As filed with the Securities and Exchange Commission on September 10, 2009
Registration No. 333-_______
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM N-14

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

PRE-EFFECTIVE AMENDMENT NO.

POST-EFFECTIVE AMENDMENT NO.

DAILY INCOME FUND
(Exact Name of Registrant as Specified in Charter)

C/O REICH & TANG ASSET MANAGEMENT, LLC
600 FIFTH AVENUE, NEW YORK, NEW YORK 10020
(Address of Principal Executive Offices)

(212) 830-5200
(Registrant's Telephone Number)

Christine Manna
Reich & Tang Asset Management
600 Fifth Avenue
New York, New York 10020
(Name and Address of Agent for Service)

with copies to:

Michael R. Rosella, Esq.
Paul, Hastings, Janofsky & Walker LLP
75 East 55th Street
New York, New York 10022
Phone No.: (212) 318-6800
Fax No.: (212) 319-4090

Approximate Date of Proposed Public Offering: As soon as practicable after
the Registration Statement becomes effective under the Securities Act of 1933.

It is proposed that this filing shall become effective on October 12, 2009,
pursuant to Rule 488.

No filing fee is due because the Registrant has previously registered an
indefinite number of shares under the Securities Act of 1933 pursuant to Section
24(f) under the Investment Company Act of 1940.

Title of Securities Being Registered.....Institutional Service Class Shares of
the U.S. Government Portfolio, par
value $0.01 per share, of the
Registrant.

PART A

SENTINEL GOVERNMENT MONEY MARKET FUND
National Life Drive
Montpelier, Vermont 05604

October 12, 2009

Dear Shareholder:

We wish to provide you with some important information concerning your
investment. The Board of Directors of Sentinel Group Funds, Inc. (the
"Corporation"), after careful consideration, has approved the reorganization
(the "Reorganization") of the Sentinel Government Money Market Fund (the
"Sentinel Government Money Market Fund"), a series of the Corporation, into the
U.S. Government Portfolio (the "U.S. Government Portfolio," and, together with
the Sentinel Government Money Market Fund, the "Funds") of the Daily Income
Fund. These two Funds pursue substantially similar investment strategies and
possess substantially similar investment policies.

The Sentinel Government Money Market Fund is no longer open to additional
investments. As a result of the Reorganization, shareholders of the Sentinel
Government Money Market Fund will become shareholders of the U.S. Government
Portfolio and will again be able to buy and sell shares of a money market fund.
Your account will be maintained through Sentinel Administrative Services, Inc.
("SASI") and you will have certain reinvestment privileges with respect to the
funds that are series of the Corporation (the "Sentinel Funds"), as described in
the additional information attached to this letter.

In approving the Reorganization, the Board of Directors has considered,
among other things, the similarities between the Funds' investment objectives
and strategies, the expected lower expenses of the U.S. Government Portfolio,
the investment yield offered by the U.S. Government Portfolio, the costs of the
Reorganization, which will be borne by Sentinel Asset Management, Inc. and Reich
& Tang Asset Management, LLC, investment advisors to the Sentinel Government
Money Market Fund and the U.S. Government Portfolio, respectively, the
continuity of Sentinel shareholder servicing, the ability of shareholders to
redeem shares of a Sentinel Fund and purchase shares of the U.S. Government
Portfolio, then to redeem such shares and reinvest them in a Sentinel Fund, each
as consistent with SEC rules and the tax-free nature of the Reorganization.

At the close of business on or about November 13, 2009, the Sentinel
Government Money Market Fund will transfer its assets into the U.S. Government
Portfolio. On that date, you will receive shares of the Institutional Service
Class of the U.S. Government Portfolio equal in aggregate net asset value to the
aggregate net asset value of your Class A or Class B Shares of the Sentinel
Government Money Market Fund. The Combined Prospectus/Information Statement
describes the Reorganization in greater detail and contains important
information about the U.S. Government Portfolio. Shareholder approval is NOT
required to effect the Reorganization.

Sentinel Administrative Services, Inc, will provide record keeping and
customer services to investors in the U.S. Government Portfolio who maintain
their accounts through Sentinel Administrative Services, Inc. after the
Reorganization. After the Reorganization, all inquiries and transaction requests
regarding the U.S. Government Portfolio should be directed to Sentinel
Administrative Services, Inc., toll free, at 1-800-282-3863, or if by mail, to:

Sentinel Administrative Services, Inc.
One National Life Drive
P.O. Box 1499
Montpelier, VT 05601-1499

Please see the additional information attached to this letter for details
regarding the servicing of your account after the Reorganization. You should
keep this letter and the attached additional information for future reference.

NO ACTION ON YOUR PART IS REQUIRED TO EFFECT THE TRANSACTION. You will
automatically receive shares of the U.S. Government Portfolio in exchange for
your shares of the Sentinel Government Money Market Fund as of the closing date.
If you have any questions, please contact us at 1-800-282-3863.

Sincerely,

/s/
Christian W. Thwaites
President and Chief Executive Officer
-2-

ADDITIONAL INFORMATION REGARDING INVESTING IN THE U.S. GOVERNMENT PORTFOLIO FOR
ACCOUNTS MAINTAINED THROUGH SENTINEL ADMINISTRATIVE SERVICES, INC.

Purchasing Information - In General. The minimum initial investment in the
U.S. Government Portfolio for regular accounts and individual retirement
accounts maintained through Sentinel Administrative Services, Inc. ("SASI") is
$1,000. The minimum amount for subsequent purchases is $50. Investors who wish
to invest in the U.S. Government Portfolio may obtain a current Prospectus and
application necessary to open an account by telephoning SASI toll free at (800)
282-3863 during the hours of 8:00 a.m. to 5:00 p.m. Eastern Time, on each
weekday (Monday through Friday) except (i) days on which the New York Stock
Exchange is closed for trading (i.e., national holidays) and (ii) Columbus Day
and Veterans' Day ("Fund Business Day"). Investors may send or deliver a check
made payable to "Daily Income Fund" along with a completed application to:

Sentinel Administrative Services, Inc.
Re: Daily Income Fund
PO Box 1499
Montpelier VT 05601-1499

To purchase shares of the U.S. Government Portfolio using the wire system
for transmittal of money among banks, an investor, prior to his or her initial
purchase of shares, should first telephone SASI toll free at (800) 282-3863 to
obtain an application necessary to open a new account. Completed applications,
and any required documentation, should be faxed to SASI at (802) 229-7521. The
original application and documentation should then be mailed to the address
specified above. The investor should then telephone SASI at the above number to
obtain a new account number and then instruct a member bank of the Federal
Reserve System to wire the amount of the investment immediately to:

TD Banknorth
ABA # 011600033
Sentinel Administrative Services, Inc.
DDA # 61420832
Account of [Investor's Name]
Fund Account #

An account will not be opened until SASI has received the application and
required documentation in proper form and has accepted the purchase order.

Purchasing Information - Electronic Funds Transfers (EFT), Pre-authorized
Credit and Direct Deposit Privilege. You may also purchase shares of the U.S.
Government Portfolio by having salary, dividend payments, interest payments or
any other payments designated by you, including federal salary, social security,
or certain veteran's, military or other payments from the federal government,
automatically deposited into your account (minimum of $50). You can also have
money debited from your checking account. To enroll in any one of these
programs, please contact your broker or SASI for the appropriate form.

Please contact SASI for additional information regarding purchasing
shares of the U.S. Government Portfolio after the Reorganization.

-3-

Redemption Information - In General. A redemption is effected immediately
following, and at a price determined in accordance with, the next determination
of net asset value per share of the U.S. Government Portfolio following receipt
by SASI of the redemption order (and any supporting documentation that SASI may
require). Payment for redeemed shares is made on the next Fund Business Day.
However, redemption payments will not be paid out unless the check (including a
certified or cashier's check) used for investment has been cleared for payment
by the investor's bank, which could take up to 15 days after investment. Written
requests for redemptions may be made to

Sentinel Administrative Services, Inc.
Re: Daily Income Fund
PO Box 1499
Montpelier VT 05601-1499

Shareholders may request a supply of checks that may be used to effect
redemptions from the U.S. Government Portfolio. The checks, which will be issued
in the shareholder's name, are drawn on a special account maintained by SASI
with its agent bank. Checks may be drawn in any amount of $250 or more. Checks
provided by SASI may not be certified. Investors who purchase shares in the U.S.
Government Portfolio by check may not receive their redemption proceeds until
the check has cleared, which can take up to 15 days following the date of
purchase. SASI reserves the right to impose a charge or impose a different
minimum check amount in the future.

Shareholders electing the checking option are subject to the procedures,
rules and regulations of SASI's agent bank governing checking accounts. Checks
drawn on a jointly owned account may, at the shareholder's election, require
only one signature. Checks in amounts exceeding the value of the shareholder's
account at the time the check is presented for payment may not be honored. SASI
provides overdraft protection by automatically transferring available funds from
your other identically registered accounts if you have available balances. A fee
of $30 will be charged to the account when funds are transferred from protecting
account(s) to cover an overdraft. Transferred funds are treated like a sale or
exchange of shares of the Sentinel Fund from which they are transferred,
including for redemption fee purposes. New checkbooks cannot be ordered within
30 days of an address change without a signature guarantee.

Since the dollar value of the account changes daily, the total value of the
account may not be determined in advance and the account may not be entirely
redeemed by check. SASI reserves the right to charge the shareholder's account a
fee of $25 for checks not honored as a result of an insufficient account value,
a check deemed not negotiable because it has been held longer than six months,
an unsigned check and/or a post-dated check. SASI reserves the right to
terminate or modify the check redemption procedure at any time or to impose
additional fees following notification to investors in U.S. Government Portfolio
whose accounts are maintained through SASI.

Please contact SASI for additional information about redemptions from the
U.S. Government Portfolio through a checking account.

Redemption Information - By Telephone. SASI accepts telephone requests for
redemption from shareholders who elect this option on their application. The
proceeds of a telephone redemption may be sent to the shareholder at their
address of record or, if in excess of $1,000, to their bank accounts, both as
set forth in the application or in a subsequent signature guaranteed written
authorization. SASI may accept telephone redemption instructions from any person
who SASI reasonably believes is authorized with respect to accounts of
shareholders who elect this

-4-

service and thus such shareholders risk possible loss of principal and interest
in the event of a telephone redemption not authorized by them. For telephone
requests for wire redemptions, SASI charges a $20 fee.

A shareholder making a telephone withdrawal should call SASI at (800)
282-3863. Usually the proceeds are sent to the designated bank account or
address of record on the next Fund Business Day. SASI may modify or discontinue
the telephone redemption option at any time and will notify shareholders
accordingly.

Please contact SASI for additional information regarding redemptions of
shares of the U.S. Government Portfolio by telephone.

Reinvestment Privileges. Investors in the U.S. Government Portfolio may
direct SASI to redeem their shares of the U.S. Government Portfolio and directly
use the proceeds of such redemption to purchase shares of a Sentinel Fund (a
"reinvestment"). Generally, the purchase of such shares of a Sentinel Fund
pursuant to a reinvestment will be subject to all applicable fees and expenses
of the applicable Sentinel Fund; however certain waivers of sales charges will
apply to direct reinvestments of redemption proceeds of U.S. Government
Portfolio shares into a Sentinel Fund as described below:

o Investors in the U.S. Government Portfolio who obtained shares through the
Reorganization and who either (a) held Class A shares of the Sentinel
Government Money Market Fund immediately prior to the Reorganization which
had been subject to an initial sales charge or (b) held Class B shares of
the Sentinel Government Money Market Fund immediately prior to the
Reorganization, may direct that the proceeds of a redemption of such shares
of the U.S. Government Portfolio be used to directly purchase Class A
shares of a Sentinel Fund, and such Class A shares of the Sentinel Fund
will not be subject to a front-end sales charge or a contingent deferred
sales charge ("CDSC").

o Investors in the U.S. Government Portfolio who maintain their accounts
through SASI who obtained such shares by using proceeds of a redemption of
Class A shares of a Sentinel Fund that were subject to a front-end sales
charge may direct that the proceeds of a redemption of such shares of the
U.S. Government Portfolio be used to directly purchase Class A shares of a
Sentinel Fund, and such Class A shares of the Sentinel Fund will not be
subject to a front-end sales charge or a CDSC.

o Investors in Sentinel Funds may redeem Class B and Class D shares of such
funds (as well as Class A shares that are subject to a CDSC) and direct
that such proceeds be used to directly purchase shares of the U.S.
Government Portfolio upon payment of any applicable CDSC. Upon the
redemption of the shares of the U.S. Government Portfolio received in
connection with such a purchase, an investor may direct that the proceeds
of the redemption be used to directly purchase Class A shares of a Sentinel
Fund, and such Class A shares of the Sentinel Fund will not be subject to a
front-end sales charge or a CDSC.

o Investors in Sentinel Funds may redeem Class C shares of such funds and
direct that such proceeds be used to directly purchase shares of the U.S.
Government Portfolio upon payment of any applicable CDSC. Upon the
redemption of the shares of the U.S. Government Portfolio received in
connection with such a purchase, an investor may direct that the proceeds
of the redemption be used to directly purchase Class C shares of a Sentinel
Fund,

-5-

and such Class C shares of the Sentinel Fund will not be subject to a front-end
sales charge or a CDSC.

Reinvestment requests may be made by phoning SASI or by providing
appropriate instructions in writing to SASI. You may also set up your account to
reinvest automatically a specified number or dollar-value of shares in the U.S
Government Portfolio for shares of the Sentinel Funds at regular intervals.
Reinvestments may be restricted in accordance with the Sentinel Funds
prospectus. New purchases must remain in an account for 15 days before they can
be reinvested.

There is no administrative charge for the reinvestment privilege. Sentinel
Fund policies prohibiting short term or excessive trading apply. The minimum
amount for a reinvestment is $1,000. However, shareholders who are establishing
a new account through the reinvestment privilege must ensure that a sufficient
number of shares are invested to meet the minimum initial investment required
for the fund into which the investment is being made.

The reinvestment privilege is available to shareholders resident in any
state in which shares of the fund being acquired may legally be sold. Before
making a reinvestment, an investor should review the current prospectus of the
fund into which the reinvestment is to be made. A reinvestment will be a taxable
event to the shareholder making such reinvestment.

Instructions for reinvestments may be made by sending a written request to:

Sentinel Administrative Services, Inc.
Re: Daily Income Fund
PO Box 1499
Montpelier VT 05601-1499

or, for shareholders who have elected that option, by telephoning SASI at
(800) 282-3863. SASI reserves the right to reject any reinvestment request and
may modify or terminate the reinvestment privilege at any time.

Please contact SASI for additional information regarding reinvestment privileges
with respect to shares of the U.S. Government Portfolio.

-6-

COMBINED PROSPECTUS/INFORMATION STATEMENT

RELATING TO THE ACQUISITION OF ASSETS OF THE

SENTINEL GOVERNMENT MONEY MARKET FUND,
a series of the Sentinel Group Funds, Inc.
National Life Drive
Montpelier, Vermont 05604
1-800-282-FUND (3863)

BY AND IN EXCHANGE FOR

INSTITUTIONAL SERVICE CLASS SHARES OF THE U.S. GOVERNMENT PORTFOLIO,
a series of the Daily Income Fund
Reich & Tang Asset Management, LLC
New York, New York 10020
1-212-830-5200

October 12, 2009

This Combined Prospectus/Information Statement is being furnished to
shareholders of the Sentinel Government Money Market Fund (the "Sentinel
Government Money Market Fund"), a series of Sentinel Group Funds, Inc., in
connection with an Agreement and Plan of Reorganization (the "Plan") that has
been approved by the Board of Directors of Sentinel Group Funds, Inc. (the
"Corporation") and the Board of Trustees of the Daily Income Fund (the "Trust").
Under the Plan, shareholders of Class A and Class B Shares of the Sentinel
Government Money Market Fund will receive shares of the Institutional Service
Class of the U.S. Government Portfolio of the Daily Income Fund ("U.S.
Government Portfolio") equivalent in aggregate net asset value to the aggregate
net asset value of their shares, in their respective classes, of the Sentinel
Government Money Market Fund, as of the closing date of the reorganization (the
"Reorganization"). After the Reorganization is complete, the Sentinel Government
Money Market Fund will be terminated as a series of the Corporation. The
Reorganization is expected to be effective on or about November 13, 2009.

The Board of Directors of the Corporation and the Board of Trustees of the
Trust believe that the Reorganization is in the best interests of the Sentinel
Government Money Market Fund and the Daily Income Fund (together, the "Funds"),
and that the interests of the Funds' shareholders will not be diluted as a
result of the Reorganization.

For federal income tax purposes, the Reorganization is to be structured as
a tax-free transaction for the Funds and their shareholders. Shareholders of the
Sentinel Government Money Market Fund are not being asked to vote on or approve
the Plan.

The investment objectives of the Funds are substantially similar. The
investment objective of the U.S. Government Portfolio is to seek as high a level
of current income to the extent consistent with the preservation of capital and
the maintenance of liquidity. The investment objective of the

Combined Prospectus/Information Statement

Sentinel Government Money Market Fund is to seek as high a level of current
income as is consistent with stable principal value.

This Combined Prospectus/Information Statement sets forth concisely
information about the U.S. Government Portfolio that shareholders of the
Sentinel Government Money Market Fund should know before investing and should be
read and retained by investors for future reference. Copies of the prospectus
for the Institutional Service Class of the U.S. Government Portfolio, dated July
29, 2009, and the annual report for the Daily Income Fund for the fiscal year
ended March 31, 2009, have been filed with the Securities and Exchange
Commission (the "SEC"), are enclosed herewith, and are incorporated by reference
herein.

A Statement of Additional Information dated October 12, 2009, relating to
this Combined Prospectus/Information Statement, has been filed with the SEC and
is incorporated by reference herein. A Statement of Additional Information for
the U.S. Government Portfolio dated July 29, 2009, as supplemented August 31,
2009, containing additional and more detailed information about the U.S.
Government Portfolio, has been filed with the SEC and is incorporated by
reference herein.

In addition, the prospectus for the Sentinel Government Money Market Fund
dated March 31, 2009, as supplemented June 17, 2009, which has been previously
delivered to shareholders, and the Statement of Additional Information for the
Sentinel Government Money Market Fund, also dated March 31, 2009, have been
filed with the SEC and are incorporated by reference herein. The annual report
for the Sentinel Government Money Market Fund for the fiscal year ended November
30, 2008, and the semi-annual report for the Sentinel Government Money Market
Fund for the six months ended May 31, 2009, have been previously mailed to
shareholders and filed with the SEC and are incorporated by reference herein.

Copies of these documents are available without charge and can be obtained
by writing to the U.S. Government Portfolio, or by calling, toll free, (800)
433-1918 for the documents relating to the U.S. Government Portfolio and by
writing to the Sentinel Government Money Market Fund, or by calling, toll free,
(800) 282-3863 for the documents relating to the Sentinel Government Money
Market Fund. In addition, these documents may be obtained from the EDGAR
database on the SEC's Internet site at www.sec.gov. You may review and copy
documents at the SEC Public Reference Room in Washington, DC (for information on
the operation of the Public Reference Room, call 1-202-551-8090). You may
request documents by mail from the SEC, upon payment of a duplication fee, by
writing to: Securities and Exchange Commission, Public Reference Section, 100 F
Street, NE, Washington, DC 20549-1520. You may also obtain this information upon
payment of a duplicating fee, by e-mailing the SEC at the following address:
publicinfo@sec.gov.

This Combined Prospectus/Information Statement is expected to be sent to
shareholders on or about October 12, 2009. SHAREHOLDER APPROVAL IS NOT REQUIRED
TO EFFECT THE REORGANIZATION. NO ACTION ON YOUR PART IS REQUIRED TO EFFECT THE
TRANSACTION.

The Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the adequacy of this Combined
Prospectus/Information Statement. Any representation to the contrary is a
criminal offense.

AN INVESTMENT IN THE FUNDS IS NOT A DEPOSIT OF ANY BANK AND IS NOT INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE

Combined Prospectus/Information Statement -ii-

CORPORATION (FDIC) OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN THE FUNDS
INVOLVES INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.

Combined Prospectus/Information Statement -iii-

TABLE OF CONTENTS

I. THE REORGANIZATION......................................................1

A. Overview.......................................................1

B. Comparison Fee Table and Examples..............................2

C. Comparison of Performance......................................3

D. Summary of Investment Objectives, Strategies and Risks.........5

E. Key Information About The Reorganization......................11

1. Summary of the Reorganization........................11

2. Description of the Shares to be Issued...............12

3. Reasons for the Reorganization.......................13

4. Federal Income Tax Consequences......................14

5. Comparison of Shareholder Rights.....................15

6. Comparison of Valuation Procedures...................16

7. Capitalization.......................................18

8. Investment Adviser...................................18

9. Distribution.........................................19

10. Purchase and Redemption Procedures...................20

11. Control Persons and Principal Holders of Securities..21

12. Service Providers....................................22

13. Financial Highlights.................................22

II. Appendix A: Agreement and Plan of Reorganization.....................A-1

Appendix B: Comparison of Investment Restrictions
and Limitations..........................................B-1

Appendix C: Additional Shareholder Information About
the U.S. Government Portfolio............................C-1

Combined Prospectus/Information Statement -i-

I. THE REORGANIZATION

A. OVERVIEW

At a meeting held on August 12, 2009, the Board of Directors of Sentinel
Group Funds, Inc. (the "Corporation"), including all of the Directors who are
not "interested persons" of the Corporation, as that term is defined in Section
2(a)(19) of the Investment Company Act of 1940, as amended (the "1940 Act"),
considered and approved an Agreement and Plan of Reorganization dated as of
September 17, 2009 (the "Plan of Reorganization"), a copy of which is attached
to this Combined Prospectus/Information Statement as Appendix A. Under the Plan
of Reorganization, the Sentinel Government Money Market Fund will transfer
substantially all of its assets and liabilities to the U.S. Government Portfolio
of the Daily Income Fund ("U.S. Government Portfolio") in exchange for a number
of Institutional Service Class Shares of the U.S. Government Portfolio
equivalent in aggregate net asset value to the aggregate net asset value of the
Class A and Class B Shares of the Sentinel Government Money Market Fund
outstanding immediately prior to the Closing Date (as defined below). This will
be followed by a distribution of those shares to Sentinel Government Money
Market Fund Class A and Class B shareholders so that each Sentinel Government
Money Market Fund shareholder would receive shares of the Institutional Service
Class of the U.S. Government Portfolio equivalent to the value of Sentinel
Government Money Market Fund shares held by such shareholder on the closing date
of the transaction, currently scheduled on or about November 13, 2009 (the
"Closing Date"). The Sentinel Government Money Market Fund will subsequently be
liquidated and terminated as a series of the Sentinel Funds (the transactions
described in this paragraph are collectively referred to as the
"Reorganization").

Reich & Tang Asset Management, LLC, the investment manager of the U.S.
Government Portfolio and Sentinel Asset Management, Inc., the investment adviser
to the Sentinel Government Money Market Fund, will share of the costs of the
Reorganization.

Combined Prospectus/Information Statement

B.COMPARISON FEE TABLE AND EXAMPLES

The following table shows the comparative fees and expenses of the
Funds as of March 31, 2009. The table also reflects the pro forma fees for the
Institutional Service Class Shares of the U.S. Government Portfolio after giving
effect to the Reorganization, also as of March 31, 2009.

------------------------------------------------- ------------------ ------------------ ------------------------- ----------------

Sentinel Sentinel U.S. Government U.S.
Government Money Government Money Portfolio Government
Market Fund Market Fund Portfolio

Class A Class B Institutional Service Institutional
Class Service Class
Pro Forma
Combined
------------------------------------------------- ------------------ ------------------ ------------------------- ----------------
Shareholder Fees
(Fees paid directly from your investment)
------------------------------------------------- ------------------ ------------------ ------------------------- ----------------
Maximum Sales Charge (Load) Imposed on Purchases None None None None
(as a percentage of the offering price)
------------------------------------------------- ------------------ ------------------ ------------------------- ----------------
------------------------------------------------- ------------------ ------------------ ------------------------- ----------------
Maximum Deferred Sales Charge (Load) Imposed on None(1) None None None
Redemptions
(as a percentage of sales price)
------------------------------------------------- ------------------ ------------------ ------------------------- ----------------
Maximum Sales Charge (Load) Imposed on None None None None
Reinvested Distributions
------------------------------------------------- ------------------ ------------------ ------------------------- ----------------
Redemption Fee None(1) None(1) None((3)) None((3))
(as a percentage of amount redeemed)
------------------------------------------------- ------------------ ------------------ ------------------------- ----------------
Exchange Fee None None None None
(as a percentage of amount exchanged)
------------------------------------------------- ------------------ ------------------ ------------------------- ----------------
Annual Fund Operating Expenses
(Expenses deducted from Fund assets)
------------------------------------------------- ------------------ ------------------ ------------------------- ----------------
Management Fees 0.40%(2) 0.40%(2) 0.12% 0.12%
------------------------------------------------- ------------------ ------------------ ------------------------- ----------------
Distribution (12b-1) Fees None None 0.25% 0.25%
------------------------------------------------- ------------------ ------------------ ------------------------- ----------------
Other Expenses 0.36% 0.56% 0.15% 0.15%
------------------------------------------------- ------------------ ------------------ ------------------------- ----------------
Total Annual Fund Operating Expenses 0.76% 0.96% 0.52%((4)) 0.52%((4))
------------------------------------------------- ------------------ ------------------ ------------------------- ----------------

(1) If you redeem by wire transfer, you are assessed a wire charge of $20. If
you exchange Class A Shares of the Sentinel Government Money Market Fund for
Class A Shares of another Sentinel Fund, and you did not acquire the Sentinel
Government Money Market Fund shares in an exchange from another Sentinel Fund's
Class A shares, then you pay a sales charge equal to the sales charge imposed on
new purchases of the new Sentinel Fund.

(2) The Sentinel Government Money Market Fund pays an advisory fee at the rate
of 0.40% per annum on the first $300 million of the Sentinel Government Money
Market Fund's average daily net assets and 0.35% on such assets over $300
million. The investment advisor has voluntarily agreed to waive fees and/or
reimburse expenses paid by the Sentinel Government Money Market Fund share
Classes A and B to the extent necessary to prevent total expenses in each Class
from exceeding the gross income allocated to each Class from the Sentinel
Government Money Market Fund's investment activities on a daily basis. This
reimbursement may be discontinued at any time.

(3) Daily Income Fund charges a $15 fee for all wire redemptions less than
$10,000.

(4) The Daily Income Fund's investment manager and distributor have voluntarily
agreed to waive fees and/or reimburse expenses in order to maintain Total Annual
Operating Expenses at 0.50% for the Institutional Service Class (the "Expense
Cap"). The Daily Income Fund's investment manager and distributor have further
agreed that they will not modify or terminate these fee waiver arrangements
through July 31, 2010, without prior approval of the Daily Income Fund's Board
of Trustees. In addition, in light of recent market conditions, the Daily Income
Fund's investment manager and distributor may temporarily waive additional fees
and/or reimburse additional expenses in an amount in excess of the amount
required under the Expense Cap in an effort to maintain certain net yields. In
the event that the Daily Income Fund's investment manager and/or distributor
waive fees and/or reimburse expenses either as a result of the Expense Cap or in
an effort to maintain certain net yields, the Daily Income Fund's Board of
Trustees has agreed that the Daily Income Fund's investment manager and
distributor may be reimbursed, on a class by class basis, for such fee
reductions and/or expense payments. In carrying out this reimbursement to the
Daily Income Fund's investment manager and/or distributor, the annualized
expense ratio as of any day in the fiscal year shall not exceed the rates set
forth in the Expense Cap. The Daily Income Fund's investment manager and
distributor may not recover fee reductions and/or expense payments with respect
to the class more than 2 years after the end of the fiscal year in which the fee
was reduced or expense was borne. This reimbursement could negatively affect the
class' future yield.

Combined Prospectus/Information Statement

Example

The Example below is intended to help you compare the cost of investing in
the Sentinel Government Money Market Fund with the cost of investing in the U.S.
Government Portfolio. The Example assumes that you invest $10,000 in the
specified class of the Funds for the time periods indicated, and then redeem all
of your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year, dividends and distributions are
reinvested, and the operating expenses remain the same. Although your actual
costs may be higher or lower, under the assumptions, your costs would be:

------------------------ --------------------- -------------------- ------------------- ------------------- ---------------------
Example Costs Sentinel Government Sentinel Sentinel U.S. Government U.S. Government
Money Market Fund Government Money Government Money Portfolio Portfolio
Market Fund Market Fund
Class A
Class B Class B Institutional Institutional
(If you redeem)* (If you do not Service Class Service Class
redeem)* Pro Forma Combined
------------------------ --------------------- -------------------- ------------------- ------------------- ---------------------

One Year $78 $498 $98 $53 $53
------------------------ --------------------- -------------------- ------------------- ------------------- ---------------------
Three Years $243 $606 $306 $167 $167
------------------------ --------------------- -------------------- ------------------- ------------------- ---------------------
Five Years $422 $731 $531 $291 $291
------------------------ --------------------- -------------------- ------------------- ------------------- ---------------------
Ten Years $942 $1,070 $1,070 $653 $653
---------------------------------------------------------------------------------------------------------------------------------
<FN>
* Class B shares of the Sentinel Government Money Market Fund are no longer
open to new investments or exchanges. Prior to January 1, 2009, they could
only be acquired by exchange from another Sentinel Fund's Class B shares.
The actual contingent deferred sales charge, if any, paid on the redemption
of Class B shares of the Sentinel Government Money Market Fund will be
equivalent to the charge that would have been due on the other Sentinel
Fund's Class B shares at the time of the exchange if such shares had been
redeemed rather than exchanged into the Sentinel Government Money Market
Fund.
</FN>

C. COMPARISON OF PERFORMANCE

Total Return Information for Periods Ended December 31, 2008

U.S. Government Portfolio

Annual returns of the Institutional Service Class Shares of the U.S. Government
Portfolio as of December 31 were as follows for each year shown:

[Insert bar chart]

1.88%
2008

As of June 30, 2009, the year to date return was 0.18%

Highest Quarterly Return: 1.22% Quarter ended June 30, 2007

Combined Prospectus/Information Statement

Lowest Quarterly Return: 0.08% Quarter ended June 30, 2009

Average Annual Total Returns for the Institutional Service Class Shares of the
U.S. Government Portfolio (for the periods ended December 31, 2008) were as
follows:

1 Year Since Inception*
Institutional Service Class Shares of the
U.S. Government Portfolio
Return Before Taxes 1.88% 3.12%
<FN>
* The inception date for the Institutional Service Class Shares of the U.S.
Government Portfolio of the Daily Income Fund was March 19, 2007.
</FN>

Sentinel Government Money Market Fund

Annual returns for the Sentinel Government Money Market Fund as of December 31
were as follows for each year shown:

[Insert bar chart]

----------------------------------------------------------------------------------------------------------------------------

4.2% 5.2% 3.3% 1.1% 0.3% 0.5% 2.2% 4.0% 3.9% 0.9%
----------------------------------------------------------------------------------------------------------------------------
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
----------------------------------------------------------------------------------------------------------------------------

As of June 30, 2009, the year to date return was 0.00%

Highest Quarterly Return: 1.39% Quarter ended December 31, 2000

Lowest Quarterly Return: 0.00% Quarter ended June 30, 2009

Average Annual Total Returns for the Sentinel Government Money Market Fund (for
the periods ended December 31, 2008)

The table below shows the average annual return before taxes for each
share class of the Sentinel Government Money Market Fund. The returns for shares
classes with a sales charge include the effect of the maximum sales charge,
including any contingent deferred sales charge that would apply to redemption at
the end of the period, in the case of the Class B shares.

1 Year 5 Years 10 Years
Sentinel Government Money Market Fund
Return Before Taxes: Class A 0.90% 2.26% 2.53%
Return Before Taxes: Class B(1) -3.39% 1.18% 1.91%

<FN>
(1) Returns for the Class B shares assume a maximum 4% contingent deferred
sales charge. Class B shares of the Sentinel Government Money Market Fund
are no longer open to new investments or exchanges. Prior to January 1,
2009 they could only be acquired by exchange from another Sentinel Fund's
Class B shares. The actual contingent deferred sales charge, if any, paid
on the redemption of Class B shares of the Sentinel Government Money Market
Fund will be equivalent to the charge that would have been due on the other
Sentinel Fund's Class B shares at the time of the exchange if such shares
had been redeemed rather than exchanged into the Sentinel Government Money
Market Fund.
</FN>

Combined Prospectus/Information Statement

D. SUMMARY OF INVESTMENT OBJECTIVES, STRATEGIES AND RISKS

Comparison of Investment Objective, Principal Strategies and Risks

The U.S. Government Portfolio has a substantially similar investment
objective as that of the Sentinel Government Money Market Fund.

Investment Objective
-------------------------------- ------------------------------------------------- ------------------------------------------

Sentinel Government Money Market Fund U.S. Government Portfolio
-------------------------------- ------------------------------------------------- ------------------------------------------
Investment Objective To seek as high a level of current income as is To seek as high a level of current income
consistent with stable principal value. to the extent consistent with the
preservation of capital and the
maintenance of liquidity.
-------------------------------- ------------------------------------------------- ------------------------------------------

Principal Investment Strategies

The Sentinel Government Money Market Fund and the U.S. Government
Portfolio each seeks to achieve its investment objective by using the principal
investment strategies discussed below. The Funds' principal strategies are
substantially similar, except that the Sentinel Government Money Market Fund may
use derivatives and participate in a securities lending program, which the U.S.
Government Portfolio does not use. Both Funds' principal investment strategies
are non-fundamental and may be changed upon at least 60 days' prior notice to
shareholders. The combined fund will follow the principal investment strategies
of the U.S. Government Portfolio.

Principal Investment The Sentinel Government Money Market Fund must Under normal market circumstances, the
Strategies invest under normal conditions at least 80% of U.S. Government Portfolio will invest at
its net assets in securities of the U.S. least 80% of its net assets in short-term
Treasury or U.S. government agencies or Government Securities with maturities of
instrumentalities. This principal investment 397 days or less and repurchase agreements
strategy is a non-fundamental policy that may which are collateralized by the foregoing
not be changed without 60 days' prior notice securities. For purposes of this test
to the Sentinel Government Money Market Fund's only, net assets include borrowings for
shareholders. investment purposes. The Fund will provide
shareholders with at least 60 days' prior
notice of any change in this policy.
------------------------------ ------------------------------------------------ ---------------------------------------------
The Sentinel Government Money Market Fund may The U.S. Government Portfolio's investments
invest in short-term direct may include the following
------------------------------ ------------------------------------------------ ---------------------------------------------
Combined Prospectus/Information Statement

------------------------------ ------------------------------------------------ ---------------------------------------------
Sentinel Government Money Market Fund U.S. Government Portfolio
------------------------------ ------------------------------------------------ ---------------------------------------------
obligations of the securities:
U.S. Treasury. These obligations include U.S.
Treasury bills, notes and bonds with remaining (i) United States Treasury Obligations:
maturities of 397 days or less. The Sentinel Obligations issued by the full faith and
Government Money Market Fund may also invest credit of the United States. U.S. Treasury
up to 25% of its total assets in repurchase obligations include bills, notes and bonds,
agreements with respect to U.S. Treasury which principally differ only in their
securities, and up to 25% of its total assets interest rates, maturities and time of
in shares of institutional money market funds issuance.
that invest primarily in securities of the Other Obligations of U.S. Government
U.S. Treasury, U.S. government agencies and agencies and instrumentalities:
instrumentalities and repurchase agreements Marketable securities and instruments
with respect to such securities. The Sentinel issued by government-sponsored agencies
Government Money Market Fund may also invest and enterprises acting under authority
without limitation in short-term direct of Congress. Although obligations of
obligations of U.S. government agencies or federal agencies and instrumentalities
instrumentalities including securities issued are not debts of the U.S. Treasury, in
by the Federal Home Loan Mortgage Corporation some cases, payment of interest and
(FHLMC), Federal Farm Credit Bank (FFCB), principal on such obligations is
Federal Home Loan Bank (FHLB) and Federal guaranteed by the U.S. Government, e.g.,
National Mortgage Association (FNMA). The obligations of the Federal Housing
Sentinel Government Money Market Fund may earn Administration, the Export-Import Bank
less income than funds owning longer-term of the United States, the Small Business
securities or lower-quality securities that Administration, the Government National
have less liquidity, greater market risk and Mortgage Association, the General
greater market value fluctuations. Services Administration and the Maritime
Administration; in other cases payment
of interest and principal is not
guaranteed, e.g., obligation of the
Federal Home Loan Bank System and the
Federal Farm Credit Bank. The Fund will
invest in the securities of those
agencies that are not guaranteed or
backed by the full faith and credit of
the U.S. Government only when the
Manager, in its sole discretion, is
satisfied that the credit risk with
respect to a particular agency or
instrumentality is minimal.
------------------------------ ------------------------------------------------ ---------------------------------------------
Combined Prospectus/Information Statement

------------------------------ ------------------------------------------------ ---------------------------------------------
Sentinel Government Money Market Fund U.S. Government Portfolio
------------------------------ ------------------------------------------------ ---------------------------------------------
The Sentinel Government Money Market Fund The U.S. Government Portfolio seeks
seeks to maintain a net asset value of $1.00 to maintain investment portfolios
per share, by using the amortized cost method with a dollar-weighted average
of valuing its securities. The Sentinel maturity of 90 days or less, to value
Government Money Market Fund is required to its investment portfolios at
maintain a dollar-weighted average portfolio amortized cost and maintain a net
maturity of 90 days or less. asset value of $1.00 per share.
------------------------------ ------------------------------------------------ ---------------------------------------------
The Sentinel Government Money Market Fund may use
derivative instruments (e.g., futures, options
and swap agreements) for hedging purposes, and
for other investment purposes such as replicating
permitted investments, as long as such
investments do not have the effect of leveraging
portfolio risks. It may establish derivative
positions only when immediately thereafter not
more than 5% of its total assets are held in
derivative positions. The Sentinel Government
Money Market Fund is not required to use hedging
and may choose not to do so.
------------------------------ ------------------------------------------------ ---------------------------------------------
The Sentinel Government Money Market Fund may The U.S. Government Portfolio may enter into
invest in repurchase agreements, provided the repurchase agreements which are
counterparty maintains the value of the collateralized by obligations issued or
underlying securities at not less than 102% of guaranteed by the U.S. Government or its
the repurchase price stated in the agreement. agencies or instrumentalities. A repurchase
Under a repurchase agreement, the Sentinel agreement arises when a buyer purchases a
Government Money Market Fund purchases bonds security and simultaneously agrees with the
and simultaneously agrees to resell these vendor to resell the security to the vendor
bonds to a counterparty at a prearranged time at an agreed upon time and price.
and specific price.
------------------------------ ------------------------------------------------ ---------------------------------------------
The U.S. Government Portfolio will only
invest in either securities which have been
rated (or whose issuers have been rated) in
the highest short-term rating category by
nationally recognized statistical rating
organizations, or in unrated securities but
which have been determined by the U.S.
Government
------------------------------ ------------------------------------------------ ---------------------------------------------
Combined Prospectus/Information Statement

------------------------------ ------------------------------------------------ ---------------------------------------------
Sentinel Government Money Market Fund U.S. Government Portfolio
------------------------------ ------------------------------------------------ ---------------------------------------------
Portfolio's investment manager to
be of comparable quality.
------------------------------ ------------------------------------------------ ---------------------------------------------
The U.S. Government Portfolio shall invest
not more than 5% of its total assets in
securities issued by a single issuer, except
for U.S. Government Obligations. With respect
to 75% of its total assets, the U.S.
Government Portfolio shall invest not more
than 10% of its total assets in securities
backed by a demand feature or guarantee from
the same institution, except for U.S.
Government Obligations.
------------------------------ ------------------------------------------------ ---------------------------------------------
The Sentinel Government Money Market Fund may
participate in a securities lending program with
respect to a substantial amount of its holdings.
------------------------------ ------------------------------------------------ ---------------------------------------------
The U.S. Government Portfolio's investment
manager considers the following factors when
buying and selling securities for the U.S.
Government Portfolio: (i) the availability of
cash; (ii) redemption requests; (iii) yield
management; and (iv) credit management.
------------------------------ ------------------------------------------------ ---------------------------------------------
Temporary Defensive Position As a temporary defensive measure the U.S.
Government Portfolio may, from time to time,
invest in securities that are inconsistent
with its principal investment strategies or
remain uninvested in an attempt to respond
to adverse market, economic, political or
other conditions as determined by the Fund's
investment manager. Such a temporary
defensive position may cause the U.S.
Government Portfolio to not achieve its
investment objective.
------------------------------ ------------------------------------------------ ---------------------------------------------

Principal Investment Risks

Because of their similar investment objectives and strategies, the
Sentinel Government Money Market Fund and the U.S. Government Portfolio have
substantially similar risks. The Sentinel Government Money Market Fund has
additional risks associated with its investments in derivatives and its
participation

Combined Prospectus/Information Statement

in securities lending. A discussion of the principal risks of investing in the
Funds is set forth below. This discussion is qualified in its entirety by the
more extensive discussion of risk factors set forth in the prospectuses and
statements of additional information of the Funds, which are incorporated by
reference. The combined fund will have the same risks as the U.S. Government
Portfolio.

An investment in either Fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
the Funds seek to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Funds.

The Sentinel Government Money Market Fund

General Fixed-Income Securities Risk. The market prices of bonds,
including those issued by the U.S. government, go up as interest rates fall, and
go down as interest rates rise. As a result, the net asset value of the shares
of funds holding bonds will fluctuate with conditions in the bond markets. Bonds
with longer maturities and longer durations (a measure of a bond's sensitivity
to changes in interest rates) generally are subject to greater price fluctuation
due to interest-rate changes than bonds with shorter maturities or shorter
durations. While considered investment-grade, bonds in the fourth highest rating
category of Moody's and Standard & Poor's may have more speculative
characteristics and may be more likely to be downgraded than bonds rated in the
three highest rating categories.

Government Securities Risk. Economic, business, or political
developments may affect the ability of government-sponsored guarantors, such as
FNMA, FFCB, FHLB and FHLMC, to repay principal and to make interest payments on
the securities in which the Sentinel Government Money Market Fund invests. In
addition, certain of these securities, including those guaranteed by FNMA, FFCB,
FHLB and FHLMC, are not backed by the full faith and credit of the U.S.
government. In addition, if prevailing interest rates are below the rates on the
mortgages, the mortgage borrowers are more likely to refinance their mortgages
than if interest rates are at or above the interest rates on the mortgages.
Faster prepayments will reduce the potential of the mortgage-backed securities
to rise in value during periods of falling interest rates, while the risk of
falling value during periods of rising interest rates may be comparable to or
higher than other bonds of similar maturities.

Derivatives Risk. Derivative investments involve credit risk (the risk
that the counterparty of the derivative transaction will be unable to honor its
financial obligation to the Sentinel Government Money Market Fund), hedging risk
(the risk that the derivative instrument will not fully offset the underlying
positions), liquidity risk (the risk that the Sentinel Government Money Market
Fund cannot sell the derivative instrument because of an illiquid secondary
market) and, when hedging, the risk that the intended risk management purpose of
the derivative instrument may not be achieved, and may produce losses or missed
opportunities.

Not Guaranteed Risk. The Sentinel Government Money Market Fund is not
guaranteed or insured by the U.S. government.

Repurchase Agreements Risk. If the repurchase agreement counterparty
defaults on its repurchase obligation, the Sentinel Government Money Market Fund
would have the collateral securities and be able to sell them to another party,
but it could suffer a loss if the proceeds from a sale of the securities turn
out to be less than the repurchase price stated in the agreement. If the
counterparty becomes insolvent or goes bankrupt, the Sentinel Government Money
Market Fund may be delayed in being able to sell securities that were subject to
the repurchase agreement. In general, for federal income tax purposes,
repurchase agreements are treated as collateralized loans secured by the
securities "sold". Therefore, amounts earned

Combined Prospectus/Information Statement

under such agreements are not eligible for the dividends-received deduction
available to corporate shareholders or for treatment as qualified dividend
income taxable at reduced rates in the hands of non-corporate shareholders.

Securities Lending Risk. Securities lending programs are subject to
borrower default risk (e.g., borrower fails to return a loaned security and
there is a shortfall on the collateral posted by the borrower), cash collateral
investment risk (e.g., principal loss resulting from the investment of the cash
collateral) and security recall/return risk (e.g., the Sentinel Government Money
Market Fund is unable to recall a security in time to exercise valuable rights
or sell the security). In addition, substitute payments (i.e., amounts
equivalent to any dividends, interest or other distributions received by the
Sentinel Government Money Market Fund while the securities are on loan) are not
treated as dividends and are not eligible for the dividends-received deduction
available to corporate shareholders or for treatment as qualified dividend
income taxable at reduced rates in the hands of non-corporate shareholders.

U.S. Government Portfolio

The U.S. Government Portfolio complies with industry-standard
requirements on the quality, maturity and diversification of its investments
which are designed to help maintain a $1.00 share price. A significant change in
interest rates or a default on the U.S. Government Portfolio's investments could
cause its share price (and the value of your investment) to change.

Investments in U.S. Government securities may or may not be supported
by the full faith and credit of the U.S. Government. Although many U.S.
Government securities purchased by the U.S. Government Portfolio, such as those
issued by the Federal National Mortgage Association ("Fannie Mae"), Federal Home
Loan Mortgage Corporation ("Freddie Mac") and the Federal Home Loan Banks
("FHLB") may be chartered or sponsored by Acts of Congress, their securities are
neither issued nor guaranteed by the U.S. Treasury and therefore, are not backed
by the full faith and credit of the United States. Accordingly, no assurance can
be given that the U.S. Government will provide financial support to U.S.
government agencies, instrumentalities or sponsored enterprises if it is not
obligated to do so by law.

The maximum potential liability of the issuers of some U.S. Government
securities held by the U.S. Government Portfolio may greatly exceed their
current resources, including their legal right to support from the U.S. Treasury
and thus, it is possible that these issuers will not have the funds to meet
their payment obligations in the future. In such case, the U.S. Government
Portfolio must look principally to the agency, instrumentality or sponsored
enterprise issuing or guaranteeing the security for ultimate repayment and may
not be able to assert a claim against the U.S. Government itself in the event
the agency, instrumentality or sponsored enterprise does not meet its
commitment.

The U.S. Government securities that the U.S. Government Portfolio may
purchase include:

o U.S. Treasury bills, notes and bonds, all of which are direct obligations
of the U.S. Government.

o Securities issued by agencies, instrumentalities or sponsored enterprises
of the U.S. Government that are backed by the full faith and credit of the
U.S. Government. Among the agencies, instrumentalities and sponsored
enterprises issuing these obligations are the Government National Mortgage
Association (Ginnie Mae) and the Federal Housing Administration (FHA).

Combined Prospectus/Information Statement

o Securities issued by agencies, instrumentalities or sponsored enterprises
that are not backed by the full faith and credit of the U.S. Government,
but whose issuing agency, instrumentality or sponsored enterprise has the
right to borrow from the U.S. Treasury to meet its obligations. Among these
agencies, instrumentalities and sponsored enterprises issuing these
obligations are Fannie Mae, Freddie Mac and the FHLB.

o Securities issued by agencies, instrumentalities or sponsored enterprises
that are backed solely by the credit of the issuing agency, instrumentality
or sponsored enterprise. Among these agencies, instrumentalities and
sponsored enterprises issuing these obligations is the Federal Farm Credit
System.

The U.S. Government Portfolio may invest in senior unsecured debt of banks,
thrifts, and certain holding companies that are guaranteed under the Federal
Deposit Insurance Corporation's ("FDIC") Temporary Liquidity Guarantee Program.
Although these investments are guaranteed under the FDIC's Temporary Liquidity
Guarantee Program and are backed by the full faith and credit of the United
States, such guarantee does not extend to shares of the U.S. Government
Portfolio itself. The U.S. Government Portfolio's investments in debt issued by
private issuers that is guaranteed under the FDIC's Temporary Liquidity
Guarantee Program are subject to certain risks, including the risk that a
trustee appointed by the private issuer of the debt fails to follow the
specified FDIC claims process, and therefore the holders of such debt, including
the U.S. Government Portfolio, may be deprived of all rights and remedies with
respect to the FDIC guarantee claim. In addition, the Portfolio is subject to
the risk that the payments by the FDIC pursuant to its guarantee will be delayed
from the date payments are due under the terms of the debt. These risks could
adversely affect the value of these securities. The investment policies of the
U.S. Government Portfolio may produce a lower yield than a policy of investing
in other types of instruments.

Disclosure of Portfolio Holdings

A description of the Funds' policies and procedures with respect to the
disclosure of the portfolio securities is available in the Statement of
Additional Information for each of the Funds, which are incorporated by
reference.

Investment Restrictions and Limitations

A chart comparing all of the fundamental and non-fundamental investment
restrictions of the U.S. Government Portfolio with those of the Sentinel
Government Money Market Fund is attached as Appendix B. The combined fund will
follow the investment restrictions and limitations of the U.S. Government
Portfolio.

E. KEY INFORMATION ABOUT THE REORGANIZATION

The following is a summary of key information concerning the proposed
Reorganization. Please also refer to the Plan of Reorganization, which is
attached to this Combined Prospectus/Information Statement as Appendix A and
which includes more detailed information about the Reorganization. The following
summary is qualified in its entirety by reference to Appendix A.

1. SUMMARY OF THE REORGANIZATION

On August 12, 2009, the Board of Directors of Sentinel Group Funds, Inc.
(the "Corporation") on behalf of the Sentinel Government Money Market Fund,
approved the Plan of Reorganization, which contemplates the transfer to the U.S.
Government Portfolio of substantially all of the assets and liabilities of the
Sentinel Government Money Market Fund

Combined Prospectus/Information Statement

solely in exchange for shares of beneficial interest of the Institutional
Service Class of the U.S. Government Portfolio. Following the transfer,
Institutional Service Class Shares of the U.S. Government Portfolio will be
distributed to Class A and Class B shareholders of the Sentinel Government Money
Market Fund in liquidation of the Sentinel Government Money Market Fund and the
Sentinel Government Money Market Fund will subsequently be terminated as a
series of the Corporation.

Both Funds are money market funds with substantially similar investment
objectives and strategies. The Funds' Boards and the Funds' investment advisers
recognize that greater economies of scale and efficiencies can be attained by
combining the assets of the Funds and that since the investment objectives are
substantially identical, such a combination would not materially alter the
nature of the Sentinel Government Money Market Fund's shareholders' investment.

As a result of the Reorganization, each shareholder of the Sentinel
Government Money Market Fund will receive full and fractional shares of the
Institutional Service Class of the U.S. Government Portfolio equal in aggregate
net asset value at the time of the Reorganization to the aggregate net asset
value of such shareholder's Class A and Class B shares of the Sentinel
Government Money Market Fund. The Sentinel Funds' Board has determined that the
interests of existing shareholders will not be diluted as a result of the
transactions contemplated by the Reorganization. For the reasons set forth below
under "Reasons for the Reorganization," the Corporation's Board, on behalf of
the Sentinel Government Money Market Fund, including the Independent Directors,
concluded that the Reorganization would be in the best interest of the
shareholders of the Sentinel Government Money Market Fund.

2. DESCRIPTION OF THE SHARES TO BE ISSUED

Full and fractional shares of the Institutional Service Class of the U.S.
Government Portfolio, a series of the Daily Income Fund, will be issued to
shareholders of the Sentinel Government Money Market Fund, in accordance with
the procedures under the Plan of Reorganization as described above. The Daily
Income Fund's Declaration of Trust permits the Trustees to issue an unlimited
number of shares of beneficial interest with a par value of $0.01 per share in
Daily Income Fund in an unlimited number of series of shares. Daily Income Fund
consists of four series, the Money Market Portfolio, the U.S. Treasury
Portfolio, the Municipal Portfolio and the U.S. Government Portfolio. Each share
of beneficial interest has one vote and shares equally in dividends and
distributions when and if declared by a series and in the series' net assets
upon liquidation. All shares, when issued, are fully paid and nonassessable. The
shares shall not entitle the holder of preference, preemptive, appraisal,
conversion or exchange rights, except as the Trustees may determine with respect
to any series of shares. Shares do not have cumulative voting rights and, as
such, holders of at least 50% of the shares voting for Trustees can elect all
Trustees and the remaining shareholders would not be able to elect any Trustees.
The Board of Trustees may classify or reclassify any unissued shares of Daily
Income Fund into shares of any series by setting or changing in any one or more
respects, from time to time, prior to the issuance of such shares, the
preference, conversion or other rights, voting powers, restrictions, limitations
as to dividends, or qualifications of such shares. Any such classification or
reclassification will comply with the provisions of the Act. Shareholders of
each series as created will vote as a series to change, among other things, a
fundamental policy of each such series and to approve the series' investment
management contracts and distribution plans pursuant to Rule 12b-1 of the Act.

Daily Income Fund is not required to hold annual meetings of shareholders
but will hold special meetings of shareholders when, in the judgment of the
Trustees, it is necessary or desirable to submit matters for a shareholder vote.
Shareholders have, under certain circumstances, the right to communicate with
other shareholders in connection with requesting a meeting of shareholders for
the purpose of

Combined Prospectus/Information Statement

removing one or more Trustees. Shareholders also have, in certain circumstances,
the right to remove one or more Trustees without a meeting. No material
amendment may be made to Daily Income Fund's Declaration of Trust without the
affirmative vote of the holders of a majority of the outstanding shares of each
series affected by the amendment.

Under Massachusetts law, shareholders of a Massachusetts business trust
may, under certain circumstances, be held personally liable as partners for its
obligations. However, Daily Income Fund's Declaration of Trust contains an
express disclaimer of shareholder liability for acts or obligations of Daily
Income Fund and provides for indemnification and reimbursement of expenses out
of Daily Income Fund property for any shareholder held personally liable for the
obligations of Daily Income Fund. Daily Income Fund's Declaration of Trust
further provides that obligations of Daily Income Fund are not binding upon the
Trustees individually but only upon the property of Daily Income Fund and that
the Trustees will not be liable for any action or failure to act, errors of
judgment or mistakes of fact or law, but nothing in the Declaration of Trust
protects a Trustee against any liability to which he would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office.

3. REASONS FOR THE REORGANIZATION

The Board of Directors of the Corporation, after careful consideration,
has approved the reorganization of the Sentinel Government Money Market Fund, a
series of the Corporation, into the U.S. Government Portfolio of the Daily
Income Fund. These two Funds pursue substantially similar investment strategies
and possess substantially similar investment policies.

In approving the Reorganization, the Board of Directors has considered,
among other things, the similarities between the Funds' investment objectives
and strategies, the expected lower expenses of the U.S. Government Portfolio,
the investment yield offered by the U.S. Government Portfolio, the costs of the
Reorganization, which will be borne by Sentinel Asset Management, Inc. and Reich
& Tang Asset Management, LLC, investment advisors to the Sentinel Government
Money Market Fund and the U.S. Government Portfolio, respectively, the
continuity of Sentinel shareholder servicing, the ability of shareholders to
redeem shares of a series of the Corporation (each such series, a "Sentinel
Fund") and purchase shares of the U.S. Government Portfolio, then to redeem such
shares and reinvest them in a Sentinel Fund, each as consistent with SEC rules
and the tax-free nature of the Reorganization.

Combined Prospectus/Information Statement

4. FEDERAL INCOME TAX CONSEQUENCES

Each Fund has qualified, in each taxable year since it was organized, and
intends to qualify, as of the Closing Date, as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended (the "Code"). Accordingly,
each of the Funds has been, and expects to continue to be, relieved of all or
substantially all federal income taxes. The exchange of substantially all of the
assets of the Sentinel Government Money Market Fund for Institutional Service
Class Shares of the U.S. Government Portfolio and the assumption by the U.S.
Government Portfolio of the liabilities of the Sentinel Government Money Market
Fund, and the liquidation of the Sentinel Government Money Market Fund, are
intended to qualify for federal income tax purposes as a tax-free reorganization
under Section 368(a)(1)(C) of the Code. However any dividend paid by Sentinel
Government Money Market Fund may result in taxable income to Sentinel Government
Money Market Fund shareholders. As a condition to the closing of the
transaction, the Funds will each receive an opinion of Paul, Hastings, Janofsky
& Walker LLP, counsel to the U.S. Government Portfolio, to the effect that,
based on certain assumptions and on the existing provisions of the Code,
Treasury Regulations issued thereunder, current Revenue Rulings, Revenue
Procedures and court decisions, for federal income tax purposes:

(1) The transfer of all of the assets and liabilities of the Sentinel
Government Money Market Fund to the U.S. Government Portfolio in
exchange for shares of the U.S. Government Portfolio and the
distribution to shareholders of the Sentinel Government Money Market
Fund of shares of the U.S. Government Portfolio, as described in the
Plan, will constitute a tax-free "reorganization" within the meaning
of Section 368(a)(1)(C) of the Code, and the Sentinel Government Money
Market Fund and the U.S. Government Portfolio each will be considered
"a party to a reorganization" within the meaning of Section 368(b) of
the Code;

(2) No gain or loss will be recognized by the Sentinel Government Money
Market Fund upon (a) the transfer of its assets and liabilities to the
U.S. Government Portfolio in exchange for the issuance of shares of
the U.S. Government Portfolio to the Sentinel Government Money Market
Fund and the assumption by the U.S. Government Portfolio of the
Sentinel Government Money Market Fund's liabilities, if any, and (b)
the distribution by the Sentinel Government Money Market Fund to its
shareholders of shares of the U.S. Government Portfolio received as a
result of the Reorganization (Sections 361(a), 354(a) and 357(a) of
the Code);

(3) No gain or loss will be recognized by the U.S. Government Portfolio
upon its receipt of the assets and liabilities of the Sentinel
Government Money Market Fund in exchange for the issuance of shares of
the U.S. Government Portfolio to the Sentinel Government Money Market
Fund and the assumption by the U.S. Government Portfolio of the
Sentinel Government Money Market Fund's liabilities, if any (Section
1032(a) of the Code);

(4) The tax basis of the U.S. Government Portfolio shares received by a
shareholder of the Sentinel Government Money Market Fund in the
aggregate will be the same as the aggregate tax basis of the
shareholder's Sentinel Government Money Market Fund shares immediately
prior to the Reorganization (Section 358(a)(i) of the Code);

(5) The tax basis of the U.S. Government Portfolio in the assets and
liabilities of the Sentinel Government Money Market Fund received
pursuant to the Reorganization will be the same as the tax basis of
the assets and liabilities in the hands of the Sentinel

Combined Prospectus/Information Statement

Government Money Market Fund immediately before the Reorganization
(Section 362(b) of the Code);

(6) The tax holding period for the shares of the U.S. Government Portfolio
issued in connection with the Reorganization will be determined by
including the period for which the shareholder held shares of the
Sentinel Government Money Market Fund exchanged therefor, provided
that the shareholder held such shares of the Sentinel Government Money
Market Fund as capital assets;

(7) The tax holding period for the U.S. Government Portfolio with respect
to the assets and liabilities of the Sentinel Government Money Market
Fund received in the Reorganization will include the period for which
such assets and liabilities were held by the Sentinel Government Money
Market Fund (Section 1223(2) of the Code);

(8) The Sentinel Government Money Market Fund's shareholders will not
recognize gain or loss upon the exchange of their shares of the
Sentinel Government Money Market Fund for shares of the U.S.
Government Portfolio as part of the Reorganization;

(9) The U.S. Government Portfolio will succeed to and take into account
the items of the Sentinel Government Money Market Fund described in
Section 381(c) of the Code, subject to the provisions and limitations
specified in Sections 381, 382, 383 and 384 of the Code and the
regulations thereunder (Section 381(a) of the Code); and

(10) The tax year of the Sentinel Government Money Market Fund will end on
the date of the Reorganization (Section 381(b) of the Code).

Shareholders of the Sentinel Government Money Market Fund should consult their
tax advisers regarding the effect, if any, of the Reorganization in light of
their individual circumstances, including state and local tax consequences, if
any, of the Reorganization.

The opinion of Paul, Hastings, Janofsky & Walker LLP is based on the Code,
Treasury Regulations promulgated thereunder, administrative pronouncements and
judicial interpretations thereof, in each case as in effect on the date thereof,
all of which are subject to change. An opinion of counsel merely represents
counsel's best judgment with respect to the probable outcome on the merits and
is not binding on the Internal Revenue Service or the courts. Accordingly, there
can be no assurance that the Internal Revenue Service will not take a contrary
position, that the applicable law will not change, or that any such change will
not have retroactive effect.

The Sentinel Government Money Market Fund had capital loss carryovers of
$203 as of November 30, 2008.

5. COMPARISON OF SHAREHOLDER RIGHTS

Set forth below is a discussion of the material differences between the
Sentinel Government Money Market Fund and the rights of its shareholders, and
the U.S. Government Portfolio and the rights of its shareholders.

Governing Law. The Sentinel Government Money Market Fund is a separate
series of Sentinel Group Funds, Inc., which was originally organized as a
Delaware corporation on December 5, 1933 and was reorganized as a Maryland
corporation on February 28, 1973. The U.S. Government Portfolio is a separate

Combined Prospectus/Information Statement

series of the Daily Income Fund, which is organized as a Massachusetts business
trust. Sentinel Group Funds, Inc. is governed by its Charter and Bylaws and
applicable Maryland law. The Daily Income Fund is governed by its Declaration of
Trust and applicable Massachusetts law.

Shareholder Liability.

Sentinel Funds

Maryland law provides that shareholders of a corporation are generally not
liable for the corporation's debts and obligations.

Daily Income Fund

Under Massachusetts law, shareholders of a Massachusetts business trust,
under certain circumstances, could be held personally liable for the obligations
of the business trust. However, the Daily Income Fund's Declaration of Trust
provides that no Shareholder shall be subject to any personal liability
whatsoever to any person in connection with Trust property or the acts,
obligations or affairs of the Trust. The Declaration of Trust further provides
that if any Shareholder of the Trust is made a party to any suit or proceeding
to enforce any such liability of the Trust, he shall not, on account thereof, be
held to any personal liability. The Trust shall indemnify and hold each
Shareholder harmless from and against all claims and liabilities, to which such
Shareholder may become subject by reason of his being or having been a
Shareholder, and shall reimburse such Shareholder for all legal and other
expenses reasonably incurred by him in connection with any such claim or
liability, provided that any such expenses shall be paid solely out of the funds
and property of the series of the Trust with respect to which such Shareholder's
shares are issued.

Board of Directors/Trustees. The Reorganization will result in a change in
the Board of the Sentinel Government Money Market Fund because the trustees of
the Daily Income Fund are different than the directors of Sentinel Group Funds,
Inc. The Board of Sentinel Group Funds, Inc. currently has seven independent
directors. For more information, refer to the Statement of Additional
information dated March 31, 2009, for the Sentinel Government Money Market Fund,
which is incorporated by reference into this Combined Prospectus/Information
Statement. The Board of Trustees of the Daily Income Fund has eight independent
trustees. For more information, refer to the Statement of Additional Information
dated July 29, 2009, for the Daily Income Fund, which is incorporated by
reference into this Combined Prospectus/Information Statement.

6. COMPARISON OF VALUATION PROCEDURES

Sentinel Government Money Market Fund

Net asset value for the Sentinel Government Money Market Fund is calculated
once, at the close of the New York Stock Exchange (NYSE), usually 4:00 p.m.
Eastern Time, each business day that the NYSE is open. The net asset value per
share is computed by dividing the total value of the assets of the Sentinel
Government Money Market Fund, less its liabilities, by the total number of the
Sentinel Government Money Market Fund's outstanding shares.

Equity securities that are traded on a national or foreign securities
exchange and over-the-counter securities listed in the NASDAQ National Market
System are valued at the last reported sales price or official closing price on
the principal exchange on which they are traded.

Combined Prospectus/Information Statement
16

Foreign equity securities traded on a foreign securities exchange are
subject to fair value pricing when appropriate, using valuations provided by an
independent pricing service.

Securities for which no sale was reported on the valuation date are valued
at the mean between the last reported bid and asked prices.

Over-the-counter securities not listed on the NASDAQ National Market System
are valued at the mean of the current bid and asked prices.

Securities held in the Sentinel Government Money Market Fund are valued at
amortized cost regardless of days left to maturity, which approximates market
value, in accordance with the terms of a rule adopted by the SEC. The amortized
cost method values a security at cost on the date of the purchase and thereafter
assumes a constant amortization to maturity of any discount or premium.

Securities for which market quotations are not readily available, or whose
values have been materially affected by events occurring before the Sentinel
Government Money Market Fund's pricing time but after the close of the
securities' primary markets, will be fair valued under procedures adopted by the
Sentinel Government Money Market Fund's Board. The Board has delegated this
responsibility to a pricing committee, subject to its review and supervision.

Securities transactions are accounted for on the next business day
following trade date (trade date plus one). Under certain circumstances,
exceptions are made so that purchases and sales are booked on trade date. These
exceptions include: (1) when trades occur on a day that happens to coincide with
the end of a month; or (2) on occasion, if Sentinel Administrative Services,
Inc., the Sentinel Government Money Market Fund's administrator, believes
significant price movements are deemed large enough to impact the calculation of
the net asset value per share.

U.S. Government Portfolio

The net asset value of the U.S. Government Portfolio's shares is determined
as of 4:00 p.m., Eastern time, on each Fund Business Day. "Fund Business Day"
means weekdays (Monday through Friday) except (i) days on which the New York
Stock Exchange is closed for trading (i.e., national holidays) and (ii) Columbus
Day and Veterans' Day. However, on certain days that the New York Stock Exchange
is closed, the U.S. Government Portfolio, at the direction of Reich & Tang Asset
Management, LLC, may be open for purchases and redemptions and will determine
its net asset value. The net asset value per share is computed by dividing the
value of the U.S. Government Portfolio's net assets (i.e., the value of its
securities and other assets less its liabilities, including expenses payable or
accrued, but excluding capital stock and surplus) by the total number of shares
outstanding. The U.S. Government Portfolio intends to maintain a stable net
asset value at $1.00 per share although there can be no assurance that this will
be achieved.

The U.S. Government Portfolio's portfolio securities are valued at their
amortized cost in compliance with the provisions of Rule 2a-7 under the 1940
Act. Amortized cost valuation involves valuing an instrument at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium. If fluctuating interest rates or credit issues cause the net asset
value of the U.S. Government Portfolio's share price to be less than $0.997 or
greater than $1.003, the Board of Trustees will consider whether any action
should be initiated to prevent the share price from going below $0.995 per share
or above $1.005 per share. Although the amortized cost method provides certainty
in valuation, it may result

Combined Prospectus/Information Statement

in periods during which the value of an instrument is higher or lower than the
price the Fund would receive if the instrument were sold.

Shares are issued as of the first determination of the U.S. Government
ortfolio's net asset value per share made after acceptance of the investor's
purchase order. In order to maximize earnings on the U.S. Government Portfolio,
the U.S. Government Portfolio normally has its assets as fully invested as is
practicable. Many securities in which the Fund invests require the immediate
settlement in funds of Federal Reserve member banks on deposit at a Federal
Reserve Bank (commonly known as "Federal Funds"). U.S. Government Portfolio
shares begin accruing income on the day the shares are issued to an investor.

7. CAPITALIZATION

The following table sets forth as of June 30, 2009: (1) the unaudited
capitalization of the Sentinel Government Money Market Fund and the unaudited
capitalization of the Institutional Service Class Shares of the U.S. Government
Portfolio, and (2) the unaudited pro forma combined capitalization of the
Institutional Service Class Shares of the U.S. Government Portfolio after the
Reorganization has been consummated. When the Reorganization is consummated, the
capitalizations are likely to be different on November 13, 2009, as a result of
daily share purchase and redemption activity in the Funds and changes in NAV per
share.

------------------------------------------------------ ----------------------------------------------------------------------
U.S. Government Portfolio
------------------------------------------------------ ----------------------------------------------------------------------
Institutional Service Class Shares
------------------------------------------------------ ----------------------------------------------------------------------

Net Assets $301,290
------------------------------------------------------ ----------------------------------------------------------------------
Shares Outstanding 302,003
------------------------------------------------------ ----------------------------------------------------------------------
Net Asset Value per Share $1.00
------------------------------------------------------ ----------------------------------------------------------------------
Sentinel Government Money Market Fund
------------------------------------------------------ ----------------------------------------------------------------------
Class A Class B
------------------------------------------------------ --------------------------------- ------------------------------------
Net Assets $87,116,017 $3,430,483
------------------------------------------------------ --------------------------------- ------------------------------------
Shares Outstanding 87,116,017 3,430,483
------------------------------------------------------ --------------------------------- ------------------------------------
Net Asset Value per Share $1.00 $1.00
------------------------------------------------------ --------------------------------- ------------------------------------
Pro Forma
Combined U.S. Government Portfolio
------------------------------------------------------ ----------------------------------------------------------------------
Institutional Service Class Shares
------------------------------------------------------ ----------------------------------------------------------------------
Net Assets $90,848,460
------------------------------------------------------ ----------------------------------------------------------------------
Shares Outstanding 90,848,460
------------------------------------------------------ ----------------------------------------------------------------------
Net Asset Value per Share $1.00
------------------------------------------------------ ----------------------------------------------------------------------

8. INVESTMENT ADVISER

Sentinel Government Money Market Fund

Sentinel Asset Management, Inc. ("Sentinel", or "SAM") manages the Sentinel
Government Money Fund's investments and its business operations under the
overall supervision of the Board of Directors of Sentinel Group Funds, Inc.
Sentinel has the responsibility for making all investment decisions for the
Sentinel Government Money Fund. Sentinel is an indirectly wholly owned
subsidiary of the National Life Holding Company. Its principal business address
is One National Life Drive, Montpelier, Vermont 05604. The Sentinel Government
Money Market Fund's investment advisory contract calls for the Sentinel

Combined Prospectus/Information Statement

Government Money Market Fund to pay Sentinel's fees, which for the fiscal year
ended November 30, 2008 were paid at a rate equal to 0.40% of the Sentinel
Government Money Market Fund's average daily net assets.

U.S. Government Portfolio

The U.S. Government Portfolio's investment manager is Reich & Tang Asset
Management, LLC (the "Manager"). The Manager's principal business office is
located at 600 Fifth Avenue, New York, NY 10020. As of June 30, 2009, the
Manager was the investment manager, adviser or sub-adviser with respect to
assets aggregating in excess of $14.2 billion. The Manager has been an
investment adviser since 1970 and currently is manager or sub-adviser of sixteen
portfolios of registered investment companies, of which it acts as administrator
for eleven. The Manager also advises high net worth individuals, private funds,
pension trusts, profit-sharing trusts and endowments. Pursuant to the investment
management contract between the U.S. Government Portfolio and the Manager, the
Manager manages the U.S. Government Portfolio's securities and makes decisions
with respect to the purchase and sale of investments, subject to the general
control of the Board of Trustees of the Daily Income Fund. Pursuant to the
Investment Management Contract, the U.S. Government Portfolio pays an annual
management fee of 0.12% of its average daily net assets. For the fiscal year
ended March 31, 2009, the U.S. Government Portfolio paid the Manager a
management fee equal to 0.12% of the U.S. Government Portfolio's average daily
net assets.

9. DISTRIBUTION

The Institutional Service Class of the U.S. Government Portfolio charges a
Rule 12b-1 fee, whereas neither Class A nor Class B of the Sentinel Government
Money Market Fund charges a Rule 12b-1 fee. The U.S. Government Portfolio
Institutional Service Class' Rule 12b-1 Plan is a compensation plan, which means
that the fees paid under the plan are intended to compensate for services
rendered, regardless of expenses actually incurred.

Sentinel Government Money Market Fund

Sentinel Financial Services Company ("SFSC") acts as the principal
underwriter of shares of the Sentinel Government Money Market Fund. Its
principal business address is National Life Drive, Montpelier, Vermont 05604.
SFSC is a Vermont general partnership of SAM and Sentinel Financial Services,
Inc. ("SFSI"), a wholly owned subsidiary of SAM. The distribution contract
provides that SFSC use its best efforts to continuously offer the Sentinel
Government Money Market Fund's shares. The contract may be terminated by either
party thereto on 60 days' written notice, without penalty, and it terminates
automatically in the event of its assignment. The distribution contract must be
approved annually.

Daily Income Fund

The U.S. Government Portfolio's distributor is Reich & Tang Distributors,
Inc. (the "Distributor"), a Delaware corporation with principal offices at 600
Fifth Avenue, New York, New York 10020, an affiliate of the Manager. Pursuant to
Rule 12b-1 under the 1940 Act, the SEC has required that an investment company
which bears any direct or indirect expense of distributing its shares must do so
only in accordance with a plan permitted by the Rule. The U.S. Government
Portfolio's Board of Trustees has adopted a distribution and service plan (the
"Plan") and, pursuant to the Plan, the U.S. Government Portfolio has entered
into a Distribution Agreement and Shareholder Servicing Agreement for the
Institutional Service Class Shares of the U.S. Government Portfolio with the
Distributor, as distributor of the U.S. Government Portfolio's shares. Under the
Distribution Agreement, the Distributor, as agent for the

Combined Prospectus/Information Statement

U.S. Government Portfolio, will solicit orders for the purchase of the U.S.
Government Portfolio's shares, provided that any subscriptions and orders will
not be binding on the U.S. Government Portfolio until accepted by the U.S.
Government Portfolio as principal. For the Institutional Service Class Shares,
the Distributor receives a nominal amount (i.e. $1.00). Under the Shareholder
Servicing Agreement, the Distributor receives from the U.S. Government Portfolio
a service fee equal to 0.25% per annum of the Institutional Service Class Shares
average daily net assets (the "Shareholder Servicing Fee") for providing or
arranging for others to provide personal shareholder services and for the
maintenance of shareholder accounts. The Shareholder Servicing Fee is accrued
daily and paid monthly.

10. PURCHASE AND REDEMPTION PROCEDURES

Purchasing Information

The Sentinel Government Money Market Fund is closed to all new investors,
new purchases and exchanges. Shares of the U.S. Government Portfolio are offered
at the next offering price, which is the NAV per share of the U.S. Government
Portfolio, computed after the purchase order and funds are received by the U.S.
Government Portfolio's transfer agent or certain financial intermediaries, and
their agents that have made arrangements with the Fund and are authorized to buy
and sell shares of the U.S. Government Portfolio. The U.S. Government Portfolio
also offers an automatic investment plan, whereby an existing shareholder may
purchase additional shares of the fund through an Automated Clearing House
arrangement.

Minimum Investments. The anticipated minimum initial investment in the U.S.
Government Portfolio for accounts maintained through Sentinel Administrative
Services, Inc. ("SASI") and/or SFSC is $1,000. The minimum amount for subsequent
purchases is $50. The minimum initial investment for the Institutional Service
Class Shares of the U.S. Government Portfolio for regular accounts and
individual retirement accounts not maintained through SASI and/or SFSC is
$100,000. The minimum amount for subsequent investments is $1,000. The Manager
may, in its sole discretion, waive this minimum in some cases.

Redemption Information

Shares of both Funds are redeemed at a price equal to the NAV next
determined after the applicable fund's transfer agent receives a redemption
request in good order less any applicable redemption fees. A redemption request
cannot be processed on days the New York Stock Exchange is closed. The Sentinel
Government Money Market Fund reserves the right to liquidate, and/or to charge
an annual maintenance fee of up to $25 to any account that has a current value
less than $1,000 and that has been open for at least 24 months. This fee will be
deducted automatically from each shareholder account in June of each year unless
it is prepaid. The Institutional Service Class Shares of the U.S. Government
Portfolio may redeem the shares in an account if the total value of the account
falls below $5,000 due to redemption. Written notice of a proposed mandatory
redemption will be given at least 30 days in advance to any shareholder whose
account is to be redeemed or, alternatively the Fund may impose a monthly
service charge of $10 on such accounts which does not require prior written
notice. Additionally, both Funds have reserved the right to redeem shares
"in-kind."

Combined Prospectus/Information Statement

Exchange Privileges

The Sentinel Government Money Market Fund is not open to new investors,
subsequent purchases or exchanges. Shares of the Sentinel Government Money
Market Fund obtained through a previous exchange of shares of another Sentinel
Fund may be exchanged back for shares of the same class of a Sentinel Fund,
without charge. Class A shares of the Sentinel Government Money Market Fund that
were purchased prior to the closing of the Fund may not exchange into other
Sentinel Funds without being treated as an initial purchaser of the other fund's
shares. Exchanges may be made by calling Sentinel Administrative Services, Inc.
or by providing appropriate instructions in writing to Sentinel Administrative
Services, Inc. An investor may also set up his or her account to exchange
automatically a specified number or dollar-value of shares of the Sentinel
Government Money Market Fund into shares of the same class in another Sentinel
Fund at regular intervals. Shares exchanged out of the Sentinel Government Money
Market Fund may not be exchanged back into the Sentinel Government Money Market
Fund.

Although shares of the U.S. Government Portfolio invested directly into the
fund are entitled to certain exchange privileges as discussed under "Additional
Shareholder Information about the U.S. Government Portfolio - Exchange
Privilege" at Appendix C, shares of the U.S. Government Portfolio held through
SASI will not have exchange privileges. However, certain waivers of sales
charges will apply to direct reinvestments of redemption proceeds of U.S.
Government Portfolio shares into certain shares of the Sentinel Funds as
described in the letter to shareholders of the Sentinel Government Money Market
Fund provided with this Combined Prospectus/Information Statement.

Additional shareholder account information for the Sentinel Government
Money Market Fund is available in its prospectus, which is incorporated by
reference. Additional shareholder information for the U.S. Government Portfolio
is provided in Appendix C.

11. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

Sentinel Government Money Market Fund

As of July 31, 2009, there are no Sentinel Government Money Market Fund
shareholders of record and/or beneficial owners (to the Sentinel Government
Money Market Fund's knowledge) who owned five percent or more of the Sentinel
Government Money Market Fund's shares.

As of July 31, 2009, the Officers and Directors of the Sentinel Government
Money Market Fund, as a group, owned of record and beneficially less than 1% of
the outstanding voting securities of the Sentinel Government Money Market Fund.

U.S. Government Portfolio

As of July 31, 2009, the Institutional Service Class of the U.S. Government
Portfolio's shareholders of record and/or beneficial owners (to the U.S.
Government Portfolio's knowledge) who owned five percent or more of the
Institutional Service Class of the U.S. Government Portfolio's shares are set
forth below:

<c>
Statement Solutions, LLC 54.74% Record
Hackensack, NJ 07601

Steven Goldberg 32.37% Beneficial
New York, NY 10025

Lisa Goldberg 6.60% Beneficial
New York, NY 10025

Combined Prospectus/Information Statement

As of July 31, 2009, the Officers and Trustees of the U.S. Government
Portfolio, as a group, owned of record and beneficially less than 1% of the
outstanding voting securities of the Institutional Service Class of the U.S.
Government Portfolio.

A beneficial owner of 25% or more of a voting security of a Fund is
presumed to have "control" of the Fund for purposes of the 1940 Act, absent a
determination to the contrary by the SEC. Based on the information provided
above, as of July 31, 2009, Steven Goldberg owned a controlling interest in the
Institutional Service Class of the U.S. Government Portfolio. No person owned a
controlling interest in the Sentinel Government Money Market Fund.

12. SERVICE PROVIDERS

Sentinel Government Money Market Fund

Sentinel Administrative Services, Inc., One National Life Drive,
Montpelier,, Vermont 05604, a wholly owned subsidiary of Sentinel Asset
Management, Inc., provides the Sentinel Government Money Market Fund with
certain fund accounting, administration, transfer agency and shareholder
relations services. State Street Bank & Trust Company, 801 Pennsylvania Avenue,
Kansas City, Missouri 64105 serves as the Sentinel Government Money Market
Fund's custodian.

U.S. Government Portfolio

The Bank of New York Mellon, 2 Hanson - 7th Floor, Brooklyn, NY 11217, is
custodian for the U.S. Government Portfolio's cash and securities. Reich & Tang
Services, Inc. ("Reich & Tang"), an affiliate of the Manager, located at 600
Fifth Avenue, New York, NY 10020, is transfer agent and dividend agent for the
shares of the U.S. Government Portfolio. Pursuant to an Administrative Services
Agreement with the U.S. Government Portfolio, the Manager performs clerical,
accounting supervision, office service and related functions for the U.S.
Government Portfolio and provides the U.S. Government Portfolio with personnel
to supervise the performance of accounting related services by The Bank of New
York Mellon, the U.S. Government Portfolio's accounting agent.

13. FINANCIAL HIGHLIGHTS

The Statement of Additional Information relating to this Combined
Prospectus/Information Statement incorporates by reference the following: (i)
the annual reports to shareholders of the Sentinel Government Money Market Fund
for its fiscal year ended November 30, 2008 and of the U.S. Government Portfolio
for its fiscal year ended March 31, 2009, both of which include the audited
financial statements and financial highlights for the periods indicated therein
and the reports of PricewaterhouseCoopers LLP, the Sentinel Government Money
Market Fund's independent registered public accounting firm and the U.S.
Government Portfolio's independent registered public accounting firm; and (ii)
the semi-annual reports to shareholders of the Sentinel Government Money Market
Fund for the six-month period ended May 31, 2009 and of the U.S. Government
Portfolio for the six-month period ended September 30, 2008, including the
unaudited financial statements and financial highlights for the periods
indicated therein.

Combined Prospectus/Information Statement

APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION

AGREEMENT AND PLAN OF REORGANIZATION dated as of September 17, 2009 (the
"Agreement"), by and between Sentinel Group Funds, Inc., a Maryland corporation
(the "Corporation"), on behalf of the Sentinel Government Money Market Fund, a
series of the Corporation (the "Acquired Fund"), and Daily Income Fund, a
Massachusetts business trust (the "Trust"), on behalf of the U.S. Government
Portfolio, a series of the Trust (the "Acquiring Fund").

This Agreement is intended to be and is adopted as a "plan of
reorganization" within the meaning of the regulations under Section 368(a) of
the United States Internal Revenue Code of 1986, as amended (the "Code"). The
reorganization will consist of the transfer of all of the assets of the Acquired
Fund to the Acquiring Fund in exchange solely for the Acquiring Fund's
Institutional Service Class shares ("Acquiring Fund Shares") of beneficial
interest, par value $.01 per share, and the assumption by the Acquiring Fund of
the liabilities of the Acquired Fund as described herein, and the distribution,
after the Closing Date hereinafter referred to, of the Acquiring Fund Shares to
the shareholders of the Acquired Fund in liquidation of the Acquired Fund as
provided herein, all upon the terms and conditions hereinafter set forth in this
Agreement (the "Reorganization").

WHEREAS, the Acquired Fund is a series of a registered, open-end management
investment company, and the Acquiring Fund is a series of a registered, open-end
management investment company, and the Acquired Fund owns securities which are
assets of the character in which the Acquiring Fund is permitted to invest;

WHEREAS, both the Acquiring Fund and the Acquired Fund are authorized to
issue their shares of beneficial interest and common stock, respectively;

WHEREAS, the Corporation's Board has determined that the Reorganization is
in the best interests of the Acquired Fund and the Acquired Fund's shareholders
and that the interests of the Acquired Fund's existing shareholders will not be
diluted as a result of the Reorganization; and

WHEREAS, the Trust's Board has determined that the Reorganization is in the
best interests of the Acquiring Fund and the Acquiring Fund's shareholders and
that the interests of the Acquiring Fund's existing shareholders will not be
diluted as a result of the Reorganization:

NOW THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties agree as follows:

1. THE REORGANIZATION.

1.1. Subject to the terms and conditions contained herein and on the basis
of the representations and warranties contained herein, the Acquired
Fund agrees to assign, transfer and convey to the Acquiring Fund
substantially

all of the assets of the Acquired Fund, as set forth in
paragraph 1.2, free and clear of all liens, encumbrances and claims
whatsoever. The Acquiring Fund agrees in exchange therefor (a) to
deliver to the Acquired Fund the number of Acquiring Fund Shares,
including fractional Acquiring Fund Shares, determined as set forth in
paragraph 2.3; and (b) to assume the stated liabilities of the
Acquired Fund, as set forth in paragraph 1.3. Such transactions shall
take place at the closing (the "Closing") as of the close of business
on the closing date (the "Closing Date"), provided for in paragraph
3.1. In lieu of delivering certificates for the Acquiring Fund Shares,
the Acquiring Fund shall credit the Acquiring Fund Shares to the
Acquired Fund's account on the books of the Acquiring Fund and shall
deliver a confirmation thereof to the Acquired Fund.

1.2. The assets of the Acquired Fund to be acquired by the Acquiring Fund
shall consist of substantially all assets, including, without
limitation, all portfolio securities, cash, cash equivalents,
commodities, interests in futures and other financial instruments,
claims (whether absolute or contingent, known or unknown), receivables
(including dividends or interest and other receivables) and other
property belonging to the Acquired Fund, and any deferred or prepaid
expenses, reflected on an unaudited statement of assets and
liabilities of the Acquired Fund as of the Valuation Date (as defined
in paragraph 2.1) (the "Assets").

1.3. The Acquired Fund will endeavor to identify and, to the extent
practicable, discharge all of its known liabilities and obligations
before the Closing Date. The Acquiring Fund shall assume the
liabilities, expenses, costs, charges and reserves reflected on an
unaudited statement of assets and liabilities of the Acquired Fund.

1.4. Delivery of the Acquired Fund's Assets shall be made on the Closing
Date and shall be delivered to The Bank of New York Mellon, the
Acquiring Fund's custodian (the "Custodian"), for the account of the
Acquiring Fund, with all securities not in bearer or book-entry form
duly endorsed, or accompanied by duly executed separate assignments or
stock powers, in proper form for transfer, with signatures guaranteed,
and with all necessary stock transfer stamps, sufficient to transfer
good and marketable title thereto (including all accrued interest and
dividends and rights pertaining thereto) to the Custodian for the
account of the Acquiring Fund free and clear of all liens,
encumbrances, rights, restrictions and claims. All cash delivered
shall be in the form of immediately available funds payable to the
order of the Custodian for the account of the Acquiring Fund.

1.5. The Acquired Fund will pay or cause to be paid to the Acquiring Fund
any dividends and interest received on or after the Closing Date with
respect to Assets transferred to the Acquiring Fund hereunder. The
Acquired Fund will transfer to the Acquiring Fund any distributions,
rights or other assets received by the Acquired Fund after the Closing
Date as distributions on

or with respect to the securities transferred. Such assets shall be
deemed included in the Assets transferred to the Acquiring Fund on the
Closing Date and shall not be separately valued.

1.6. Upon completion of the transfer of assets and delivery of Acquiring
Fund Shares pursuant to paragraph 1.1, the Acquired Fund will
distribute pro rata to holders of record of the Acquired Fund's Class
A shares and Class B shares, determined as of the close of business on
the Closing Date ("Fund Shareholders"), Institutional Service Class
shares of the Acquiring Fund received by the Acquired Fund pursuant to
paragraph 1.1. As soon after the Closing Date as is conveniently
practicable, the Acquired Fund will take such additional steps as are
necessary to liquidate and, promptly thereafter, terminate as a series
of the Corporation in accordance with applicable laws of the State of
Maryland and federal securities laws. Such distribution and
liquidation will be accomplished by the transfer of the Acquiring Fund
Shares then credited to the account of the Acquired Fund on the books
of the Acquiring Fund to an open account in the name of Sentinel
Administrative Services, Inc., for the exclusive benefit of its
customers, on the share records of the Acquiring Fund. All issued and
outstanding shares of the Acquired Fund simultaneously will be
redeemed and canceled on the books of the Acquired Fund and will be
null and void. Acquiring Fund Shares distributed to Fund Shareholders
will be reflected on the books of Sentinel Administrative Services,
Inc. as uncertificated, book-entry shares; the Acquiring Fund will not
issue share certificates in the Reorganization.

1.7. Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund's transfer agent as an account for Sentinel
Administrative Services, Inc., for the exclusive benefit of its
customers. Acquiring Fund Shares will be issued in the manner
described in the Acquiring Fund's then-current prospectus and
statement of additional information.

1.8. Any transfer taxes payable upon issuance of the Acquiring Fund Shares
in a name other than the registered holder of the Acquired Fund Shares
on the books of the Acquired Fund as of that time shall, as a
condition of such issuance and transfer, be paid by the person to whom
such Acquiring Fund Shares are to be issued and transferred.

1.9. Any reporting responsibility of the Acquired Fund, including the
responsibility for filing regulatory reports, tax returns, or other
documents with the Securities and Exchange Commission (the
"Commission"), any state securities commission, and any federal, state
or local tax authorities or any other relevant regulatory authority,
is and shall remain the responsibility of the Acquired Fund up to and
including the Closing Date and such later date on which the Acquired
Fund's existence is terminated.

1.10. As soon as practicable after the Closing Date, the Acquired Fund
shall provide the Acquiring Fund with copies of all books and records
that pertain to the Acquired Fund that the Acquiring Fund is required
to

maintain under the Investment Company Act of 1940, as amended (the
"1940 Act"), and the rules of the Commission thereunder.

2. VALUATION.

2.1. The value of the Acquired Fund's Assets to be acquired, and the amount
of the Acquired Fund's liabilities to be assumed, by the Acquiring
Fund hereunder shall be computed as of the close of trading on the
floor of the New York Stock Exchange (usually 4:00 p.m., Eastern time)
on the Closing Date (such time and date being hereinafter called the
"Valuation Date"), using the valuation procedures set forth in the
Acquiring Fund's then-current prospectus or statement of additional
information, or such other valuation procedures as shall be mutually
agreed upon by the parties hereto.

2.2. The net asset value of an Acquiring Fund share shall be the net asset
value per share computed as of the Valuation Date, using the valuation
procedures set forth in the Acquiring Fund's then-current prospectus
or statement of additional information, which are and shall be
consistent with the policies currently in effect for the Acquired
Fund.

2.3. The number of Acquiring Fund Shares to be issued (including fractional
shares, if any) in exchange for the Acquired Fund's net assets shall
be determined by dividing the value of the net assets of the
applicable class of the Acquired Fund determined using the same
valuation procedures referred to in paragraph 2.1 by the net asset
value of one Acquiring Fund Share of the corresponding class,
determined in accordance with paragraph 2.2.

2.4. All computations of value shall be made by Sentinel Administrative
Services, Inc., in cooperation with Reich & Tang Asset Management,
LLC, on behalf of the Acquired Fund and the Acquiring Fund.

3. CLOSING AND CLOSING DATE.

3.1. The Closing Date shall be November 13, 2009, or such other date as the
parties may mutually agree. All acts taking place at the Closing shall
be deemed to take place simultaneously on the Closing Date unless
otherwise provided. The Closing shall be held at 5:00 p.m., Eastern
time, at the offices of Reich & Tang Asset Management, LLC, 600 Fifth
Avenue, New York, New York, or such other time and/or place as the
parties may mutually agree.

3.2. The Custodian shall deliver at the Closing a certificate of an
authorized officer stating that the Acquired Fund's Assets have been
delivered in proper form to the Acquiring Fund on the Closing Date.
The Acquired Fund's portfolio securities and instruments deposited
with a securities depository (as defined in Rule 17f-4 under the 1940
Act) or with a

permitted counterparty or futures commission merchant (as defined in
Rule 17f-6 under the 1940 Act) shall be delivered to the Custodian as
of the Closing Date by book entry, in accordance with the customary
practices of the Custodian. The cash to be transferred by the Acquired
Fund shall be delivered to the Custodian for the account of the
Acquiring Fund by wire transfer of federal funds on the Closing Date.

3.3. If on the Valuation Date (a) the New York Stock Exchange or another
primary trading market for portfolio securities of the Acquiring Fund
or the Acquired Fund shall be closed to trading or trading thereon
shall be restricted, or (b) trading or the reporting of trading on
said Exchange or elsewhere shall be disrupted so that accurate
appraisal of the value of the net assets of the Acquiring Fund or the
Acquired Fund is impracticable, the Closing Date shall be postponed
until the first business day after the day when trading shall have
been fully resumed and reporting shall have been restored or such
other date as the parties hereto may agree.

3.4. The Acquired Fund's transfer agent shall deliver at the Closing a
certificate of an authorized officer stating that its records contain
the names and addresses of the Fund Shareholders and the number and
percentage ownership of outstanding shares owned by each such
shareholder immediately prior to the Closing. The Acquiring Fund's
transfer agent shall issue and deliver to the Acquired Fund's
Secretary a confirmation evidencing the Acquiring Fund Shares to be
credited on the Closing Date, or provide evidence satisfactory to the
Acquired Fund that such Acquiring Fund Shares have been credited to
the Acquired Fund's account on the books of the Acquiring Fund.

3.5. At the Closing, each party shall deliver to the other such bills of
sale, checks, assignments, receipts, transfer agent certificates,
officers certificates, custodian certificates, opinion and other
certificates and documents as such other party or its counsel may
reasonably request.

3.6. If the Acquired Fund is unable to make delivery to the Custodian
pursuant to paragraph 3.2 of any of the Assets for the reason that any
of such Assets have not yet been delivered to the Acquired Fund by the
Acquired Fund's broker, dealer or other counterparty, then, in lieu of
such delivery, the Acquired Fund shall deliver with respect to said
Assets executed copies of an agreement of assignment and due bills
executed on behalf of said broker, dealer or other counterparty,
together with such other documents as may be required by the Acquiring
Fund or the Custodian, including broker confirmation slips.

4. REPRESENTATIONS AND WARRANTIES.

4.1. The Acquired Fund represents and warrants to the Acquiring Fund as
follows:

4.1.1. The Acquired Fund is a separate series of the Corporation, which is
duly organized and validly existing under the laws of the State of
Maryland.

4.1.2. The Corporation is registered under the 1940 Act as an open-end
management investment company, and the Acquired Fund's shares are
registered under the Securities Act of 1933, as amended (the "1933
Act"), and such registrations have not been revoked or rescinded and
are in full force and effect.

4.1.3. The current prospectus and statement of additional information of
the Acquired Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and
regulations of the Commission thereunder and do not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
materially misleading.

4.1.4. The Acquired Fund is not, and the execution, delivery and
performance of this Agreement will not result, in material violation
of the Acquired Fund's Articles of Amendment and Restatement, as
amended and supplemented (the "Acquired Fund's Charter"), or its
Bylaws or of any material agreement, indenture, instrument, contract,
lease or other undertaking to which the Acquired Fund is a party or by
which the Acquired Fund is bound.

4.1.5. The Acquired Fund has no material contracts or other commitments
that will be terminated with liability to it on or prior to the
Closing Date.

4.1.6. No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the
Acquired Fund of the transactions contemplated herein, except as may
be required under the 1933 Act, the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and the 1940 Act and by state securities
laws.

4.1.7. No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or to the
Acquired Fund's knowledge threatened against the Acquired Fund or any
of the Acquired Fund's properties or assets which, if adversely
determined, would materially and adversely affect the Acquired Fund's
financial condition or the conduct of the Acquired Fund's business.
The Acquired Fund knows of no facts which might form the basis for the
institution of such proceedings, and is not a party to or subject to
the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects the Acquired
Fund's business or the Acquired Fund's ability to consummate the
transactions contemplated herein.

4.1.8. The financial statements of the Acquired Fund for the fiscal year
ended November 30, 2008 have been prepared by in accordance with
generally accepted accounting principles and audited by
PricewaterhouseCoopers LLP, an independent registered public
accounting firm, and such statements (copies of which have been
furnished to the Acquiring Fund) fairly reflect the financial
condition of

the Acquired Fund as of such date, and there are no known
contingent liabilities of the Acquired Fund as of such date not
disclosed therein.

4.1.9. Since November 30, 2008, there has not been any material adverse
change in the Acquired Fund's financial condition, assets, liabilities
or business other than changes occurring in the ordinary course of
business, or any incurrence by the Acquired Fund of indebtedness
maturing more than one year from the date such indebtedness was
incurred, except as disclosed on the statement of assets and
liabilities referred to in paragraphs 1.3 and 4.1.8 or otherwise
disclosed to and accepted by the Acquiring Fund. For the purposes of
this paragraph 4.1.9, a decline in the net asset value of the Acquired
Fund shall not constitute a material adverse change.

4.1.10. At the Closing Date, all federal and other tax returns and reports
of the Acquired Fund required by law then to be filed shall have been
filed, and all federal and other taxes shown as due on said returns
and reports shall have been paid so far as due, or provision shall
have been made for the payment thereof, and to the knowledge of the
Acquired Fund no such return is currently under audit and no
assessment or deficiency has been asserted with respect to such
returns.

4.1.11. For each taxable year of its operation (including the taxable year
ending on the Closing Date), the Acquired Fund has met the
requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company.

4.1.12. All issued and outstanding shares of the Acquired Fund are, and at
the Closing Date will be, duly and validly issued and outstanding,
fully paid and non-assessable by the Acquired Fund. All of the issued
and outstanding shares of the Acquired Fund will, at the time of
Closing, be held by the persons and in the amounts set forth in the
records of its transfer agent as provided in paragraph 3.4. The
Acquired Fund does not have outstanding any options, warrants or other
rights to subscribe for or purchase any of the Acquired Fund's shares,
nor is there outstanding any security convertible into any of the
Acquired Fund's shares.

4.1.13. On the Closing Date, the Acquired Fund will have good and
marketable title to the Assets and full right, power and authority to
sell, assign, transfer and deliver the Assets to be transferred by it
hereunder free of any liens or other encumbrances, and upon delivery
and payment for the Assets, the Acquiring Fund will acquire good and
marketable title thereto, subject to no restrictions on the full
transfer thereof, including such restrictions as might arise under the
1933 Act, other than as disclosed to and accepted by the Acquiring
Fund.

4.1.14. The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action
on the part of the Acquired Fund's Board and does not require the
approval or consent of Fund Shareholders, and this Agreement will
constitute the valid and legally binding obligation of the Acquired
Fund, enforceable in

accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and
other similar laws relating to or affecting creditors' rights
generally and court decisions with respect thereto, and to general
principles of equity and the discretion of the court (regardless of
whether the enforceability is considered in a proceeding in equity or
at law).

4.1.15. The information to be furnished by the Acquired Fund for use in
registration statements, information statements and other documents
filed or to be filed with any federal, state or local regulatory
authority (including the Financial Industry Regulatory Authority),
which may be necessary in connection with the transactions
contemplated hereby, shall be accurate and complete in all material
respects and shall comply in all material respects with federal
securities and other laws and regulations applicable thereto.

4.1.16. The Registration Statement on Form N-14 and the Combined
Prospectus/Information Statement contained therein as amended or
supplemented (the "Registration Statement"), as of the effective date
of the Registration Statement and at all times subsequent thereto up
to and including the Closing Date, conform and will conform, as it
relates to the Acquired Fund, in all material respects to the
requirements of the federal and state securities laws and the rules
and regulations thereunder and do not and will not include, as it
relates to the Acquired Fund, any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which such statements were made, not misleading.

4.2. The Acquiring Fund represents and warrants to the Acquired Fund as
follows:

4.2.1. The Acquiring Fund is a separate series of the Daily Income Fund,
which is organized as a Massachusetts business trust.

4.2.2. The Trust is registered under the 1940 Act as an open-end management
investment company, and the Acquiring Fund's shares are registered
under the 1933 Act, and such registrations have not been revoked or
rescinded and are in full force and effect.

4.2.3. The current prospectus and statement of additional information of
the Acquiring Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and
regulations of the Commission thereunder and do not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
materially misleading.

4.2.4. The Acquiring Fund is not, and the execution, delivery and
performance of this Agreement will not result, in material violation
of the Acquiring Fund's Declaration of Trust, as amended or its
Amended

and Restated By-Laws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Acquiring Fund is a
party or by which the Acquiring Fund is bound.

4.2.5. No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the
Acquiring Fund of the transactions contemplated herein, except as may
be required under the 1933 Act, the 1934 Act and the 1940 Act and by
state securities laws.

4.2.6. No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or to the
Acquiring Fund's knowledge threatened against the Acquiring Fund or
any of the Acquiring Fund's properties or assets which, if adversely
determined, would materially and adversely affect the Acquiring Fund's
financial condition or the conduct of the Acquiring Fund's business.
The Acquiring Fund knows of no facts which might form the basis for
the institution of such proceedings, and is not a party to or subject
to the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects the Acquiring
Fund's business or the Acquiring Fund's ability to consummate the
transactions contemplated herein.

4.2.7. The financial statements of the Acquiring Fund for the fiscal year
ended March 31, 2009 have been prepared in accordance with generally
accepted accounting principles and audited by PricewaterhouseCoopers
LLP an independent registered public accounting firm, and are in
accordance with GAAP, consistently applied, and such statements
(copies of which have been furnished to the Acquired Fund) fairly
reflect the financial condition of the Acquiring Fund as of such date.

4.2.8. Since March 31, 2009, there has not been any material adverse change
in the Acquiring Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of
business, or any incurrence by the Acquiring Fund of indebtedness
maturing more than one year from the date such indebtedness was
incurred, except as disclosed on the statement of assets and
liabilities referred to in paragraph 4.2.8, or as otherwise disclosed
to and accepted by the Acquired Fund. For the purposes of this
paragraph 4.2.8, a decline in the net asset value of the Acquiring
Fund shall not constitute a material adverse change.

4.2.9. At the Closing Date, all federal and other tax returns and reports
of the Acquiring Fund required by law then to be filed shall have been
filed, and all federal and other taxes shown as due on said returns
and reports shall have been paid so far as due, or provision shall
have been made for the payment thereof, and to the knowledge of the
Acquiring Fund no such return is currently under audit and no
assessment or deficiency has been asserted with respect to such
returns.

4.2.10. For each taxable year of its operation, the Acquiring Fund has met,
and for the taxable year that includes the Closing Date, the Acquiring
Fund expect to meet, the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment company.

4.2.11. All issued and outstanding shares of the Acquiring Fund are, and at
the Closing Date (including the shares of the Acquiring Fund to be
issued pursuant to paragraph 1.1 of this Agreement) will be, duly and
validly issued and outstanding, fully paid and non-assessable by the
Acquiring Fund. The Acquiring Fund does not have outstanding any
options, warrants or other rights to subscribe for or purchase any of
the Acquiring Fund Shares, nor is there outstanding any security
convertible into any Acquiring Fund Shares.

4.2.12. The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action
on the part of the Acquiring Fund's Board, and this Agreement will
constitute the valid and legally binding obligation of the Acquiring
Fund, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and
other similar laws relating to or affecting creditors' rights
generally and court decisions with respect thereto, and to general
principles of equity and the discretion of the court (regardless of
whether the enforceability is considered in a proceeding in equity or
at law).

4.2.13. The Registration Statement as of its effective date and at all
times subsequent thereto up to and including the Closing Date,
conforms and will conform, as it relates to the Acquiring Fund, in all
material respects to the requirements of the federal and state
securities laws and the rules and regulations thereunder and does not
and will not include, as it relates to the Acquiring Fund, any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which such statements
were made, not misleading. No representations and warranties in this
paragraph 4.2 shall apply to statements or omissions made in reliance
upon and in conformity with written information concerning the
Acquired Fund furnished to the Acquiring Fund by the Acquired Fund.

4.2.14. No consideration other than the Acquiring Fund Shares (and the
Acquiring Fund's assumption of the Acquired Fund's stated liabilities)
will be issued in exchange for the Acquired Fund's assets in the
Reorganization.

4.2.15. The Acquiring Fund does not directly or indirectly own, nor on the
Closing Date will it directly or indirectly own, nor has it directly
or indirectly owned at any time during the past five years, any shares
of the Acquired Fund.

5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND.

5.1. The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course between the date hereof and the
Closing Date, it being understood that such ordinary course of
business will include payment of customary dividends and other
distributions.

5.2. Subject to the provisions of this Agreement, the Acquired Fund and the
Acquiring Fund will each take, or cause to be taken, all action, and
do or cause to be done, all things reasonably necessary, proper or
advisable to consummate and make effective the transactions
contemplated by this Agreement.

5.3. As promptly as practicable, but in any case within sixty days after
the Closing Date, the Acquired Fund shall furnish the Acquiring Fund,
in such form as is reasonably satisfactory to the Acquiring Fund, a
statement of the earnings and profits of the Acquired Fund for federal
income tax purposes which will be carried over to the Acquiring Fund
as a result of Section 381 of the Code and which will be certified by
the Acquired Fund's Chief Executive Officer, President, Chief
Financial Officer or its Vice President and Treasurer.

5.4. The Acquired Fund will provide the Acquiring Fund with information
reasonably necessary for the preparation of the Registration Statement
and the Acquiring Fund will take such steps and make such filings as
are required to register Acquiring Fund Shares transferred in the
Reorganization under the 1933 Act and the 1940 Act.

5.5. The Acquiring Fund agrees to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act
and such of the state Blue Sky or securities laws as it may deem
appropriate in order to continue its operations after the Closing
Date.

5.6. The Acquired Fund covenants that the Acquired Fund is not acquiring
the Acquiring Fund Shares to be issued hereunder for the purpose of
making any distribution thereof, other than in accordance with the
terms of this Agreement.

5.7. As soon as is reasonably practicable after the Closing, the Acquired
Fund will make a liquidating distribution to the Acquired Fund's
shareholders consisting of the Acquiring Fund Shares received at the
Closing.

6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.

The obligations of the Acquiring Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquired Fund of all the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following conditions:

6.1. All representations and warranties of the Acquired Fund contained in
this Agreement shall be true and correct in all material respects as
of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing Date
with the same force and effect as if made on and as of the Closing
Date.

6.2. The Acquired Fund shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets and liabilities, together with
a list of the Acquired Fund's portfolio securities showing the tax
basis of such securities by lot and the holding periods of such
securities, as of the Closing Date, certified by the Acquired Fund's
Treasurer.

6.3. The Acquired Fund shall have delivered to the Acquiring Fund on the
Closing Date a certificate executed in the Acquired Fund's name by the
Acquired Fund's Chief Executive Officer, President or Vice President
and its Treasurer, in form and substance satisfactory to the Acquiring
Fund, to the effect that the representations and warranties of the
Acquired Fund made in this Agreement are true and correct at and as of
the Closing Date, except as they may be affected by the transactions
contemplated by this Agreement, and as to such other matters as the
Acquiring Fund shall reasonably request.

6.4. The Acquiring Fund shall have received an opinion(s) of counsel(s) of
the Acquired Fund as to the matters identified in paragraphs 4.1.1,
4.1.2., 4.1.6. and 4.1.14.

7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND.

The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquiring Fund of all the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following conditions:

7.1. All representations and warranties of the Acquiring Fund contained in
this Agreement shall be true and correct in all material respects as
of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing Date
with the same force and effect as if made on and as of the Closing
Date.

7.2. The Acquiring Fund shall have delivered to the Acquired Fund on the
Closing Date a certificate executed in the Acquiring Fund's name by
the Acquiring Fund's Chief Executive Officer, President or Vice
President and its Treasurer, in form and substance reasonably
satisfactory to the Acquired Fund, to the effect that the
representations and warranties of the Acquiring Fund made in this
Agreement are true and correct at and as of the Closing Date, except
as they may be affected by the transactions contemplated by this
Agreement, and as to such other matters as the Acquired Fund shall
reasonably request.

7.3. The Acquired Fund shall have received an opinion(s) of counsel(s) of
the Acquiring Fund as to the matters identified in paragraphs 4.2.1,
4.2.2., 4.2.5. and 4.2.12.

8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND AND THE
ACQUIRING FUND.

If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Acquired Fund or the Acquiring Fund, the other
party to this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement.

8.1. This Agreement and the transactions contemplated herein shall have
been approved by the Boards of each of the Acquired Fund and the
Acquiring Fund.

8.2. On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought
to restrain or prohibit, or obtain damages or other relief in
connection with, this Agreement or the transactions contemplated
herein.

8.3. All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including
those of the Commission and of state Blue Sky and securities
authorities) deemed necessary by the Acquired Fund or the Acquiring
Fund to permit consummation, in all material respects, of the
transactions contemplated hereby shall have been obtained, except
where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or
properties of the Acquired Fund or the Acquiring Fund, provided that
either party hereto may for itself waive any of such conditions.

8.4. The Registration Statement shall have become effective under the 1933
Act and no stop orders suspending the effectiveness thereof shall have
been issued and, to the best knowledge of the parties hereto, no
investigation or proceeding for that purpose shall have been
instituted or be pending, threatened or contemplated under the 1933
Act.

8.5. The Acquired Fund shall have declared and paid a dividend or dividends
which, together with all previous dividends, shall have the effect of
distributing to Acquired Fund shareholders all of the Acquired Fund's
investment company taxable income (within the meaning of Section
852(b)(2) of the Code) for all taxable years or periods ending on or
prior to the Closing Date (computed without regard to any deduction
for dividends paid); the excess of its interest income excludable from
gross income under Section 103(a) of the Code over its disallowed
deductions under Sections 265 and 171(a)(2) of the Code, for all
taxable years or periods; and all of its net capital gain (as defined
in Section 1222(11) of

the Code) realized in all taxable years or periods (after reduction
for any capital loss carryforward).

8.6. The Acquired Fund and Acquiring Fund shall have received an opinion of
Paul, Hastings, Janofsky & Walker LLP substantially to the effect that
based on the facts and assumptions stated herein and conditioned on
consummation of the Reorganization in accordance with this Agreement,
for federal income tax purposes:

a) The transfer of all of the assets and liabilities of the Acquired Fund
to the Acquiring Fund in exchange for shares of the Acquiring Fund and
the distribution to shareholders of the Acquired Fund of shares of the
Acquiring Fund, as described in the Plan, will constitute a tax-free
"reorganization" within the meaning of Section 368(a)(1)(C) of the
Code, and the Acquired Fund and the Acquiring Fund each will be
considered "a party to a reorganization" within the meaning of Section
368(b) of the Code;

b) No gain or loss will be recognized by the Acquired Fund upon (a) the
transfer of its assets and liabilities to the Acquiring Fund in
exchange for the issuance of shares of the Acquiring Fund to the
Acquired Fund and the assumption by the Acquiring Fund of the Acquired
Fund's liabilities, if any, and (b) the distribution by the Acquired
Fund to its shareholders of shares of the Acquiring Fund received as a
result of the Reorganization (Sections 361(a), 354(a) and 357(a) of
the Code);

c) No gain or loss will be recognized by the Acquiring Fund upon its
receipt of the assets and liabilities of the Acquired Fund in exchange
for the issuance of shares of the Acquiring Fund to the Acquired Fund
and the assumption by the Acquiring Fund of the Acquired Fund's
liabilities, if any (Section 1032(a) of the Code);

d) The tax basis of the Acquiring Fund shares received by a shareholder
of the Acquired Fund in the aggregate will be the same as the
aggregate tax basis of the shareholders' Acquired Fund shares
immediately prior to the Reorganization (Section 358(a)(i) of the
Code);

e) The tax basis of the Acquiring Fund in the assets and liabilities of
the Acquired Fund received pursuant to the Reorganization will be the
same as the tax basis of the assets and liabilities in the hands of
the Acquired Fund immediately before the Reorganization (Section
362(b) of the Code);

f) The tax holding period for the shares of the Acquiring Fund issued in
connection with the Reorganization will be determined by including the
period for which the shareholder held shares of the Acquired Fund
exchanged therefor, provided that the shareholder held such shares of
the Acquired Fund as capital assets;

g) The tax holding period for the Acquiring Fund with respect to the
assets and liabilities of the Acquired Fund received in the
Reorganization will include the period for which such assets and
liabilities were held by the Acquired Fund (Section 1223(2) of the
Code);

h) The Acquired Fund's shareholders will not recognize gain or loss upon
the exchange of their shares of the Acquired Fund for shares of the
Acquiring Fund as part of the Reorganization;

i) The Acquiring Fund will succeed to and take into account the items of
the Acquired Fund described in Section 381(c) of the Code, subject to
the provisions and limitations specified in Sections 381, 382, 383 and
384 of the Code and the regulations thereunder (Section 381(a) of the
Code); and

j) The tax year of the Acquired Fund will end on the date of the
Reorganization (Section 381(b) of the Code).

In rendering its opinion, counsel may rely as to factual matters,
exclusively and without independent verification, on the representations and
warranties made in this Agreement, which counsel may treat as representations
and warranties made to it, and in separate letters addressed to counsel and the
certificates delivered pursuant to this Agreement.

No opinion will be expressed as to the effect of the Reorganization on (i)
the Acquired Fund or the Acquiring Fund with respect to any asset as to which
any unrealized gain or loss is required to be recognized for federal income tax
purposes at the end of a taxable year (or on the termination or transfer
thereof) under a mark-to-market system of accounting, and (ii) any Fund
Shareholder that is required to recognize unrealized gains and losses for
federal income tax purposes under a mark-to-market system of accounting.

9. TERMINATION OF AGREEMENT; EXPENSES.

9.1. This Agreement and the transactions contemplated hereby may be
terminated and abandoned by resolution of the Board of the Acquiring
Fund or of the Acquired Fund, as the case may be, at any time prior to
the Closing Date if circumstances should develop that, in the opinion
of the party's Board, make proceeding with the Reorganization
inadvisable.

9.2. If this Agreement is terminated and the transactions contemplated
hereby are abandoned pursuant to the provisions of this Section 9,
this Agreement shall become void and have no effect, without any
liability on the part of any party hereto or the Board members or
officers of the Acquired Fund or the Acquiring Fund, or shareholders
of the Acquired Fund or of the Acquiring Fund, as the case may be, in
respect of this Agreement.

9.3. Each party acknowledges that all expenses directly incurred in
connection with the Reorganization will be borne by Reich & Tang Asset
Management, LLC and Sentinel Asset Management, Inc.; provided however,
that expenses will in any event be paid by the party directly
incurring such expenses if and to the extent that the payment by
another person of such expenses would result in the disqualification
of such party

as a "regulated investment company" within the meaning of Section 851
of the Code.

10. WAIVER.

At any time prior to the Closing Date, except as otherwise expressly
provided, any of the foregoing conditions may be waived by the Board of the
Corporation or of the Trust if, in the judgment of either, such waiver will not
have a material adverse effect on the benefits intended under this Agreement to
the shareholders of the Acquired Fund or of the Acquiring Fund, as the case may
be.

11. MISCELLANEOUS.

11.1. None of the representations and warranties included or provided for
herein shall survive consummation of the transactions contemplated
hereby.

11.2. This Agreement contains the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof,
and merges and supersedes all prior discussions, agreements and
understandings of every kind and nature between them relating to the
subject matter hereof. Neither party shall be bound by any condition,
definition, warranty or representation, other than as set forth or
provided in this Agreement or as may be, on or subsequent to the date
hereof, set forth in a writing signed by the party to be bound
thereby. In this Agreement, any references to the Acquired Fund or the
Acquiring Fund taking action shall mean and include all necessary
actions of the Corporation on behalf of the Acquired Fund or the Trust
on behalf of the Acquiring Fund, respectively, unless the context of
this Agreement or the 1940 Act requires otherwise.

11.3. This Agreement shall be governed and construed in accordance with the
internal laws of the State of New York, without giving effect to
principles of conflict of laws; provided, however, that the due
authorization, execution and delivery of this Agreement by the Trust
and the Corporation shall be governed and construed in accordance with
the internal laws of the state of each party's incorporation or
formation, without giving effect to principles of conflict of laws;
provided that, in the case of any conflict between those laws and the
federal securities laws, the latter shall govern.

11.4. This Agreement may be amended only by a signed writing between the
parties.

11.5. This Agreement may be executed in counterparts, each of which, when
executed and delivered, shall be deemed to be an original, but all of
which together shall constitute one and the same Agreement. Delivery
of an executed signature page of this Agreement by facsimile or e-mail
shall constitute due and sufficient delivery of such counterpart.

11.6. This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment
or transfer hereof or of any rights or obligations hereunder shall be
made by any party without the written consent of the other party.
Nothing herein expressed or implied is intended or shall be construed
to confer upon or give any person, firm or corporation, other than the
parties hereto and their respective successors and assigns, any rights
or remedies under or by reason of this Agreement.

11.7. It is expressly agreed that the obligations of the parties hereunder
shall not be binding upon any of the Board members or officers of the
Acquired Fund or the Acquiring Fund, or shareholders, nominees,
agents, or employees of the Acquired Fund or the Acquiring Fund
personally, but shall bind only the property of the Acquired Fund or
the Acquiring Fund, as the case may be, as provided in the Acquired
Fund's Charter or the Acquiring Fund's Declaration of Trust,
respectively. The execution and delivery of this Agreement by such
officers shall not be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but
shall bind only the property of the Acquired Fund or the Acquiring
Fund, as the case may be.

[Signature pages follow]

IN WITNESS WHEREOF, the Acquired Fund and the Acquiring Fund have caused this
Agreement and Plan of Reorganization to be executed and attested on its behalf
by its duly authorized representatives as of the date first above written.

SENTINEL GROUP FUNDS, INC., on behalf of the Sentinel
Government Money Market Fund

------------------------------------------
Christian W. Thwaites
President & Chief Executive Officer

DAILY INCOME FUND, on behalf of the U.S. Government Portfolio

------------------------------------------
Joseph Jerkovich
Chief Financial Officer

APPENDIX B

COMPARISON OF INVESTMENT RESTRICTIONS AND LIMITATIONS

Fundamental Policies. The following is a comparison of the investment
restrictions and limitations of the Sentinel Government Money Market Fund and
U.S. Government Portfolio. A fundamental investment restriction is one that
cannot be changed without approval of the majority of outstanding shareholders.
For both Funds, if a percentage restriction is adhered to at the time of an
investment, a later increase or decrease in percentage resulting from a change
in values of portfolio securities or in the amount of a Fund's portfolio's
assets will not constitute a violation of such restriction.

Fundamental Investment May not borrow except from banks in an amount May not borrow money, unless (i) the
Restrictions up to 5% of the Sentinel Government Money borrowing does not exceed 10% of the total
Market Fund's total assets for temporary or market value of the assets of the U.S.
emergency purposes or to meet redemption Government Portfolio with respect to which
requests that might otherwise require the the borrowing is made (determined at the
untimely disposition of securities time of borrowing but without giving effect
thereto) and the money is borrowed from one
or more banks as a temporary measure for
extraordinary or emergency purposes or to
meet unexpectedly heavy redemption requests
and furthermore the U.S. Government
Portfolio will not make additional
investments when borrowings exceed 5% of the
value of the U.S. Government Portfolio's net
assets or as otherwise provided herein and
permissible under the 1940 Act
----------------------------- ------------------------------------------------- ----------------------------------------------
May not purchase securities on margin No similar restriction
----------------------------- ------------------------------------------------- ----------------------------------------------
May not deal in real estate May not invest in real estate (other than
debt obligations secured by real estate or
interests therein or debt obligations issued
by companies which invest in real estate or
interests therein), commodities, commodity
contracts, commodity options, interests in
oil or gas or interests in other mineral
exploration or development programs
----------------------------- ------------------------------------------------- ----------------------------------------------
May not act as an underwriter of securities May not act as an underwriter of securities
issued by others
----------------------------- ------------------------------------------------- ----------------------------------------------
May not purchase from or sell to any officer, No similar restriction
director or employee of the Company, the
Adviser, the Distributor or a subadviser (or
any of their officers or directors) any
securities other than Sentinel Government Money
Market Fund shares
----------------------------- ------------------------------------------------- ----------------------------------------------
May not invest in oil, gas or other mineral May not invest in commodities, commodity
exploration or development programs or leases contracts, commodity options, interests and
leases in oil, gas or other mineral
exploration or development programs (the
U.S. Government Portfolio may, however,
purchase and sell securities of companies
----------------------------- ------------------------------------------------- ----------------------------------------------

B-1

----------------------------- ------------------------------------------------- ----------------------------------------------
Sentinel Government Money
Market Fund U.S. Government Portfolio
----------------------------- ------------------------------------------------- ----------------------------------------------
engaged in the exploration, development,
production, refining, transporting and
marketing of oil, gas or minerals)
----------------------------- ------------------------------------------------- ----------------------------------------------
May not invest more than 5% of its net assets No similar restriction
in warrants valued at the lower of cost or
market, or more than 2% of its net assets in
warrants that are not listed on either the New
York Stock Exchange or the American Stock
Exchange
----------------------------- ------------------------------------------------- ----------------------------------------------
May not invest for the purposes of exercising May not make investments for the purpose of
control or management exercising control over any issuer or other
person
----------------------------- ------------------------------------------------- ----------------------------------------------
May not make short sales of securities May not make short sales of securities or
intentionally maintain a short position in
any security or write, purchase or sell
puts, calls, straddles, spreads or any
combination thereof
----------------------------- ------------------------------------------------- ----------------------------------------------
May not invest in restricted securities May not purchase restricted securities in
excess of the percentage limitations set
forth in restriction * below; provided,
however, that restricted securities shall
not include privately placed securities that
are exempt from registration under Section
4(2) or Rule 144A of the Securities Act, or
purchase securities on margin
----------------------------- ------------------------------------------------- ----------------------------------------------
* May not acquire securities that are not
readily marketable or repurchase agreements
calling for resale within more than seven
days if, as a result thereof, more than 10%
of the value of its net assets would be
invested in such illiquid securities
----------------------------- ------------------------------------------------- ----------------------------------------------
Must meet the requirements of Rule 2a-7 under
the Investment Company Act of 1940, as amended
----------------------------- ------------------------------------------------- ----------------------------------------------
No similar restriction May not invest in securities of companies
that have conducted operations for less than
three years, including the operations of
predecessors
----------------------------- ------------------------------------------------- ----------------------------------------------
No similar restriction May not invest in or hold securities of any
issuer if officers and Trustees of the U.S.
Government Portfolio or Natixis Global Asset
Management, L.P., the managing member of the
Manager, individually own beneficially more
than 1/2 of 1% of the issuer's securities or
in the aggregate own more than 5% of the
issuer's securities
----------------------------- ------------------------------------------------- ----------------------------------------------
No similar restriction May not purchase securities having voting
rights at the time of purchase
----------------------------- ------------------------------------------------- ----------------------------------------------
See non-fundamental restrictions below May not purchase securities of other
investment companies, except in connection
with a merger, acquisition, consolidation or
reorganization involving the U.S. Government
Portfolio
----------------------------- ------------------------------------------------- ----------------------------------------------
See non-fundamental restrictions below May not issue senior securities, except
----------------------------- ------------------------------------------------- ----------------------------------------------

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The Sentinel Government Money Market Fund also has the below non-fundamental
investment restrictions, which may be changed by the Board.

(1) To the extent the Sentinel Government Money Market Fund invests in
derivatives, it will observe the following limitations:

o It may not hold more than 5% of its total assets in the aggregate in
options on individual securities, options on securities indices, and
futures contracts.

o It will buy options on individual securities only to hedge underlying
securities that are owned by the Sentinel Government Money Market
Fund, or to close out transactions in options written.

o It will sell options on individual securities only to generate
additional income on securities that are owned by the Sentinel
Government Money Market Fund, or to close out transactions in options
purchased.

B-3

o It will sell options on securities indices or futures on securities
indices only to hedge portfolio risks, or to close out positions in
such index options or futures that had previously been purchased. As
such, the Sentinel Government Money Market Fund shall not sell such
index options or futures with aggregate notional amounts in excess of
the Sentinel Government Money Market Fund's exposure to the market
such index options or futures with aggregate notional amounts in
excess of the Sentinel Government Money Market Fund's exposure to the
market or sector covered by such index option or future.

o It will purchase options on securities indices or futures on
securities indices only in anticipation of buying securities related
to the index, or to close out positions in such index options or
futures that the Sentinel Government Money Market Fund had previously
sold. In purchasing such index options or futures, it must set aside
cash or short-term money market investments so as to ensure that the
purchase of such index options or futures does not result in
leveraging the Sentinel Government Money Market Fund's portfolio.

o It will enter into interest rate swap transactions and total return
swaps on fixed income indices only in circumstances in which there is
no leveraging of credit risk in the portfolio, or in which significant
diversification or reduction of credit risk results.

o It will enter into default swaps on fixed-income securities only for
the purpose of hedging credit risk on securities owned by the Sentinel
Government Money Market Fund, and will not take on additional credit
risk through the use of default swaps.

o When entering into swap agreements, it will segregate cash or
appropriate liquid securities in an amount equal to its obligations
under swap agreements; when an agreement provides for netting of the
payments by the two parties, the Sentinel Government Money Market Fund
will segregate only the amount of its net obligation, if any.

o When transacting in OTC derivatives involving counterparty risk, it
will deal only with counterparties that meet appropriate credit
guidelines, and will limit exposure to any counterparty such that the
sum of the value of all portfolio securities held by the Sentinel
Government Money Market Fund of which the issuer is the counterparty
or an affiliate of the counterparty, plus the exposure to the
counterparty in respect of the OTC options, does not exceed 5% of the
total assets of the Sentinel Government Money Market Fund.

(2) In addition, to comply with Subchapter M of the Internal Revenue Code
of 1986, as amended ("Code"), at least 50% of the Sentinel Government Money
Market Fund's total assets must be comprised of individual issues, each of which
represents no more than 5% of the Sentinel Government Money Market Fund's total
assets and no more than 10% of the issuer's outstanding voting securities. Those
issues which represent more than 5% of the Sentinel Government Money Market
Fund's total assets must be limited in the aggregate to 50% of the Sentinel
Government Money Market Fund's total assets, provided, however, that no more
than 25% of the Sentinel Government Money Market Fund's total assets may be
invested in any one issuer or in qualified publicly-traded partnerships.

(3) The Sentinel Government Money Market Fund may invest up to 10% of its
total assets in the securities of other investment companies, but may not invest
more than 5% of its total assets in the securities of any one investment company
or acquire more than 3% of the outstanding securities of any one investment
company, unless it does so in reliance on a statutory exemption under the 1940
Act or related rules or SEC staff interpretations.

(4) The Sentinel Government Money Market Fund may not have on loan at any
given time securities representing more than 33-1/3% of its total assets. For
the sole purpose of calculating this limit, loan collateral can be included as
part of the Sentinel Government Money Market Fund's total assets, which means
that the Sentinel Government Money Market Fund could lend up to 50% of its total
assets before the securities loan.

(5) The Sentinel Government Money Market Fund may not invest in commodities
or commodity contracts; except that the Sentinel Government Money Market Fund
may do so in accordance with applicable law and the Sentinel Government Money
Market Fund's prospectus and statement of additional information, as they may be
amended from time to time, to the extent it may do so without registering as a
commodity pool operator under the Commodity Exchange Act.

B-4

(6) The Sentinel Government Money Market Fund may not issue senior
securities to the extent such issuance would violate applicable law. The 1940
Act currently generally defines a "senior security" as any bond, debenture,
note, or similar obligation or instrument constituting a security and evidencing
indebtedness, and any stock of a class having priority over any other class as
to distribution of assets or payment of dividends. With certain exceptions, the
1940 Act prohibits the Sentinel Government Money Market Fund from issuing senior
securities. For example, the Sentinel Government Money Market Fund may borrow
from any bank if it maintains an asset coverage of at least 300% in the
aggregate provided that, in the event that such asset coverage falls below 300%,
the Sentinel Government Money Market Fund must, within three days (not including
Sundays and holidays),; reduce the amount of its borrowings to attain the 300%
asset coverage.

(7) The Sentinel Government Money Market Fund may not change its policy of
investing, under normal circumstance, at least 80% of its assets in government
securities, unless the fund provides its shareholders with 60 days' prior
written notice of such change.

(8) The Sentinel Government Money Market Fund may not invest more than 25%
of its total assets in shares of institutional money market funds, and only if
they invest primarily in securities of the U.S. Treasury, U.S. government
agencies and instrumentalities and repurchase agreements with respect to such
securities.

(9) The Sentinel Government Money Market Fund may not invest more than 25%
of its net assets in repurchase agreements.

B-5

APPENDIX C

ADDITIONAL SHAREHOLDER INFORMATION ABOUT THE U.S. GOVERNMENT PORTFOLIO

Below is additional shareholder information about the U.S. Government
Portfolio. Additional shareholder information about the Sentinel Government
Money Market Fund is incorporated by reference from its current prospectus and
is available upon request from Sentinel Group Funds, Inc. without charge by
calling toll free, (800) 282-3863.

The Daily Income Fund (the "Fund") sells and redeems its shares on a
continuing basis at their net asset value. The Fund does not impose a charge for
either purchases or redemptions, although there may be a fee imposed on certain
wire redemption requests. All transactions in Fund shares are processed through
the Fund's transfer agent or its principal underwriter, as appropriate, which
accept orders for purchases and redemptions from Participating Organizations
(see "Investments Through Participating Organizations" for a definition of
Participating Organizations) and from investors directly.

Pricing of Fund Shares

The net asset value of each Portfolio of the Fund's shares is determined as
of 4:00 p.m., Eastern time, on each Fund Business Day. Fund Business Day means
weekdays (Monday through Friday) except (i) days on which the New York Stock
Exchange is closed for trading (i.e., national holidays) and (ii) Columbus Day
and Veterans' Day. However, on certain days that the New York Stock Exchange is
closed, the Fund, at the direction of the Manager, may be open for purchases and
redemptions and will determine its net asset value. The net asset value is
computed by dividing the value of each Portfolio's net assets (i.e., the value
of its securities and other assets less its liabilities, including expenses
payable or accrued, but excluding capital stock and surplus) by the total number
of shares outstanding. Each Portfolio intends to maintain a stable net asset
value at $1.00 per share although there can be no assurance that this will be
achieved.

Each Portfolio's portfolio securities are valued at their amortized cost in
compliance with the provisions of Rule 2a-7 under the Investment Company Act of
1940, as amended (the "1940 Act"). Amortized cost valuation involves valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium. If fluctuating interest rates or credit
issues cause the market value of the Fund's share price to be less than $0.997
or greater than $1.003, the Board of Directors will consider whether any action
should be initiated to prevent the share price from going below $0.995 per share
or above $1.005 per share. Although the amortized cost method provides certainty
in valuation, it may result in periods during which the value of an instrument
is higher or lower than the price the Fund would receive if the instrument were
sold.

Shares are issued as of the first determination of the Portfolio's net
asset value per share made after acceptance of the investor's purchase order. In
order to maximize earnings on its Portfolios, the Fund normally has its assets
as fully invested as is practicable. Many securities in which the Fund invests
require the immediate settlement in funds of Federal Reserve member banks on
deposit at a Federal Reserve Bank (commonly known as "Federal Funds"). Portfolio
shares begin accruing income on the day the shares are issued to an investor.

The Fund reserves the right to reject any purchase order of its shares. In
addition, the Fund does not accept cash, and may refuse to accept cash
equivalents (i.e., travelers cheques, money orders, cashier's checks or similar
instruments) and certain other forms of payment at its discretion.

Subscribing to the Fund

At the time of initial investment in the Fund, investors must elect on
their fund application the Class of shares of the Portfolio in which they wish
to invest. Subject to the Portfolios' initial

C-1

investment minimums, investors may divide their investment in the Fund between
the Portfolios in any manner they choose by submitting the Fund application with
their choices. Investors may purchase shares of the Portfolios from a
Participating Organization or directly. Certain Participating Organizations are
compensated for their services by the Manager and/or the Distributor.

Shareholders will have a separate account with the Fund for each Portfolio
in which they invest. Certificates for Fund shares will not be issued to
investors.

Purchase of Fund Shares

The Fund does not accept a purchase order from investors investing in the
Fund directly (i.e., not through Participating Organizations) until an
investor's payment has been converted into Federal Funds and is received by the
Fund's transfer agent, or its principal underwriter, as appropriate. Orders from
these direct investors that are accompanied by Federal Funds and received after
4:00 p.m., Eastern time, on a Fund Business Day will result in the issuance of
shares on the following Fund Business Day.

Investors may, if they wish, invest in the Fund through a Participating
Organization with which they have accounts. Generally, all other investors, and
investors who have accounts with Participating Organizations but do not wish to
invest in the Fund through them, may invest in the Fund directly. Direct
shareholders generally do not receive the benefit of the servicing functions
performed by a Participating Organization.

The minimum initial investment in the Fund for each Portfolio is $100,000
for the Institutional Service Class. The minimum amount for subsequent
investments is $1,000 for the Institutional Service Class. In addition, the Fund
may impose different minimum investment requirements for clients of certain
financial intermediaries with which the Distributor has entered into an
agreement. The Fund may waive any minimum purchase requirements.

The Fund will provide each shareholder, except certain investors, with a
personalized monthly statement listing (i) the total number of Fund shares owned
as of the statement closing date, (ii) purchases and redemptions of Fund shares,
and (iii) the dividends paid on Fund shares (including dividends paid in cash or
reinvested in additional Fund shares).

Investments Through Participating Organizations

Sentinel Administrative Services, Inc. ("SASI") and/or Sentinel Financial
Services Company ("SFSC") will be a Participating Organization after the
effective date of the Reorganization, and will transmit purchase or redemption
orders for the Daily Income Fund for former Sentinel Government Money Market
Fund shareholders who maintain their accounts through SASI and/or SFSC.
Generally, investors purchasing shares through a Participating Organization are
referred to as Participant Investors. Participating Organizations are securities
brokers, banks and financial institutions or other industry professionals or
organizations that have entered into shareholder servicing agreements with the
Distributor with respect to investment of their customer accounts in the Fund.
When instructed by a Participant Investor to purchase or redeem Fund shares, the
Participating Organization, on behalf of the Participant Investor, transmits to
the Fund's transfer agent a purchase or redemption order, and in the case of a
purchase order, payment for the shares being purchased.

C-2

Procedures relating to investing through SASI are contained in the letter
to shareholders of the Sentinel Government Money Market Fund provided with this
Combined Prospectus/Information Statement.

Participating Organizations may confirm to Participant Investors each
purchase and redemption of Fund shares for their accounts. Also, Participating
Organizations may send periodic account statements to their customers showing
(i) the total number of Fund shares owned by each Participant Investor as of the
statement closing date, (ii) purchases and redemptions of Fund shares by each
Participant Investor during the period covered by the statement, and (iii) the
income earned by Fund shares of each Participant Investor during the statement
period (including dividends paid in cash or reinvested in additional Fund
shares). Participant Investors whose Participating Organizations have not
undertaken to provide such statements will receive them from the Fund directly.

Participating Organizations may charge Participant Investors a fee in
connection with their use of specialized purchase and redemption procedures. In
addition, Participating Organizations offering purchase and redemption
procedures similar to those offered to shareholders who invest in the Fund
directly, may impose charges, limitations, minimums and restrictions in addition
to or different from those applicable to shareholders who invest in the Fund
directly. Accordingly, the net yield to investors who invest through
Participating Organizations may be less than the net yield that could be
achieved by investing in the Fund directly. Participating Organizations may also
set deadlines for receipt of orders from Participant Investors that are earlier
than the order deadline of the Fund due to processing or other reasons. A
Participant Investor should read this Prospectus in conjunction with the
materials provided by the Participating Organization describing the procedures
under which Fund shares may be purchased and redeemed through the Participating
Organization.

Qualified Participating Organizations may transmit an investor's purchase
or redemption order to the Fund's transfer agent after 4:00 p.m., Eastern time
on the day the order is received from the investor as long as the investor has
placed his order with the Participating Organization before 4:00 p.m. Eastern
time on that day. The investor will then receive the net asset value of the
Fund's shares determined as of 4:00 p.m. Eastern time on the day he placed his
order with the qualified Participating Organization. Participating Organizations
are responsible for instituting procedures to ensure that purchase orders by
their respective clients are processed expeditiously.

Initial Direct Purchases of Shares

Investors who wish to invest in the Fund directly may obtain a current
Prospectus and the Fund application necessary to open an account by telephoning
the Fund at (212) 830-5345 or toll free at (800) 433-1918 during the hours of
8:30 a.m. to 5:30 p.m., Eastern time on any Fund Business Day. Investors who
invest through a Participating Organization, including SASI and/or SFSC, should
follow instructions from SASI and/or SFSC as to purchases of shares.

Mail and Personal Delivery

Investors may send or deliver a check made payable to "Daily Income Fund"
along with a completed Fund application to:

C-3

Daily Income Fund
c/o Reich & Tang Funds
600 Fifth Avenue - 8th Floor
New York, New York 10020

Checks are accepted subject to collection at full value in United States
currency. Payment by a check drawn on any member of the Federal Reserve System
will normally be converted into Federal Funds within two business days after
receipt of the check. Checks drawn on a non-member bank may take substantially
longer to convert into Federal Funds. If your check is returned unpaid due to
insufficient funds, your order will be cancelled and your account will be
charged a $20.00 fee for each returned check.

Bank Wire

To purchase shares of the Fund using the wire system for transmittal of
money among banks, an investor, prior to his or her initial purchase of shares,
should first telephone the Fund at (212) 830-5345 or toll free at (800) 433-1918
to obtain a Fund application necessary to open a new account. The investor
should complete and fax the Fund application along with any required
documentation to the Fund at (212) 830-5476. The original Fund application and
documentation should then be mailed to the address specified under "Mail and
Personal Delivery." The investor should then telephone the Fund at the above
number to obtain a new account number and then instruct a member bank of the
Federal Reserve System to wire the amount of the investment immediately to:

The Bank of New York Mellon
ABA # 021000018
Reich & Tang Funds
DDA # 890040352-7
For Daily Income Fund
Name of Portfolio
Account of (Investor's Name)
Fund Account #

An account will not be opened until the Fund has received the Fund
application and required documentation in proper form and has accepted the
purchase order for its shares.

There may be a charge by the investor's bank for transmitting the money by
bank wire, and there also may be a charge for use of Federal Funds. The Fund
does not charge investors in the Fund for its receipt of wire transfers. Payment
in the form of a "bank wire" received prior to 4:00 p.m., Eastern time, on a
Fund Business Day will be treated as a Federal Funds payment received on that
day.

Electronic Funds Transfers (EFT), Pre-authorized Credit and Direct Deposit
Privilege

You may purchase shares of the Fund (minimum of $100) by having salary,
dividend payments, interest payments or any other payments designated by you,
including federal salary, social security, or certain veteran's, military or
other payments from the federal government, automatically deposited into your
Fund account. You can also have money debited from your checking account. To
enroll in any one of these programs, please contact your broker or the Fund for
the appropriate form. You may elect at any time to terminate your participation
by notifying in

C-4

writing the appropriate depositing entity and/or federal agency. Upon
notification of death or legal incapacity your participation in the Privilege
will automatically terminate. Further, the Fund may terminate your participation
in the Privilege upon 30 days' notice to you. Investors who invest through a
Participating Organization, including SASI and/or SFSC, should follow
instructions from SASI and/or SFSC regarding EFT, Pre-authorized Credit and
Direct Deposit Privileges.

Subsequent Purchases of Shares

Subsequent purchases can be made by bank wire, as indicated above, or by
mailing a check to:

Daily Income Fund
c/o Reich & Tang Funds
P.O. Box 13232 Newark, New Jersey 07101-3232

There is a $1,000 minimum for the Institutional Service Class for
subsequent purchases of shares. All payments should clearly indicate the
shareholder's account number.

Provided that the information on the application form on file with the Fund
is still applicable, a shareholder may reopen an account without filing a new
Fund application at any time during the year the shareholder's account is closed
or during the following calendar year.

Investors who invest through a Participating Organization, including SASI
and/or SFSC, should follow instructions from SASI and/or SFSC regarding
subsequent purchases of shares.

Redemption of Shares

A redemption is effected immediately following, and at a price determined
in accordance with, the next determination of net asset value per share of each
Portfolio following receipt by the Fund's transfer agent of the redemption order
(and any supporting documentation that the Fund's transfer agent may require).
Normally, payment for redeemed shares is made on the same Fund Business Day the
redemption is effected, if the redemption proceeds are paid by wire (on the next
Fund Business Day if paid by check). However, redemption payments will not be
paid out unless the check (including a certified or cashier's check) used for
investment has been cleared for payment by the investor's bank, which could take
up to 15 days after investment. Shares redeemed are not entitled to participate
in dividends declared on the day a redemption becomes effective.

A shareholder's original Fund application permits the shareholder to redeem
by written request and to elect one or more of the additional redemption
procedures described below. A shareholder may only change the instructions
indicated on his original Fund application by transmitting a written direction
to the Fund's transfer agent. Requests to institute or change any of the
additional redemption procedures will require a signature guarantee.

When a signature guarantee is called for, the shareholder should have
"Signature Guaranteed" stamped under his signature. It should be signed and
guaranteed by an eligible guarantor institution which includes a domestic bank,
a domestic savings and loan institution, a domestic credit union, a member bank
of the Federal Reserve System or a member firm of a national securities
exchange, pursuant to the Fund's transfer agent's standards and procedures.

C-5

Investors who invest through a Participating Organization, including SASI
and/or SFSC, should follow instructions from SASI and/or SFSC regarding
redemption of shares.

Written Requests

Shareholders may make a redemption in any amount by sending a written
request to the Fund addressed to:

Daily Income Fund
c/o Reich & Tang Funds
600 Fifth Avenue - 8th Floor
New York, New York 10020

All written requests for redemption must be signed by the shareholder, in
each case with signature guaranteed, unless otherwise indicated on the Fund
application or in a subsequent written authorization.

Normally the redemption proceeds are paid by check and mailed to the
shareholder at the address of record.

Checks

By making the appropriate election on their Fund application, shareholders
may request a supply of checks that may be used to effect redemptions from the
Class of shares of the Fund in which they invest. The checks, which will be
issued in the shareholder's name, are drawn on a special account maintained by
the Fund with the Fund's agent bank. Checks may be drawn in any amount of $250
or more. When a check is presented to the Fund's agent bank, it instructs the
Fund's transfer agent to redeem a sufficient number of full and fractional
shares in the shareholder's account to cover the amount of the check. The use of
a check to make a withdrawal enables a shareholder in the Fund to receive
dividends on the shares to be redeemed up to the Fund Business Day on which the
check clears. Checks provided by the Fund may not be certified. Investors who
purchase Fund shares by check may not receive their redemption proceeds until
the check has cleared, which can take up to 15 days following the date of
purchase.

There is no charge to the shareholder for checks provided by the Fund,
although there may be fees charged for checks provided in connection with
certain cash management programs offered through Participating Organizations.
The Fund reserves the right to impose a charge or impose a different minimum
check amount in the future.

Shareholders electing the checking option are subject to the procedures,
rules and regulations of the Fund's agent bank governing checking accounts.
Checks drawn on a jointly owned account may, at the shareholder's election,
require only one signature. Checks in amounts exceeding the value of the
shareholder's account at the time the check is presented for payment will not be
honored. Since the dollar value of the account changes daily, the total value of
the account may not be determined in advance and the account may not be entirely
redeemed by check. Shareholders will be charged a $16 fee for any stop payment
requests, a $15 fee if the Fund is requested to deliver a supply of checks
overnight and a $4 fee for each copy of a check requested. In addition, the Fund
reserves the right to charge the shareholder's account a fee of up to $20 for
checks not honored as a result of an insufficient account value, a check deemed
not negotiable because it has been held longer

C-6

than six months, an unsigned check and/or a post-dated check. The Fund reserves
the right to terminate or modify the check redemption procedure at any time or
to impose additional fees following notification to the Fund's shareholders.

Corporations and other entities electing the checking option are required
to furnish a certified resolution or other evidence of authorization in
accordance with the Fund's normal practices. Individuals and joint tenants are
not required to furnish any supporting documentation. Appropriate authorization
forms will be sent by the Fund or its agents to corporations and other
shareholders who select this option. As soon as the authorization forms are
filed in good order with the Fund's agent bank, the Fund will provide the
shareholder with a supply of checks.

Telephone

The Fund accepts telephone requests for redemption from shareholders who
elect this option on their Fund application. The proceeds of a telephone
redemption may be sent to the shareholder at their address of record or, if in
excess of $1,000, to their bank accounts, both as set forth in the Fund
application or in a subsequent signature guaranteed written authorization. The
Fund may accept telephone redemption instructions from any person with respect
to accounts of shareholders who elect this service and thus such shareholders
risk possible loss of principal and interest in the event of a telephone
redemption not authorized by them. Telephone requests to wire redemption
proceeds must be for amounts in excess of $10,000. For telephone requests for
wire redemptions of less than $10,000, the Fund charges a $15 fee. The Fund will
employ reasonable procedures to confirm that telephone redemption instructions
are genuine, and will require that shareholders electing such option provide a
form of personal identification at the time of such redemption request. Failure
by the Fund to employ such reasonable procedures may cause the Fund to be liable
for the losses incurred by investors due to unauthorized or fraudulent telephone
redemptions.

A shareholder making a telephone withdrawal should call the Fund at (212)
830-5345 or toll free at (800) 433-1918, and state: (i) the name of the
shareholder appearing on the Fund's records, (ii) the shareholder's account
number with the Fund, (iii) the amount to be withdrawn, (iv) whether such amount
is to be forwarded to the shareholder's designated bank account, and (v) the
name of the person requesting the redemption. Usually the proceeds are sent to
the designated bank account or address of record on the same Fund Business Day
the redemption is effected, if the redemption proceeds are being paid by wire
(or to the address of record on the next Fund Business Day if paid by check).
The Fund may modify or discontinue the telephone redemption option at any time
and will notify shareholders accordingly.

Generally

There is no redemption charge, although there may be a fee charged on
certain wire redemption requests, no minimum period of investment, no minimum
amount for a redemption, and no restriction on frequency of withdrawals.
Proceeds of redemptions are paid by check. Unless other instructions are given
in proper form to the Fund's transfer agent, a check for the proceeds of a
redemption will be sent to the shareholder's address of record. If a shareholder
elects to redeem all of his or her shares of a Portfolio, all dividends accrued
to the date of such redemption will be paid to the shareholder along with the
proceeds of the redemption. A redemption of shares may result in taxable income
to the shareholder.

C-7

The right of redemption generally may not be suspended or the date of
payment upon redemption postponed for more than seven days after the shares are
tendered for redemption, except for (i) any period during which the New York
Stock Exchange is closed (other than customary weekend and holiday closings),
(ii) any period during which the SEC determines that trading thereon is
restricted, (iii) any period during which an emergency (as determined by the
SEC) exists as a result of which disposal by the Fund of its portfolio
securities is not reasonably practicable or as a result of which it is not
reasonably practicable for the Fund to fairly determine the value of its net
assets, or (iv) for such other period as the SEC may by order permit for the
protection of the shareholders of the Fund.

The Fund and its agents reserve the right to "freeze" or "block" (that is,
disallow any further purchases or redemptions from any account) or suspend
account services in certain instances as permitted or required by applicable
laws and regulations, including applicable anti-money laundering regulations.
Examples of such instances include, but are not limited to, (i) where an
accountholder appears on the list of "blocked" entities and individuals
maintained pursuant to OFAC (Office of Foreign Assets Control) regulations, (ii)
where the Fund or its agents detect suspicious activity or suspect fraudulent or
illegal activity, or (iii) when notice has been received by the Fund or its
agents that there is a dispute between the registered or beneficial account
owners.

The Fund reserves the right to redeem the shares of any shareholder if the
total value of all the remaining shares in the shareholder's or its
Participating Organization's account after a withdrawal is less than $5,000 for
the Institutional Service Class. Written notice of a proposed mandatory
redemption will be given at least 30 days in advance to any shareholder whose
account is to be redeemed or, alternatively the Fund may impose a monthly
service charge of $10 on such accounts which does not require prior written
notice. For Participant Investor accounts, notice of a proposed mandatory
redemption will be given only to the appropriate Participating Organization. The
Participating Organization will be responsible for notifying the Participant
Investor of the proposed mandatory redemption. A shareholder or Participating
Organization who receives such a notice may avoid mandatory redemption by
purchasing sufficient additional shares to increase its account value to the
minimum amount during the notice period. Shareholders who purchase shares under
these circumstances are not subject to the normal minimums for subsequent
purchases.

In addition, in accordance with applicable customer identification
regulations, the Fund reserves the right to redeem the shares of any shareholder
and close the shareholder's account if the Fund and its agents are unable to
verify the shareholder's identity within a reasonable time after the
shareholder's account is opened. If the Fund closes a shareholder's account in
this manner, the shares will be valued in accordance with the net asset value
next calculated after the Fund decides to close the account.

Automatic Withdrawal Plan

Shareholders may elect to withdraw shares and receive payment from the Fund
of a specified amount of $50 or more automatically on a monthly or quarterly
basis. The monthly or quarterly withdrawal payments of the specified amount are
made by the Fund on the date specified on the Automatic Withdrawal Authorization
form. Whenever such day of the month is not a Fund Business Day, the payment
date is the Fund Business Day preceding the day of the month specified on the
Automatic Withdrawal Authorization form. In order to make a payment, a number of
shares equal in aggregate net asset value to the payment amount are redeemed at
their net asset value on the Fund Business Day immediately preceding the date of
payment. To the extent that the redemptions to

C-8

make plan payments exceed the number of shares purchased through reinvestment of
dividends and distributions, the redemptions reduce the number of shares
purchased on original investment, and may ultimately liquidate a shareholder's
investment.

The election to receive automatic withdrawal payments may be made at the
time of the original application by completing an Automatic Authorization
Withdrawal form. The election may also be made, changed or terminated at any
later time by sending a signature guaranteed written request to the Fund's
transfer agent. Because the withdrawal plan involves the redemption of Fund
shares, such withdrawals may constitute taxable events to the shareholder.
However, the Fund does not expect that there will be any realized capital gains.

Dividends and Distributions

The Fund declares dividends equal to all its net investment income
(excluding capital gains and losses, if any, and amortization of market
discount) on each Fund Business Day and pays dividends monthly. There is no
fixed dividend rate. In computing these dividends, interest earned and expenses
are accrued daily.

Net realized capital gains, if any, are distributed at least annually and
in no event later than 60 days after the end of the Fund's fiscal year.

All dividends and distributions of capital gains are automatically
invested, at no charge, in additional Fund shares of the same Class of shares
immediately upon payment thereof unless a shareholder has elected by written
notice to the Fund to receive either of such distributions in cash. The
reinvestment of capital gains or any taxable dividends does not avoid a taxable
event to the shareholder, even though such shareholder has not received a cash
distribution to pay the resulting tax, if any. See "Tax Consequences."

Election to receive dividends and distributions in cash or shares is made
at the time shares are subscribed for and may be changed by notifying the Fund
in writing at any time prior to the record date for a particular dividend or
distribution. If the shareholder makes no election, the Fund will make the
distribution in shares. There are no sales or other charges in connection with
the reinvestment of dividends and capital gains distributions.

While it is the intention of the Fund to distribute to its shareholders
substantially all of each fiscal year's net income and net realized capital
gains, if any, the amount and time of any such dividend or distribution must
necessarily depend upon the realization by the Fund of income and capital gains
from investments. Except as described herein, each Portfolio's net investment
income (excluding capital gains, if any) will be declared as a dividend on each
Fund Business Day. The Fund declares dividends for Saturdays, Sundays and
holidays on the previous Fund Business Day. The Fund pays dividends monthly.
There is no fixed dividend rate, and there can be no assurance that the Fund
will pay any dividends or realize any capital gains.

Exchange Privilege

Shareholders of the Fund who hold their shares directly and not through a
Participating Organization such as SASI and/or SFSC are entitled to exchange
some or all of their Class of shares in the Fund for shares of the same Class of
certain other investment companies that retain Reich & Tang Asset Management,
LLC as investment manager and that participate in the exchange privilege

C-9

program with the Fund. If only one Class of shares is available in a particular
exchange fund, the shareholders of the Fund are entitled to exchange their
shares for the shares available in that exchange fund. If a particular exchange
fund has more than one available class of shares the shareholders of the Fund
are entitled to exchange their shares for a comparable class of shares available
in the exchange fund. Currently the exchange privilege program has been
established between the Fund and California Daily Tax Free Income Fund, Inc.,
Connecticut Daily Tax Free Income Fund, Inc., Delafield Fund, Inc., Florida
Daily Municipal Income Fund, New Jersey Daily Municipal Income Fund, Inc. and
New York Daily Tax Free Income Fund, Inc. In the future, the exchange privilege
program may be extended to other investment companies that retain Reich & Tang
Asset Management, LLC as investment adviser or manager.

There is no charge for the exchange privilege or limitation as to frequency
of exchange. The minimum amount for an exchange is $1,000. However, shareholders
who are establishing a new account with an investment company through the
exchange privilege must ensure that a sufficient number of shares are exchanged
to meet the minimum initial investment required for the investment company into
which the exchange is being made. Each Class of shares is exchanged at its
respective net asset value.

The exchange privilege provides shareholders of the Fund with a convenient
method to shift their investment among different investment companies when they
feel such a shift is desirable. The exchange privilege is available to
shareholders resident in any state in which shares of the investment company
being acquired may legally be sold. Shares of the same Class may be exchanged
only between investment company accounts registered in identical names. Before
making an exchange, an investor should review the current prospectus of the
investment company into which the exchange is to be made. An exchange will be a
taxable event to an exchanging shareholder. See "Tax Consequences."

Instructions for exchanges may be made by sending a written request to:

Daily Income Fund
c/o Reich & Tang Funds
600 Fifth Avenue-8th Floor
New York, New York 10020

or, for shareholders who have elected that option, by telephoning the Fund at
(212) 830-5345 or toll free at (800) 433-1918. The Fund reserves the right to
reject any exchange request and may modify or terminate the exchange privilege
at any time.

Shares of the U.S. Government Portfolio held through SASI will not have
exchange privileges. However, certain waivers of sales charges will apply to
direct reinvestments of redemption proceeds of U.S. Government Portfolio shares
into certain shares of the Sentinel Funds, as described in the letter to
shareholders of the Sentinel Government Money Market Fund provided with this
Combined Prospectus/Information Statement.

Frequent Trading

The Reich & Tang family of funds discourages short-term or excessive
trading ("frequent trading") of their shares by shareholders (including by means
of exchanges) and maintains procedures reasonably designed to detect and deter
such frequent trading, except with respect to the

C-10

money market funds as discussed below. Frequent trading is sometimes referred to
as market timing. Market timing may take many forms but commonly refers to
arbitrage activity involving the frequent buying and selling of mutual fund
shares in order to take advantage of the fact that there may be a lag between a
change in the value of a mutual fund's portfolio securities and the reflection
of that change in the fund's share price. Frequent trading may dilute the value
of fund shares held by long-term shareholders. Frequent trading may also
interfere with the efficient management of a fund's portfolio, as it may result
in a fund maintaining higher cash balances than it otherwise would (which would
result in reduced yields for money market funds) or cause a fund to sell
portfolio securities at a time it otherwise would not. Frequent trading may
further result in increased portfolio transaction (or brokerage) costs,
administrative and other operating costs and may cause a fund to realize taxable
capital gains or harvest capital losses at a time that it otherwise would not.
For these reasons, frequent trading poses the risk of lower returns for
long-term shareholders of a fund. There is no guarantee that these policies and
procedures will be effective in detecting and preventing frequent trading in
whole or in part.

Money market funds are not effective vehicles for market timing activity
since these types of funds seek to maintain a constant net asset value of $1.00
per share. In addition, the risks of frequent trading are not generally
applicable to money market funds because money market funds are created as cash
management vehicles which accommodate frequent inflows and outflows of cash. As
a result, money market funds are managed to accommodate such cash flows,
particularly when used as sweep vehicles, which generally eliminates the
potential for disruptive trading.

Nonetheless, as indicated under "Pricing of Fund Shares" the Fund reserves
the right to reject any purchase order for its shares for any reason and thus
may exercise such right in the event it determines that a purchase order is
disruptive to the Fund's management or otherwise. The Fund's procedures with
respect to frequent purchases and redemptions of Fund shares by shareholders are
thus limited to the Fund exercising its right to reject purchase orders it
determines in its discretion to be disruptive. The Fund may change its policies
relating to frequent trading at any time without prior notice to shareholders.

Tax Consequences

The Fund intends to continue to qualify for the income tax treatment
applicable to a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code"), for each Portfolio. To qualify as a regulated
investment company, each Portfolio must meet certain tests concerning its
investments and distributions. For each year a Portfolio qualifies as a
regulated investment company, the Portfolio will not be subject to federal
income tax on its investment company taxable income (which generally consists of
ordinary income, including taxable interest, and realized net short-term capital
gains in excess of realized net long-term capital losses, if any) and net
long-term capital gains distributed to its shareholders in the form of dividends
or capital gain distributions. Additionally, each Portfolio will not be subject
to a federal excise tax if the Portfolio distributes each year at least 98% of
its ordinary income and 98% of its capital gain income to its shareholders and
any undistributed and untaxed amounts from prior years.

Dividends of investment company taxable income are taxable to the recipient
shareholders as ordinary income. The Fund expects that as a result of its
investment objectives, except as provided in the following paragraph,
distributions will (i) consist primarily of ordinary income, (ii) in the case of
corporate shareholders, not be eligible for the dividends received deduction,
and (iii) in the case of individual shareholders, not be eligible for the
reduced tax rate currently applicable to certain

C-11

qualified dividend income. Dividends and distributions are treated in the same
manner for federal income tax purposes whether the shareholders receive cash or
additional shares. A shareholder who elects to reinvest in additional shares
will be treated for tax purposes as if it had received and reinvested the cash
dividend.

A shareholder's initial tax basis for its shares in the Fund will be its
cost of the shares, including any fees or expenses. The sale of shares in the
Fund will be the taxable disposition of an asset, with gain or loss recognized
in an amount equal to the difference between the shareholder's adjusted tax
basis for the shares and the proceeds received on the sale. Gain or loss
generally will be treated as capital gain or loss if the shares in the Fund are
held as capital assets. Such capital gain or loss will be long-term if the
shareholder has held the shares in the Fund for more than one year, and, in this
case, for individual shareholders, may qualify for the maximum capital gain tax
rate of 15% (for taxable years beginning before January 1, 2011) rather than the
tax rate applicable to ordinary income. The exchange of shares of one Portfolio
for shares of another Portfolio, if available, will also be treated as a taxable
disposition of the shares exchanged, on which gain or loss will be recognized.
In either case, loss recognition may be affected by the loss disallowance rules
of the Code.

The Fund is required by federal law to withhold 28% of reportable payments
as backup withholding (which may include dividends, capital gain distributions
and redemptions) paid to shareholders who have not complied with Code
requirements regarding the supplying of their taxpayer identification number and
the reporting of income. In connection with this withholding requirement, a
shareholder will be asked to certify on its application that the social security
or tax identification number provided is correct and that the shareholder is not
subject to backup withholding for various reasons including previous
underreporting to the IRS.

Distributions from the U.S. Government Portfolio that are derived from
interest on certain obligations of the United States Government and agencies
thereof, may be exempt from state and local taxes in certain states. Investors
should consult their own tax advisors regarding specific questions as to
federal, state or local taxes. Additional tax information is provided in the
Statement of Additional Information.

DISTRIBUTION ARRANGEMENTS

Rule 12b-1 Fees

Investors do not pay a front-end sales charge to purchase shares of the
Fund. However, the Fund pays fees in connection with distribution of shares
and/or for the provision of servicing to the Institutional Service Class
shareholders. The Fund pays these fees from its assets on an ongoing basis and
therefore, over time, the payment of these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.

The Fund's Board of Trustees has adopted a Rule 12b-1 distribution and
service plan (the "Plan"), with respect to the Institutional Service Class
shares of the Fund and, pursuant to the Plan, the Fund and the Distributor have
entered into a Distribution Agreement and Shareholder Servicing Agreement.

As agent for the Fund, the Distributor will solicit orders for the purchase
of the Fund's shares, provided that any orders will not be binding on the Fund
until accepted by the Fund as principal. The Distributor may use the
distribution fee to pay the cost of, and to compensate others,

C-12

including Participating Organizations that provide distribution assistance with
respect to these classes. This fee is accrued daily and paid monthly.

Under the Shareholder Servicing Agreement, the Distributor receives, with
respect to the Institutional Service Class shares a service fee equal to 0.25%
annum of each Portfolio's average daily net assets (the "Shareholder Servicing
Fee") for providing personal shareholder services and for the maintenance of
shareholder accounts. This fee is accrued daily and paid monthly. Any portion of
the fees may be deemed to be used by the Distributor for payments to
Participating Organizations with respect to their provision of such services to
their clients or customers who are shareholders of the Institutional Service
Class shares of each Portfolio.

The Plan and the Shareholder Servicing Agreement provide that the Fund will
pay for (i) telecommunications expenses, including the cost of dedicated lines
and CRT terminals, incurred by the Distributor and Participating Organizations
in carrying out their obligations under the Shareholder Servicing Agreement with
respect to Institutional Service Class shares or the Participating Organization
agreement, as the case may be, and (ii) preparing, printing and delivering the
Fund's Prospectus to existing shareholders of the Fund and preparing and
printing Fund applications for shareholder accounts.

The Plan provides that the Manager may make payments from time to time from
its own resources, which may include the management fee, administrative services
fee, and past profits for the following purposes: (i) to pay the cost of, and to
compensate others, including Participating Organizations with whom the
Distributor has entered into written agreements, for performing shareholder
servicing on behalf of the Institutional Service Class shares of the Fund; (ii)
to compensate Participating Organizations for providing assistance in
distributing the Institutional Service Class shares of the Fund; and (iii) to
pay the costs of the preparation and printing of brochures and other promotional
materials, mailings to prospective shareholders, advertising, and other
promotional activities, including the salaries and/or commissions of sales
personnel of the Distributor and other persons in connection with the
distribution of the Fund's shares. The Distributor may also make payments from
time to time from its own resources, which may include the Shareholder Servicing
Fee (with respect to Institutional Service Class shares) and past profits, for
the purposes enumerated in (i) above. The Distributor may determine the amount
of such payments made pursuant to the Plan, provided that such payments will not
increase the amount which the Fund is required to pay to the Manager and
Distributor for any fiscal year under either the Investment Management Contract,
Administrative Services Agreement, Distribution Agreement or Shareholder
Servicing Agreement in effect for that year.

The Distributor or an affiliate may, from time to time, at its expense and
out of its own resources (a source of which may be the 12b-1 fees paid by the
Fund under the Plan), make cash payments to some but not all Participating
Organizations for shareholder services, as an incentive to sell shares of the
Fund and/or to promote retention of their customers' assets in the Fund. These
payments may be referred to as "revenue sharing," but do not change the price
paid by investors to purchase the Fund's shares or the amount the Fund receives
as proceeds from such sales. Revenue sharing payments may be made to
Participating Organizations that provide services to the Fund or its
shareholders, including (without limitation) shareholder servicing,
administration, accounting, transfer agency and/or distribution services. The
Distributor negotiates the level of payments described above to any particular
Participating Organization with each firm, based on, among other things, the
nature and level of services provided by such Participating Organization and the
significance of the overall relationship of the Participating Organization to
the Manager and its

C-13

affiliates. The amount of these payments may be significant and may create an
incentive for the Participating Organization to sell shares of the Fund to you
or to recommend one fund complex over another. Please speak with your
Participating Organization to learn more about payments made to them by the
Distributor or its affiliates. Additional information regarding these payments
can be found in the Fund's Statement of Additional Information. In addition, to
the extent allowable under the Financial Industry Regulatory Authority ("FINRA")
rules and any other applicable regulations, the Distributor or an affiliate may
contribute to sales programs for certain Participating Organizations and may
provide non-cash compensation to certain Participating Organizations like
sponsorship or funding of sales seminars, tickets to sporting events, theater or
other entertainment, opportunities to participate in golf or other outings and
gift certificates for meals or by giving out merchandise at industry
conferences, which may be paid for by the Distributor or an affiliate out of its
own resources.

C-14

PART B

STATEMENT OF ADDITIONAL INFORMATION

Relating to the acquisition of the assets of the

SENTINEL GOVERNMENT MONEY MARKET FUND,
a series of
SENTINEL GROUP FUNDS, INC.

by and in exchange for

INSTITUTIONAL SERVICE CLASS SHARES OF THE U.S. GOVERNMENT PORTFOLIO,
a series of
DAILY INCOME FUND
600 Fifth Avenue
New York, New York 10020
1-212-830-5200

This Statement of Additional Information relates specifically to the
acquisition of all of the assets of the Sentinel Government Money Market Fund, a
series of Sentinel Group Funds, Inc. by the U.S. Government Portfolio, a series
of the Daily Income Fund, consists of this cover page and the following
described documents, each of which is incorporated by reference herein:

The Statement of Additional Information of the U.S. Government Portfolio
dated July 29, 2009 as supplemented August 31, 2009;

The Statement of Additional Information of the Sentinel Government Money
Market Fund dated March 31, 2009;

The Annual Report of the U.S. Government Portfolio for the year ended March
31, 2009; and the Semi-Annual Report of the U.S. Government Portfolio for the
six months ended September 30, 2008; and

The Annual Report of the Sentinel Government Money Market Fund for the year
ended November 30, 2008; and the Semi-Annual Report of the Sentinel Government
Money Market Fund for the six months ended May 31, 2009.

This Statement of Additional Information is not a prospectus. A Combined
Prospectus/Information Statement dated October 12, 2009, relating to the
above-referenced transaction has been filed with the Securities and Exchange
Commission and may be obtained, without charge, by writing to the U.S.
Government Portfolio, c/o Christine Manna, Reich & Tang Asset Management, LLC,
600 Fifth Avenue, New York, New York 10020, or by calling (800) 433-1918. This
Statement of Additional Information relates to, and should be read in
conjunction with, such Combined Prospectus/Information Statement, and has been
incorporated by reference into the Combined Prospectus/Information Statement.

The date of this Statement of Additional Information is October 12, 2009.

PRO FORMA FINANCIAL STATEMENTS

Pro forma financial statements demonstrating the effect of the merger on
the U.S. Government Portfolio are not necessary because the net asset value of
the Sentinel Government Money Market Fund does not exceed ten percent of the net
asset value of the U.S. Government Portfolio as of August 18, 2009.

PART C. OTHER INFORMATION

ITEM 15. Indemnification

The Registrant incorporates herein by reference the response to Item 27 of the
Registration Statement filed with the SEC on July 28, 1997 with Post-Effective
Amendment No. 5.

ITEM 16. Exhibits

(a) Declaration of Trust of the Registrant filed with Post-Effective
Amendment No. 8 to the Registration Statement on Form N-1A on
July 29, 1999, and incorporated herein by reference.

(b) Amendment to the Declaration of Trust of the Registrant filed
with Post-Effective Amendment No. 18 to the Registration
Statement on Form N-1A on October 25, 2006, and incorporated
herein by reference.

2. Amended and Restated By-laws of the Registrant filed with Post-Effective
Amendment No. 10 to the Registration Statement on Form N-1A on July 27,
2001, and incorporated herein by reference.

3. Not Applicable.

4. Form of Agreement and Plan of Reorganization - filed herewith

5. Instruments Defining Rights of Security Holders are herein incorporated by
reference from the Trust's Declaration of Trust and By-laws.

(a) Investment Management Contract dated October 30, 2000 between the
Registrant and Reich & Tang Asset Management, LLC formerly known as
Reich & Tang Asset Management L.P. filed with Post-Effective Amendment
No. 10 to the Registration Statement on Form N-1A on July 27, 2001,
and incorporated herein by reference.

(b) Amendment to the Investment Management Contract dated July 20, 2006,
between the Registrant and Reich & Tang Asset Management, LLC filed
with Post-Effective Amendment No. 21 to the Registration Statement on
Form N-1A on July 29, 2008, and incorporated herein by reference.

7. Form of Amended and Restated Distribution Agreement dated October 30, 2000,
as amended and restated on July 20, 2006, September 21, 2006 and May 22,
2007 between the Registrant and Reich & Tang Distributors, Inc. filed with
Post-Effective Amendment No. 19 to the Registration Statement on Form N-1A
on May 24, 2007, and incorporated herein by reference.

8. Not Applicable.

(a) Custody Agreement between the Registrant and Bank of New York Mellon
filed with Post- Effective Amendment No. 16 to the Registration
Statement on Form N-1A on July 28, 2006, and incorporated herein by
reference.

(b) Amendment to the Custody Agreement dated October 16, 2006, between the
Registrant and The Bank of New York Mellon filed with Post-Effective
Amendment No. 19 to the Registration Statement on Form N-1A on May 24,
2007, and incorporated herein by reference.

(c) Amendment to Schedule I of the Custody Agreement dated January 12,
2009 between the Registrant and The Bank of New York Mellon filed with
Post-Effective Amendment No. 22 to the Registration Statement on Form
N-1A on July 29, 2009, and incorporated herein by reference.

(d) Amendment to Schedule II of the Custody Agreement dated January 12,
2009 between the Registrant and The Bank of New York Mellon filed with
Post-Effective Amendment No. 22 to the Registration Statement on Form
N-1A on July 29, 2009, and incorporated herein by reference.

(e) Amendment to the Custody Agreement dated January 12, 2009 between the
Registrant and The Bank of New York Mellon filed with Post-Effective
Amendment No. 22 to the Registration Statement on Form N-1A on July
29, 2009, and incorporated herein by reference.

10. Amended and Restated Distribution and Service Plan dated January 25, 2001,
as amended and restated on January 29, 2004, July 20, 2006 and may 22, 2007
pursuant to Rule 12b-1 under the Investment Company Act of 1940 filed with
Post-Effective Amendment No. 19 to the Registration Statement on Form N-1A
on May 24, 2007, and incorporated herein by reference.

11. Opinion and Consent of Counsel

(a) Form of Opinion of Counsel regarding legality of issuance of shares
and other matters - filed herewith

(b) Consent of Counsel - filed herewith

12. Form of Opinion of Counsel on tax matters - filed herewith

13. Other Material Contracts

(a) Administrative Services Agreement dated October 30, 2000, between the
Registrant and Reich & Tang Asset Management, LLC formerly known as
Reich & Tang Asset Management L.P. filed with Post-Effective Amendment
No. 10 to the Registration Statement on Form N-1A on July 27, 2001,
and incorporated herein by reference.

(a.1) Amendment to the Administrative Services Agreement dated July 20,
2006, between the Registrant and Reich & Tang Asset Management, LLC
filed with Post-Effective Amendment No. 21 to the Registration
Statement on Form N-1A on July 29, 2008, and incorporated herein by
reference.

(b) Transfer Agency Agreement and Addendum to the Transfer Agency
Agreement between Registrant and Reich & Tang Asset Services, Inc.
filed with Post-Effective Amendment No. 12 to the Registration
Statement on Form N-1a on July 28, 2003, and incorporated herein by
reference.

(c) Fund Accounting Agreement between the Registrant and The Bank of New
York Mellon filed with Post-Effective Amendment No. 15 to the
Registration Statement on Form N-1A on July 29, 2005, and incorporated
herein by reference.

(c.1) Amendment to the Fund Accounting Agreement dated October 16, 2006,
between the Registrant and The Bank of New York Mellon filed with
Post-Effective Amendment No. 19 to the Registration Statement on Form
N-1A on May 24, 2007, and incorporated herein by reference.

(c.2) Amendment to the Fund Accounting Agreement dated January 12, 2009,
between the Registrant and The Bank of New York Mellon filed with
Post-Effective Amendment No. 22 to the Registration Statement on Form
N-1A on July 29, 2009, and incorporated herein by reference.

(d) Cash Management Agreement and Related Services Agreement between the
Registrant and The Bank of New York Mellon filed with Post-Effective
Amendment No. 10 to the Registration Statement on Form N-1A on July
29, 2005, and incorporated herein by reference.

(d.1) Amendment to the Cash Management Agreement and Related Services
Agreement dated October 16, 2006, between the Registrant and The Bank
of New York Mellon filed with Post-Effective Amendment No. 19 to the
Registration Statement on Form N-1A on May 24, 2007, and incorporated
herein by reference.

(d.2) Amendment to the Cash Management Agreement dated January 12, 2009,
between the Registrant and The Bank of New York Mellon filed with
Post-Effective Amendment No. 22 to the Registration Statement on Form
N-1A on July 29, 2009, and incorporated herein by reference.

(f) Form of Amended and Restated Expense Limitation Agreement dated May
22, 2007 among the Registrant, on behalf of the Institutional Class,
Institutional Service Class, Investor Class, Investor Service Class,
Short Term Income Shares Class, Retail Class and Pinnacle Class filed
with Post-Effective Amendment No. 19 to the Registration Statement on
Form N-1A on May 24, 2007, and incorporated herein by reference.

(g) Form of Amended and Restated Shareholder Servicing Agreement dated
October 30, 2000, as amended and restated on July 20, 2006 and May 22,
2007 between the Registrant and Reich & Tang Distributors, Inc. filed
with Post-Effective Amendment No. 19 to the Registration Statement on
Form N-1A on May 24, 2007, and incorporated herein by reference.

14. Consent of PricewaterhouseCoopers LLP - filed herewith

15. Not Applicable.

16. Powers of Attorney of the Trustees of the Registrant filed with
Post-Effective Amendment No. 22 to the Registration Statement on Form N-1A
on July 29, 2009, and incorporated herein by reference.

17.

(a) Prospectus of Sentinel Group Funds, Inc. dated March 31, 2009, and
supplemented on June 17, 2009, incorporated by reference from the
filings on March 31, 2009 and June 17, 2009.

(b) Statement of Additional Information of Sentinel Group Funds, Inc.
dated March 31, 2009 incorporated by reference from the filing on
March 31, 2009.

(c) Annual Report of Sentinel Group Funds, Inc. for the fiscal year ended
November 30, 2008, incorporated by reference to the filing on February
6, 2009.

(d) Semi-Annual Report of Sentinel Group Funds, Inc. for the period ended
May 31, 2009, incorporated by reference to the filing on August 5,
2009.

(e) Prospectus of Daily Income Fund dated July 29, 2009 incorporated by
reference from the filing on July 29, 2009.

(f) Statement of Additional Information of Daily Income Fund dated July
29, 2009, and supplemented on August 31, 2009, incorporated by
reference from the filings on July 29, 2009 and August 31, 2009.

(g) Annual Report of Daily Income Fund for the fiscal year ended March 31,
2009, incorporated by reference to the filing on June 8, 2009.

ITEM 17. Undertakings

(1) The undersigned registrant agrees that prior to any public reoffering of the
securities registered through the use of a prospectus which is part of this
registration statement by any person or party who is deemed to be an underwriter
within the meaning of Rule 145(c) of the Securities Act [17 CFR 230.145c], the
reoffering prospectus will contain the information called for by the applicable
registration form for the reofferings by persons who may be deemed underwriters,
in addition to the information called for by the other items of the applicable
form.

(2) The undersigned registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as part of an amendment to the registration
statement and will not be used until the amendment is effective, and that, in
determining any liability under the 1933 act, each post-effective amendment
shall be deemed to be a new registration statement for the securities offered
therein, and the offering of the securities at that time shall be deemed to be
the initial bona fide offering of them.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on N-14 to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York, and
State of New York on the 10th day of September, 2009.

DAILY INCOME FUND

By: /s/ Michael P. Lydon
----------------------
Michael P. Lydon
President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on N-14 has been signed by the following persons in the
capacities indicated on the 10th of September, 2009.

Signatures Title Date

/s/ Michael P. Lydon President and Trustee September 10, 2009
----------------------------------
Michael P. Lydon

/s/ Joseph Jerkovich Treasurer September 10, 2009
----------------------------------
Joseph Jerkovich

/s/ Steven W. Duff Trustee September 10, 2009
------------------
Steven W. Duff

Albert R. Dowden* Trustee
Carl Frischling* Trustee
Dr. W. Giles Mellon* Trustee
Dr. Yung Wong* Trustee
Robert Straniere* Trustee
Edward A. Kuczmarski* Trustee
William Lerner* Trustee
James L. Schultz* Trustee September 10, 2009

/s/ Joseph Jerkovich September 10, 2009
----------------------------------
Joseph Jerkovich
Attorney-in-Fact*
<FN>
* Executed copies of the Powers of Attorney were filed as Exhibit (q) to
Registration Statement on July 29, 2009.
</FN>

INDEX TO EXHIBITS

Exhibit Caption
(4) Form of Agreement and Plan of Reorganization
(11)(a) Form of Opinion of Counsel regarding legality of issuance of shares and other
matters
(11)(b) Consent of Paul, Hastings, Janofsky & Walker LLP
(12) Form of Opinion of Counsel on tax matters
(14) Consent of PricewaterhouseCoopers LLP