Sub-Item 77E:  Legal proceedings

On October 6, 2004, RS Investments entered into settlement
agreements with the Securities and Exchange
Commission (the "SEC") and the Office of the New York State
Attorney General (the "NYAG"). The settlement agreements relate
to certain investors' frequent trading of shares of RS Emerging
Growth Fund during 2000 through 2003. In its settlement with the
SEC, RS Investments consented to the entry of an order by the
SEC (the "SEC Order") instituting and settling administrative
and cease-and-desist proceedings against it.

A copy of the SEC Order is available on the SEC's Web site at
www.sec.gov, and a copy of the settlement agreement with the
NYAG is available on the NYAG's Web site at www.oag.state.ny.us.

RS Investments, and not the RS Funds, will bear all the costs of
complying with the settlements, including payments of
disgorgement and civil penalties (except those paid by
individuals) and associated legal fees relating to these
regulatory proceedings.

After the announcement of those settlements, three related civil
lawsuits were commenced. These lawsuits were consolidated into
one proceeding in the United States District Court for the
District of Maryland on April 19, 2005 (In re Mutual Fund
Investment Litigation, Case No. MD-15863-JFM). The district
court has appointed a lead plaintiff, and a consolidated
complaint has been filed. The consolidated complaint includes RS
Investments, the Trust, and certain current or former Trustees,
sub-advisers, employees, and officers of the Trust or RS
Investments as defendants. It generally tracks the factual
allegations made in the SEC and NYAG settlements, including the
allegations that Fund prospectuses were false and misleading,
and alleges a variety of theories for recovery, including, among
others, that defendants violated sections 34(b), 36(a), 36(b),
and 48(a) of the Investment Company Act of 1940 and breached
fiduciary duties to investors. The consolidated lawsuit further
alleges that defendants violated, or caused to be violated,
sections 11 and 12(a)(2) of the Securities Act of 1933 and
section 10(b) of the Securities Exchange Act of 1934.The
consolidated action purports to be brought on behalf of a
specified class of investors in the Funds and does not quantify
any relief requested.

On May 27, 2005, the defendants moved to dismiss the
consolidated action. On November 3, 2005, the Court issued a
ruling dismissing all claims against the Trust. As for the
claims against the other RS defendants, the Court dismissed the
claims arising under: sections 34(b) and 36(a) of the Investment
Company Act of 1940; sections 11, 12(a)(2), and 15 of the
Securities Act of 1933; and state law. The Court allowed
plaintiffs to proceed against some of the RS defendants with
their claims arising under sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and sections 36(b) and 48(a) of
the Investment Company Act of 1940. As to some other RS
defendants, the Court deferred until a later time any ruling on
the claims arising under sections 10(b), 20(a), 36(b), and 48(a).

Additional lawsuits arising out of the same circumstances and
presenting similar or different or additional allegations may be
filed against the Funds, RS Investments, or their affiliates in
the future. RS Investments does not believe that the pending
consolidated action will materially affect its ability to
continue to provide to the Funds the services it has agreed to
provide. It is not possible at this time to predict whether the
litigation will have any material adverse effect on any of the Funds.