As filed with the Securities and Exchange Commission on March 9, 2005
                       File Nos. 333-103714 and 811-21317

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM N-14

                        REGISTRATION STATEMENT UNDER THE
                             SECURITIES ACT OF 1933


   Pre-Effective Amendment No. __             Post-Effective Amendment No. __


                        (Check appropriate box or boxes)



                              PMFM INVESTMENT TRUST
                              ---------------------
               (Exact Name of Registrant as Specified in Charter)

          1551 Jennings Mill Road - Suite 2400A, Bogart, Georgia 30622
          ------------------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

                  Registrant's Telephone Number: (252) 972-9922
                                                 --------------

                               Julian G. Winters
     116 S. Franklin Street, P.O. Box 69, Rocky Mount, North Carolina 27802
     ----------------------------------------------------------------------
                     (Name and Address of Agent for Service)


                                 With a copy to:
                                 ---------------
                             Reinaldo Pascual, Esq.
                             Kilpatrick Stockton LLP
                        1100 Peachtree Street, Suite 2800
                             Atlanta, Georgia 30309



Approximate Date of Proposed Public Offering:

                                        As soon as practicable after the
                                        Registration Statement becomes Effective
                                        ----------------------------------------


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

No filing fee is due because an indefinite  number of shares have been deemed to
be registered in reliance on Section 24(f) under the  Investment  Company Act of
1940, as amended.




                              MURPHYMORRIS ETF FUND

                      1551 JENNINGS MILL ROAD - SUITE 2400A
                              BOGART, GEORGIA 30622
                                 1-800-715-3611

          SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON ___________2005

Dear Shareholder:

     I am  writing to ask for your vote on  important  matters  concerning  your
investment in the MurphyMorris ETF Fund (the  "MurphyMorris  Fund"), a series of
The MurphyMorris  Investment Trust (the "Trust").  The Trust's Board of Trustees
has called a special  meeting of  shareholders  (the  "Special  Meeting") of the
MurphyMorris  Fund for ____ a.m., on ________,  2005 at the offices of the North
Carolina  Shareholder  Services,  LLC,  the Trust's  transfer  agent,  116 South
Franklin Street, Rocky Mount, North Carolina 27804.

     At the  Special  Meeting,  you will be asked to  approve  an  agreement  to
reorganize the  MurphyMorris  Fund into the PMFM Core Advantage  Portfolio Trust
(the "PMFM Fund") in a tax-free  reorganization.  Please read the enclosed Proxy
Statement/Prospectus  carefully for differences in the investment  strategies of
the funds.  The PMFM Fund is a mutual  fund that,  like the  MurphyMorris  Fund,
invests  primarily in ETFs. The PMFM Fund is managed by PMFM, Inc.  ("PMFM"),  a
registered investment advisor, affiliated with MurphyMorris Money Management Co,
the  registered  investment  advisor for the  MurphyMorris  Fund.  The portfolio
managers of the PMFM Fund  include  most of the same  portfolio  managers of the
MurphyMorris  Fund. As you may know, PMFM has been assisting  MurphyMorris Money
Management  Co. by handling the back office  functions  like executing the model
and trading the portfolio since the inception of MurphyMorris  Money  Management
Co.

     If  approved by the  MurphyMorris  Fund's  shareholders,  you will become a
shareholder of the PMFM Fund on the date that the reorganization  occurs.  There
are no  sales  charges  or  redemption  fees  imposed  in  connection  with  the
reorganization. Again, this is also a tax-free reorganization.

     Please read the PMFM Fund's  Prospectus,  a copy of which is included  with
this letter,  to learn about its  investment  objective,  strategies,  risks and
other  important  information.  Once the  reorganization  is  completed  and the
MurphyMorris  Fund  becomes part of the PMFM fund family you will have access to
three  additional PMFM managed mutual funds:  the PMFM Managed  Portfolio Trust,
which has the same investment  objective as the current  MurphyMorris  Fund, the
PMFM Tactical  Preservation Fund and the PMFM Tactical  Opportunities Fund. As a
part of the  PMFM  fund  family  you will  have a  broader  range of  investment
objectives, without changing the investment management philosophy which is based
on technical market analysis.

     After careful consideration, the Board of Trustees of the Trust unanimously
approved this proposal and recommends shareholders vote "FOR" the proposal.

     No matter what size your  investment is, your vote is critical.  Therefore,
whether or not you plan to attend the Special Meeting in person, please read the
Proxy  Statement/Prospectus  carefully  and  cast  your  vote  promptly.  It  is
important  that  your vote be  received  no later  than the time of the  Special
Meeting on _______,  2005.  You may cast your vote by completing,  signing,  and
returning the enclosed proxy card by mail in the envelope provided.






     If you have any questions  about this  transaction or the proxy  materials,
please do not hesitate contact me at 706-579-1392,  or the Trust by calling toll
free  1-800-715-3611.  We appreciate your  participation  and prompt response in
this matter and thank you for your continued support.

                                            Sincerely
                                            MurphyMorris ETF Fund



                                            Gregory L. Morris
                                            President
March __, 2005



                                       2



                          MURPHYMORRIS INVESTMENT TRUST

                              MURPHYMORRIS ETF FUND

                      1551 JENNINGS MILL ROAD - SUITE 2400A
                              BOGART, GEORGIA 30622
                                 1-800-715-3611

                    NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
                          OF THE MURPHYMORRIS ETF FUND
                         TO BE HELD ON __________, 2005

To the Shareholders:

     NOTICE IS  HEREBY  GIVEN  that a special  meeting  of  shareholders  of the
MurphyMorris  ETF Fund (the  "MurphyMorris  Fund"), a series of The MurphyMorris
Investment  Trust (the  "Trust"),  will be held at the  offices  of the  Trust's
transfer agent,  North Carolina  Shareholder  Services,  LLC, 116 South Franklin
Street, Rocky Mount, North Carolina 27804 on ________, 2005, at ______ a.m.

     At the  Special  Meeting  you will be asked to  consider  and  approve  the
following proposals:

     (1) To approve a proposed Agreement and Plan of Reorganization  between the
     Trust, on behalf of the MurphyMorris Fund, and the PMFM Investment Trust on
     behalf of one of its series,  the PMFM Core Advantage  Portfolio Trust (the
     "PMFM Fund"),  whereby (i) the PMFM Fund would acquire all of the assets of
     the MurphyMorris Fund in exchange solely for shares of beneficial  interest
     in the PMFM Fund and the assumption of all liabilities of the  MurphyMorris
     Fund and (ii) the MurphyMorris Fund would be subsequently liquidated.

     (2) To transact such other business as may properly come before the Special
     Meeting or any adjournments or postponements thereof.

     You may vote at the Special  Meeting if you are the record  owner of shares
of the  MurphyMorris  Fund as of the close of business on ___________,  2005. If
you attend the Special Meeting,  you may vote your shares in person. Even if you
do not attend the Special Meeting, you may vote by proxy by completing, signing,
and returning the enclosed proxy card by mail in the envelope provided.

     Your vote is very  important  to us.  Whether or not you plan to attend the
Special  Meeting in person,  please  vote the  enclosed  proxy.  If you have any
questions,  please  contact  the Trust for  additional  information  by  calling
toll-free 1-800-715-3611.

                                    By Order of the Board of Trustees of
                                    The MurphyMorris Investment Trust

                                    Julian G. Winters
                                    Secretary

______________, 2005


                                       3


                           PROXY STATEMENT/PROSPECTUS

                              ______________, 2005

                              PROXY STATEMENT FOR:

                              MURPHYMORRIS ETF FUND
                 (A SERIES OF THE MURPHYMORRIS INVESTMENT TRUST)
                      1551 JENNINGS MILL ROAD - SUITE 2400A
                              BOGART, GEORGIA 30622
                                 1-800-715-3611

                                 PROSPECTUS FOR:

                       PMFM CORE ADVANTAGE PORTFOLIO TRUST
                     (A SERIES OF THE PMFM INVESTMENT TRUST)
                      1551 JENNINGS MILL ROAD - SUITE 2400A
                              BOGART, GEORGIA 30622
                                 1-866-383-7636

     This combined Proxy Statement and Prospectus ("Proxy Statement/Prospectus")
is being furnished in connection  with the  solicitation of proxies by the Board
of Trustees of the  MurphyMorris  Investment  Trust, a Delaware  statutory trust
(the  "Trust"),  on  behalf  of its  series,  the  MurphyMorris  ETF  Fund  (the
"MurphyMorris  Fund"), for a Special Meeting of Shareholders of the MurphyMorris
Fund (the  "Special  Meeting").  The Special  Meeting will be held on _________,
2005,  at _______  a.m.,  at the offices of the Trust's  transfer  agent,  North
Carolina  Shareholder  Services,  LLC, 116 South Franklin  Street,  Rocky Mount,
North   Carolina    27804.    As   more   fully    described   in   this   Proxy
Statement/Prospectus,  the  purpose  of the  Special  Meeting  is to  vote  on a
proposed Agreement and Plan of Reorganization (the  "Reorganization  Agreement")
that contemplates the reorganization (the  "Reorganization") of the MurphyMorris
Fund  into the PMFM  Core  Advantage  Portfolio  Trust  (the  "PMFM  Fund";  the
MurphyMorris Fund and the PMFM Fund individually and collectively referred to as
"Fund" and  "Funds"  respectively),  a series of the PMFM  Investment  Trust,  a
Delaware statutory trust (the "PMFM Trust").

     The Reorganization Agreement provides for:

     o    the transfer of all of the assets of the MurphyMorris Fund to the PMFM
          Fund in exchange for Investor  Class shares of beneficial  interest of
          the PMFM Fund;

     o    the  assumption  by the  PMFM  Fund of all of the  liabilities  of the
          MurphyMorris Fund; and

     o    the distribution of shares of beneficial  interest of the PMFM Fund to
          the  shareholders  of the  MurphyMorris  Fund in  connection  with the
          liquidation of the MurphyMorris Fund.

     Because  shareholders of the  MurphyMorris  Fund are being asked to approve
the  Reorganization   Agreement  that  will  result  in  the  MurphyMorris  Fund
shareholders'  ultimately  holding shares of the PMFM Fund, this Proxy Statement
also  serves  as a  Prospectus  for the  shares of the PMFM Fund to be issued in
connection with the  Reorganization.  The MurphyMorris  Fund offers one class of
shares. The PMFM Fund offers one class of shares: Investor Class shares. Holders

                                       4


of shares of the  MurphyMorris  Fund will  receive an amount of  Investor  Class
shares of the PMFM Fund equal in value to their MurphyMorris Fund shares.

     This Proxy  Statement/Prospectus,  which  should be read and  retained  for
future reference, sets forth concisely the information that a shareholder should
know before voting on the Reorganization Agreement.

HOW TO OBTAIN ADDITIONAL INFORMATION

     A  Statement  of  Additional  Information  ("SAI")  relating  to this Proxy
Statement/Prospectus  dated ________,  2005, containing  additional  information
about the Reorganization  and the parties thereto,  has been filed with the U.S.
Securities and Exchange  Commission  (the "SEC") and is  incorporated  herein by
reference, and therefore is legally part of this Proxy Statement/Prospectus. You
may receive a copy of the SAI without charge by contacting  the PMFM Trust,  c/o
NC Shareholder Services,  116 South Franklin Street, P.O. Box 4365, Rocky Mount,
NC 27803-0365 or by calling toll free 1-866-383-7636.

     For more information  regarding the  MurphyMorris  Fund, see the Prospectus
(dated  September 28, 2004) and the SAI (dated  September 28, 2004) of the Trust
(including the MurphyMorris  Fund),  which is incorporated  herein by reference,
and  therefore  is legally part of this Proxy  Statement/Prospectus.  The annual
report dated May 31, 2004 for the  MurphyMorris  Fund is incorporated  herein by
reference, and therefore is legally part of this Proxy Statement/Prospectus. You
may obtain a copy of the MurphyMorris  Fund  Prospectus,  SAI, and annual report
without  charge  by  writing  to  the  MurphyMorris  Investment  Trust,  c/o  NC
Shareholder Services,  116 South Franklin Street, P.O. Box 4365, Rocky Mount, NC
27803-0365 or by calling toll free 1-800-715-3611.

     For more  information  regarding the PMFM Fund,  see the  Prospectus  dated
March 7, 2005 and the SAI dated March 7, 2005 of the PMFM Trust  (including  the
PMFM Fund), which is incorporated herein by reference,  and therefore is legally
a part of this Proxy  Statement/Prospectus.  A COPY OF THE PMFM  FUND'S  CURRENT
PROSPECTUS IS ENCLOSED WITH THIS MAILING.

     You may obtain a copy of the most recent Prospectus, SAI, annual report and
semiannual report for the PMFM Fund by writing to the PMFM Investment Trust, c/o
NC Shareholder Services,  116 South Franklin Street, P.O. Box 4365, Rocky Mount,
NC 27803-0365 or by calling toll free 1-866-383-7636.

     In addition,  you can copy and review any of the above referenced documents
at  the  SEC's  Public  Reference  Room  in  Washington,  D.C.  You  may  obtain
information on the operation of the Public  Reference Room by calling the SEC at
1-202-942-8090.  Reports and other  information  about the MurphyMorris and PMFM
Trust  are  available  on the  EDGAR  Database  on the  SEC's  internet  site at
http://www.sec.gov.  You may obtain copies of this  information,  after paying a
duplicating  fee,  by  electronic   request  at  the  following  email  address:
publicinfo@sec.gov,   or  by  writing  the  SEC's  Public   Reference   Section,
Washington, D.C. 20549-0102.

     NO  PERSON  HAS  BEEN  AUTHORIZED  TO GIVE  ANY  INFORMATION  OR  MAKE  ANY
REPRESENTATION NOT CONTAINED IN THIS COMBINED PROXY STATEMENT/PROSPECTUS AND, IF
SO GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION  MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED.  THIS PROXY  STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN

                                       5


OFFER  TO SELL OR A  SOLICITATION  OF AN  OFFER  TO BUY  ANY  SECURITIES  IN ANY
JURISDICTION  IN WHICH,  OR TO ANY PERSON TO WHOM,  IT IS  UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION.

     THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

     The date of this Proxy Statement/Prospectus is March __, 2005.























                                       6


                                TABLE OF CONTENTS



SYNOPSIS .....................................................................11

   The Reorganization ........................................................11
   Board Recommendations .....................................................12
   Comparison of Business Structures .........................................13
   Comparison of Investment Objectives and Principal Investment Strategies ...13
   Comparison of Investment Advisory Services and Fees .......................16
   Comparison of Fees and Expenses  ..........................................18
   Comparison of Purchase, Redemption and Exchange Policies and Procedures....20
   Shareholder Services and Distribution Plan ................................21
   Comparison of Distribution Policies .......................................21
   Comparison of Net Asset Value Calculation Procedures ......................21
   Principal Investment Risk of the Funds ....................................21

INFORMATION ABOUT THE REORGANIZATION .........................................25

   The Reorganization Agreement. .............................................25
   Reasons for the Reorganization and Board Considerations....................25
   Tax Considerations.........................................................27
   Expenses of the Reorganization.............................................28
   Additional Information About PMFM..........................................28

ADDITIONAL INFORMATION ABOUT THE MURPHYMORRIS FUND'S AND PMFM FUND'S
  DISTRIBUTORS, ADMINISTRATORS, TRANSFER AND AGENT ...........................29

   Capitalization.............................................................29
   Other Business.............................................................30
   General Information........................................................30
   Solicitation of Votes......................................................30
   Quorum.....................................................................30
   Vote Required..............................................................31
   Adjournments...............................................................31
   Receipt of Shareholder Proposals...........................................31
   Record Date and Outstanding Shares.........................................31
   Security Ownership of Certain Beneficial Owners and Management.............31
   Financial Statements and Experts...........................................32
   Legal Matters..............................................................32
   Information About the Funds................................................32

                     EXHIBIT A ........................ A-1



                                       7



                           ____________________________

                               QUESTIONS & ANSWERS
                           ____________________________


     We  recommend  that  you  read  the  complete  Proxy   Statement/Prospectus
carefully. For your convenience, we have prepared these questions and answers to
provide a brief overview of the proposal to be voted on.

                           ____________________________

Q.   WHAT IS THE PROPOSAL UNDER CONSIDERATION?

A.   The proposal under  consideration is the proposed transfer of the assets of
     the MurphyMorris  Fund to the PMFM Fund, a newly formed series of shares of
     the PMFM Trust.  Shareholders of the  MurphyMorris  Fund are being asked to
     vote  on  whether  to  approve  the  proposed  transaction  (such  proposed
     transaction is referred to as the "Reorganization").

Q:   WHY IS A SHAREHOLDER MEETING BEING HELD?

A:   The  proposed  transaction  that  you  are  being  asked  to  approve  as a
     shareholder of the MurphyMorris Fund is a plan of reorganization that would
     result in you becoming a shareholder of the PMFM Fund and no longer being a
     shareholder  of the  MurphyMorris  Fund.  The  PMFM  Fund is an  investment
     company like the  MurphyMorris  Fund, but it is a part of the PMFM Trust, a
     different (but affiliated)  mutual fund family.  The PMFM Fund's investment
     objective is the same as the MurphyMorris Fund, but the investment strategy
     of the PMFM Fund is  different  than the  MurphyMorris  Fund.  The proposed
     Reorganization  requires  shareholder  approval in order to be consummated,
     and so a meeting  of each  Fund's  shareholders  is being held to seek that
     approval.  Please  refer to the Proxy  Statement/Prospectus  for a detailed
     explanation of the proposed plan of reorganization  and for a more complete
     description of the PMFM Fund.

Q:   WHO WILL ADVISE THE PMFM FUND ONCE THE REORGANIZATION IS COMPLETED?

 A:  PMFM, Inc. ("PMFM") will manage the new PMFM Fund. PMFM is an affiliate of
     MurphyMorris Money Management Co. ("MurphyMorris"), the investment adviser
     to the MurphyMorris Fund. The current portfolio management team of
     MurphyMorris (Donald Beasley and Tim Chapman) are the majority owners of
     PMFM and members of the PMFM portfolio management team. Greg Morris,
     currently the President and Treasurer of the MurphyMorris Fund and
     Treasurer of MurphyMorris, is also a member of the PMFM portfolio
     management team for the PMFM Fund. Therefore, the portfolio managers and
     president of the MurphyMorris Fund will also lead the management of the
     PMFM Fund. More information about PMFM and its investment team appears
     below under "COMPARISON OF INVESTMENT ADIVOSRY SERVICES AND FEES -
     Additional Information About PMFM."

Q:   WILL I HAVE TO PAY ANY  SALES  LOAD,  COMMISSION  OR OTHER  SIMILAR  FEE IN
     CONNECTION WITH THE REORGANIZATION?

                                       8


A:   You will pay no sales load,  commission  or other similar fee in connection
     with the Reorganization.

Q:   HOW DO OPERATING EXPENSES PAID BY THE PMFM FUND COMPARE TO THOSE PAYABLE BY
     THE MURPHYMORRIS FUND?

A:   The fees and expenses  for the PMFM Fund are  expected to be  substantially
     the same as those for the  MurphyMorris  Fund.  PMFM's  fee for  investment
     advisory  services  for the PMFM  Fund  will be the  same as  MurphyMorris'
     advisory fee for the  MurphyMorris  Fund (annualized rate of 1.25% of daily
     net  assets).  In  addition,  PMFM has entered  into an expense  limitation
     agreement with the PMFM Fund that is substantially  the same as the expense
     limitation  agreement that  MurphyMorris  has with the  MurphyMorris  Fund.
     Therefore, the PMFM Fund's expected annual operating expenses (exclusive of
     interest, taxes, brokerage fees and commissions, extraordinary expenses and
     payments,  if any,  under the PMFM  Fund's  12b-1  Plan) will be limited to
     2.25% (the same rate as the MurphyMorris Fund's expense cap) of the average
     daily net assets of the PMFM Fund for the fiscal year ending May 31,  2005.
     More  information  about the PMFM Fund's fees and  expenses  appears  below
     under "COMPARISON OF FEES AND EXPENSES."

Q:   HOW WILL THE REORGANIZATION AFFECT ME?

A:   If the proposed plan of reorganization  is approved and the  Reorganization
     is consummated, the assets and liabilities of the MurphyMorris Fund will be
     combined  with  those of the PMFM Fund;  an account  will be set up in your
     name at PMFM Trust;  and you will receive Investor Class shares of the PMFM
     Fund.  The  value  of the  shares  of the  PMFM  Fund  you  receive  in the
     Reorganization  will equal the value of the shares of the MurphyMorris Fund
     you own immediately prior to the  Reorganization,  based on their net asset
     value.  No  certificates  for shares will be issued in connection  with the
     Reorganization.

Q:   WILL I HAVE TO PAY ANY FEDERAL TAXES AS A RESULT OF THE REORGANIZATION?

A:   The Reorganization as proposed is expected to qualify as a "reorganization"
     within the meaning of Section 368(a) of the Internal  Revenue Code of 1986,
     as amended. If the Reorganization so qualifies,  you will not recognize any
     gain or loss as a result of the exchange of your shares of the MurphyMorris
     Fund for shares of the PMFM Fund.

Q:   HOW DOES THE BOARD OF TRUSTEES RECOMMEND THAT I VOTE?

A:   After careful  consideration,  the Board of Trustees of the Trust ("Board")
     have  determined  that  the  proposed   Reorganization   will  benefit  the
     shareholders of the MurphyMorris Fund and recommend that you cast your vote
     "FOR" the proposed  plan of  reorganization.  The Board  believes that that
     shareholders  of the  MurphyMorris  Fund will  benefit  from,  among  other
     things:  (i)  continued  management  by  the  MurphyMorris  Fund  portfolio
     management  team  members  and  President  in a  new  fund  with  the  same
     investment  objective  and a  strategy  with  similaries  to  that  of  the
     MurphyMorris  Fund;  (ii) the greater  resources,  larger  staff,  and fund
     options offered by the PMFM Trust that shareholders will enjoy by combining
     the MurphyMorris Fund with the PMFM Fund; and (iii) the greater  potential,
     relative to the MurphyMorris  Fund's  prospects as a stand-alone  fund, for
     growth of assets as part of the PMFM Trust.  The Board also  believes  that

                                       9


     the   Reorganization   presents  a  more  attractive   alternative  to  the
     MurphyMorris  Fund than  continuing  operations  as a single fund family or
     liquidation. See "Reasons for the Reorganization" for a detailed discussion
     of the Board's considerations in approving the Reorganization.

Q:   WHAT IF I REDEEM OR  EXCHANGE  MY SHARES  BEFORE THE  REORGANIZATION  TAKES
     PLACE?

A:   If you choose to redeem or exchange your shares  before the  Reorganization
     takes  place,  the  redemption  or  exchange  will be  treated  as a normal
     redemption  or  exchange  of  shares  and,  generally,  will  be a  taxable
     transaction.

Q:   HOW DO I CAST MY VOTE, AS A TECHNICAL MATTER?

A:   You may cast your vote by mail or you may attend the  Special  Meeting.  To
     vote by mail,  please mark your vote on the  enclosed  proxy card and sign,
     date and return the card in the postage-paid envelope provided.

Q:   WHEN WILL THE REORGANIZATION OCCUR?

A:   If approved by  shareholders,  the  Reorganization  is expected to occur in
     April 2005, promptly following the shareholders meeting.

Q:   WHOM DO I CONTACT FOR FURTHER INFORMATION?

A:   You may contact your  financial  adviser for further  information.  You may
     also  call the  MurphyMorris  Fund at  800-715-3611  or visit  MurphyMorris
     Fund's  website  at  www.murphymorris.com,  where you can send us an e-mail
     message by selecting "Contact Us."















                                       10


                                    SYNOPSIS

     This  synopsis is qualified in its entirety by reference to the  additional
information  contained elsewhere in this Proxy  Statement/Prospectus,  including
the exhibits and documents  incorporated by reference herein,  including without
limitation,  the Reorganization  Agreement,  a copy of which is attached to this
Proxy  Statement/Prospectus  as Exhibit A. Shareholders  should read this entire
Proxy Statement/Prospectus carefully.

     For a  detailed  discussion  of  the  topics  discussed  in  this  synopsis
regarding the PMFM Fund, see the PMFM Fund's  Prospectus dated March 7, 2005 and
Statement  of  Additional  Information  dated  March 7,  2005,  each of which is
incorporated   by   reference   into,   and  is  legally  part  of,  this  Proxy
Statement/Prospectus.  For a detailed discussion of the topics discussed in this
synopsis regarding the MurphyMorris Fund, see the MurphyMorris Fund's Prospectus
dated September 28, 2004 and Statement of Additional Information dated September
28, 2004,  each of which is  incorporated by reference into, and is legally part
of, this Proxy Statement/Prospectus.

THE REORGANIZATION

     At a meeting held on March 4, 2005 the Board, including all of the trustees
of the Trust  ("Trustees")  who are not "interested  persons" (as defined in the
Investment  Company Act of 1940,  as amended (the "1940 Act")) of the Trust (the
"Independent Trustees"),  considered and unanimously approved the Reorganization
Agreement and the Reorganization.

     Subject to the approval of the shareholders of the  MurphyMorris  Fund, the
Reorganization Agreement provides for:

     o    the transfer of all of the assets of the MurphyMorris Fund to the PMFM
          Fund in exchange for Investor  Class shares of beneficial  interest of
          the PMFM Fund;

     o    the  assumption  by the  PMFM  Fund of all of the  liabilities  of the
          MurphyMorris Fund; and

     o    the distribution of shares of beneficial  interest of the PMFM Fund to
          the  shareholders  of the  MurphyMorris  Fund in  connection  with the
          liquidation of the MurphyMorris Fund.

     The  Reorganization  is scheduled to be effective as of 4:00 P.M.,  Eastern
Time, on the Closing Date (as defined in the Reorganization Agreement). Pursuant
to the Reorganization, each shareholder of the MurphyMorris Fund will become the
owner of the number of full and/or  fractional shares of the PMFM Fund having an
aggregate  net  asset  value  equal  to the  aggregate  net  asset  value of the
shareholder's shares of the MurphyMorris Fund as of the close of business on the
Closing Date. See "INFORMATION ABOUT THE REORGANIZATION" below.

     Approval of the  Reorganization  requires approval of the lesser of (a) 67%
or more of the shares of the MurphyMorris Fund present at the Special Meeting or
represented by proxy if the holders of more than 50% of the  outstanding  shares
are present at the Special Meeting or represented by proxy; or (b) a majority of
the outstanding  voting  securities of the MurphyMorris  Fund.  Shareholders are
entitled to one vote per each dollar (and  fractional  vote for each  fractional
dollar) of the net asset value of each share (including  fractional shares) that

                                       11


they own of the  MurphyMorris  Fund.  See "General  Information"  below.  If the
MurphyMorris Fund's  shareholders do not approve the  Reorganization,  the Board
will consider  other  alternatives,  including the possible  liquidation  of the
MurphyMorris Fund.

     In considering  whether to approve the  Reorganization you should note that
the  Reorganization  is not expected to cause you to recognize any taxable gains
or  losses  on the  disposition  of your  shares  of the  MurphyMorris  Fund and
acquisition of shares of the PMFM Fund.

BOARD RECOMMENDATIONS

     For  the  reasons  set  forth  in the  section  entitled  "Reasons  for the
Reorganization and Board  Considerations," the Board,  including the Independent
Trustees,  unanimously recommends that you approve the Reorganization Agreement.
The  Board  considered,  with  the  assistance  of  independent  counsel  to the
Independent  Trustees,  a variety of different  factors  prior to approving  the
Reorganization Agreement, including, without limitation:

     (1) each MurphyMorris Fund shareholder will receive shares of the PMFM Fund
equal in value to its MurphyMorris Fund shares;

     (2)  the  Reorganization   allows  for  the  continued  management  by  the
MurphyMorris  Fund  portfolio  management  team  members  (with the  support  of
additional  PMFM  portfolio  management  team  members) and the President of the
MurphyMorris  Fund in a new  fund  with  the  same  investment  objective  and a
strategy with similarities to that of the MurphyMorris Fund;

     (3) the affiliated relationship between the PMFM Trust and the MurphyMorris
Investment  Trust,  and the  potential  benefits for  shareholders  of joining a
series of the PMFM Trust;

     (4) historical  performance  and inflows,  outflows and asset levels of the
MurphyMorris  Fund since its  inception,  its current  prospects for  increasing
growth as a stand-alone fund, and the combined pro forma asset levels and future
growth  prospects of the PMFM Fund as part of the PMFM Trust  (assuming that the
Reorganization occurs);

     (5) the  anticipated  expenses of the PMFM Fund will be  substantially  the
same as the current expenses of the MurphyMorris Fund;

     (6) the  agreement  by the  investment  advisor of the  MurphyMorris  Fund,
MurphyMorris, to pay the expenses related to the Reorganization;

     (7) the anticipated tax-free nature of the Reorganization and the effect of
the Reorganization on certain tax losses of the funds; and

     (8)  the  potential   benefits  to  the  shareholders  of  MurphyMorris  in
connection with the Reorganization.

           THE BOARD RECOMMENDS THAT YOU VOTE FOR THE REORGANIZATION.
           ----------------------------------------------------------





                                       12


COMPARISON OF BUSINESS STRUCTURES

     The MurphyMorris Fund is a series of the MurphyMorris Investment Trust, and
the PMFM Fund is a series of the PMFM  Investment  Trust.  Each of the Trust and
the PMFM Trust is an  open-end  management  investment  company  organized  as a
Delaware statutory trust offering  redeemable shares in different classes and/or
series. The MurphyMorris Fund is the only series of the Trust, and it offers one
class of shares,  the Investor Class. The PMFM Fund is one of four series of the
PMFM Trust, and it offers one class of shares, the Investor Class.

     The  declaration  of trust and  bylaws for each of the Trust and PMFM Trust
are substantially  identical and there are no material  differences  between the
rights of shareholders of the  MurphyMorris  Fund and the rights of shareholders
of the PMFM Fund.

     The  Board and the  Board of  Trustees  of the PMFM  Trust  ("PMFM  Board")
formulate  the general  policies of each of the  MurphyMorris  Fund and the PMFM
Fund and PMFM Trust's other series, respectively.  Each board meets regularly to
review performance,  investment  activities and practices and to discuss matters
relating to their respective series.

COMPARISON OF INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES

     Investment  Objectives.  The investment objectives of the MurphyMorris Fund
and the PMFM Fund are the same, as shown below.


- --------------- ------------------------------- -------------------------------
                MURPHYMORRIS FUND               PMFM FUND
- --------------- ------------------------------- -------------------------------
INVESTMENT
 OBJECTIVE      To seek capital appreciation.   To seek capital appreciation.
- --------------- ------------------------------- -------------------------------













                                       13


     Principal Investment Strategies. The principal investment strategies of the
MurphyMorris Fund and the PMFM Fund are set forth below.

                                                        
- ------------------- ----------------------------------------  ----------------------------------------
                               MurphyMorris Fund                               PMFM Fund
- ------------------- ----------------------------------------  ----------------------------------------
PRINCIPAL           To   achieve    its    objective,    the  To achieve its investment objective, the
INVESTMENT          MurphyMorris  Fund invests  primarily in  PMFM Fund invests  primarily in ETFs and
STRATEGY            exchange-traded  funds  ("ETFs")  and in  Cash Positions. The PMFM Fund utilizes a
                    cash or cash equivalent positions ("Cash  core and satellite  investment strategy.
                    Positions").   The  MurphyMorris  Fund's  The PMFM Fund will invest  generally  as
                    assets  are  allocated  primarily  among  follows:
                    different ETFs and Cash Positions  using
                    a  rules-based   quantitatively   driven  o    The Core Position.  50% of the PMFM
                    asset  allocation model which determines       Fund's  assets  will be invested in
                    a  weighted  average  score for  "market       broad-based market index positions,
                    risk" based on a combination of factors,       such  as the  S&P  500  Index,  the
                    such  as  the  following  technical  and       Russell  2000  Index,  the  S&P 400
                    fundamental indicators:                        Mid-Cap   Index,   the  Dow   Jones
                                                                   Industries Index, the EAFE (Europe,
                            o Market breadth;                      Australia and Far East) Index (each
                            o Trend line;                          a "Broad Market Index") These Broad
                            o Interest rates; and                  Market   Indexes  are  designed  to
                            o Relative  strength                   reflect    the    performance    of
                            o Sector Performance                   different  types of markets  (e.g.,
                                                                   the U.S.  equity  market or foreign
                    Based on the asset allocation model, the       markets).    Through    the    core
                    MurphyMorris  Fund  purchases  and sells       position,  the  PMFM  Fund  will be
                    shares of  different  index-based  ETFs,       exposed  to  the   performance   of
                    sector-based ETFs, fixed-income ETFs and       selected  U.S.  and   international
                    Cash Positions that MurphyMorris  Fund's       equity  markets  as  a  whole.  The
                    investment advisor, MurphyMorris,  deems       percentage  of the  core  portfolio
                    to be best  positioned to participate in       invested in different  Broad Market
                    market gains during rising markets or to       Indexes  may change as PMFM  Fund's
                    protect   the  Fund   during   declining       investment  advisor,   PMFM,  deems
                    markets. Under normal circumstances, the       appropriate  or necessary  based on
                    MurphyMorris  Fund will  invest at least       its analysis and allocation models.
                    80% of its assets in ETFs.
                                                              o    The Satellite Position.  50% of the
                                                                   PMFM Fund's assets will be invested
                                                                   primarily  in market  sector  index
                                                                   positions     (e.g.,     healthcare
                                                                   indexes,  utilities  indexes,  real
                                                                   estate  indexes,   etc.)  and  Cash
                                                                   Positions using an allocation model
                                                                   and   risk-based   ranking   system
                                                                   similar   to   the   PMFM   Managed
                                                                   Portfolio  Trust (see the PMFM Fund
                                                                   Prospectus     for    a    detailed
                                                                   description    of   the   principal
                                                                   investment  strategy  of  the  PMFM
                                                                   Managed   Portfolio   Trust).   The
                                                                   satellite   position  will  not  be
                                                                   designed    to   hedge   the   core
                                                                   position,  however, some investment
                                                                   positions  may hedge a  portion  of
                                                                   the core position.

                                                              The PMFM  Fund  will  seek to blend  the
                                                              benefits of the market  exposure  gained
                                                              through   investing   in  Broad   Market
                                                              Indexes with the benefits of an actively
                                                              managed market-sector rotation investing
                                                              strategy. Under this approach, generally
                                                              one  half  of  the  PMFM  Fund  will  be
                                                              invested in broad-based U.S. and foreign
                                                              equity  markets  as a whole and one half
                                                              of  the  PMFM  Fund  will  be   actively
                                                              managed  in  market   sector   positions
                                                              selected   by  PMFM  in  an  attempt  to
                                                              outperform the equity markets.
- ------------------- ----------------------------------------- ----------------------------------------


                                           14


     Key  Issues  and  Differences  in  Investment  Strategies.   The  principal
investment  strategies  of the  MurphyMorris  Fund and the PMFM  Fund  have some
important  similarities.  Each of the funds invests primarily in exchange traded
funds (ETFs).  An ETF is an investment  company that holds a portfolio of common
stocks  designed to track the performance of a particular  securities  index (or
sector of an index),  like the S&P 500 or NASDAQ,  or a portfolio  of bonds that
may be designed to track a bond index. Because ETFs may be traded like stocks on
a securities exchange (e.g., the American Stock Exchange), ETFs may be purchased
and sold throughout the trading day, based on their market price.  Each share of
an ETF  represents an undivided  ownership  interest in the portfolio held by an
ETF.

     In addition to investing  primarily in ETFs, the MurphyMorris  Fund and the
PMFM Fund will be similar  in that  their  portfolio  investment  decisions  are
based,  subject to the  discretion  of the Fund's  investment  team, on the same
quantitatively driven asset allocation and risk-assessement  models. Each of the
Funds is also  non-diversified,  which  generally means that they may hold fewer
securities in their portfolios than funds electing to be "diversified."

     The  primary  differences   between  the  investment   strategies  for  the
MurphyMorris Fund and the PMFM Fund are:

     o    The   MurphyMorris   Fund  is   required  to  invest,   under   normal
          circumstances,  more  than  80% of its  assets  in  ETFs.  While it is
          generally  anticipated that the PMFM Fund will likely invest more than
          80% of its assets in ETFs under normal circumstances as well; however,
          there is no requirement that the PMFM Fund do so.

     o    The PMFM Fund will invest 50% of its assets under normal circumstances
          in ETFs or other investment companies tracking Broad Market Indices in
          order to, among other things, ensure that a significant portion of the
          portfolio is always  invested  invested in broad U.S.  and/or  foreign
          markets.  This portion of the PMFM Fund's  portfolio is referred to as
          its "Core  Position." The  MurphyMorris  Fund has no such  requirement
          regarding investment in Broad Market Indices.

     o    The PMFM Fund will  invest  the other 50% of its assets  under  normal
          circumstances  in ETFs or other investment  companies  tracking market
          sectors and Cash Positions using an active sector  rotation  strategy,
          seeking to invest in market sectors that are  appreciating and seeking
          to avoid market sectors that are falling in value. This portion of the
          PMFM Fund's portfolio is referred to as its "Satellite  Position." The
          MurphyMorris Fund does not have an emphasis on market sectors like the
          Satellite Position of the PMFM Fund, however,  the MurphyMorris Fund's
          strategy may emphasize investments in sectors from time to time.

     Compared to the  MurphyMorris  Fund, which is generally an asset allocation
fund that rotates assets between ETFs tracking  various  securities  indexes and
market sector indexes and Cash Positions,  the PMFM Fund generally  represents a
more rigid  strategy  designed  to ensure  that at least 50% of the PMFM Fund is
always invested in Broad Market Indices.

Additional Investment Strategies, Issues and Differences Among the Funds

     Each Fund may invest in all types of ETFs, such as index based ETFs, sector
based  ETFs and fixed  income  ETFs.  Each  Fund may hold  ETFs with  portfolios
comprised  of domestic or foreign  stocks or bonds or any  combination  thereof.
However,  due to legal limitations,  each Fund will be prevented from purchasing
more than 3% of an ETF's  outstanding  shares unless (i) the ETF or the Fund has

                                       15


received  an  order  for  exemptive  relief  from  the 3%  limitation  from  the
Securities and Exchange  Commission  ("SEC") that is applicable to the Fund; and
(ii) the ETF and the Fund take  appropriate  steps to comply with any conditions
in such order.

     In cases  where  these  legal  limits  prevent  either  Fund from  buying a
particular  ETF, the Fund may instead invest in a similar index or  sector-based
mutual fund or other investment company ("Index Funds"),  or a similar basket of
stocks (a group of securities  related by index or sector that are  pre-selected
by, and made available through,  certain brokers at a discounted brokerage rate)
("Stock  Baskets").  Each Fund may also invest in Index  Funds or Stock  Baskets
when the Fund's  investment  adviser  believes they  represent  more  attractive
opportunities than similar ETFs.

     In addition,  each Fund may invest in all types of Cash Positions,  such as
money  market  instruments,  U.S.  Government  obligations,   commercial  paper,
repurchase  agreements and other cash or cash  equivalent  positions.  Each Fund
also has the  flexibility  to  invest in equity  securities  and other  types of
securities  when  the  Fund's  investment   adviser  believes  they  offer  more
attractive  opportunities.  Accordingly,  each Fund may hold positions in common
stocks of domestic and foreign  companies and corporate and/or  government bonds
from time to time.

     Temporary  Defensive  Positions.  Each  Fund may,  from time to time,  take
temporary  defensive  positions that are inconsistent  with the Fund's principal
investment  strategies  in an attempt to  respond to adverse  market,  economic,
political or other conditions. In such circumstances,  either Fund may also hold
up to 100% of its portfolio in Cash Positions for reasons  inconsistent with the
Fund's  principal  investment  strategy.  When  either  Fund  takes a  temporary
defensive  position,  the  Fund  may  not be  able  to  achieve  its  investment
objective.

     Other Investment  Policies.  Other investment  policies of the MurphyMorris
Fund  are  summarized  in  the  MurphyMorris   Fund's  Statement  of  Additional
Information dated September 28, 2004, a copy of which is available upon request,
without charge, by writing  MurphyMorris ETF Fund, c/o NC Shareholder  Services,
116 South Franklin  Street,  Post Office Box 4365,  Rocky Mount,  North Carolina
27803-0365 or calling (800) 715-3611.

     Other investment  policies of the PMFM Fund are summarized in its Statement
of Additional Information dated March 7, 2005, a copy of which is available upon
request,  without  charge,  by  writing  PMFM  Funds -  Investor  Class,  c/o NC
Shareholder  Services,  116 South Franklin  Street,  Post Office Box 4365, Rocky
Mount, North Carolina 27803-0365 or calling (866) 383-7636.

COMPARISON OF INVESTMENT ADVISORY SERVICES AND FEES

     The  investment  advisory fees paid by the  MurphyMorris  Fund and the PMFM
Fund are the same:  monthly  compensation based on the applicable Fund's average
daily net  assets at the  annual  rate of 1.25%.  In  addition,  the  investment
advisors for each Fund (MurphyMorris and PMFM, respectively),  have entered into
an expense limitation agreements (each an "Expense Limitation  Agreement") under
which each has agreed to waive or reduce its fees and to assume  other  expenses
of the applicable Fund, if necessary, in an amount that limits the Fund's annual
operating   expenses   (exclusive  of  interest,   taxes,   brokerage  fees  and
commissions,  extraordinary expenses, and payments, if any, under the Rule 12b-1
Plan) to not more than 2.25% of the average  daily net assets of the  applicable
Fund.  The  provisions  of each  of  these  Expense  Limitation  Agreements  are
substantially  the same,  and each is expected to  continue  from  year-to-year,
subject to the approval of the applicable Fund's Board of Trustees.

                                       16


     As  noted   elsewhere   in  this  Proxy   Statement/Prospectus,   PMFM  and
MurphyMorris  are affiliates due to common  ownership and  management,  and they
share the same address.  Specific information regarding each investment advisory
firm is set forth below:

     MurphyMorris  Management  and  the  MurphyMorris  Fund.  MurphyMorris,  the
investment  advisor of the  MurphyMorris  Fund, is located at 1551 Jennings Mill
Road, Suite 2400A, Bogart,  Georgia 30622.  MurphyMorris is controlled by Donald
L.  Beasley,  Timothy A.  Chapman  and  Gregory  L.  Morris.  Mr.  Morris is the
Treasurer of  MurphyMorris,  and the Treasurer and President of the MurphyMorris
Fund. He is also a trustee of the  MurphyMorris  Trust, and has been a portfolio
manager for PMFM since  November  2004. Mr. Chapman and Mr. Beasley serve as the
portfolio  management team for the  MurphyMorris  Fund and have managed the Fund
since its  inception in 2003.  Mr.  Chapman is a co-founder  and has been a Vice
President  of  MurphyMorris  since  1996,  and has been  Vice  President  of the
MurphyMorris Fund since its inception.  Mr. Beasley is a co-founder and has been
Secretary  of  MurphyMorris  since 1996.  Mr.  Beasley and Mr.  Chapman are also
co-founders  and  have  been  principal  shareholders,  portfolio  managers  and
officers  of PMFM  since its  inception  in 1993.  They are also  members of the
portfolio management team for the PMFM Fund. Biographies for Mr. Chapman and Mr.
Beasley are set forth under  "Additional  Information About PMFM." The Statement
of Additional  Information  provides additional  information about Mr. Chapman's
and Mr. Beasley's compensation from MurphyMorris, other accounts they manage and
their ownership of securities in the MurphyMorris Fund and the PMFM Fund.

     As compensation for its investment advisory services, MurphyMorris receives
monthly  compensation  based on MurphyMorris  Fund's average daily net assets at
the  annual  rate of  1.25%;  subject  to the  terms of the  Expense  Limitation
Agreement.  MurphyMorris  has  entered  into an  agreement  with PMFM to license
PMFM's  proprietary,  rules-based  quantitatively  driven asset allocation model
research software to assist it in managing the MurphyMorris  Fund.  MurphyMorris
pays  PMFM a fee  of  15%  of  its  gross  investment  advisory  fees  from  the
MurphyMorris  Fund under the terms of the license  agreement.  As of March 2005,
MurphyMorris has approximately $__ million in assets under management.

     PMFM and the PMFM Fund.  PMFM, the investment  advisor of the PMFM Fund, is
also located at 1551 Jennings Mill Road,  Suite 2400A,  Bogart,  Georgia  30622.
PMFM is controlled by Timothy  Chapman and Donald  Beasley.  Mr.  Beasley is the
President  of PMFM and is a Trustee of the PMFM Funds.  He is also  Secretary of
MurphyMorris.  Mr.  Chapman  is the  Secretary  and  Treasurer  of PMFM  and the
President of the PMFM Trust.  He is also a Vice  President of  MurphyMorris  and
Vice President of the  MurphyMorris  Fund. Mr.  Chapman,  Mr.  Beasley,  and Mr.
Morris are part of the portfolio  management  team for the PMFM Fund.  Additonal
members of the PMFM Fund  investment  team are Judson P.  Doherty  and Joseph G.
Ezernack.

     As compensation for its investment advisory services, PMFM receives monthly
compensation  based on the PMFM  Fund's  average  daily net assets at the annual
rate of 1.25%; subject to the terms of PMFM's Expense Limitation  Agreement.  As
of March 2005, PMFM has approximately $__ million in assets under management.

     Biographies for Mr. Beasley,  Mr. Chapman,  Mr. Morris, Mr. Doherty and Mr.
Ezernack  are set forth below under  "Additional  Information  About  PMFM." The
Statement of Additional Information provides additional information about PMFM's

                                       17


compensation  of each  portfolio  management  team member,  other  accounts they
manage and their ownership of securities in the PMFM Fund.

COMPARISON OF FEES AND EXPENSES

     Like all  mutual  funds,  the  MurphyMorris  Fund and the PMFM  Fund  incur
certain expenses in their respective  operations and, as a shareholder,  you pay
these  expenses  indirectly.  The following  tables compare the various fees and
expenses that a shareholder incurred from an investment in the MurphyMorris Fund
as of the fiscal year ended May 31, 2004 to the  estimated  fees and expenses of
the PMFM Fund and the pro forma  estimated  expenses of the PMFM Fund,  assuming
the  Reorganization  Agreement  is  approved  and the  Reorganization  had  been
consummated.  Actual  expense  information  for the PMFM Fund for an  historical
period is not provided  because the PMFM Fund has not made a public  offering of
its shares and has had (and will  have)  only  nominal  assets as of the date of
this   Proxy   Statement/Prospectus   and  prior  to  the   completion   of  the
Reorganization.



                                                                                
- --------------------------------------- -------------------------- --------------------- -------------------
                                                                                          Pro forma Combined
           Shareholder Fees                                                                    PMFM Fund
    (Fees Paid Directly From Your
             Investment)                    MurphyMorris Fund           PMFM Fund
- --------------------------------------- -------------------------- --------------------- -------------------
Maximum Sales Charge (Load) Imposed
On Purchases(as a percentage of                   None                     None                 None
offering price)
- --------------------------------------- -------------------------- --------------------- -------------------
Redemption Fee                                    None                     None                 None
- --------------------------------------- -------------------------- --------------------- -------------------




                                                                                
- --------------------------------------- ------------------------- ---------------------- -------------------
    Annual Fund Operating Expenses                                                            Pro Forma
   (expenses that are deducted from                                                           Combined
             Fund assets)                    MurphyMorris Fund            PMFM Fund           PMFM Fund
- --------------------------------------- ------------------------- ---------------------- -------------------
Management Fees                                    1.25%                    1.25%                1.25%
- --------------------------------------- ------------------------- ---------------------- -------------------
Distribution and/or Service (12b-1)                0.25%                    0.25%                0.25%
Fees
- --------------------------------------- ------------------------- ---------------------- -------------------
Other Expenses                                     0.94%                    1.00%^3              1.00%3
                                                  -----                    -----                -----
- --------------------------------------- ------------------------- ---------------------- -------------------
Total Annual Fund Operating Expenses               2.44%^1,3                2.50%^2,3            2.50%^2,3
                                                  =====                    =====                =====
- --------------------------------------- ------------------------- ---------------------- -------------------


 ^1  "Total Annual Fund Operating  Expenses" are based upon actual  expenses for
     the fiscal  year ending May 31,  2004.  MurphyMorris  has  entered  into an
     Expense Limitation  Agreement with the MurphyMorris Fund under which it has
     agreed to waive or  reduce  its fees and to assume  other  expenses  of the
     Fund,  if necessary,  in an amount that limits the Fund's annual  operating
     expenses  (exclusive of interest,  taxes,  brokerage fees and  commissions,
     extraordinary  expenses and payments, if any, under the Rule 12b-1 Plan) to
     not more than  2.25% of the  average  daily net  assets of the Fund for the
     fiscal year ending May 31, 2005. As a result, the Fund's "Total Annual Fund
     Operating  Expenses"  (excluding  interest,   taxes,   brokerage  fees  and
     commissions  and  extraordinary  expenses) will be limited to 2.50%.  It is



                                       18


     expected  that  the  Expense   Limitation   Agreement  will  continue  from
     year-to-year,  provided  such  continuance  is  approved  by the  Board  of
     Trustees of the Fund.

  ^2 Since  the PMFM Fund  is newly  organized,  the  expenses  in the chart are
     based on estimated  expenses.  PMFM has entered into an Expense  Limitation
     Agreement  with the PMFM Fund under  which it has agreed to waive or reduce
     its fees and to assume other  expenses of that Fund,  if  necessary,  in an
     amount that  limits the Fund's  annual  operating  expenses  (exclusive  of
     interest, taxes, brokerage fees and commissions, extraordinary expenses and
     payments,  if any, under the Rule 12b-1 Plan) to not more than 2.25% of the
     average  daily net assets of that Fund for the fiscal  year  ending May 31,
     2005.  As a result,  the Fund's  "Total  Annual  Fund  Operating  Expenses"
     (excluding   interest,   taxes,   brokerage   fees  and   commissions   and
     extraordinary  expenses) will be limited to 2.50% each, as indicated in the
     table. It is expected that the Expense  Limitation  Agreement will continue
     from  year-to-year,  provided such  continuance is approved by the Board of
     Trustees of the Fund.

  ^3 The  differences  in the "Other  Expenses" and "Total Annual Fund Operating
     Expenses" of the MurphyMorris  Fund and the PMFM Fund reflect the fact that
     the  MurphyMorris  Fund's fees and  expenses  are actual  expenses  for the
     fiscal year ended May 31,  2004 and the fees and  expenses of the PMFM Fund
     are based on  estimated  expenses.  If the PMFM Fund has the same  level of
     assets as the  MurphyMorris  Fund had during the fiscal  year ended May 31,
     2004,  then the PMFM Fund's fees and expenses will generally be the same as
     those shown in the chart for the MurphyMorris Fund.

Example:


     The  following  examples  are  intended  to help you  compare  the costs of
investing in the  MurphyMorris  Fund,  the PMFM Fund and the combined PMFM Fund.
Since all mutual funds use the same hypothetical conditions, this example should
help you compare the costs of  investing in the  MurphyMorris  Fund and the PMFM
Fund, and the combined PMFM Fund versus other mutual funds. This example assumes
the following conditions:

     (1)  You invest $10,000 in the specified fund for the periods shown;
     (2)  You reinvest all dividends and distributions;
     (3)  You redeem all of your shares at the end of those periods;
     (4)  You earn a 5% total return; and
     (5)  The Fund's operating expenses remain the same.

     Although  your actual  costs may be higher or lower,  the  following  table
shows you what your costs may be under the conditions listed above.



                                                                              
- ----------------------------------- ----------------- ----------------- ----------------- -----------
                   Fund                  1 Year           3 Years           5 Years        10 Years
- ----------------------------------- ----------------- ----------------- ----------------- -----------
  MurphyMorris Fund                       $247              $761             $1301          $2776
- ----------------------------------- ----------------- ----------------- ----------------- -----------
  PMFM Fund*                              $253              $779              n/a            n/a
- ----------------------------------- ----------------- ----------------- ----------------- -----------
  Pro Forma Combined PMFM Fund            $___              $___              $___           $___
- ----------------------------------- ----------------- ----------------- ----------------- -----------


  *  Because the PMFM Fund is a new fund,  the  expenses  are only given for the
     one-year and three-year periods in the table above

                                       19


COMPARISON OF PURCHASE, REDEMPTION AND EXCHANGE POLICIES AND PROCEDURES


     The  following  chart  highlights  the purchase,  redemption,  and exchange
policies and procedures of the shares of the MurphyMorris Fund and the shares of
the PMFM Fund. As shown in the chart,  the purchase and redemption  policies for
the  MurphyMorris  Fund and the PMFM Fund are the same, but the PMFM Fund offers
exchange  privileges  with  other  funds in the PMFM Funds  family  that are not
offered by the MurphyMorris  Fund. For a more complete  discussion of each share
class' purchase, redemption and exchange policies and procedures, please see the
applicable section(s) of the respective Fund's prospectus.


                                                                           
- --------------------------------------------------- ---------------------------- --------------------------
Purchase, Redemption, And Exchange Policies And
Procedures                                          MurphyMorris Fund            PMFM Fund
- --------------------------------------------------- ---------------------------- --------------------------
Minimum Initial Purchase                            The minimum investment       The   minimum   investment
                                                    required to open an          required    to   open   an
                                                    account is $1,000.           account is $1,000.

- --------------------------------------------------- ---------------------------- --------------------------
Additional Investment                               The   minimum    additional  The   minimum   additional
                                                    investment  is  $250  ($100  investment  is $250  ($100
                                                    for those  participating in  for  those   participating
                                                    an   automatic   investment  in      an       automatic
                                                    plan).                       investment plan).

- --------------------------------------------------- ---------------------------- --------------------------
Purchases                                           By  check,  money  order  ,  By  check,  money  order ,
                                                    wire     transfer,      and  wire     transfer,     and
                                                    automatic investment plan.   automatic investment plan.

                                                    Through      the     Fund's  Through     the     Fund's
                                                    distributor  or  through an  distributor  or through an
                                                    intermediary   such  as  an  intermediary  such  as  an
                                                    authorized broker-dealer.    authorized broker-dealer.
- --------------------------------------------------- ---------------------------- --------------------------
Redemptions                                         By    telephone     (unless  By    telephone    (unless
                                                    specifically     declined),  specifically    declined),
                                                    mail,  wire (under  certain  mail,  wire (under certain
                                                    limited  conditions),   and  limited  conditions),  and
                                                    systematic withdrawal plan.  systematic      withdrawal
                                                                                 plan.
- --------------------------------------------------- ---------------------------- --------------------------
Exchanges                                           N/A                          Shareholders  may exchange
                                                                                 Investor  Class shares for
                                                                                 Investor  Class  shares of
                                                                                 any  other  series  of the
                                                                                 PMFM   Trust  at  the  net
                                                                                 asset value.

                                                                                 The  PMFM  Trust  reserves
                                                                                 the  right   to   suspend,
                                                                                 terminate,  or  amend  the
                                                                                 terms  of   the   exchange
                                                                                 privilege    upon    prior
                                                                                 written   notice   to  the
                                                                                 shareholders.
- --------------------------------------------------- ---------------------------- --------------------------


                                           20


SHAREHOLDER SERVICES AND DISTRIBUTION PLAN

     Each of the MurphyMorris  Fund and the PMFM Fund has adopted a Distribution
Plan in  accordance  with Rule 12b-1  ("Distribution  Plan")  under the 1940 Act
providing  that the Fund will pay the annual  rate of up to 0.25% of the average
daily net assets of the Fund for activities  primarily intended to result in the
sale of Fund shares.  For each Fund, these activities  include  reimbursement to
entities for providing  distribution  and shareholder  servicing with respect to
the Fund's shares. Because the 12b-1 fees are paid out of a mutual fund's assets
on an  on-going  basis,  these fees,  over time,  will  increase  the cost of an
investment  in a mutual  fund and may cost you more than  paying  other types of
sales charges.

     There  are no  material  differences  in the  Distribution  Plans  for  the
MurphyMorris  Fund and the PMFM Fund with respect to their  respective  Investor
Class of shares.

COMPARISON OF DISTRIBUTION POLICIES

     The MurphyMorris  Fund and the PMFM Fund each distribute  substantially all
of its investment income, if any, quarterly and substantially all of its capital
gains,  if  any,  annually.   Dividends  and  distributions  of  each  Fund  are
automatically  reinvested in additional  shares of the respective  class of that
Fund, unless the shareholder elects to receive distributions in cash.

     If  the  Reorganization  Agreement  is  approved  by  shareholders  of  the
MurphyMorris  Fund, then prior to the Closing,  the MurphyMorris Fund intends on
distributing to its shareholders  all  undistributed  net investment  income and
undistributed realized net capital gains.

COMPARISON OF NET ASSET VALUE CALCULATION PROCEDURES

     The net asset value per share for both the  MurphyMorris  Fund and the PMFM
Fund is calculated by dividing the value of the applicable  Fund's total assets,
less  liabilities  (including Fund expenses,  which are accrued  daily),  by the
total number of  outstanding  shares of that Fund. The net asset value per share
of each Fund is normally  determined at the time regular  trading  closes on the
New York Stock  Exchange  ("NYSE"),  currently  4:00 p.m.  Eastern time,  Monday
through Friday, except when the NYSE closes earlier. In determining the value of
each Fund's total  assets,  portfolio  securities  are  generally  calculated at
market  value by  quotations  from the primary  market in which they are traded.
Instruments  with  maturities  of 60 days or less are valued at amortized  cost,
which approximates market value.  Securities and assets for which representative
market quotations are not readily available or which cannot be accurately valued
using normal  pricing  procedures are valued at fair value as determined in good
faith under policies approved by the applicable Fund's Board of Trustees.

     There are no material differences in the procedures for calculating NAV for
the MurphyMorris Fund and the PMFM Fund.


PRINCIPAL INVESTMENT RISKS OF THE FUNDS

     The  following  is a summary  only of the  principal  risk  factors  of the
MurphyMorris Fund and the PMFM Fund. For additional  information about the risks
of investing in the  MurphyMorris  Fund,  see its  Prospectus  and  Statement of

                                       21


Additional Information.  For additional information about the risks of investing
in the PMFM Fund, see its Prospectus and Statement of Additional Information.

     Because the Funds have investment  objectives and use investment techniques
that  are  similar,  the  risks  of  investing  in  the  MurphyMorris  Fund  are
substantially  the same as the risks of investing in the PMFM Fund. You may lose
money on your  investment in either Fund.  There can be no assurance that either
Fund will be  successful  in meeting  its  investment  objectives.  Each Fund is
subject to market risks,  management style risks,  risks related to its "fund of
funds" structure,  sector risks,  fixed income risks,  foreign securities risks,
tracking  risks,  risks  related  to ETF net asset  value and  market  price and
portfolio turnover,  and non-diversified fund risks. In addition,  the PMFM Fund
is subject to small capitalization  companies risks since it may invest a higher
percentage  of its assets in small  capitalization  companies  from time to time
than the MurphyMorris Fund does.

     A chart  showing the  principal  investment  risks of an investment in each
Fund is set forth below,  and a description  of each risk is set forth below the
chart:

                                                                      
- -------------------------------------- ------------------------------------ --------------------------------
        Principal Risk Factor                   MurphyMorris Fund                      PMFM Fund
- -------------------------------------- ------------------------------------ --------------------------------
Market Risks                                            X                                  X
- -------------------------------------- ------------------------------------ --------------------------------
Management Style Risks                                  X                                  X
- -------------------------------------- ------------------------------------ --------------------------------
"Fund of funds" Structure Risks                         X                                  X
- -------------------------------------- ------------------------------------ --------------------------------
Sector Risks                                            X                                  X
- -------------------------------------- ------------------------------------ --------------------------------
Fixed Income Risks                                      X                                  X
- -------------------------------------- ------------------------------------ --------------------------------
Foreign Securities Risks                                X                                  X
- -------------------------------------- ------------------------------------ --------------------------------
Tracking Risks                                          X                                  X
- -------------------------------------- ------------------------------------ --------------------------------
ETF NAV Risks                                           X                                  X
- -------------------------------------- ------------------------------------ --------------------------------
Portfolio Turnover Risks                                X                                  X
- -------------------------------------- ------------------------------------ --------------------------------
Non-Diversified Fund Risks                              X                                  X
- -------------------------------------- ------------------------------------ --------------------------------
Small Capitalization Companies Risks                                                       X
- -------------------------------------- ------------------------------------ --------------------------------


Market Risks:  Each of the Funds is subject to market risks.  Market risk refers
to the risk that the value of securities in a Fund's  portfolios may decline due
to  daily  fluctuations  in  the  securities  markets  generally.   Each  Fund's
performance  per  share  will  change  daily  based on many  factors,  including
fluctuation  in interest  rates,  the quality of the  instruments  in the Fund's
investment portfolio, national and international economic conditions and general
equity market  conditions.  In a declining  stock  market,  stock prices for all
companies (including those in the Funds' portfolios) may decline,  regardless of
their long-term prospects.

Management  Style  Risks:  Each of the Funds is subject to the risks  associated
with management  style.  The share price of each Fund changes daily based on the
performance of the securities in which it invests. The ability of either Fund to
meet its investment  objective is directly  related to its investment  advisor's
allocation of the Fund's assets.  The investment  advisor's  judgments about the
attractiveness,  value and potential  appreciation of particular  investments in
which the  applicable  Fund  invests may prove to be  incorrect  and there is no
guarantee  that the  investment  advisor's  judgment  will  produce  the desired
results.   In   addition,   either  Fund  may  allocate  its  assets  so  as  to
under-emphasize or over-emphasize investments under the wrong market conditions,
in which case the Fund's value may be adversely affected.

                                       22


"Fund of Funds" Structure:  Each of the Funds is subject to the risks associated
with a "fund of funds" structure.  The term "fund of funds" is typically used to
describe  investment  companies,  such as the Funds,  whose  primary  investment
strategy  involves  investing in other  investment  companies,  such as ETFs and
index or  sector-basted  mutual  funds or other  investments  companies  ("Other
Investment  Companies").  Under the 1940 Act, neither Fund may acquire shares of
an ETF or other investment company if,  immediately after such acquisition,  the
Fund  and its  affiliated  persons  would  hold  more  than 3% of the  ETF's  or
investment  company's  total  outstanding  stock  unless  (i)  the  ETF  or  the
applicable  Fund  has  received  an  order  for  exemptive  relief  from  the 3%
limitation from the SEC that is applicable to the Fund; and (ii) the ETF and the
applicable  Fund take  appropriate  steps to comply with any  conditions in such
order.  Accordingly,  the 3% limitation  may prevent a Fund from  allocating its
investments in the manner the Fund's investment  advisor considers  optimal,  or
cause the Fund's  investment  advisor to select  Other  Investment  Companies or
stock  baskets  (a group of  securities  related  by  index or  sector  that are
pre-selected  by, or made  available  through,  certain  brokers at a discounted
brokerage rate) as alternatives to the investment the Fund's investment  advisor
considers optimal.

     Since each Fund is a "fund of funds,"  your cost of  investing in each Fund
will  generally be higher than the cost of  investing  directly in ETFs or other
investment company shares. By investing in either Fund, you indirectly bear fees
and expenses  charged by the underlying  ETFs and investment  companies in which
the  Fund  invests  in  addition  to  the  Fund's   direct  fees  and  expenses.
Furthermore,  the use of a fund of funds  structure  could  affect  the  timing,
amount and  character of  distributions  to you and  therefore  may increase the
amount  of taxes  payable  by you.  Each  Funds  is best  suited  for  long-term
investors.

Sector Risks: Each Fund is subject to the risks associated with the focus of its
assets in securities of a particular sector. Sector risk is the possibility that
securities  within the same  group of  industries  will  decline in price due to
sector-specific market or economic developments.  If a Fund invests more heavily
in a particular sector,  the value of its shares may be especially  sensitive to
factors and economic risks that  specifically  affect that sector.  As a result,
the Fund's share price may  fluctuate  more widely than the value of shares of a
mutual fund that invests in a broader range of  industries.  Additionally,  some
sectors could be subject to greater  government  regulation  than other sectors.
Therefore,  changes in regulatory policies for those sectors may have a material
effect on the value of  securities  issued by  companies in those  sectors.  The
sectors in which each Fund may invest in more heavily will vary.

Fixed Income Risks: There are risks associated with the potential  investment of
each Fund's  assets in fixed  income  investments,  which  include  credit risk,
interest risk, maturity risk and  investment-grade  securities risk. These risks
could affect the value of a particular investment by each Fund, possibly causing
that Fund's share price and total return to be reduced and  fluctuate  more than
other types of investments.  Additional information about fixed income risks can
be found in each Fund's SAI.

Tracking  Risks:  Investment in each Fund should be made with the  understanding
that the ETFs and Other Investment Companies in which a Fund may invest will not
be able to replicate  exactly the  performance of the indices they track because
the total return  generated  by the  securities  will be reduced by  transaction
costs incurred in adjusting the actual balance of the  securities.  In addition,
the ETFs and Other  Investment  Companies  in which each Fund invests will incur
expenses not incurred by their applicable indices. Certain securities comprising
the indices tracked by the ETFs or other investment  companies may, from time to
time,  temporarily be unavailable,  which may further impede the ETFs' and other
investment  companies' ability to track their applicable indices.

                                       23


Ricks  Related  to ETF Net Asset  Value and Market  Price:  Each of the Funds is
subject to the risks associated with investing in ETFs. Both Funds may invest in
ETFs and the market  value of the ETF  shares  may  differ  from their net asset
value.  This  difference  in price  may be due to the fact that the  supply  and
demand in the market for ETF shares at any point in time is not always identical
to the supply and demand in the market for the underlying  basket of securities.
Accordingly,  there  may be times  when an ETF  share  trades  at a  premium  or
discount to its net asset value.

Foreign  Securities  Risk: Each of the Funds is subject to the risks  associated
with  investing in  securities  issued by  companies  whose  principal  business
activities  are outside the United  States.  Investing in  securities  issued by
companies whose principal business  activities are outside the United States may
involve  significant  risks not present in domestic  investments.  For  example,
there is generally less publicly available  information about foreign companies,
particularly  those not subject to the disclosure and reporting  requirements of
the U.S.  securities  laws.  Foreign  issuers are generally not bound by uniform
accounting,  auditing,  and financial  reporting  requirements  and standards of
practice  comparable to those  applicable to domestic  issuers.  Investments  in
foreign  securities  also  involve  the  risk of  possible  adverse  changes  in
investment  or  exchange  control  regulations,  expropriation  or  confiscatory
taxation,  limitation  on the  removal of cash or other  assets  held by a Fund,
political or financial  instability,  or diplomatic and other developments which
could affect such  investments.  Further,  economies of particular  countries or
areas of the world may differ  favorably or unfavorably  from the economy of the
United  States.  Foreign  securities  often trade with less frequency and volume
than domestic  securities  and therefore may exhibit  greater price  volatility.
Additional information about foreign securities risk can be found in each Fund's
SAI.

Risks Related to Portfolio  Turnover:  Each of the Funds is subject to the risks
associated with portfolio  turnover,  which is a ratio  indicating how often the
securities in a mutual  fund's  portfolio  change  during a year's time.  Higher
numbers  indicate a greater  number of  changes,  and lower  numbers  indicate a
smaller  number of changes.  Either Fund may sell portfolio  securities  without
regard to the length of time they have been held in order to take  advantage  of
new investment  opportunities  or changing  market  conditions.  Since portfolio
turnover may involve paying brokerage  commissions and other transaction  costs,
there could be  additional  expenses  for either  Fund.  High rates of portfolio
turnover could lower  performance of a Fund due to increased  costs and may also
result in the  realization  of capital gains.  If a Fund realizes  capital gains
when it sells its portfolio  investments,  it must  generally  distribute  those
gains to  shareholders,  increasing  their taxable  distributions.  Under normal
circumstances, the anticipated portfolio turnover rate for each Fund is expected
to be more than 100%.

Non-diversified  Fund Risk: Each of the Funds is subject to the risks related to
non-diversified  funds. In general, a non-diversified  fund may invest a greater
percentage of its assets in a particular issue and may own fewer securities than
other mutual funds. Accordingly,  a non-diversified fund is generally subject to
the risk that a large loss in an individual  issue will cause a greater loss for
the fund  than it would if the fund  were  required  to hold a larger  number of
securities or smaller positions.

Small  Capitalization  Companies  Risk:  The PMFM Fund is  subject  to the risks
associated with investing in small  capitalization  companies  (i.e.,  companies
with less than $1 billion in  capitalization).  Investing in the  securities  of
small capitalization companies generally involves greater risk than investing in
larger,  more established  companies.  The securities of small companies usually
have more limited  marketability  and  therefore  may be more  volatile and less
liquid than  securities  of larger,  more  established  companies  or the market
averages  in  general.  Because  small  companies  normally  have  fewer  shares

                                       24


outstanding  than  larger  companies,  it may be more  difficult  to buy or sell
significant  amounts of such shares without an unfavorable  impact on prevailing
prices. Small companies often have limited product lines,  markets, or financial
resources and lack  management  depth,  making them more  susceptible  to market
pressures.  Small  capitalization  companies  are  typically  subject to greater
changes in earnings and business  prospects  than are larger,  more  established
companies.

                      INFORMATION ABOUT THE REORGANIZATION

THE REORGANIZATION AGREEMENT

     The terms and conditions under which the  Reorganization may be consummated
are set forth in the Reorganization  Agreement.  Although significant provisions
of the Reorganization  Agreement are summarized below, this summary is qualified
in its entirety by reference to the Reorganization Agreement, a copy of which is
attached as Exhibit A.

     The  Reorganization  Agreement  provides for: (i) the  transfer,  as of the
Closing Date, of all of the assets of the  MurphyMorris  Fund in exchange solely
for shares of  beneficial  interest of the PMFM Fund and the  assumption  by the
PMFM  Fund  of  all  of  the  MurphyMorris  Fund's  liabilities;  and  (ii)  the
distribution  of shares of beneficial  interest of the PMFM Fund to shareholders
of the MurphyMorris Fund, as provided for in the Reorganization  Agreement.  The
MurphyMorris Fund will then be liquidated.

     After the Reorganization each shareholder of the MurphyMorris Fund will own
shares of the PMFM Fund having an aggregate  value equal to the aggregate  value
of the  shares  in the  MurphyMorris  Fund  held by that  shareholder  as of the
Closing  Date.  Shares  of the PMFM  Fund will not be  represented  by  physical
certificates.

     Until the Closing Date, shareholders of the MurphyMorris Fund will continue
to be able to  redeem  their  shares.  Redemption  requests  received  after the
Closing  Date will be  treated  as  requests  received  by the PMFM Fund for the
redemption of its shares.  The obligations of the Funds under the Reorganization
Agreement  are  subject  to  various  conditions,   including  approval  of  the
shareholders of the MurphyMorris  Fund.  Please refer to Exhibit A to review the
terms and conditions of the Reorganization Agreement.

     Related Party  Transactions.  In connection  with the  consummation  of the
Reorganization,  PMFM and MurphyMorris have agreed to a merger pursuant to which
the shareholders of MurphyMorris (Mr. Morris,  Mr. Beasley and Mr. Chapman) will
receive  shares  of  PMFM  in  exchange  for  their  MurphyMorris   shares,  and
MurphyMorris  will be  liquidated.  MurphyMorris  has agreed to pay the expenses
related to the Reorganization.

REASONS FOR THE REORGANIZATION AND BOARD CONSIDERATIONS

     The Board,  including all of its Independent Trustees,  has determined that
the  Reorganization  is in  the  best  interests  of  the  shareholders  of  the
MurphyMorris Fund and that the interests of the MurphyMorris Fund's shareholders
will not be diluted as a result of the Reorganization. The Board has unanimously
approved the Reorganization  Agreement and has recommended that the shareholders
of the MurphyMorris  Fund vote in favor of the  Reorganization  by approving the
Reorganization Agreement.

                                       25


     In approving the Reorganization  Agreement and making its recommendation to
shareholders,  the Board considered a number of factors,  with the assistance of
independent  counsel to the  Independent  Trustees of the Board,  including  the
following issues related to the Reorganization:

     (1) Each MurphyMorris Fund shareholder will receive shares of the PMFM Fund
equal in value to its shares of the MurphyMorris Fund.

     (2)  The  Reorganization   allows  for  the  continued  management  by  the
MurphyMorris  Fund  portfolio  management  team  members  (with the  support  of
additional  PMFM  portfolio  management  team  members) and the President of the
MurphyMorris  Fund in a new  fund  with  the  same  investment  objective  and a
strategy with similarities to that of the MurphyMorris  Fund. In connection with
the  foregoing,   the  Board  also  considered  the  compatibility  of  and  the
differences between the investment strategies,  policies and restrictions of the
MurphyMorris Fund and the PMFM Fund.

     (3) The affiliated relationship between the PMFM Trust and the MurphyMorris
Investment  Trust,  and the  potential  benefits for  shareholders  of joining a
series of the PMFM Trust. In connection with the foregoing, the Board considered
that:  (a) the PMFM Trust is a larger  mutual fund family than the  MurphyMorris
Trust,  with  significantly  more assets and a greater variety of fund offerings
(four funds versus one); (b) MurphyMorris  and PMFM have substantial  overlap in
their management,  ownership and portfolio management teams; and (c) PMFM Trust,
relative to the MurphyMorris  Trust,  maintain a significantly  more diverse and
extensive distribution network to grow overall assets.

     (4) The historical  performance  and inflows,  outflows and asset levels of
the MurphyMorris Fund since its inception,  its current prospects for increasing
growth as a stand-alone fund, and the combined pro forma asset levels and future
growth  prospects of the PMFM Fund as part of the PMFM Trust  (assuming that the
Reorganization occurs).

     (5) The expenses of the PMFM Fund are anticipated to be  substantially  the
same as the expenses of the MurphyMorris Fund.

     (6)   MurphyMorris   has  agreed  to  pay  the  expenses   related  to  the
Reorganization.

     (7) The anticipated tax-free nature of the Reorganization and the effect of
the Reorganization on certain tax losses of the funds (see "Tax  Considerations"
below).

     (8)  The  potential   benefits  to  the  shareholders  of  MurphyMorris  in
connection  with  the  Reorganization  including,   without  limitation,   those
discussed under "Related Party Transactions" above.

     After  considering  the  foregoing  matters,  the Board  believes  that the
Reorganization  is in the best interests of MurphyMorris  Fund  shareholders and
that the interests of the MurphyMorris  Fund shareholders will not be diluted as
a result  of the  Reorganization.  The Board  believes  that  shareholders  will
benefit by becoming  investors  in the PMFM Fund,  a new series of shares of the
PMFM Trust since (i) the PMFM Fund is part of a larger  mutual fund family (PMFM
Trust and its group of funds)  than the  MurphyMorris  Fund and its Trust,  (ii)
that the PMFM Fund is managed by the MurphyMorris Fund portfolio management team
members (with the support of additional  PMFM  investment  team members) and the
President of the  MurphyMorris  Fund,  and (iii) that the PMFM Fund has the same

                                       26


investment   objective  and  a  strategy  with   similarities  to  that  of  the
MurphyMorris  Fund.  The Board also  believes that the potential for growing the
assets of the PMFM Fund  through the PMFM Trust's  distribution  network will be
substantially  greater than the potential for growing the MurphyMorris Fund as a
stand alone fund.  Growing assets offers a number of potential  benefits in that
it may permit a fund to negotiate lower  commission  rates,  spread costs over a
larger asset base,  and  generally  benefit from  economies of scale that,  over
time, generally lower larger funds' overall expense ratios.

     In considering the Reorganization, the Board also considered that since the
MurphyMorris Fund had not become economically viable and does not seem likely to
become  so in the  foreseeable  future  without  continued  substantial  expense
subsidies,   the   Reorganization   presented  the  MurphyMorris  Fund  with  an
alternative to liquidation by allowing the  MurphyMorris  Fund to become part of
the PMFM  Trust.  The Board  also  considered  that  liquidation  would  deprive
shareholders of the advisory services of MurphyMorris's  management team members
and the fact that the MurphyMorris Fund's portfolio had unrealized capital gains
and loss carry forwards from prior years and that if the MurphyMorris  Fund were
to  liquidate,  it would  realize  those capital gains which could result in tax
liability to shareholders  and lose the ability to apply the loss carry forwards
to offset future gains.

BASED ON THE ABOVE  ANALYSIS,  THE BOARD,  INCLUDING THE  INDEPENDENT  TRUSTEES,
UNANIMOUSLY  RECOMMENDS THAT THE MURPHYMORRIS  FUND'S  SHAREHOLDERS  APPROVE THE
REORGANIZATION OF THEIR FUND INTO THE PMFM FUND.


TAX CONSIDERATIONS

     The  Reorganization  is intended to qualify for federal income tax purposes
as a tax-free  reorganization  under Section 368 of the Internal Revenue Code of
1986, as amended. Pursuant to this treatment,  neither the MurphyMorris Fund nor
its  shareholders,  nor the PMFM  Fund nor its  shareholders,  are  expected  to
recognize any gain or loss for federal income tax purposes from the transactions
contemplated by the Reorganization  Agreement.  As a condition to the Closing of
the  Reorganization,  the Funds will  receive  an  opinion  from the law firm of
Kilpatrick  Stockton,  L.L.P,  counsel to the PMFM Trust, to the effect that the
Reorganization will qualify as a tax-free  reorganization for federal income tax
purposes. That opinion will be based in part upon certain facts, assumptions and
representations made by the Funds.

     On  or  as  soon  as   practicable   prior  to  the  Closing  Date  of  the
Reorganization,  the  MurphyMorris  Fund  will  declare  and pay a  dividend  or
dividends and/or other distributions which, together with all previous dividends
and  distributions,  will have the effect of  distributing  to its  shareholders
substantially  all of the Fund's  investment  company taxable income for taxable
years ending on or prior to the  Reorganization  (computed without regard to any
deduction for dividends paid) and all of its net capital gain, if any,  realized
in taxable years ending on or prior to the  Reorganization  (after reduction for
any available  capital loss carry  forward).  Such dividends will be included in
the taxable income of each of the MurphyMorris Fund shareholders.

     Shareholders  of the  MurphyMorris  Fund should  consult their tax advisers
regarding  the effect on them, if any, of the  Reorganization  in light of their
individual  circumstances.  Because the foregoing discussion only relates to the
federal income tax consequences of the Reorganization,  shareholders also should
consult their tax advisers  about state and local tax  consequences,  if any, of
the Reorganization.


                                       27


EXPENSES OF THE REORGANIZATION

     MurphyMorris,  the MurphyMorris Fund's investment adviser, will bear all of
the costs of the  Reorganization.  No such costs or  expenses  shall be borne by
PMFM or either Fund.

ADDITIONAL INFORMATION ABOUT PMFM

     PMFM  is an SEC  registered  investment  advisor  founded  in  1991.  PMFM,
organized  as a  Georgia  corporation,  is  controlled  by Mr.  Beasley  and Mr.
Chapman. The executives and members of the advisory staff of PMFM have extensive
experience  in  managing   investments   for  clients   including   individuals,
corporations,  non-taxable entities, and other business and private accounts. As
of  December  2004,  PMFM  had  approximately   $___  million  in  assets  under
management.  As full compensation for the investment  advisory services provided
to the PMFM  Fund,  PMFM  receives  monthly  compensation  based on each  Fund's
average daily net assets at the annual rate of 1.25%.

     PMFM's  Portfolio  Management  Team.  As noted above under  "COMPARISON  OF
INVESTMENT  ADVISORY  SERVICES  AND  FEES - PMFM  and  the  PMFM  Fund,"  PMFM's
portfolio  management team for the PMFM Fund includes Mr. Beasley,  Mr. Chapman,
Mr. Doherty, Mr. Ezernack and Mr. Morris. Biographical information for each team
member is described below.

          Donald L. Beasley, President

     Mr.  Beasley is a co-founder of PMFM and has served as its President  since
1993.  Mr.  Beasley also serves as a member of the Board of Trustees of the PMFM
Trust that oversees the management and administration of the PMFM Trust and as a
principal  portfolio  manager for the PMFM Trust's funds.  Mr. Beasley is also a
co-founder and the Secretary of MurphyMorris.  Mr. Beasley received his Bachelor
of Science  degrees  in Math and  Physical  Education  from  Northwestern  State
University in 1965 and his Masters in  Administration  from  Northwestern  State
University in 1966. He has been in the money management business since 1988.

          Timothy L. Chapman, Secretary and Treasurer

     Mr.  Chapman is a co-founder  of PMFM and has served as its  Secretary  and
Treasurer since 1993. Mr. Chapman is also a co-founder of  MurphyMorris  and has
served as its Vice President  since 1996. Mr. Chapman  studied  Economics at the
University of Georgia and has received the Series 6, the Series 7 and the Series
8 licenses from the National  Association of Securities Dealers. Mr. Chapman has
been in the investment business since 1981.

          Judson P. Doherty, Executive Vice President

     Mr.  Doherty is an Executive  Vice President of PMFM and has served in that
capacity  since joining PMFM in 2001.  Prior to joining PMFM, Mr. Doherty was an
institutional  investment  consultant with Aon Consulting.  Mr. Doherty received
his Bachelor of Arts degree in Economics from Vanderbilt  University in 1991. He
has over 10 years  experience in the  investment  consulting  business,  with an
emphasis on mutual fund evaluation.

                                       28


          Joseph G. Ezernack, Portfolio Manager and Director of Operations

     Mr. Ezernack is a portfolio manager and Director of Operations for PMFM and
has served in that capacity  since 1997. Mr.  Ezernack  received his Bachelor of
Science degree from  Northwestern  State University in 1994. He has over 7 years
experience in the money management business.

          Gregory L. Morris, Portfolio Manager

     Mr.  Morris  is a  portfolio  manager  for the PMFM and has  served in that
capacity  since  joining  the  Advisor in November  2004.  Mr.  Morris is also a
principal of MurphyMorris  and has served as its Treasurer since 2002. Also, Mr.
Morris serves as a Trustee and President and Treasurer of MurpyMorris  Trust. In
addition, Mr. Morris has served as a consultant to StockCharts.com,  a web-based
market  charting  service,  since 2002.  Mr. Morris was a Captain with Delta Air
Lines from 1978 until May 2004. Mr. Morris was the CEO of MurphyMorris,  Inc., a
provider of web-based  market  analysis tools and commentary  from 1996 to 2002.
Mr. Morris received his Bachelor of Science degree in Aerospace Engineering from
the  University of Texas in 1971.  Mr. Morris also  graduated from the U.S. Navy
Fighter Weapons School known as Top Gun. He has over 20 years  experience in the
investment consulting business.


ADDITIONAL   INFORMATION   ABOUT  THE   MURPHYMORRIS   FUND'S  AND  PMFM  FUND'S
DISTRIBUTOR, ADMINISTRATOR, TRANSFER AND AGENT

     As described in more detail below, the MurphyMorris  Fund and the PMFM Fund
use the same principal underwriter, fund administrator and transfer agent.

     Distributor.  Capital  Investment  Group,  Inc.,  Post  Office  Box  32249,
Raleigh,   North  Carolina  27622,  serves  as  the  principal  underwriter  and
distributor  for the continuous  offering of the shares and the  facilitation of
registration of shares under state securities laws of both the PMFM Fund and the
MurphyMorris  Fund. The distributor  also assists in sales of each Fund's shares
pursuant to pursuant to a distribution agreement.

     Administrator.  The Nottingham  Company,  116 South Franklin  Street,  Post
Office Box 69, Rocky Mount, North Carolina  27802-0069,  serves as administrator
for both the PMFM Fund and the MurphyMorris Fund.

     Transfer Agent. NC Shareholder Services, LLC d/b/a NC Shareholder Services,
LLC,  116 South  Franklin  Street,  Post  Office Box 4365,  Rocky  Mount,  North
Carolina 27803-0365,  serves as the transfer agent and dividend-disbursing agent
for both the PMFM Fund and the MurphyMorris Fund.


CAPITALIZATION

The following table shows the  capitalization  of the MurphyMorris  Fund and the
PMFM  Fund as of  __________,  2005 and on a pro  forma  basis as of that  date,
giving  effect to the  proposed  acquisition  of assets at net asset  value.  No
historical  capitalization  information is provided for the PMFM Fund because it
has not commenced operations.


                                       29


                                                                         
           MurphyMorris Fund - PMFM Fund- Pro Forma Combined PMFM Fund
- -------------------------------- ---------------------------- ------------------- ---------------------------
                                                                                           Pro Forma
                                    MurphyMorris Fund              PMFM Fund                Combined
                                                                                           PMFM Fund
- -------------------------------- ---------------------------- ------------------- ---------------------------
Net Assets                              $____________                                    $____________
- -------------------------------- ---------------------------- ------------------- ---------------------------
Net Asset Value Per Share               $____________                                    $____________
- -------------------------------- ---------------------------- ------------------- ---------------------------
Shares Outstanding                       ____________                                     ____________
- -------------------------------- ---------------------------- ------------------- ---------------------------



OTHER BUSINESS

     The Board does not  intend to present  any other  business  at the  Special
Meeting.  If, however, any other matters are properly brought before the Special
Meeting,  the persons named in the accompanying  form of proxy will vote thereon
in accordance with their judgment.

GENERAL INFORMATION

     This  Proxy   Statement/Prospectus   is  furnished  in  connection  with  a
solicitation  of proxies by the Board to be used at the  Special  Meeting.  This
Proxy  Statement/Prospectus,  along with a Notice of the  Special  Meeting and a
proxy card, is first being mailed to shareholders of the MurphyMorris Fund on or
about ________, 2005. Only shareholders of record as of the close of business on
________,  2005 ("Record Date"),  will be entitled to notice of, and to vote at,
the Special Meeting. If the enclosed form of proxy card is properly executed and
returned in time to be voted at the Special  Meeting,  the proxies named therein
will  vote  the  shares   represented  by  the  proxy  in  accordance  with  the
instructions marked thereon.  Unmarked but properly executed proxy cards will be
voted  FOR  then  proposed  Reorganization  and FOR  any  other  matters  deemed
appropriate.

     A proxy may be  revoked  at any time on or before  the  Special  Meeting by
written notice to the Secretary of the Trust at the address on the cover of this
Proxy  Statement/Prospectus  or by attending and voting at the Special  Meeting.
Unless revoked,  all valid and executed proxies will be voted in accordance with
the  specifications  thereon  or, in the  absence  of such  specifications,  for
approval of the  Reorganization  Agreement and the  Reorganization  contemplated
thereby.

SOLICITATION OF VOTES

     Proxies are  solicited  by mail.  Additional  solicitations  may be made by
telephone,  email or other personal contact by personnel of the Trust and/or its
affiliates.

QUORUM

     The holders of more than 50% of the total  combined  net asset value of all
the shares of the MurphyMorris Fund that are outstanding and entitled to vote at
the  close  of  business  on the  Record  Date  and are  present  in  person  or
represented by proxy will constitute a quorum for the Special Meeting.


                                       30


VOTE REQUIRED

     Approval of the Reorganization  will require the affirmative vote of (i) 67
percent or more of the shares of the  MurphyMorris  Fund present in person or by
proxy at the Special  Meeting if the holders of more than 50% of the outstanding
shares of the MurphyMorris Fund are present or represented by proxy or (ii) more
than 50% of the outstanding shares of the MurphyMorris Fund,  whichever is less.
Shareholders  of the  MurphyMorris  Fund are  entitled  to one vote for per each
dollar (and fractional  vote for each fractional  dollar) of the net asset value
of each share (including  fractional shares).  Fractional shares are entitled to
proportional  voting rights.  Abstentions  or broker  non-votes (if any) will be
counted  as votes  present  for  purposes  of  determining  whether  a quorum is
present. Abstentions and broker non-votes have the same effect as a vote against
the proposal.

ADJOURNMENTS

     In the event that sufficient  votes to approve a proposal are not received,
the persons named as proxies may propose one or more adjournments of the Special
Meeting to permit further  solicitation  of proxies.  In determining  whether to
adjourn the Special  Meeting with respect to a proposal,  the following  factors
may be  considered:  the  percentage of votes  actually  cast, the percentage of
negative votes actually  cast,  the nature of any further  solicitation  and the
information to be provided to  shareholders  with respect to the reasons for the
solicitation.  Generally,  votes  cast in favor of a  proposal  will be voted in
favor of  adjournment  while votes cast against a proposal will be voted against
adjournment.  The persons named as proxies will vote upon such adjournment after
consideration of the best interests of all shareholders.

RECEIPT OF SHAREHOLDER PROPOSALS

     Under the proxy rules of the SEC, shareholder  proposals that satisfy tests
contained in those rules may,  under  certain  conditions,  be included in proxy
materials of the Trust for a particular  meeting of  shareholders.  One of these
conditions  relates  to the timely  receipt  by the Trust of any such  proposal.
Since the Trust does not have regular  annual  meetings of  shareholders,  under
these rules,  proposals  submitted  for  inclusion in the proxy  materials for a
particular  meeting must be received by the Trust a  reasonable  time before the
solicitation  of proxies  for the  meeting is made.  The fact that  receipt of a
shareholder  proposal in a timely manner occurs does not ensure its inclusion in
proxy materials  since there are other  requirements in the proxy rules relating
to such inclusion.

RECORD DATE AND OUTSTANDING SHARES

     Only  shareholders  of  record  of the  MurphyMorris  Fund at the  close of
business on the Record Date are entitled to notice of and to vote at the Special
Meeting and at any postponement or adjournment thereof. At the close of business
on the  Record  Date,  there  were  _________  shares of the  MurphyMorris  Fund
outstanding and entitled to vote.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Unless  otherwise noted below, as of the Record Date, the current  officers
and trustees of the Funds in the  aggregate  beneficially  owned less than 1% of
the shares of the  MurphyMorris  Fund and less than 1% of the shares of the PMFM
Fund.

                                       31


     As  of  the  Record  Date,  the  following   persons  owned  of  record  or
beneficially 5% or more of the outstanding shares of the class identified of the
MurphyMorris Fund and the PMFM Fund, as the case may be:

                                                              PERCENTAGE
FUND/CLASS                 NAME AND ADDRESS OF OWNER          OF OWNERSHIP

                                [to be provided]


* Persons or entities owning 25% or more of the outstanding shares of a fund may
be presumed to "control" (as such term is defined in the 1940 Act) the fund.


FINANCIAL STATEMENTS AND EXPERTS

     The  financial  statements  of  the  MurphyMorris  Fund  contained  in  the
MurphyMorris  Fund's  annual  report to  shareholders  for the fiscal year ended
April 30,  2004,  which is  included in the  MurphyMorris  Fund's  Statement  of
Addition of Information and incorporated by reference herein, have been included
and  incorporated  herein  in  reliance  on the  report  of  Deloitte  & Touche,
independent registered public accounting firm for the MurphyMorris Fund.

     No financial  information of the PMFM Fund is included or  incorporated  by
reference  herein as it has not yet begun  operations.  The PMFM Fund will begin
operations on the Closing Date and its future financial  statements are expected
to be audited and  reported on by  Deloitte & Touche,  which is the  independent
registered public accounting firm for each of the other PMFM mutual funds.

LEGAL MATTERS

Certain legal matters for the MurphyMorris Fund and the PMFM Fund will be passed
upon by Kilpatrick  Stockton  LLP,  which firm will also render an opinion as to
certain Federal income tax consequences of the Reorganization.

INFORMATION ABOUT THE FUNDS

     Each Fund is subject to the  informational  requirements  of the Securities
Exchange Act of 1934 and certain other federal  securities  statutes,  and files
reports and other  information with the SEC. Proxy materials,  reports and other
information  filed by the  Funds  can be  inspected  and  copied  at the  Public
Reference Facilities  maintained by the SEC at 450 Fifth Street, NW, Washington,
DC  20549.   The  SEC   maintains   an   Internet   World   Wide  Web  site  (at
http://www.sec.gov) that contains other information about the Funds.






                                       32


                                    Exhibit A

                      Agreement and Plan of Reorganization


     This AGREEMENT AND PLAN OF  REORGANIZATION  (the "Plan") is made as of this
____ day of _____________,  2005, by and between  MurphyMorris  Investment Trust
(the "Trust"), a Delaware business trust, for itself and on behalf of its series
listed in the Target Fund column  below  ("Target  Fund"),  and PMFM  Investment
Trust, a Delaware  business trust ("PMFM Investment  Trust"),  for itself and on
behalf of its series  listed in the  Acquiring  Fund  column  below  ("Acquiring
Fund").

- ------------------------------------------ -------------------------------------
              Acquiring Fund                            Target Fund
- ------------------------------------------ -------------------------------------
   PMFM Core Advantage Portfolio Trust             MurphyMorris ETF Fund
- ------------------------------------------ -------------------------------------

     WHEREAS,  the  Trust and PMFM  Investment  Trust  are  open-end  management
investment companies registered with the Securities and Exchange Commission (the
"SEC") under the Investment Company Act of 1940, as amended (the "1940 Act");

     WHEREAS,  the parties  desire that the  Acquiring  Fund  acquire all of the
assets and assume all of the  liabilities  of the Target  Fund in  exchange  for
shares of equal value of the Acquiring Fund and the  distribution  of the shares
of the Acquiring Fund to the  shareholders of the Target Fund in connection with
the dissolution and liquidation of the Target Fund (the "Reorganization" );

     WHEREAS, the parties intend that all agreements,  representations,  actions
and obligations described herein made or undertaken by the Acquiring Fund or the
Target Fund are made and shall be taken or  undertaken by the Trust on behalf of
the Target Fund or by PMFM Investment  Trust on behalf of the Acquiring Fund, as
appropriate.  Similarly,  the  parties  intend,  if context  requires,  that all
agreements,  representations,  actions and obligations  described herein made or
undertaken by the Trust or PMFM Investment  Trust are made and shall be taken by
the Trust on behalf of the Target Fund or PMFM Investment Trust on behalf of the
Acquiring Fund, as appropriate; and

     WHEREAS,   the  parties  intend  that  the  Reorganization   qualify  as  a
"reorganization,"  within the meaning of Section 368(a) of the Internal  Revenue
Code of 1986,  as amended  (the  "Code"),  and that the  Acquiring  Fund and the
Target Fund each be a "party to a reorganization," within the meaning of Section
368(b) of the Code, with respect to the Reorganization.

     NOW, THEREFORE, in accordance with the mutual promises and in consideration
of the covenants and agreements described herein, the parties agree as follows:


                                     A-1


1.  Definitions.  The following terms shall have the following meanings:

    1933 Act        The Securities Act of 1933, as amended.
    --------

    1934 Act        The Securities Exchange Act of 1934, as amended.
    --------

    Assets          All  property  and  assets  of any kind  and all  interests,
    ------          rights,  privileges  and  powers of or  attributable  to the
                    Target Fund  whether or not  determinable  at the  Effective
                    Time (as defined below) and wherever located. Assets include
                    all  cash,   cash   equivalents,securities,claims   (whether
                    absolute or contingent, Known (as defined below) or unknown,
                    accrued or unaccrued or conditional or unmatured),  contract
                    rights and  receivables  (including  dividend  and  interest
                    receivables)  owned by or  attributed to the Target Fund and
                    any  deferred  or prepaid  expense  shown as an asset on the
                    Target Fund's books.

    Business        Day Each  weekday  that the New York Stock  Exchange is open
    --------        or,  under  unusual  circumstances,as  deemed by the Trust's
                    officers.

    Assets          List A  list  of  securities  and  other  Assets  and  Known
    ------          Liabilities  (as defined  below) of or  attributable  to the
                    Target Fund as of the date provided to the Trust.

    Closing Date    [t/b/d],  or such other date as the  parties may agree to in
    ------------    writing.

    Effective Time  9:00 a.m.  Eastern  time on the  Closing  Date,  or such
    --------------  other time as the parties may agree to in writing.

    Fund            The Acquiring Fund  or the Target  Fund as the  context  may
    ----            require.

    Know, Known
    or Knowledge    Known after reasonable inquiry.
    ------------

    Liabilities     All liabilities of, allocated or attributable  to the Target
    -----------     Fund,  whether  Known  or  unknown,  accrued  or  unaccrued,
                    absolute or contingent or conditional or unmatured.

    N-14 Registration
    Statement       PMFM Investment Trust's Registration  Statement on Form N-14
    ---------       under  the 1940 Act that  will  register  the  shares of the
                    Acquiring Fund to be issued in the  Reorganization  and will
                    include the proxy  materials  necessary for  shareholders of
                    the Target Fund to approve the Reorganization.

                                     A-2



   Material
   Agreements       The agreements set forth in Schedule A.
   ----------

   Net Value
   of Assets        Value of Assets, determined in accordance with Section 3(d),
   ---------        net of Liabilities.

   Reorganization
   Documents        Such  bills of sale,  assignments,  assumptions,  and  other
   ---------        instruments  as desirable for the Target Fund to transfer to
                    the  Acquiring  Fund all right and title to and  interest in
                    the  Assets  and  for  the  Acquiring  Fund  to  assume  the
                    Liabilities.

   Schedule A       Schedule A to this Plan.
   ----------

   Schedule B       Schedule B to this Plan.
   ----------

   Target
   Financial
   Statements       The audited financial  statements of the Target Fund for its
   ----------       most recently  completed  fiscal period and, if  applicable,
                    the  unaudited  financial  statements of the Target Fund for
                    its most recently completed semi-annual period.

   Valuation
   Time             The time on the Closing Date,  the Business Day  immediately
   ----             preceding  the  Closing  Date if the  Closing  Date is not a
                    Business Day, or such other date as the parties may agree to
                    in writing,  that PMFM Investment  Trust  determines the Net
                    Value  of  Assets  of  the  Acquiring  Fund  and  the  Trust
                    determines the Net Value of Assets of or attributable to the
                    Target  Fund.  Unless  otherwise  agreed to in writing,  the
                    Valuation Time shall be at the time of day then set forth in
                    the  Acquiring   Fund's  and  Target   Fund's   Registration
                    Statement on Form N-1A as the time of day at which net asset
                    value is calculated.

                      A-3


2.   Regulatory Filings and Shareholder Action.

(a)  PMFM Investment Trust shall promptly file the N-14  Registration  Statement
     with the SEC. The Trust and the Target Fund shall promptly prepare and file
     any other appropriate  regulatory filings,  including,  without limitation,
     filings with federal, state or foreign securities regulatory authorities.

(b)  As soon as practicable  after the effective  date of the N-14  Registration
     Statement, the Trust shall hold a meeting of the Target Fund's shareholders
     to  consider  and approve  this Plan and such other  matters as the Trust's
     Board of Trustees may determine.

3.   Transfer of Assets and Related Transactions.  The Trust and PMFM Investment
     Trust shall take the following steps with respect to the Reorganization:

(a)  At the Effective Time, the Trust shall sell, assign, transfer,  deliver and
     convey  all of the  Assets to the  Acquiring  Fund,  subject  to all of the
     Liabilities.  PMFM Investment Trust shall then accept the Assets and assume
     the  Liabilities  such that at and after the Effective  Time (i) all of the
     Assets shall become and be the assets of the Acquiring Fund and (ii) all of
     the Liabilities shall attach to the Acquiring Fund, enforceable against the
     Acquiring Fund to the same extent as if initially incurred by the Acquiring
     Fund.

(b)  The Target Fund shall sell, assign, transfer, deliver and convey the Assets
     to the Acquiring Fund at the Effective Time on the following bases:

     (1)  In exchange  for the  transfer of the Assets,  PMFM  Investment  Trust
          shall  simultaneously  issue and  deliver to the Target  Fund full and
          fractional  shares of beneficial  interest of the Acquiring Fund. PMFM
          Investment Trust shall determine the number of shares of the Acquiring
          Fund to be issued by  dividing  the Net Value of Assets of the  Target
          Fund by the net asset value of one Acquiring  Fund share,  which shall
          be the net asset  value per share of one share of the  Target  Fund at
          the  end  of  business  on the  Closing  Date,  as  selected  by  PMFM
          Investment Trust in its sole discretion.

     (2)  Based on the calculation of the number of shares of the Acquiring Fund
          to issue under Paragraph  (b)(1) above,  PMFM  Investment  Trust shall
          issue  to  the  Target  Fund  shares  of  beneficial  interest  of the
          Acquiring  Fund with an  aggregate  net asset  value  equal to the Net
          Value of Assets of the Target Fund.

     (3)  The parties shall  determine,  as of the Valuation Time, the Net Asset
          Value of the  Acquiring  Fund shares to be delivered and the Net Asset

                                     A-4


          Value of the Assets to be conveyed,  substantially  in accordance with
          the Trust's current valuation procedures.

     (4)  The Trust shall transfer the Assets with good and marketable  title to
          PMFM  Investment  Trust's  custodian  for the account of the Acquiring
          Fund.  The Trust shall  transfer all of the Target  Fund's cash in the
          form of  immediately  available  funds  payable  to the  order of PMFM
          Investment  Trust's  custodian for the account of the Acquiring  Fund.
          The Trust shall  transfer any of the Assets that were not  transferred
          to PMFM  Investment  Trust's  custodian at the Effective  Time to PMFM
          Investment   Trust's  custodian  at  the  earliest   practicable  date
          thereafter.

(c)  The steps set forth in Section  3(b),  together with all other related acts
     necessary  to  consummate  the  Reorganization,  shall occur at the Trust's
     principal office on the Closing Date, or at such other place as the parties
     may  agree  on.   All  steps  and  acts  shall  be  deemed  to  take  place
     simultaneously at the Effective Time.

(d)  Promptly  after the  Closing  Date (and in any event  within 10 days),  the
     Trust will  deliver to PMFM  Investment  Trust the  Statement of Assets and
     Liabilities of the Target Fund as of the Closing.

4.   Dissolution and Liquidation of the Target Fund,  Registration of Shares and
     Access to Records.  The Trust and PMFM Investment Trust also shall take the
     following steps in connection with the Reorganization:

(a)  At or as soon as reasonably  practical after the Effective Time, the Target
     Fund shall dissolve and liquidate by transferring to shareholders of record
     full and  fractional  shares of beneficial  interest of the Acquiring  Fund
     equal in value to the  shares of the Target  Fund held by the  shareholder.
     Each  Target  Fund  shareholder  also shall  have the right to receive  any
     unpaid dividends or other  distributions that the Target Fund declared with
     respect to the shareholder's  Target Fund shares at or before the Effective
     Time.  The Target  Fund shall  declare  dividends  and make any  applicable
     distributions prior to the Closing Date. PMFM Investment Trust shall record
     on its  books the  ownership  by the  shareholders  of the  Acquiring  Fund
     shares; the Target Fund shall simultaneously redeem and cancel on its books
     all of its issued and outstanding  shares. The Trust shall then wind up the
     affairs of the Target Fund and take all steps as are  necessary  and proper
     to terminate the Target Fund as soon as is  reasonably  possible (but in no
     event more than six months) after the Effective Time and in accordance with
     all applicable laws and regulations.

(b)  If a Target Fund  shareholder  requests a change in the registration of the
     shareholder's Acquiring Fund shares to a person other than the shareholder,
     the  Acquiring  Fund shall  require  the  shareholder  to (i)  furnish  the

                                     A-5


     Acquiring   Fund  with  an  instrument  of  transfer   properly   endorsed,
     accompanied  by any required  signature  guarantees and otherwise in proper
     form for transfer and such other information as the Acquiring Fund may need
     to  comply  with  applicable  laws  and  regulations,   including   without
     limitation  anti-money  laundering  laws;  (ii)  if any of  the  shares  is
     outstanding  in  certificate  form,  deliver  to  the  Acquiring  Fund  the
     certificate  representing such shares;  and (iii) pay to the Acquiring Fund
     any  transfer or other taxes  required  by reason of such  registration  or
     establish to the  reasonable  satisfaction  of the Acquiring Fund that such
     tax has been paid or does not apply.

(c)  At and after the Closing  Date,  the Trust shall  provide  PMFM  Investment
     Trust and its  transfer  agent with  immediate  access to: (i) all  records
     containing the names, addresses and taxpayer  identification numbers of all
     of the Target Fund shareholders and the number and percentage  ownership of
     the outstanding  shares of the Target Fund owned by each  shareholder as of
     the  Effective  Time and (ii) all  original  documentation  (including  all
     applicable Internal Revenue Service forms, certificates, certifications and
     correspondence)   relating  to  the  Target  Fund  shareholders'   taxpayer
     identification  numbers and their  liability for or exemption  from back-up
     withholding.  The Trust shall  preserve and  maintain,  or shall direct its
     service  providers  to preserve  and  maintain,  its records as required by
     Section 31 of and Rules 31a-1 and 31a-2 under the 1940 Act.

5.   Certain Representations, Warranties and Agreements of the Trust. The Trust,
     on behalf of itself and, as  appropriate,  the Target Fund,  represents and
     warrants to, and agrees with, PMFM Investment Trust as follows:

(a)  The Trust is a statutory trust, validly existing and in good standing under
     the laws of the State of  Delaware.  The Board of Trustees of the Trust has
     duly  established  and designated the Target Fund as a series of the Trust.
     The Trust is registered with the SEC as an open-end  management  investment
     company  under the 1940 Act,  and such  registration  is in full  force and
     effect.

(b)  The  Trust  has the  power  and all  necessary  federal,  state  and  local
     qualifications  and authorizations to own all of its properties and Assets,
     to carry on its  business  as now  being  conducted  and  described  in its
     currently effective Registration Statement on Form N-1A, to enter into this
     Plan and to consummate the transactions contemplated herein.

(c)  The Board of Trustees of the Trust has duly  authorized  the  execution and
     delivery  of this  Plan  and the  transactions  contemplated  herein.  Duly
     authorized  officers of the Trust have  executed and  delivered  this Plan.
     Assuming due execution and delivery of this Plan by PMFM Investment  Trust,

                                     A-6


     this  Plan  represents  a  valid  and  binding  contract,   enforceable  in
     accordance with its terms, subject to the effect of bankruptcy, insolvency,
     reorganization,  arrangement, moratorium, and other similar laws of general
     applicability  relating to or  affecting  creditors'  rights and to general
     equity  principles.  The execution and delivery of this Plan does not, and,
     subject to the approval of  shareholders  referenced in Section  2(c),  the
     consummation  of the  transactions  contemplated  by this  Plan  will  not,
     violate the Trust's Trust  Instrument,  By-Laws or any Material  Agreement.
     Except for the  approval  of Target Fund  shareholders,  the Trust does not
     need to take any other action to authorize its officers to effectuate  this
     Plan and the transactions contemplated herein.

(d)  To the best of its  knowledge  and belief,  the Target Fund is a "fund" (as
     defined in Section  851(g)(2) of the Code);  it has qualified for treatment
     as a regulated  investment  company ("RIC") under Part I of Subchapter M of
     Subtitle  A,  Chapter  1, of the  Code,  for each  taxable  year  since the
     commencement  of its operations and qualifies and shall continue to qualify
     for treatment as a RIC during its current taxable year,  which includes the
     Effective  Time;  it will  invest its assets at all times and  through  the
     Effective Time in a manner that ensures compliance with the foregoing;  and
     it has no earnings and profits accumulated in any taxable year in which the
     provisions of such Subchapter M did not apply to it.

(e)  The materials  included within the N-14  Registration  Statement when filed
     with the SEC, when Part A of the N-14 Registration Statement is distributed
     to shareholders,  at the time of the Target Fund shareholder meeting and at
     the Effective Time, insofar as they relate to the Trust and the Target Fund
     (i) shall, to the best of its knowledge and belief,  comply in all material
     respects with the  applicable  provisions of the 1933 Act and the 1940 Act,
     the rules and regulations  thereunder and state  securities  laws, and (ii)
     shall not contain any untrue  statement of a material fact or omit to state
     a material  fact  required to be stated  therein or  necessary  to make the
     statements made therein not misleading.

(f)  The Trust has duly  authorized  and  validly  issued  all of its issued and
     outstanding  shares of the Target  Fund and all of the  shares are  validly
     outstanding,  fully paid and  non-assessable,  and are offered for sale and
     sold in conformity  with the  registration  requirements  of all applicable
     federal  and  state  securities  laws.  There are no  outstanding  options,
     warrants or other rights to subscribe  for or purchase  Target Fund shares,
     nor are there any securities convertible into Target Fund shares.

(g)  The Trust  shall  operate the  business of the Target Fund in the  ordinary
     course between the date hereof and the Effective Time, it being agreed that
     such ordinary  course of business will include the  declaration and payment
     of customary  dividends and other distributions and any other distributions

                                     A-7


     deemed   advisable  in  anticipation  of  the   Reorganization   (including
     distributions  pursuant  to  Section  3(a)(2)  hereof).  From  the  date it
     commenced  operations  through the  Effective  Time,  the Target Fund shall
     conduct   its   "historic   business"   (within   the  meaning  of  Section
     1.368-1(d)(2) of the Regulations).

(h)  At the Effective Time, the Target Fund will have good and marketable  title
     to the  Assets  and full  right,  power  and  authority  to  sell,  assign,
     transfer, deliver and convey the Assets.

(i)  To the best of its knowledge and belief,  the Target Financial  Statements,
     copies of which have been previously delivered to the Trust, fairly present
     the  financial  position of the Target  Fund as of its most  recent  fiscal
     year-end  and the results of its  operations  and changes in its net assets
     for  the  periods  indicated.   The  Target  Financial  Statements  are  in
     accordance  with  generally  accepted  accounting  principles  consistently
     applied.

(j)  To the Knowledge of the Trust, the Target Fund has no liabilities,  whether
     or not determined or determinable,  other than the Liabilities disclosed or
     provided for in the Target Financial  Statements or Liabilities incurred in
     the  ordinary  course  of  business  subsequent  to the date of the  Target
     Financial Statements, and Liabilities set forth in the Assets List.

(k)  Other than the claims,  actions,  suits,  investigations or proceedings set
     forth on Schedule B, the Trust does not Know of any claims, actions, suits,
     investigations or proceedings of any type pending or threatened  against it
     or the Assets or its businesses.  The Trust does not Know of any facts that
     it  currently  has reason to  believe  are likely to form the basis for the
     institution of any such claim,  action,  suit,  investigation or proceeding
     against the Target Fund, except as disclosed on Schedule B. For purposes of
     this  provision,   investment   underperformance   or  negative  investment
     performance  shall not be deemed to  constitute  such facts,  provided  all
     required  performance  disclosures  have been made.  Other than the orders,
     decrees or  judgments  set forth on  Schedule  B, the Target  Fund is not a
     party to or subject to the  provisions of any order,  decree or judgment of
     any court or  governmental  body that adversely  affects,  or is reasonably
     likely to adversely affect, its financial condition, results of operations,
     business,  properties  or the  Assets  or its  ability  to  consummate  the
     transactions contemplated by the Plan.

(l)  Except for contracts,  agreements,  franchises, licenses or permits entered
     into or  granted  in the  ordinary  course  of its  business  or  listed in
     Schedule A, in each case under which no known material default exists,  the
     Trust  is  not a  party  to or  subject  to  any  material  contract,  debt
     instrument,  employee benefit plan, lease, franchise,  license or permit of
     any kind or nature whatsoever on behalf of the Target Fund.

                                       8


(m)  The Trust has filed the  federal  income tax  returns  of the Target  Fund,
     copies of which have been previously  delivered to PMFM  Investment  Trust,
     for all taxable  years to and  including  the Target  Fund's most  recently
     completed  taxable year,  and has paid all taxes  payable  pursuant to such
     returns. No such return is currently under audit and no assessment has been
     asserted with respect to such returns.

(n)  Since  the  date of the  Target  Financial  Statements,  there  has been no
     material adverse change in the financial condition,  results of operations,
     business,  properties or assets of the Target Fund.  For all purposes under
     this Plan,  investment  underperformance,  negative investment  performance
     and/or  investor  redemptions  shall  not be  considered  material  adverse
     changes,  provided all required performance disclosures have been made. The
     Target  Fund  incurred  the  Liabilities  in  the  ordinary  course  of its
     business.

(o)  Between the date of  inception of the Target Fund and the  Effective  Time,
     (a) neither the Target Fund nor any person "related" (within the meaning of
     section  1.368-1(e)(3)  of the Regulations) to it will have acquired Target
     Fund shares,  either  directly or through any  transaction,  agreement,  or
     arrangement with any other person,  with consideration other than Acquiring
     Fund  shares or Target  Fund  shares,  except  for shares  redeemed  in the
     ordinary  course of the Target  Fund's  business as a series of an open-end
     investment company as required by section 22(e) of the 1940 Act, and (b) no
     distributions will have been made with respect to Target Fund shares, other
     than normal,  regular  dividend  distributions  made pursuant to the Target
     Fund's  historic  dividend-paying  practice  and other  distributions  that
     qualify for the deduction for dividends paid (within the meaning of section
     561 of the Code) referred to in sections 852(a)(1) and 4982(c)(1)(A) of the
     Code.

(p)  Not more than 25% of the value of the Target Fund's total assets (excluding
     cash,  cash items,  U.S.  government  securities,  and  securities of other
     regulated investment  companies) is invested in the stock and securities of
     any one  issuer,  and not more  than 50% of the  value  of such  assets  is
     invested in the stock and securities of five or fewer issuers.

6.   Certain  Representations,  Warranties  and  Agreements  of PMFM  Investment
     Trust. PMFM Investment Trust, on behalf of itself and, as appropriate,  the
     Acquiring  Fund,  represents  and warrants to, and agrees with the Trust as
     follows:

(a)  PMFM  Investment  Trust is  organized  as a business  trust  duly  created,
     validly  existing  and in good  standing  under  the  laws of the  state of
     Delaware.  The  Board  of  Trustees  of  PMFM  Investment  Trust  has  duly
     established  and  designated  the  Acquiring  Fund  as  a  series  of  PMFM

                                       A-9


     Investment  Trust.  PMFM Investment  Trust is registered with the SEC as an
     open-end  management  investment  company  under  the  1940  Act,  and such
     registration  is  in  full  force  and  effect.   PMFM  Investment  Trust's
     Registration  Statement  relating to the  Acquiring  Fund will be effective
     with the SEC prior to the effectiveness of the N-14 Registration Statement.

(b)  PMFM Investment  Trust has the power and all necessary  federal,  state and
     local  qualifications  and  authorizations to own all of its properties and
     assets,  to carry on its business as now being  conducted  and described in
     its currently effective  Registration Statement on Form N-1A, to enter into
     this Plan and to consummate the transactions contemplated herein.

(c)  The Board of  Trustees of PMFM  Investment  Trust has duly  authorized  the
     execution  and  delivery  of this  Plan and the  transactions  contemplated
     herein. Duly authorized officers of PMFM Investment Trust have executed and
     delivered  this Plan.  Assuming due  execution and delivery of this Plan by
     the Trust, this Plan represents a valid and binding  contract,  enforceable
     in  accordance  with  its  terms,  subject  to the  effect  of  bankruptcy,
     insolvency, reorganization,  arrangement, moratorium and other similar laws
     of general applicability  relating to or affecting creditors' rights and to
     general  equity  principles.  The  execution and delivery of this Plan does
     not, and the  consummation  of the  transactions  contemplated by this Plan
     will not,  violate PMFM  Investment  Trust's  Agreement and  Declaration of
     Trust,  By-Laws or any Material  Agreement.  PMFM Investment Trust does not
     need to take any other action to authorize its officers to  effectuate  the
     Plan and the transactions contemplated herein.

(d)  The  Acquiring  Fund is a "fund" (as  defined in Section  851(g)(2)  of the
     Code); it shall qualify for treatment as a RIC under Part I of Subchapter M
     of Subtitle A, Chapter 1, of the Code, for its current taxable year,  which
     includes  the  Effective  Time;  it will invest its assets at all times and
     through the  Effective  Time in a manner that ensures  compliance  with the
     foregoing;  and it has no earnings and profits  accumulated  in any taxable
     year in which the provisions of such Subchapter M did not apply to it.

(e)  The materials  included within the N-14  Registration  Statement when filed
     with the SEC, when Part A of the N-14 Registration Statement is distributed
     to shareholders,  at the time of the Target Fund shareholder meeting and at
     the Effective  Time of the  Reorganization,  insofar as they relate to PMFM
     Investment  Trust and the  Acquiring  Fund (i) shall comply in all material
     respects with the  applicable  provisions of the 1933 Act and the 1940 Act,
     the rules and regulations  thereunder and state  securities  laws, and (ii)
     shall not contain any untrue  statement of a material fact or omit to state
     a material  fact  required to be stated  therein or  necessary  to make the
     statements made therein not misleading.

                                      A-10


(f)  There shall be no issued and outstanding shares of the Acquiring Fund prior
     to the Closing Date other than shares issued to PMFM Investment Trust, PMFM
     Inc., or its affiliates in order to approve certain Acquiring Fund start-up
     matters. When issued and delivered, the Acquiring Fund shares shall be duly
     and validly issued,  fully paid and  non-assessable,  and no shareholder of
     the  Acquiring  Fund shall have any  preemptive  right of  subscription  or
     purchase in respect of them. There are no outstanding options,  warrants or
     other rights to subscribe for or purchase  Acquiring  Fund shares,  nor are
     there any securities convertible into Acquiring Fund shares.

(g)  PMFM  Investment  Trust will not commence the  operations  of the Acquiring
     Fund (other than the issuance of initial shares and the approval of certain
     start-up matters) prior to the Effective Time.

(h)  PMFM  Investment  Trust  does  not  Know  of any  claims,  actions,  suits,
     investigations or proceedings of any type pending or threatened against the
     Acquiring  Fund or its assets or  businesses.  There are no facts that PMFM
     Investment  Trust  currently  has reason to believe  are likely to form the
     basis for the institution of any such claim, action, suit, investigation or
     proceeding against the Acquiring Fund. The Acquiring Fund is not a party to
     or subject to the provisions of any order,  decree or judgment of any court
     or governmental  body that adversely  affects,  or is reasonably  likely to
     adversely affect, its financial condition, results of operations, business,
     properties  or  assets  or  its  ability  to  consummate  the  transactions
     contemplated herein.

(i)  Except for contracts,  agreements,  franchises, licenses or permits entered
     into or granted in the ordinary course of its business,  in each case under
     which no known material  default  exists,  PMFM  Investment  Trust is not a
     party to or subject to any material  contract,  debt  instrument,  employee
     benefit  plan,  lease,  franchise,  license or permit of any kind or nature
     whatsoever on behalf of the Acquiring Fund.

(j)  No consideration other than Acquiring Fund shares (and the Acquiring Fund's
     assumption of the Liabilities) will be issued in exchange for the Assets in
     the Reorganization.

(k)  The Acquiring Fund has no plan or intention to issue  additional  Acquiring
     Fund shares  following the  Reorganization  except for shares issued in the
     ordinary  course  of its  business  as a series of an  open-end  investment
     company;  nor does the Acquiring Fund, or any person "related"  (within the
     meaning of section  1.368-1(e)(3)  of the Regulations) to it, have any plan
     or intention  to acquire -- during the  five-year  period  beginning at the
     Effective Time, either directly or through any transaction,  agreement,  or
     arrangement with any other person,  any Acquiring Fund shares issued to the

                                      A-11


     Target  Fund's  shareholders  pursuant  to the  Reorganization,  except for
     redemptions in the ordinary  course of such business as required by section
     22(e) of the 1940 Act.

(l)  Following  the  Reorganization,  the  Acquiring  Fund (a) will continue the
     Target  Fund's   "historic   business"   (within  the  meaning  of  section
     1.368-1(d)(2) of the Regulations) or (b) will use a significant  portion of
     the Target Fund's "historic business assets" (within the meaning of section
     1.368-1(d)(3) of the Regulations) in a business; in addition, the Acquiring
     Fund (c) has no plan or intention  to sell or  otherwise  dispose of any of
     the Assets,  except for  dispositions  made in the ordinary  course of that
     business and dispositions necessary to maintain its status as a RIC and (d)
     expects  to  retain  substantially  all the  Assets  in the same form as it
     receives them in the Reorganization, unless and until subsequent investment
     circumstances suggest the desirability of change or it becomes necessary to
     make dispositions thereof to maintain such status.

(m)  There is no plan or  intention  for the  Acquiring  Fund to be dissolved or
     merged into another  business  trust or a corporation or any "fund" thereof
     (as defined in section 851(g)(2) of the Code) following the Reorganization.

(n)  Immediately after the Reorganization, (a) not more than 25% of the value of
     the  Acquiring  Fund's  total  assets  (excluding  cash,  cash items,  U.S.
     government  securities,   and  securities  of  other  regulated  investment
     companies)  will be invested in the stock and  securities of any one issuer
     and (b) not more than 50% of the value of such  assets  will be invested in
     the stock and securities of five or fewer issuers.

(o)  The  Acquiring  Fund  does  not  directly  or  indirectly  own,  nor at the
     Effective  Time 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
     Target Fund.

(p)  During the  five-year  period  ending at the  Effective  Time,  neither the
     Acquiring  Fund nor any person  "related"  (within  the  meaning of section
     1.368-1(e)(3)  of the  Regulations)  to it will have  acquired  Target Fund
     shares with consideration other than Acquiring Fund shares.

(q)  PMFM Investment  Trust has made all state filings to register the Acquiring
     Fund in each jurisdiction that the Target Fund is currently  registered and
     all  necessary  steps have been  taken  under all  relevant  jurisdictions'
     securities laws to consummate the Reorganization.

                                      A-12


(r)  The fair  market  value of the  Acquiring  Fund  shares  each  Target  Fund
     shareholder  receives  will be equal to the fair market value of the Target
     Fund shares it surrenders in exchange therefor.

(s)  A majority of the trustees of the PMFM Investment Trust are not "interested
     persons" of the Acquiring Fund and those trustees are  responsible  for the
     nomination and selection of any other disinterested trustees; and

(t)  To its knowledge,  no circumstances  arising from the Reorganization  might
     result in an "unfair  burden" (as that term is defined in Section  15(f) of
     the 1940 Act) being imposed on the Acquiring Fund.

6A.  Additional Representations, Warranties and Agreements of the Trust and PMFM
     Investment  Trust. The Trust, on behalf of itself and, as appropriate,  the
     Target Fund,  represents and warrants to, and agrees with,  PMFM Investment
     Trust, and PMFM Investment  Trust, on behalf of itself and, as appropriate,
     the Acquiring Fund, represents and warrants to, and agrees with, the Trust,
     as follows:

(a)  The  respective  management of the Trust and PMFM  Investment  Trust (a) is
     unaware,  without making independent  inquiry,  of any plan or intention of
     the Target Fund's  shareholders to redeem, sell or otherwise dispose of (i)
     any portion of their Target Fund shares  before the  Reorganization  to any
     person  "related"  (within  the  meaning  of section  1.368-1(e)(3)  of the
     Regulations)  to either the  Acquiring  Fund or the Target Fund or (ii) any
     portion of the Acquiring Fund shares they receive in the  Reorganization to
     any person "related"  (within such meaning) to the Acquiring Fund, (b) does
     not anticipate  dispositions  of those Acquiring Fund shares at the time of
     or soon after the  Reorganization to exceed the usual rate and frequency of
     dispositions  of  shares  of the  Target  Fund as a series  of an  open-end
     investment  company,  (c)  expects  that  the  percentage  of  Target  Fund
     shareholder  interests,  if any, that will be disposed of as a result of or
     at the  time of the  Reorganization  will be de  minimis,  and (d) does not
     anticipate  that there will be  extraordinary  redemptions  of Target  Fund
     shares immediately following the Reorganization.

(b)  There is no  intercompany  indebtedness  between the Acquiring Fund and the
     Target Fund that was issued or acquired, or will be settled, at a discount.

(c)  None of the compensation  received by any Target Fund shareholder who is an
     employee  of or  service  provider  to the  Target  Fund  will be  separate
     consideration  for,  or  allocable  to, any of the Target  Fund shares that
     shareholder  held;  none of the Acquiring Fund shares any such  shareholder
     receives  will  be  separate   consideration  for,  or  allocable  to,  any

                                      A-13


     employment  agreement,  investment  advisory  agreement  or  other  service
     agreement;  and the consideration  paid to any such shareholder will be for
     services  actually  rendered and will be commensurate  with amounts paid to
     third parties bargaining at arm's-length for similar services.

(d)  The aggregate  value of the  acquisitions,  redemptions  and  distributions
     limited by  Sections  5(p),  6(k) and 6(p) will not exceed 50% of the value
     (without   giving   effect   to   such   acquisitions,   redemptions,   and
     distributions)  of the  proprietary  interest  in the  Target  Fund  at the
     Effective Time.

(e)  The shareholders of the Target Fund will receive no consideration  pursuant
     to the Reorganization other than Acquiring Fund shares.

7.   Conditions to the Trust's  Obligations.  The  obligations  of the Trust set
     forth herein shall be subject to the following conditions precedent:

(a)  PMFM Investment Trust shall have duly executed and delivered its applicable
     Reorganization Documents to the Trust.

(b)  The Target Fund's  shareholders shall have approved this Plan in the manner
     required by the Trust's Trust  Instrument,  Bylaws,  and applicable law. If
     the Target Fund  shareholders fail to approve this Plan, that failure shall
     release the Trust of its obligations under this Plan.

(c)  PMFM Investment Trust shall have delivered to the Trust a certificate dated
     as of the  Closing  Date  and  executed  in its  name by the  Secretary  or
     Assistant  Secretary  of  PMFM  Investment  Trust,  in  a  form  reasonably
     satisfactory to the Trust,  stating that the representations and warranties
     of PMFM Investment  Trust in this Plan are true and correct in all material
     respects at and as of the Effective Time.

(d)  The Trust shall have  received an opinion of Kilpatrick  Stockton,  LLP, as
     counsel  to  PMFM  Investment  Trust,  in  form  and  substance  reasonably
     satisfactory  to the Trust and dated as of the Closing Date,  substantially
     to the effect that:

     (1)  PMFM  Investment  Trust is a  business  trust  duly  created,  validly
          existing and in good standing  under the laws of the state of Delaware
          and is an open-end, management investment company registered under the
          1940 Act;

     (2)  The Plan has been duly  authorized,  executed  and  delivered  by PMFM
          Investment  Trust,  and assuming  due  authorization,  execution,  and
          delivery  of this  Plan by the Trust on  behalf  of the  Target  Fund,
          represents  a  legal,  valid  and  binding  contract,  enforceable  in
          accordance  with its  terms,  subject  to the  effect  of  bankruptcy,

                                      A-14


          insolvency, moratorium, fraudulent conveyance and transfer and similar
          laws relating to or affecting  creditors'  rights  generally and court
          decisions with respect thereto, and further subject to the application
          of equitable principles in any proceeding, whether at law or in equity
          or with respect to the  enforcement of provisions of the Plan, and the
          effect of judicial  decisions which have held that certain  provisions
          are  unenforceable  when their  enforcement  would  violate an implied
          covenant  of good  faith  and fair  dealing  or would be  commercially
          unreasonable or when default under the Plan is not material;

     (3)  The shares of the  Acquiring  Fund to be  delivered as provided for by
          this  Plan  are duly  authorized  and upon  delivery  will be  validly
          issued, fully paid and non-assessable by PMFM Investment Trust;

     (4)  The execution and delivery of this Plan did not, and the  consummation
          of the  Reorganization  will  not,  violate  PMFM  Investment  Trust's
          Agreement  and  Declaration  of  Trust  or  By-Laws  or  any  Material
          Agreement to which PMFM Investment  Trust is a party or by which it is
          bound; and

     (5)  To the Knowledge of such counsel, no consent, approval,  authorization
          or order of any court or  governmental  authority  is required for the
          consummation by PMFM Investment Trust of the Reorganization or for the
          execution  and  delivery  of  the  Acquiring   Fund's   Reorganization
          Documents,  except those that have been  obtained  under the 1933 Act,
          the 1940 Act and the rules and  regulations  under  those Acts or that
          may be  required  under state  securities  laws or  subsequent  to the
          Effective  Time or when the failure to obtain the  consent,  approval,
          authorization or order would not have a material adverse effect on the
          operation of the Acquiring Fund.

          In rendering such opinion, such counsel may (i) rely on the opinion of
          other  counsel  to the  extent  set forth in such  opinion,  (ii) make
          assumptions regarding the authenticity,  genuineness and/or conformity
          of  documents  and copies  thereof  without  independent  verification
          thereof, (iii) limit such opinion to applicable federal and state law,
          (iv)  define  the  word  "Knowledge"  and  related  terms  to mean the
          Knowledge  of   attorneys   then  with  such  firm  who  have  devoted
          substantive attention to matters directly related to this Plan and (v)
          rely on certificates of officers or trustees of PMFM Investment Trust.

(e)  The Trust shall have  received an opinion of  Kilpatrick  Stockton LLP with
     respect to the tax matters specified in Section 8(e) addressed to the Trust

                                      A-15


     and PMFM Investment Trust in form and substance reasonably  satisfactory to
     them,  and dated as of the Closing Date (the "Tax  Opinion").  In rendering
     the Tax Opinion,  such counsel may rely as to factual matters,  exclusively
     and without independent verification, on the representations and warranties
     made in this Plan,  which such  counsel  may treat as  representations  and
     warrantees  made to it, and in separate  letters  addressed to such counsel
     and  certificates  delivered  pursuant to this Plan.  The Tax Opinion shall
     comprise  substantively  the information  listed under Section  8(e)(1)-(7)
     based on the  facts and  assumptions  stated  therein  and  conditioned  on
     consummation  of the  Reorganization  in  accordance  with this  Plan,  for
     federal income tax purposes.

(f)  The N-14 Registration  Statement shall have become effective under the 1933
     Act as to  the  Acquiring  Fund's  shares,  and  the  SEC  shall  not  have
     instituted or, to the Knowledge of the Trust, contemplated instituting, any
     stop order suspending the effectiveness of the N-14 Registration Statement.

(g)  No action,  suit or other  proceeding shall be threatened or 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 the
     Reorganization.

(h)  The SEC shall not have issued any unfavorable advisory report under Section
     25(b) of the 1940 Act nor  instituted  any  proceeding  seeking  to  enjoin
     consummation of the Reorganization under Section 25(c) of the 1940 Act.

(i)  PMFM  Investment  Trust shall have  performed  and complied in all material
     respects with each of its agreements and covenants required by this Plan to
     be performed or complied with by it prior to or at the  Valuation  Time and
     Effective Time.

(j)  The Trust shall have  received from PMFM  Investment  Trust a duly executed
     instrument  whereby the Acquiring Fund assumes all of the Liabilities of or
     attributable to the Target Fund.

(k)  Neither  party shall have  terminated  this Plan  pursuant to Section 10 of
     this Plan.

(l)  The Trust shall have received a certificate from:

     (1)  MurphyMorris  Money Management Co.,  investment advisor for the Target
          Fund  ("MurphyMorris"),  stating  that it will pay all of the fees and
          expenses  incurred by the Trust,  the Target Fund, the PMFM Investment
          Trust and the Acquiring  Fund in connection  with the  Reorganization,
          including  all  legal  fees  and  expenses  in  connection   with  (i)

                                      A-16


          preparing,  filing  and  processing  of  the  Form  N-14  Registration
          Statement in connection with this Plan; (ii) obtaining opinion letters
          in  connection  with this Plan,  (iii)  printing and mailing the proxy
          statement to  shareholders of the Target Fund; and (iv) the closing of
          the Reorganization (collectively the "Reorganization Expenses"); and

     (2)  PMFM, Inc., investment advisor for the Acquiring Fund, stating that it
          will pay expenses  incurred by PMFM Investment Trust and the Acquiring
          Fund  in   connection   with  the   Reorganization   other   than  the
          Reorganization Expenses (if any).

(m)  The parties shall have received  such  assurances as they deem  appropriate
     with  respect to the audited  and pro forma  financial  information  of the
     Acquiring  Fund and the  Target  Fund  contained  in the N-14  Registration
     Statement.

8.   Conditions to PMFM Investment Trust's Obligations.  The obligations of PMFM
     Investment  Trust  set  forth  herein  shall be  subject  to the  following
     conditions precedent:

(a)  The  Trust  shall  have  duly  executed  and   delivered   its   applicable
     Reorganization Documents to PMFM Investment Trust.

(b)  The Target Fund's  shareholders shall have approved this Plan in the manner
     required by the Trust's Trust Instrument, Bylaws and applicable law. If the
     Target Fund  shareholders  fail to approve this Plan,  that  failure  shall
     release PMFM Investment  Trust's  obligations with respect to the Acquiring
     Fund under this Plan.

(c)  The Trust shall have delivered to PMFM Investment Trust a certificate dated
     as of the Closing Date and executed in its name by the Trust's Secretary or
     Assistant Secretary,  in a form reasonably  satisfactory to PMFM Investment
     Trust, stating that the representations and warranties of the Trust in this
     Plan  are  true  and  correct  in all  material  respects  at and as of the
     Effective Time.

(d)  PMFM Investment Trust shall have received an opinion of Kilpatrick Stockton
     LLP, as counsel to the Trust, in form and substance reasonably satisfactory
     to PMFM Investment Trust and dated as of the Closing Date, substantially to
     the effect that:

     (1)  The  Trust  is a  Delaware  business  trust  duly  organized,  validly
          existing and in good standing  under the laws of the State of Delaware

                                      A-17


          and is an open-end, management investment company registered under the
          1940 Act;

     (2)  The Plan has been duly authorized, executed and delivered by the Trust
          and, assuming due  authorization,  execution and delivery of this Plan
          by PMFM Investment Trust on behalf of the Acquiring Fund, represents a
          legal, valid and binding contract,  enforceable in accordance with its
          terms,  subject to the effect of bankruptcy,  insolvency,  moratorium,
          fraudulent  conveyance  and transfer  and similar laws  relating to or
          affecting creditors' rights generally and court decisions with respect
          thereto,   and  further   subject  to  the  application  of  equitable
          principles  in any  proceeding,  whether  at law or in  equity or with
          respect to the  enforcement  of provisions of the Plan, and the effect
          of judicial  decisions  which have held that  certain  provisions  are
          unenforceable when their enforcement would violate an implied covenant
          of good faith and fair dealing or would be  commercially  unreasonable
          or when default under the Plan is not material;

     (3)  The execution and delivery of this Plan did not, and the  consummation
          of the  Reorganization  will  not,  violate  the Trust  Instrument  or
          By-Laws of the Trust or any Material Agreement to which the Trust is a
          party or by which it is bound; and

     (4)  To the Knowledge of such counsel, no consent, approval,  authorization
          or order of any court or  governmental  authority  is required for the
          consummation by the Trust of the  Reorganization  or the execution and
          delivery of the Target Fund's Reorganization  Documents,  except those
          that have been obtained under the 1933 Act, the 1940 Act and the rules
          and  regulations  under those Acts or that may be required under state
          securities  laws or  subsequent  to the  Effective  Time  or when  the
          failure to obtain the consent, approval,  authorization or order would
          not have a  material  adverse  effect on the  operation  of the Target
          Fund.

          In rendering such opinion, such counsel may (i) rely on the opinion of
          other  counsel  to the  extent  set forth in such  opinion,  (ii) make
          assumptions regarding the authenticity,  genuineness and/or conformity
          of  documents  and copies  thereof  without  independent  verification
          thereof, (iii) limit such opinion to applicable federal and state law,
          (iv)  define  the  word  "Knowledge"  and  related  terms  to mean the
          Knowledge  of   attorneys   then  with  such  firm  who  have  devoted
          substantive attention to matters directly related to this Plan and (v)
          rely on certificates of officers or trustees of the Trust.

                                      A-18


(e)  PMFM  Investment  Trust shall have  received the Tax Opinion of  Kilpatrick
     Stockton LLP addressed to the Trust and PMFM  Investment  Trust in form and
     substance reasonably  satisfactory to them dated as of the Closing Date, as
     to the federal income tax  consequences  mentioned  below. In rendering the
     Tax Opinion,  such counsel may rely as to factual matters,  exclusively and
     without  independent  verification,  on the  representations and warranties
     made in this Plan,  which such  counsel  may treat as  representations  and
     warranties  made to it, and in separate  letters  addressed to such counsel
     and certificates  delivered pursuant to this Plan. The Tax Opinion shall be
     substantially to the effect that, based on the facts and assumptions stated
     therein and conditioned on consummation of the Reorganization in accordance
     with this Plan, for federal income tax purposes:

     (1)  The Reorganization  will qualify as a "reorganization"  (as defined in
          Code Section 368(a)),  and the Acquiring Fund and the Target Fund each
          will be a "party to a  reorganization"  (within  the  meaning  of Code
          Section 368(b)).

     (2)  The Target Fund  shareholders  will recognize no gain or loss on their
          receipt of  Acquiring  Fund shares in exchange  for their  Target Fund
          shares pursuant to the Reorganization.

     (3)  The Target Fund will  recognize no gain or loss on the transfer of all
          of the Assets to the  Acquiring  Fund solely in exchange for Acquiring
          Fund  shares  and  the   assumption  by  the  Acquiring  Fund  of  the
          Liabilities  pursuant to the  Reorganization or on its distribution of
          those  shares  to its  shareholders  pursuant  to its  liquidation  in
          exchange for their Target Fund shares.

     (4)  The Acquiring Fund will  recognize no gain or loss on its  acquisition
          of all of the Assets solely in exchange for the Acquiring  Fund shares
          and its assumption of the Liabilities.

     (5)  The aggregate tax basis in the Acquiring Fund shares  received by each
          Target Fund shareholder  pursuant to the Reorganization will equal the
          aggregate tax basis of the Target Fund shares  surrendered in exchange
          therefore,  and the  shareholder's  holding period for those Acquiring
          Fund shares will  include  the period  that the  shareholder  held the
          Target Fund shares exchanged therefore,  provided that the shareholder
          held such Target Fund shares as a capital asset at the Effective Time.

     (6)  The Acquiring  Fund's basis in the Assets will equal the Target Fund's
          basis in the Assets  immediately  before the  Reorganization,  and the

                                      A-19


          Acquiring Fund's holding period for the Assets will include the period
          during which the Target Fund held the Assets.

     (7)  The Acquiring  Fund will succeed to and take into account the items of
          the Target  Fund  described  in Code  Section  381(c),  including  the
          earnings  and  profits,  or deficit in earnings  and  profits,  of the
          Target Fund as of the Effective  Time.  The  Acquiring  Fund will take
          these items into account  subject to the  conditions  and  limitations
          specified  in Code  Sections  381,  382,  383  and 384 and  applicable
          regulations thereunder.

(f)  The N-14 Registration  Statement shall have become effective under the 1933
     Act as to  the  Acquiring  Fund's  shares,  and  the  SEC  shall  not  have
     instituted  or, to the  Knowledge of PMFM  Investment  Trust,  contemplated
     instituting,  any  stop  order  suspending  the  effectiveness  of the N-14
     Registration Statement.

(g)  No action,  suit or other  proceeding shall be threatened or 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  the
     Reorganization.

(h)  The SEC shall not have issued any unfavorable advisory report under Section
     25(b) of the 1940 Act nor  instituted  any  proceeding  seeking  to  enjoin
     consummation of the Reorganization under Section 25(c) of the 1940 Act.

(i)  The Trust shall have  performed and complied in all material  respects with
     each of its agreements and covenants  required by this Plan to be performed
     or  complied  with by it prior to or at the  Valuation  Time and  Effective
     Time.

(j)  Neither  party shall have  terminated  this Plan  pursuant to Section 10 of
     this Plan.

(k)  PMFM Investment Trust shall have received a certificate from:

     (1)  MurphyMorris stating that it will pay the Reoganization Expenses; and

     (2)  PMFM,  stating  that  it  will  pay  the  expenses  incurred  by  PMFM
          Investment  Trust  and the  Acquiring  Fund  in  connection  with  the
          Reorganization other than the Reorganization Expenses.

(l)  The parties shall have received  such  assurances as they deem  appropriate
     with  respect to the audited  and pro forma  financial  information  of the

                                      A-20


     Acquiring  Fund and the  Target  Fund  contained  in the N-14  Registration
     Statement.

9.   Survival  of  Representations  and  Warranties.   The  representations  and
     warranties  of the  parties  hereto  shall  survive the  completion  of the
     transactions contemplated herein.

10.  Termination  of  Plan.  A  majority  of a  party's  Board of  Trustees  may
     terminate this Plan, by giving notice to the other party at any time before
     the Effective  Time if: (i) the party's  conditions  precedent set forth in
     Sections 7 or 8, as  appropriate,  are not  satisfied  or (ii) the Board of
     Trustees  determines that the consummation of the  Reorganization is not in
     the best interests of shareholders.

11.  Governing Law. This Plan and the transactions  contemplated hereby shall be
     governed,  construed and enforced in accordance  with the laws of the State
     of Delaware,  except to the extent preempted by federal law, without regard
     to conflicts of law principles.

12.  Brokerage  Fees.  Each  party  represents  and  warrants  that there are no
     brokers or finders  entitled to receive any payments  from the Trust,  PMFM
     Investment  Trust, the Target Fund or the Acquiring Fund in connection with
     the transactions provided for in this Plan.

13.  Amendments.  The parties may, by agreement in writing  authorized  by their
     respective Boards of Trustees,  amend this Plan at any time before or after
     the Target Fund's shareholders approve this Plan. However, after the Target
     Fund shareholders approve this Plan, the parties may not amend this Plan in
     a manner  that  materially  alters  the  obligations  of either  party with
     respect to the  Reorganization.  The parties shall not deem this Section to
     preclude  them from  changing  the Closing  Date or the  Effective  Time by
     mutual agreement.

14.  Waivers. At any time prior to the Closing Date, either party may by written
     instrument  signed by it (i) waive the  effect of any  inaccuracies  in the
     representations  and warranties made to it contained  herein and (ii) waive
     compliance with any of the agreements, covenants or conditions made for its
     benefit  contained  herein.  The parties  agree that any waiver shall apply
     only to the particular inaccuracy or requirement for compliance waived, and
     not any other or future inaccuracy or lack of compliance.

15.  Cooperation  and Further  Assurances.  Each party will  cooperate  with the
     other in fulfilling its  obligations  under this Plan and will provide such
     information and  documentation  as is reasonably  requested by the other in
     carrying  out this  Plan's  terms.  Each party will  provide  such  further

                                      A-21


     assurances  concerning the  performance of obligations  under this Plan and
     the consummation of the  Reorganization  as the other shall deem necessary,
     advisable or appropriate.

16.  Updating  of N-14  Registration  Statement.  If at any  time  prior  to the
     Effective Date, a party becomes aware of any material  information  that is
     not reflected in the N-14 Registration Statement, the party discovering the
     information  shall  promptly  notify the other party and the parties  shall
     cooperate in promptly preparing,  filing and clearing with the SEC, and, if
     appropriate,  distributing  to  shareholders  appropriate  disclosure  with
     respect to the information.

17.  Limitation on Liabilities.  The obligations of the Trust,  the Target Fund,
     PMFM  Investment  Trust,  and the Acquiring  Fund shall not bind any of the
     Trustees,  shareholders,  nominees,  officers,  agents, or employees of the
     Trust or PMFM Investment Trust  personally,  but shall bind only the assets
     and property of the Target Fund and the Acquiring Fund,  respectively.  The
     execution and delivery of this Plan by the parties'  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 Assets and the
     property of the Target Fund or Acquiring Fund, as appropriate.

18.  Notices. Any notice, report,  statement,  certificate or demand required or
     permitted  by any  provision  of this Plan shall be in writing and shall be
     given by prepaid telegraph,  telecopy,  certified mail or overnight express
     courier to:

     For the Trust:

                      Jack E. Brinson, Chairman
                      MurphyMorris Investment Trust
                      1105 Panola Street
                      Tarboro, NC  27886

     With copies to:
                      MurphyMorris Investment Trust
                      C/O The Nottingham Company
                      P.O. Drawer 69
                      116 S. Franklin Street
                      Rocky Mount, NC 27802

                      Beth R. MacDonald, Esq. (counsel for independent trustees)
                      Alston & Bird LLP
                      Bank of America Plaza
                      101 South Tryon Street, Suite 4000
                      Charlotte, NC 28280


                                      A-22


     For PMFM Investment Trust:
                      Donald L. Beasley, Chairman
                      PMFM Investment Trust
                      1551 Jennings Mill Road
                      Suite 2400A
                      Bogart, GA  30622


     With copies to:
                      PMFM Investment Trust
                      C/O The Nottingham Company
                      P.O. Drawer 69
                      116 S. Franklin Street
                      Rocky Mount, NC 27802

                      Jeffrey T. Skinner, Esq.
                      Kilpatrick Stockton LLP
                      3737 Glenwood Avenue
                      Suite 400
                      Raleigh, North Carolina  27612

19.  Indemnification. (a) The Trust will indemnify and hold harmless, out of the
     assets of the Target Fund but no other assets, the PMFM Trust, its trustees
     and its  officers  (for  purposes of this  subparagraph,  the  "Indemnified
     Parties")  against  any and  all  expenses,  losses,  claims,  damages  and
     liabilities  at any time imposed upon or reasonably  incurred by any one or
     more of the  Indemnified  Parties in  connection  with,  arising out of, or
     resulting  from any claim,  action,  suit or proceeding in which any one or
     more of the  Indemnified  Parties  may be involved or with which any one or
     more of the  Indemnified  Parties may be threatened by reason of any untrue
     statement or alleged  untrue  statement of a material  fact relating to the
     Trust  contained in the N-14  Registration  Statement,  or any amendment or
     supplement  thereto,  or arising  out of, or based  upon,  the  omission or
     alleged  omission to state in any of the foregoing a material fact relating
     to the  Trust  required  to be  stated  therein  or  necessary  to make the
     statements relating to the Trust therein not misleading, including, without

                                      A-23


     limitation,  any amounts paid by any one or more of the Indemnified Parties
     in a reasonable compromise or settlement of any such claim, action, suit or
     proceeding,  or threatened claim,  action, suit or proceeding made with the
     consent of the Trust.  The  Indemnified  Parties  will  notify the Trust in
     writing  within  ten  days  after  the  receipt  by any  one or more of the
     Indemnified  Parties  of any notice of legal  process  or any suit  brought
     against or claim made  against  such  Indemnified  Party as to any  matters
     covered by this Section  19(a).  The Trust shall be entitled to participate
     at its own expense in the defense of any claim,  action, suit or proceeding
     covered  by this  Section  19(a),  or,  if it so  elects,  to assume at its
     expense by counsel  satisfactory to the Indemnified  Parties the defense of
     any such claim,  action,  suit or  proceeding,  and, if the Trust elects to
     assume  such  defense,   the  Indemnified  Parties  shall  be  entitled  to
     participate in the defense of any such claim, action, suit or proceeding at
     their expense. The Trust's obligation under this Section 19(a) to indemnify
     and hold harmless the Indemnified  Parties shall  constitute a guarantee of
     payment  so that the Trust  will pay in the first  instance  any  expenses,
     losses,  claims,  damages and  liabilities  required to be paid by it under
     this Section 19(a) without the necessity of the Indemnified  Parties' first
     paying the same.

     (b) The PMFM Investment Trust will indemnify and hold harmless,  out of the
     assets of the Acquiring Fund but no other assets,  the Trust,  its trustees
     and its  officers  (for  purposes of this  subparagraph,  the  "Indemnified
     Parties")  against  any and  all  expenses,  losses,  claims,  damages  and
     liabilities  at any time imposed upon or reasonably  incurred by any one or
     more of the  Indemnified  Parties in  connection  with,  arising out of, or
     resulting  from any claim,  action,  suit or proceeding in which any one or
     more of the  Indemnified  Parties  may be involved or with which any one or
     more of the  Indemnified  Parties may be threatened by reason of any untrue
     statement or alleged  untrue  statement of a material  fact relating to the
     PMFM Investment Trust contained in the N-14 Registration  Statement, or any
     amendment  or  supplement  thereto,  or arising out of, or based upon,  the
     omission or alleged  omission  to state in any of the  foregoing a material
     fact relating to the PMFM Investment Trust required to be stated therein or
     necessary  to make the  statements  relating to the PMFM  Investment  Trust
     therein not misleading,  including without limitation,  any amounts paid by
     any one or more of the  Indemnified  Parties in a reasonable  compromise or
     settlement of any such claim,  action,  suit or  proceeding,  or threatened
     claim,  action,  suit or  proceeding  made  with  the  consent  of the PMFM
     Investment  Trust. The Indemnified  Parties will notify the PMFM Investment
     Trust in writing  within  ten days after the  receipt by any one or more of
     the Indemnified  Parties of any notice of legal process or any suit brought
     against or claim made  against  such  Indemnified  Party as to any  matters
     covered by this Section 19(b).  The PMFM Investment Trust shall be entitled

                                      A-24


     to participate at its own expense in the defense of any claim, action, suit
     or proceeding covered by this Section 19(b), or, if it so elects, to assume
     at its  expense by counsel  satisfactory  to the  Indemnified  Parties  the
     defense of any such claim,  action,  suit or  proceeding,  and, if the PMFM
     Investment  Trust elects to assume such defense,  the  Indemnified  Parties
     shall be entitled to participate in the defense of any such claim,  action,
     suit or  proceeding  at their  own  expense.  The PMFM  Investment  Trust's
     obligation  under this  Section  19(b) to indemnify  and hold  harmless the
     Indemnified  Parties  shall  constitute  a guarantee of payment so that the
     PMFM Investment Trust will pay in the first instance any expenses,  losses,
     claims,  damages  and  liabilities  required  to be paid by it  under  this
     Section  19(b)  without the  necessity of the  Indemnified  Parties'  first
     paying the same.

20.  General.  This Plan  supersedes  all prior  agreements  between the parties
     (written or oral), is intended as a complete and exclusive statement of the
     terms of the  agreement  between  the  parties  and may not be  changed  or
     terminated orally. The parties may execute this Plan in counterparts, which
     shall be considered one and the same agreement,  and shall become effective
     when the counterparts  have been executed by and delivered to both parties.
     The headings  contained in this Plan are for  reference  only and shall not
     affect in any way the meaning or  interpretation  of this Plan.  Nothing in
     this Plan,  expressed or implied,  confers upon any other person any rights
     or remedies under or by reason of this Plan. This Plan shall bind and inure
     to the benefit of the parties  hereto and their  respective  successors and
     assigns,  but neither  party may assign or transfer any right or obligation
     under this Plan without the written consent of the other party.





                                      A-25


     IN WITNESS  WHEREOF,  the parties hereto have caused their duly  authorized
officers  designated  below to execute  this Plan as of the date  first  written
above.


                                                 MurphyMorris Investment Trust
ATTEST:



_____________________________________            By: __________________________
  Name: Julian G. Winters                            Name:  Gregory L. Morris
  Title:  Secretary                                  Title: President



                                                 PMFM Investment Trust for
                                                 itself and on  behalf of PMFM
                                                 Core Advantage Portfolio Trust
ATTEST:



_____________________________________            By: __________________________
  Name: Julian G. Winters                            Name:  Timothy A. Chapman
  Title:  Secretary                                  Title: President














                                      A-26


                                     PART B

                  RELATING TO THE ACQUISITION OF THE ASSETS OF
                          THE MURPHYMORRIS ETF FUND OF
                        THE MURPHYMORRIS INVESTMENT TRUST
                      1551 JENNINGS MILL ROAD - SUITE 2400A
                                BOGART, GA 30622

                      BY AND IN EXCHANGE FOR SHARES OF THE
                   THE PMFM CORE ADVANTAGE PORTFOLIO TRUST OF
                            THE PMFM INVESTMENT TRUST
                      551 JENNINGS MILL ROAD - SUITE 2400A
                                BOGART, GA 30622

       ------------------------------------------------------------------
                       STATEMENT OF ADDITIONAL INFORMATION

                              _______________, 2005
       ------------------------------------------------------------------

     This Statement of Additional  Information is available to the  shareholders
of the MurphyMorris ETF Fund ("MurphyMorris  Fund) in connection with a proposed
transaction  whereby all of the assets and liabilities of the MurphyMorris  Fund
will be transferred to the PMFM Core Advantage  Portfolio Trust ("PMFM Fund") in
exchange for shares of beneficial interest of the PMFM Fund.

     This  Statement of Additional  Information  consists of this cover page and
the  following  documents,  each of  which  was  filed  electronically  with the
Securities and Exchange Commission and is incorporated by reference herein:

     1. The Statement of Additional Information for the PMFM Fund dated March 7,
     2005; and

     2. The Statement of Additional  Information for the MurphyMorris Fund dated
     September 28, 2004;

     3. The  Financial  Statements  of the PMFM Fund as  included  in the Fund's
     Annual  Report  filed for the year ended May 31,  2004;  and the  Financial
     Statements of the PMFM Fund as included in the Semi-Annual Report filed for
     the period ended November 30, 2004.

     4. The  Financial  Statements of the  MurphyMorris  Fund as included in the
     Fund's  Annual  Report  filed for the period  ended May 31,  2004;  and the
     Financial   Statements  of  the  MurphyMorris   Fund  as  included  in  the
     Semi-Annual Report filed for the period ended November 30, 2004.

     This  Statement of  Additional  Information  is not a  prospectus.  A Proxy
Statement/Prospectus  dated __________,  2005 relating to the  reorganization of
the MurphyMorris  Fund may be obtained,  without charge,  by writing to The PMFM
Fund, PMFM Trust, c/o NC Shareholder  Services,  116 South Franklin Street, Post
Office Box 4365, Rocky Mount, North Carolina  27803-0365 or by calling toll-free

                                      B-1


1-866-383-7636.  This  Statement  of  Additional  Information  should be read in
conjunction with the Proxy Statement/Prospectus.

ADDITIONAL INFORMATION REGARDING MURPHYMORRIS PORTFOLIO MANAGEMENT TEAM

MurphyMorris Money Management Co.  ("MurphyMorris") is the investment adviser to
the  MurphyMorris  Fund.  Mr.  Beasley  and Mr.  Chapman  are the members of the
portfolio  management  team  for the  MurphyMorris  Fund.  As  explained  in the
Prospectus,  Mr. Beasley and Mr. Chapman are also  co-founders  and  controlling
shareholders of PMFM, Inc.  (investment adviser to the PMFM Fund) and members of
the PMFM portfolio management team.

Other Accounts  Managed.  MurphyMorris  does not have any client  accounts other
than the MurphyMorris Fund account.  However, Mr. Beasley and Mr. Chapman manage
other accounts as part of PMFM as members of the portfolio  management teams for
other PMFM mutual funds,  including the PMFM Managed  Portfolio  Trust, the PMFM
Tactical Preservation Trust, the PMFM Tactical Opportunities Portfolio Trust and
the PMFM Fund. In addition,  Mr. Beasley and Mr. Chapman are members of the PMFM
portfolio  management team for separate  account clients of PMFM  (approximately
___ accounts as of March __, 2005). PMFM does not receive performance-based fees
with respect to any of these funds or accounts.

Potential  Conflicts of Interest.  Actual or apparent  conflicts of interest may
arise when a portfolio manager has day-to-day  management  responsibilities with
respect to more than one fund or other account (each an "Account"):

     o    In general,  Accounts  managed by MurphyMorris and PMFM focus on a set
          of distinct investment  disciplines,  so that the Accounts in the same
          discipline are managed in  substantially  the same manner and may hold
          many of the  same  securities  at the  same  time.  Nevertheless,  the
          management of multiple  Accounts may give rise to potential  conflicts
          of interest for Mr. Beasley and Mr. Chapman to the extent the Accounts
          are in different disciplines or have different objectives, strategies,
          benchmarks,   time  horizons,  tax  considerations,   fees  or  client
          restrictions.  Mr. Beasley and Mr. Chapman seek to allocate their time
          and  investment  ideas across the  different  Accounts they manage for
          MurphyMorris  and  PMFM,  but  there  can  be no  guarantee  that  the
          MurphyMorris Fund will not be disadvantaged from time to time.

     o    Because Accounts have different  investment  disciplines,  objectives,
          strategies,  benchmarks,  time horizons,  tax considerations,  fees or
          client  restrictions,  there may be times when different Accounts hold
          different  securities.  These  conditions  may give rise to  potential
          conflicts of interest to the extent the MurphyMorris or PMFM portfolio
          management  teams  direct   transactions  for  one  Account  that  may
          adversely  impact the value of  securities  held by  another  Account.
          Securities  selected for Accounts other than the MurphyMorris Fund may
          outperform the securities selected for the MurphyMorris Fund from time
          to time.

     o    With respect to securities transactions for the MurphyMorris Fund, Mr.
          Beasley and Mr.  Chapman will  determine  the broker that  executes or
          will execute each order, which determinations shall be made consistent
          with the duty to seek best execution of the transaction.  MurphyMorris
          has adopted a policy that  permits the  aggregation  of trades (each a
          "bunched  trade") in the same  security  for the same  Accounts on the

                                       B-2


          same day. In a bunched  trade,  each Account  receives the same price,
          but different  commission rates may apply to different  Accounts owing
          either  to the  size of an  Account's  position,  the  minimum  ticket
          charges applied by the broker, or both.

     o    The  MurphyMorris  Fund and  MurphyMorris  have each adopted a code of
          ethics that, among other things, permits personal trading by employees
          (including  MurphyMorris portfolio managers) under conditions where it
          has been determined that such trades would not adversely impact client
          accounts.  Nevertheless,  the management of personal accounts may give
          rise to potential  conflicts  of  interest,  and there is no assurance
          that these codes of ethics will adequately address such conflicts.

     o    In general,  MurphyMorris  does not invest Accounts in securities that
          would constitute limited  investment  opportunities.  However,  to the
          extent that MurphyMorris  recommends a limited investment  opportunity
          for  multiple  Accounts,  MurphyMorris  seeks  to  work  with  PMFM to
          allocate such limited  opportunities  pro rata among Accounts based on
          account size, available cash or any other method determined to be fair
          by the PMFM and MurphyMorris portfolio management teams.

Compensation.  Neither  Mr.  Beasley  nor Mr.  Chapman is paid a base  salary by
MurphyMorris  (although  each receives a base salary from PMFM,  and eligible to
participate in PMFM's retirement plan arrangements). Each of Mr. Beasley and Mr.
Chapman is a co-founder and one-third owner of MurphyMorris,  and is entitled to
profits  related  to his share of  ownership.  Since  profits  are  expected  to
increase as assets increase,  each of Mr. Beasley and Mr. Chapman is expected to
receive  increased  profits as a shareholder as assets of the MurphyMorris  Fund
increase.

Ownership of Securities. The dollar value of the shares of the MurphyMorris Fund
beneficially owned by Mr. Beasley is between $_____ and $__________.  The dollar
value of the shares of MurphyMorris  Fund  beneficially  owned by Mr. Chapman is
between $______ and $____________.

Information  about the PMFM Fund's  Portfolio  Management Team. The Statement of
Additional  Information  for the PMFM Fund  (incorporated  herein by  reference)
provides additional  information about the PMFM Fund's Portfolio Management Team
and their  compensation,  other managed  accounts and ownership of securities in
the PMFM Fund.






                                      B-3




FINANCIAL STATEMENTS

Shown below are the financial  statements for each Fund The first table presents
the Portfolio of Investments for each Fund. The second table presents Statements
of Assets and Liabilities for each Fund. The third table presents  Statements of
Operations for each Fund

                       [financial statements to be added]




















                                      B-4


                        THE MURPHYMORRIS INVESTMENT TRUST
                              MURPHYMORRIS ETF FUND

                         SPECIAL MEETING OF SHAREHOLDERS
                             SCHEDULED TO BE HELD ON
                               ____________, 2005

THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of The MurphyMorris  Investment
Trust ("Trust"), on behalf of the MurphyMorris ETF Fund ("Fund"), for use at the
special meeting of shareholders ("Special Meeting") to be held at the offices of
the Trust's transfer agent, North Carolina Shareholder Services,  LLC, 116 South
Franklin Street,  Rocky Mount,  North Carolina 27804 on __________,  2005 at ___
a.m. The undersigned  hereby appoints Tracey L. Hendricks and Julian G. Winters,
each of them with full power of  substitution,  as proxies of the undersigned to
vote at the above stated Special Meeting and at all  adjournments  thereof,  all
shares  of  beneficial  interest  of the Fund  that are  held of  record  by the
undersigned  on the  record  date for the  Special  Meeting,  upon the  proposal
indicated below:

IF THIS PROXY CARD IS RETURNED,  AND NO CHOICE IS INDICATED,  THIS PROXY WILL BE
VOTED  AFFIRMATIVELY ON THE MATTER PRESENTED.  THE BOARD OF TRUSTEES  RECOMMENDS
THAT YOU VOTE "FOR" THE FOLLOWING PROPOSAL.



                                                FOR        AGAINST       ABSTAIN
1.  To  approve  an  Agreement  and  Plan  of   [ ]          [ ]           [ ]
Reorganization  providing for the acquisition
of all of the assets of the  MurphyMorris ETF
Fund by the  PMFM  Core  Advantage  Portfolio
Trust in  exchange  for shares of  beneficial
interest of the PMFM Core Advantage Portfolio
Trust,   as  more  fully   described  in  the
Prospectus/Proxy  Statement  dated  March  7,
2005,    together   with   each   and   every
transaction contemplated thereby.


2. To  transact  such other  business  as may
properly  come  before  the  meeting,  or any
adjournments thereof.

Please sign exactly as your name  appears on this card.  When an account is held
by joint  tenants,  all should sign.  When  signing as executor,  administrator,
trustee or  guardian,  please  give  title.  If a  corporation  or  partnership,
indicate the entity's name and sign as an authorized person.

x                                           x
_____________________________               _____________________________
Signature              (Date)               Signature             (Date)
(Please sign within the box)                (Please sign within the box)








                                 THE PMFM FUNDS

                                     PART C

                                OTHER INFORMATION

ITEM 15. INDEMNIFICATION

Article VII of the Registrant's Amended Declaration of Trust states as follows:

     Under  Delaware  statutes,  Section  3817  of  the  Treatment  of  Delaware
Statutory  Trusts  empowers  Delaware  business  trusts  to  indemnify  and hold
harmless  any trustee or  beneficial  owner or other person from and against any
and  all  claims  and  demands   whatsoever,   subject  to  such  standards  and
restrictions  as may be set forth in the  governing  instrument of the statutory
trust. The Registrant's Trust Instrument contains the following provisions:

     Article VII. Section 2.  Indemnification  and Limitation of Liability.  The
Trustees  shall not be  responsible  or liable in any event for any  neglect  or
wrong-doing of any officer, agent, employee, Manager or Principal Underwriter of
the Trust,  nor shall any Trustee be responsible  for the act or omission of any
other Trustee,  and, as provided in Section 3 of this Article VII, the Trust out
of its assets  shall  indemnify  and hold  harmless  each and every  Trustee and
officer  of the Trust  from and  against  any and all  claims,  demands,  costs,
losses,  expenses,  and  damages  whatsoever  arising  out of or related to such
Trustee's performance of his or her duties as a Trustee or officer of the Trust;
provided that nothing herein contained shall indemnify, hold harmless or protect
any  Trustee  or  officer  from or  against  any  liability  to the Trust or any
Shareholder  to which he or she 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 or her office.

     Every note,  bond,  contract,  instrument,  certificate or undertaking  and
every other act or thing whatsoever issued,  executed or done by or on behalf of
the Trust or the Trustees or any of them in  connection  with the Trust shall be
conclusively  deemed  to have  been  issued,  executed  or done  only in or with
respect  to  their or his or her  capacity  as  Trustees  or  Trustee,  and such
Trustees or Trustee shall not be personally liable thereon.

     Article VII. Section 3. Indemnification.

          (a) Subject to the exceptions and limitations  contained in Subsection
     (b) below:

               (i) every  person who is, or has been,  a Trustee or an  officer,
     employee or agent of the Trust  (including any individual who serves at its
     request  as  director,  officer,  partner,  trustee  or the like of another
     organization  in which it has any  interest as a  shareholder,  creditor or
     otherwise)  ("Covered  Person")  shall be  indemnified  by the Trust or the
     appropriate Series to the fullest extent permitted by law against liability
     and against all expenses  reasonably  incurred or paid by him in connection
     with any claim,  action, suit or proceeding in which he becomes involved as
     a party or otherwise by virtue of his being or having been a Covered Person
     and against amounts paid or incurred by him in the settlement thereof; and


               (ii) as used  herein,  the words  "claim,"  "action,"  "suit," or
     "proceeding"  shall  apply to all  claims,  actions,  suits or  proceedings
     (civil,  criminal or other, including appeals),  actual or threatened,  and
     the words  "liability" and "expenses"  shall include,  without  limitation,
     attorney's  fees,  costs,  judgments,  amounts paid in  settlement,  fines,
     penalties and other liabilities.

          (b) No  indemnification  shall  be  provided  hereunder  to a  Covered
     Person:

               (i) who shall  have been  adjudicated  by a court or body  before
     which  the  proceeding  was  brought  (A) to be  liable to the Trust or its
     Shareholders by reason of willful misfeasance,  bad faith, gross negligence
     or reckless  disregard of the duties involved in the conduct of his office,
     or (B) not to have acted in good faith in the  reasonable  belief  that his
     action was in the best interest of the Trust; or

               (ii) in the event the  matter  is not  adjudicated  by a court or
     other  appropriate  body,  unless there has been a determination  that such
     Covered  Person  did not engage in willful  misfeasance,  bad faith,  gross
     negligence or reckless  disregard of the duties  involved in the conduct of
     his  office:  by at least a  majority  of those  Trustees  who are  neither
     Interested  Persons of the Trust nor are parties to the matter based upon a
     review  of  readily  available  facts  (as  opposed  to a  full  trial-type
     inquiry),  or by written opinion of independent  legal counsel based upon a
     review  of  readily  available  facts  (as  opposed  to a  full  trial-type
     inquiry).

          (c) The  rights of  indemnification  herein  provided  may be  insured
     against by policies maintained by the Trust, shall be severable,  shall not
     be exclusive of or affect any other rights to which any Covered  Person may
     now or hereafter be entitled,  and shall inure to the benefit of the heirs,
     executors and administrators of a Covered Person.

          (d) To the  maximum  extent  permitted  by  applicable  law,  expenses
     incurred in defending  any  proceeding  may be advanced by the Trust before
     the  disposition of the proceeding  upon receipt of an undertaking by or on
     behalf of such Covered  Person that such amount will be paid over by him to
     the Trust or applicable  Series if it is ultimately  determined  that he is
     not entitled to indemnification under this Section; provided, however, that
     either a majority of the Trustees who are neither Interested Persons of the
     Trust nor parties to the matter,  or independent legal counsel in a written
     opinion,  shall have determined,  based upon a review of readily  available
     facts (as  opposed to a full  trial-type  inquiry)  that there is reason to
     believe  that  such   Covered   Person  will  not  be   disqualified   from
     indemnification under this Section.

          (e)  Any  repeal  or   modification   of  this   Article  VII  by  the
     Shareholders,  or adoption or  modification  of any other  provision of the
     Declaration or By-laws inconsistent with this Article, shall be prospective
     only, to the extent that such repeal,  or  modification  would,  if applied
     retrospectively,  adversely  affect any  limitation on the liability of any
     Covered  Person or  indemnification  available  to any Covered  Person with
     respect  to any act or  omission  which  occurred  prior  to  such  repeal,
     modification or adoption.


     In  addition,  the  Registrant  has  entered  into an  Investment  Advisory
Agreements with its Advisor and  Distribution  Agreements with its  Distributor.
These  agreements   provide   indemnification   for  those  entities  and  their
affiliates.  The Advisor's and Distributor's personnel may serve as trustees and
officers of the Trust.

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933,  as  amended  ("Act"),  may be  permitted  to  trustees,  officers  and
controlling  persons of the Registrant by the  Registrant  pursuant to the Trust
Instrument or otherwise,  the  Registrant is aware that that the  Securities and
Exchange   Commission  has  expressed  its  opinion  that   indemnification  for
liabilities under the 1933 Act is against public policy as expressed in the 1933
Act, so indemnification for 1933 Act liabilities may be unenforceable.


ITEM 16. EXHIBITS

(1)(a) Certificate of Trust of Registrant.

   (b)   Amended  and  Restated  Agreement  and  Declaration  of  Trust  ("Trust
         Instrument") for the PMFM Investment Trust ("Registrant").^2

(2)      By-Laws of Registrant.^1

(3)      Not Applicable.

(4)      Form of Agreement and Plan of Reorganization.^10

(5)      Not Applicable.

(6)(a)   Investment  Advisory  Agreement  between the Registrant and PMFM,  Inc.
         ("Advisor"),  as advisor for the PMFM Managed Portfolio Trust (formerly
         known as the PMFM ETF Portfolio Trust).^2

   (b)   Investment  Advisory  Agreement between the Registrant and the Advisor,
         as advisor for the PMFM Tactical Preservation Portfolio Trust (formerly
         known as the PMFM Moderate Portfolio Trust).^3

   (c)   Investment  Advisory  Agreement between the Registrant and the Advisor,
         as advisor for the PMFM Tactical Opportunities Portfolio Trust.^7

   (d)   Investment  Advisory  Agreement between the Registrant and the Advisor,
         as advisor for the PMFM Core Advantage Portfolio Trust.^9

(7)(a)   Distribution    Agreement    between   the   Registrant   and   Capital
         Investment  Group,  Inc.  ("Distributor"),  as distributor for the PMFM
         Managed  Portfolio  Trust  (formerly  known as the  PMFM ETF  Portfolio
         Trust).^2

   (b)   Distribution  Agreement between the Registrant and the Distributor,  as
         distributor  for  the  PMFM  Tactical   Preservation   Portfolio  Trust
         (formerly known as the PMFM Moderate Portfolio Trust).^3


   (c)   Distribution  Agreement between the Registrant and the Distributor,  as
         distributor for the PMFM Tactical Opportunities Portfolio Trust.^7

   (d)   Distribution  Agreement between the Registrant and the Distributor,  as
         distributor for the PMFM Core Advantage Portfolio Trust.^9

(8)      Not Applicable.

(9)(a)   Master   Custodian   Agreement   between  The   Nottingham   Management
         Company and Wachovia  Bank,  N.A.  (successor  by merger to First Union
         National Bank).^2

   (b)   First Addendum to the Master Custodian Agreement between The Nottingham
         Management  Company and Wachovia  Bank,  N.A.  (successor  by merger to
         First Union National Bank).^2

   (c)   Second  Addendum  to  the  Master  Custodian   Agreement   between  The
         Nottingham  Management  Company and Wachovia Bank,  N.A.  (successor by
         merger to First Union National Bank).^2

   (d)   Third Addendum to the Master Custodian Agreement between The Nottingham
         Management  Company and Wachovia  Bank,  N.A.  (successor  by merger to
         First Union National Bank).^2

   (e)   Fourth  Addendum  to  the  Master  Custodian   Agreement   between  The
         Nottingham  Management  Company and Wachovia Bank,  N.A.  (successor by
         merger to First Union National Bank).^2

   (f)   Fifth Addendum to the Master Custodian Agreement between The Nottingham
         Management  Company and Wachovia  Bank,  N.A.  (successor  by merger to
         First Union National Bank).^3

   (g)   Sixth Addendum to the Master Custodian Agreement between The Nottingham
         Management  Company and Wachovia  Bank,  N.A.  (successor  by merger to
         First Union National Bank).^5

   (h)   Seventh  Addendum  to  the  Master  Custodian   Agreement  between  The
         Nottingham  Management  Company and Wachovia Bank,  N.A.  (successor by
         merger to First Union National Bank).^6

   (i)   Eighth  Addendum  to  the  Master  Custodian   Agreement   between  The
         Nottingham  Management  Company and Wachovia Bank,  N.A.  (successor by
         merger to First Union National Bank).^9

   (j)   Individual  Custodian  Agreement  between the  Registrant  and Wachovia
         Bank, N.A. ("Custodian"), as custodian for the Registrant.^2

(10)(a)  Distribution  Plan under  Rule 12b-1  for  the  PMFM Managed  Portfolio
         Trust (formerly known as the PMFM ETF Portfolio Trust).^2

    (b)  Amended  and  Restated  Distribution  Plan  under  Rule  12b-1 for PMFM
         Managed  Portfolio  Trust  (formerly  known as the  PMFM ETF  Portfolio
         Trust).^6


   (c)   Distribution  Plan  under Rule  12b-1 for the PMFM  Moderate  Portfolio
         Trust.^3

   (d)   Amended  and  Restated  Plan  under  Rule  12b-1 for the PMFM  Moderate
         Portfolio Trust.^6

   (e)   Plan  under Rule 12b-1 for the PMFM  Tactical  Opportunities  Portfolio
         Trust.^7

   (f)   Plan under Rule 12b-1 for the PMFM Core Advantage Portfolio Trust.^8

   (g)   Rule 18f-3 Multi-Class Plan.^3

   (h)   Amended and Restated Rule 18f-3 Multi-Class Plan.^6

(11)     Form of  opinion of  Kilpatrick  Stockton  LLP  regarding  legality  of
         issuance of shares.^9

(12)     Form of opinion of Kilpatrick Stockton LLP regarding certain tax
         matters.^9

(13)     Not Applicable.

(14)     Consent of Independent Auditors.^9

(15)     Not Applicable.

(16)     Powers of Attorney.^2

(17)     Not Applicable.

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

^1   Incorporated herein by reference to Registrant's  Registration Statement on
     Form N-1A filed March 10, 2003 (File No. 333-103714).
^2   Incorporated herein by reference to Registrant's  Registration Statement on
     Form N-1A  Pre-Effective  Amendment  No. 1 filed  June 27,  2003  (File No.
     333-103714).
^3   Incorporated herein by reference to Registrant's  Registration Statement on
     Form N-1A Post-Effective  Amendment No. 1 filed December 11, 2003 (File No.
     333-103714).
^4   Incorporated herein by reference to Registrant's  Registration Statement on
     Form N-1A  Post-Effective  Amendment  No. 2 filed  March 2, 2004  (File No.
     333-103714).
^5   Incorporated herein by reference to Registrant's  Registration Statement on
     Form N-1A  Post-Effective  Amendment  No. 3 filed  April1,  2004  (File No.
     333-103714).
^6   Incorporated herein by reference to Registrant's  Registration Statement on
     Form N-1A  Post-Effective  Amendment  No. 4 filed  July 20,  2004 (File No.
     333-103714).
^7   Incorporated herein by reference to Registrant's  Registration Statement on
     Form N-1A Post-Effective Amendment No. 5 filed September 27, 2004 (File No.
     333-103714).
^8   Incorporated herein by reference to Registrant's  Registration Statement on
     Form N-1A  Post-Effective  Amendment No.6 filed December 22,  2004(File No.
     333-103714).
^9   To be filed by Amendment.
^10  Filed herewith as Exhibit A to the Proxy Statement/Prospectus.






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 a 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 of 1933, as amended, the
reoffering  prospectus will contain the information called for by the applicable
registration form for 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 a 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 Securities  Act of 1933, as amended,  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.

(3) The undersigned  Registrant agrees to file in a Post-Effective  Amendment to
this  Registration  Statement  a final  tax  opinion  upon  the  closing  of the
transaction.






                                   SIGNATURES

As  required  by the  Securities  Act of 1933,  as  amended,  this  Registration
Statement  has been signed on behalf of  Registrant  in the City of Rocky Mount,
and State of North Carolina on this 9th day of March 2005.


                                            PMFM INVESTMENT TRUST

                                            /s/ Julian G. Winters, Secretary
                                            _______________________________
                                            Julian G. Winters, Secretary


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


              *                                                    March 9, 2005
___________________________________________                        _____________
James M. Baker, Trustee                                            Date


              *                                                    March 9, 2005
___________________________________________                        _____________
Donald L. Beasley, Trustee, Chairman and Treasurer                 Date


              *                                                    March 9, 2005
___________________________________________                        _____________
Timothy A. Chapman, President                                      Date


              *                                                    March 9, 2005
___________________________________________                        _____________
Norman A. McLean, Trustee                                          Date


/s/ Tracey L. Hendricks                                            March 9, 2005
___________________________________________                        _____________
Tracey L. Hendricks, Assistant Secretary and Assistant Treasurer   Date


* By: /s/ Julian G. Winters                                        March 9, 2005
      ___________________________________________                  _____________
       Julian G. Winters, Attorney-in-Fact and Secretary           Date