoted with a plus
sign designation.  Capacity for timely payment on commercial
paper rated A-2 is satisfactory, but the relative degree of
safety is not as high as for issues designated A-1.
The rating Prime-1 is the highest commercial paper rating
assigned by Moody's.  Issuers rated Prime-1 (or related
supporting institutions) are considered to have a superior
capacity for repayment of short-term promissory obligations.
Issuers rated Prime-2 (or related supporting institutions) are
considered to have a strong capacity for repayment of short-term
promissory obligations.  This will normally be evidenced by many
of the characteristics of issuers rated Prime-1 but to a lesser
degree.  Earnings trends and coverage ratios, while sound, will
be more subject to variation.  Capitalization characteristics,
while still appropriate, may be more affected by external
conditions.  Ample alternative liquidity is maintained.
Corporate Bond Ratings
The following summarizes the ratings used by S&P for
corporate bonds:
AAA - This is the highest rating assigned by S&P to a debt
obligation and indicates an extremely strong capacity to pay
interest and repay principal.
AA - Debt rated AA has a very strong capacity to pay
interest and repay principal and differs from AAA issues only in
small degree.
A - Debt rated A has a strong capacity to pay interest and
repay principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than debt in higher-rated categories.
BBB - This is the lowest investment grade.  Debt rated BBB
is regarded as having an adequate capacity to pay interest and
repay principal.  Although it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to
pay interest and repay principal for bonds in this category than
for bonds in higher rated categories.
BB, B and CCC - Debt rated BB and B are regarded, on
balance, as predominately speculative with respect to capacity to
pay interest and repay principal in accordance with the terms of
the obligation.  BB represents a lower degree of speculation than
B, and CCC the highest degree of speculation.  While such bonds
will likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
BB - Debt rated BB has less near-term vulnerability to
default than other speculative issues.  However, it faces major
ongoing uncertainties or exposure to adverse business, financial,
or economic conditions, which could lead to inadequate capacity
to meet timely interest and principal payments.  The BB rating
category is also used for debt subordinated to senior debt that
is assigned an actual or implied BBB rating.
B - Debt rated B has a greater vulnerability to default but
currently has the capacity to meet interest payments and
principal repayments.  Adverse business, financial, or economic
conditions will likely impair capacity or willingness to pay
interest and repay principal.  The B rating category is also used
for debt subordinated to senior debt that is assigned an actual
or implied BB or BB- rating.
CCC - Debt rated CCC has a currently identifiable
vulnerability to default and is dependent upon favorable
business, financial and economic conditions to meet timely
payment of interest and repayment of principal.  In the event of
adverse business, financial or economic conditions, it is not
likely to have the capacity to pay interest and repay principal.
The CCC rating category is also used for debt subordinated to
senior debt that is assigned an actual or implied B or B- rating.
CC - This rating is typically applied to debt subordinated
to senior debt that is assigned an actual or implied CCC rating.
C - This rating is typically applied to debt subordinated
to senior debt which is assigned an actual or implied CCC- debt
rating.  The C rating may be used to cover a situation where a
bankruptcy petition has been filed, but debt service payments are
continued.
Additionally, the rating CI is reserved for income bonds on
which no interest is being paid.  Such debt is rated between debt
rated C and debt rated D.
To provide more detailed indications of credit quality, the
ratings may be modified by the addition of a plus or minus sign
to show relative standing within this major rating category.
D - Debt rated D is in payment default.  The D rating
category is used when interest payments or principal payments are
not made on the date due even if the applicable grace period has
not expired, unless S&P believes that such payments will be made
during such grace period.  The D rating also will be used upon
the filing of a bankruptcy petition if debt service payments are
jeopardized.
The following summarizes the ratings used by Moody's for
corporate bonds:
Aaa - Bonds that are rated Aaa are judged to be of the best
quality.  They carry the smallest degree of investment risk and
are generally referred to as "gilt edged."  Interest payments are
protected by a large or 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 that are rated Aa are judged to be of high
quality by all standards.  Together with the Aaa group they
comprise what are generally known as high grade bonds.  They are
rated lower than the best bonds because margins of protection may
not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat
larger than in Aaa securities.
A - Bonds which are rated A possess many favorable invest-
ment attributes and are to be considered as upper-medium-grade
obligations.  Factors giving security to principal and interest
are considered adequate, but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa - Bonds which are rated Baa are considered as
medium-grade obligations, i.e., they are neither highly protected
nor poorly secured.  Interest payments and principal security
appear adequate for the present but certain protective elements
may be lacking or may be characteristically unreliable over any
great length of time.  Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as
well.
Ba - Bonds which are rated Ba are judged to have
speculative elements; their future cannot be considered as well
assured.  Often the protection of interest and principal payments
may be very moderate and thereby not well safeguarded during both
good and bad times over the future.  Uncertainty of position
characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics
of desirable investments.  Assurance of interest and principal
payments or of maintenance of other terms of the contract over
any long period of time may be small.
Moody's applies numerical modifiers (1, 2 and 3) with
respect to the bonds rated "Aa" through "B."  The modifier 1
indicates that the bond being rated ranks in the higher end of
its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the bond ranks in the
lower end of its generic rating category.
Caa - Bonds that are rated Caa are of poor standing.  These
issues may be in default or present elements of danger may exist
with respect to principal or interest.
Ca - Bonds which are rated Ca represent obligations which
are speculative in a high degree.  Such issues are often in
default or have other marked shortcomings.
C - Bonds which are rated C comprise the lowest rated class
of bonds, and issues so rated can be regarded as having extremely
poor prospects of ever attaining any real investment standing.