UNITED SERVICES FUNDS, 497, 1996-11-01

UNITED SERVICES FUNDS
497, 1996-11-01

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UNITED SERVICES FUNDS

CHINA REGION OPPORTUNITY FUND

P.O. BOX 781234
SAN ANTONIO, TEXAS 78278-1234
1-800-US-FUNDS (1-800-873-8637)
(INFORMATION, SHAREHOLDER SERVICES AND REQUESTS)
INTERNET: http://www.usfunds.com

PROSPECTUS

NOVEMBER 1, 1996

This prospectus presents information that a prospective investor should
know about the China Region Opportunity Fund (the "Fund"), a fund of United
Services Funds (the "Trust"). The Fund is one of several diversified
portfolios of the Trust, an open-end management investment company.

The objective of the Fund is to achieve capital appreciation by investing
primarily in the China Region. THE FUND INVOLVES SPECULATIVE INVESTMENTS,
SPECIAL RISKS, AND MAY NOT BE APPROPRIATE FOR ALL INVESTORS. (See "Risk Factors
and Special Considerations.") Investors are responsible for determining whether
or not an investment in the fund is appropriate for their needs. Read and retain
this prospectus for future reference.

A Statement of Additional Information dated November 1, 1996 has been filed
with the Securities and Exchange Commission and is incorporated herein by
reference. The Statement is available free from United Services Funds upon
written request at the address set forth above or by calling 1-800-US-FUNDS
(1-800-873-8637).

THESE SECURITIES HAVE NOT BEEN APPROVED OR DIS-
APPROVED BY THE SECURITIES AND EXCHANGE COM-
MISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COM-
MISSION OR ANY STATE SECURITIES COMMIS-
SION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

TABLE OF CONTENTS

PAGE
----
SUMMARY OF FEES AND EXPENSES .............................................. 2
FINANCIAL HIGHLIGHTS ...................................................... 4
INVESTMENT OBJECTIVES AND
CONSIDERATIONS .......................................................... 6
SECURITIES MARKETS ........................................................ 9
RISK FACTORS AND SPECIAL
CONSIDERATIONS .......................................................... 12
ADDITIONAL INVESTMENT PRACTICES ........................................... 14
FUTURES CONTRACTS AND OPTIONS ............................................. 16
HOW TO PURCHASE SHARES .................................................... 18
HOW TO EXCHANGE SHARES .................................................... 21
HOW TO REDEEM SHARES ...................................................... 23
HOW SHARES ARE VALUED ..................................................... 27
DIVIDENDS AND TAXES ....................................................... 28
THE TRUST ................................................................. 31
MANAGEMENT OF THE FUND .................................................... 32
PERFORMANCE INFORMATION ................................................... 34

SUMMARY OF FEES AND EXPENSES

The following summary is provided to assist you in understanding the
various costs and expenses a shareholder in the Fund could bear directly or
indirectly.

SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load .......................................... None
Redemption Fee (on the redemption or exchange of shares
held less than 180 days) ................................. 1%
Administrative Exchange Fee ................................. $ 5
Account Closing Fee (does not apply to exchanges) ........... $ 10
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET
ASSETS)(1)
Management Fees (net of waivers and reimbursements) ......... 0.34%
12b-1 Fees .................................................. None
Other Expenses .............................................. 1.18%
Transfer Agency Fees ........................................ 0.58%
Accounting Services Fees .................................... 0.15%
Total Fund Operating Expenses (net of waivers
and reimbursements) ...................................... 2.25%

Except for active ABC Investment Plan (Registered Trademark) accounts,
custodial accounts for minors, and retirement plan accounts, if an account
balance falls, for any reason other than market fluctuations, below $1,000 at
any time during a month, that account will be subject to a monthly small account
charge of $5. (See "Small Accounts.")

A shareholder who requests delivery of redemption proceeds by wire transfer
will be subject to a $10 charge. International wires will be charged more.

HYPOTHETICAL EXAMPLE OF EFFECT OF FUND EXPENSES:

You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return and redemption at the end of each period.

1 year............................... $ 33
3 years.............................. $ 85

Included in these estimates is the account closing fee of $10 for each period.
This fee is a flat charge which does not vary with the size of your investment.
Accordingly, for investments larger than $1,000, your total expenses will be
substantially lower in percentage terms than this illustration implies. The
examples should not be considered a representation of past or future expenses.
Actual expenses may be more or less than those shown.
- --------------------------------------------------------------------------------

(1) Annual Fund Operating Expenses are based on each Fund's historical
expenses. Management Fees, Transfer Agency Fees, and Accounting Service Fees are
paid to U.S. Global Investors, Inc. (the "Advisor") and its wholly owned
subsidiary. Please refer to the section entitled "Management of the Fund" for
further information.

(2) The Advisor has guaranteed that Total Fund Operating Expenses (as a
percentage of average net assets) will not exceed 2.25% on an annualized basis
through June 30, 1997 and until such later date as the Advisor determines. Based
on actual operating expenses of the Fund for the year ended June 30, 1996 and
subject to expense limitations imposed by the state of California, the
annualized Management, Transfer Agency, Accounting Fees and Other Expenses would
have been 0.63%, 0.58%, 0.15%, and 1.18%, respectively for Total Fund Operating
Expenses of 2.54%, in light of the state of California expense limitation.

FINANCIAL HIGHLIGHTS
CHINA REGION OPPORTUNITY FUND

The following per share data and ratios for a share of beneficial interest
outstanding throughout the period February 10, 1994, effective date of original
registration statement, to June 30, 1994 and the years ended June 30, 1995 and
1996 has been audited by Price Waterhouse LLP, the Fund's Independent
Accountants, whose report therein is included in the Fund's 1996 Annual Report
to Shareholders and is incorporated by reference into the Statement of
Additional Information ("SAI"). The Financial Highlights should be read in
conjunction with the financial statements and notes thereto included in the
Annual Report. The SAI and the Annual Report may be obtained without charge.

YEAR ENDED JUNE 30, PERIOD ENDING
-------------------- JUNE 30,
1996 1995 1994(A)
--------- --------- -------------
Per Share Operating Performance:
Net asset value, beginning of
period.......................... $ 6.67 7.75 9.92
--------- --------- -------------
Net investment income(b)........... .08 .10 .04
Net realized and unrealized gain
(loss) on investments(c)........ (.21) (1.09) (2.17)
--------- --------- -------------
Total from investment
operations................ (.13) (.99) (2.13)
--------- --------- -------------
Less dividends and distributions:
Dividends from net investment
income....................... (.08) (.09) (.04)
Dividends in excess of net
investment income(d)......... (.02) -- --
Distributions from net realized
gain......................... -- -- --
--------- --------- -------------
Total dividends and
distributions............. (.10) (.09) (.04)
--------- --------- -------------
Net asset value, end of period..... $ 6.44 6.67 7.75
========= ========= =============
Total Investment Return(e):.......... (2.07)% (12.79) (21.48)*
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)...................... $ 20,967 19,022 7,655
Ratio of expenses to average net
assets.......................... 2.15 (g) 1.95 1.88(f)
Ratio of net income to average net
assets.......................... 1.24 (g) 1.53 1.51(f)
Portfolio turnover rate............ 36.65% 53.64 13.11(f)
Average commission rate paid(h)...... $ 0.0028 NA NA

* Total Investment Return is not annualized.

(FOOTNOTES ON FOLLOWING PAGE)

(a) For the period from February 10, 1994, effective date of original
registration statement, to June 30, 1994.

(b) Net of expense reimbursements.

(d) Distributions in excess of net investment income and net realized gains and
tax returns of capital are presented in accordance with SOP 93-2, Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain, and
Return of Capital Distribution by Investment Companies, which was first
implemented by the Funds in fiscal 1993. Information for prior years has not
been restated.

(e) Total return does not reflect the effect of account fees.

(f) Annualized; the ratios are not necessarily indicative of twelve months of
operations.

(g) Expense ratio is net of expense reimbursement or fee waivers by the
Advisor. Had such reimbursements not been made, the expense ratio subject to the
most restrictive state limitation would have been 2.60% and the net investment
income ratio would have been 0.79%.

(h) Represents total commissions paid on portfolio securities divided by the
total number of shares purchased or sold on which commissions were charged. This
information was not required prior to 1996.

INVESTMENT OBJECTIVES AND CONSIDERATIONS

The investment objective of the Fund is to achieve capital appreciation by
investing primarily in business associations in the People's Republic of China
(the "PRC" or "China"), Hong Kong, Taiwan, Korea, Singapore, Thailand and
Malaysia (collectively, the "China Region"). Investment in the Fund involves a
high degree of risk, and there can be no assurance that the Fund will achieve
its objective. The Fund's objective is not a fundamental policy and may be
changed by the Board of Trustees without shareholder approval. However,
shareholders will be notified in writing at least 30 days prior to any material
change in the Fund's objective. The Fund is not intended to be a complete
investment program, and a prospective investor should take into account personal
objectives and other investments when considering the purchase of Fund shares.

INVESTMENTS

The Fund will invest in equity securities (listed or traded over-the-
counter) of China Region companies through the Shenzhen Stock Exchange, the
Shanghai Stock Exchange and the Hong Kong Stock Exchange, as well as other
authorized stock exchanges in China. The Fund will also invest in the securities
of companies that have business associations in China which are listed on
authorized stock exchanges in the China Region.

At least 65% of the Fund's assets will be invested in equity securities
issued by China Region companies that (1) are organized under the laws of the
countries within the China Region, or (2) have at least 50% of their assets in
one or more China Region countries or derive at least 50% of their gross
revenues or profits from providing goods or services to or from one or more
China Region countries.

There are currently two officially recognized securities exchanges in
China - the Shanghai Stock Exchange which opened in December 1990 and the
Shenzhen Stock Exchange which opened in July 1991. Shares traded on these
Exchanges are of two types - "A" shares which can be traded only by Chinese
investors and "B" shares which can be traded only by individuals and
corporations not residents of China. The settlement period for "B" share
trades is the same in Shenzhen and Shanghai. Settlements are effected on the
third business day after the transaction. As of June 1996, seventeen companies
were authorized to issue what are called "H" shares which trade in Hong Kong
and may be purchased by anyone.

The Fund will invest in both new and existing enterprises registered and
operating in China. These will include wholly Chinese-owned enterprises, wholly
foreign-owned enterprises and Sino-foreign joint ventures. It is not the
intention of the Fund to limit its investments to Shenzhen and Shanghai alone.
In addition to other provinces and municipalities, investment opportunities will
also be sought in China's five Special Economic

Zones (SEZs) and in the Economic and Technical Development Zones (ETDZs) of the
fourteen coastal cities. While portfolio companies may be geographically
dispersed, it is anticipated that the trading activities of the Fund in PRC
securities will be focused in the authorized China securities markets and, in
particular, the Hong Kong, Shenzhen and Shanghai Stock Exchanges.

The Fund will invest primarily in securities which are listed or otherwise
traded by authorized brokers and other entities and will focus its investments
on equities and quasi-equity securities. Quasi-equity securities may include,
for example: warrants or similar rights, other financial instruments with
substantial equity characteristics, such as debt securities convertible into
equity securities.

Although the Fund expects to invest primarily in listed securities of
established companies, it may, subject to local investment limitations, invest
in unlisted securities of China companies and companies that have business
associations in China, including investments in new and early stage companies.
This may include direct equity investments. Such investments may involve a high
degree of business and financial risk. Because of the absence of any trading
markets for these investments, the Fund may find itself unable to liquidate such
securities in a timely fashion, especially in the event of negative news
regarding the specific securities or the China markets in general. Such
securities could decline significantly in value prior to the Fund's being able
to liquidate such securities. In addition to financial and business risks,
issues whose securities are not listed will not be subject to the same
disclosure requirements applicable to issuers whose securities are listed.

The Fund will not invest more than 15% of its net assets in illiquid
securities. Securities may be illiquid because they are unlisted, subject to
contractual or legal restrictions on resale or due to other factors which, in
the Advisor's opinion, raise a question concerning the Fund's ability to
liquidate the securities in a timely and orderly fashion without substantial
loss.

ADRS AND GDRS

The Fund may also invest in sponsored or unsponsored American Depository
Receipts ("ADRs") or Global Depository Receipts ("GDRs") representing shares
of companies located in the China Region. ADRs are depository receipts typically
issued by a U.S. bank or trust company which evidence ownership of underlying
securities issued by a foreign corporation. GDRs are typically issued by foreign
banks or trust companies, although they also may be issued by U.S. banks or
trust companies, and evidence ownership of underlying securities issued by
either a foreign or a United States corporation. Generally, depository receipts
in registered form are designed for use in the U.S. securities market, and
depository receipts in bearer form are designed for use in securities markets
outside the United

States. Depository receipts may not necessarily be denominated in the same
currency as the underlying securities into which they may be converted. In
addition, the issuers of the securities underlying unsponsored depository
receipts are not obligated to disclose material information in the United
States; and, therefore, there may be less information available regarding such
issuers and there may not be a correlation between such information and the
market value of the depository receipts. For purposes of the Fund's investment
policies, the Fund's investments in depository receipts will be deemed to be
investments in the underlying securities.

TEMPORARY DEFENSIVE INVESTMENT

For temporary defensive purposes during periods which, in the Advisor's
opinion, present the Fund with adverse changes in the economic, political or
securities markets of the China Region, the Fund may seek to protect the capital
value of the Fund's assets by temporarily investing up to 100% of its assets in:

(1) money market instruments, deposits or such other investment grade
short-term investments in the local China Region currencies as are considered
appropriate at the time;

(2) U.S. Government bills, short-term indebtedness, money market
instruments, or other investment grade cash equivalents, each denominated in
U.S. dollars or any other freely convertible currency; or

(3) repurchase agreements as described herein.

REPURCHASE AGREEMENTS

In a repurchase agreement, the Fund purchases securities subject to the
seller's agreement to repurchase such securities at a specified time (normally
one day) and price. The repurchase price reflects an agreed upon interest rate
during the time of investment. All repurchase agreements must be collateralized
by United States Government or government agency securities, the market values
of which equal or exceed 102% of the principal amount of the repurchase
obligation. If an institution enters an insolvency proceeding, the resulting
delay in liquidation of securities serving as collateral could cause the Fund
some loss if the value of the securities declined prior to liquidation. To
minimize the risk of loss, the Fund will enter into repurchase agreements only
with institutions and dealers which the Board of Trustees considers
creditworthy.

CLOSED-END INVESTMENT COMPANIES

The Fund may also invest in the securities of closed-end investment
companies with investment policies similar to those of the Fund, provided its
investments in these securities do not exceed 3% of the total voting stock of
any such closed-end investment company and do not, in the aggregate, exceed 10%
of the Fund's total assets. The Fund will indirectly bear its proportionate
share of any management fees paid by investment companies in which it invests in
addition to the advisory fee paid by the Fund.

PORTFOLIO TURNOVER

It is the policy of the Fund to seek capital appreciation. The Fund will
effect portfolio transactions without regard to its holding period if, in the
judgment of the Advisor, such transactions are advisable. For the year ended
June 30, 1996, the Fund's portfolio turnover ratio was 36.65%.

SECURITIES MARKETS

CHINA

The People's Bank of China is officially responsible for managing the stock
markets, regulating all trading and settlement and approving all issues of new
securities. The Shanghai and Shenzhen Stock Exchanges are highly automated with
trading and settlement executed electronically.

Considerable autonomy has been given to local offices of the State
Commission of Economic System Reform in developing securities markets. They are
charged with identifying suitable companies for listing based on whether the
companies have: (1) products which are competitive in world markets, providing
the ability to export and earn foreign currency; (2) strong management; (3) a
successful history over at least five years, with profits in the last three
years; and, (4) a clearly defined project requiring foreign financing to
introduce new equipment or technology.

In early 1993 the Securities Regulatory Commission was created which has
many of the attributes of our United States Securities and Exchange Commission.
Another control on the quality of "B" share issues is the requirement of an
audit in accordance with international accounting guidelines.

China passed its first Joint Venture Law in 1979, signaling the opening of
the Chinese economy to the outside world. With the implementation of the "Open
Door" policy in the 1980s, China established a number of special investment
zones which offer a variety of investment incentives to foreign businesses,
including preferential tax treatment. These special investment areas include:
five SEZs (i.e., Shenzhen, Shantou and Zhuhai in Guangdong Province, Xiamen in
Fujian Province and the entire Hainan Province); fourteen coastal cities as
"open zones;" twenty-seven High and New Technology Industrial Development
Zones; and the Pudong New Area in Shanghai. Establishment of these zones and
other economic reform

policies have resulted in a steady inflow of foreign investment, which boosted
China's economic growth rate to an average of 10% per annum during the 1980s.

In 1991, China approved more than 12,000 foreign invested enterprises with
total contractual value of $12 billion, the highest number since the Open Door
Policy started and representing an increase of 46% over 1990. In 1992 approved
foreign investments in China increased dramatically to $58 billion, up 483% from
1991. In 1993 approved foreign investments in China reached $100 billion. While
Hong Kong continues to be the leading source of foreign investment, investments
from Taiwan, South Korea, the United States and Japan have increased
significantly. With recent renewed momentum for further economic reform, foreign
invested enterprises are expected to play an increasingly important role in
China's economy.

Investing in China involves risks and special considerations as discussed
in the prospectus in the section entitled, "Risk Factors and Special
Considerations."

HONG KONG

Sovereignty over Hong Kong will be transferred from Great Britain to the
PRC on July 1, 1997, at which time Hong Kong will become a Special
Administrative Region ("SAR") of the PRC. Under the agreement providing for
such transfer (known as the "Joint Declaration") and the PRC law implementing
its commitments thereunder (the "Basic Law"), the current social and economic
systems in Hong Kong are to remain unchanged for at least 50 years, and Hong
Kong is to enjoy a high degree of autonomy except in foreign and defense
affairs. The SAR will be vested with executive, legislative and judicial power.
Laws currently in force, as they may be amended by the SAR Legislature, are to
remain in force except to the extent they contravene the Basic Law. The PRC may
not levy taxes on the SAR, the Hong Kong dollar is to remain fully convertible,
and Hong Kong is to remain a free port. Under the terms of the Basic Law, Hong
Kong's current social freedoms, including freedoms of speech, press, assembly,
travel, and religion, are not to be affected. It is not clear how future
developments in Hong Kong and China may affect the implementation of the Basic
Law after the transfer of sovereignty in 1997.

It is to be expected that the Hong Kong stock market will remain volatile
in response to prevailing perceptions of political developments in China.
Foreign enterprises are treated virtually the same as domestic enterprises and
there are no restrictions on exchange of foreign currencies or on the
repatriation of profits. Import and export licenses are easy to obtain. There
are no exchange controls, investment restrictions or dividend withholding taxes.
However, currently there are no laws in Hong Kong which specifically protect
foreign investors against expropriation.

Hong Kong's economic and political integration with China will officially
occur in less than one year when sovereignty over Hong Kong is transferred to
China on July 1, 1997. Hong Kong's role as the gateway to China for trade is
growing. Hong Kong is China's largest market, as well as its largest supplier.
Hong Kong is widely acknowledged to account for a significant portion of foreign
investment in China, although it is difficult to determine the portion of Hong
Kong's investments attributable to Hong Kong-based subsidiaries of foreign
multi-national companies.

TAIWAN

The Taiwan Stock Exchange (the "TSE"), the sole stock exchange in Taiwan,
is owned by government-controlled enterprises and private banks. In 1968, the
Securities and Exchange Law was passed and, since that time, the Taiwan
securities market has been regulated by the Taiwan Securities and Exchange
Commission (the "TSEC") which, in turn, is supervised by the Ministry of
Finance (the "MOF"). The Central Bank of China (the "CBC") is also
responsible for supervising certain aspects of the Taiwan securities market.

While, historically, foreign individual investors have not been permitted
to invest directly in securities listed on the TSE, since 1990 certain foreign
institutional investors have been permitted access to the Taiwan securities
market. Currently, foreign institutional investors which meet certain guidelines
promulgated by the TSEC and which are also approved by the TSEC, the MOF and the
CBC, will be permitted to invest in TSE listed securities. However, qualifying
foreign institutional investors (such as the Fund) may not own more than 5% of
the shares of a company listed on the TSE, and the total foreign ownership of
any listed company may not exceed 10%. In addition, the Taiwanese government
prohibits foreign investment in certain industries including transportation and
energy companies. Furthermore, Taiwan imposes an overall country limit on
investment and requires a long-term commitment. The Fund's Management believes
that over time restrictions on investments in Taiwan may ease to permit greater
and more flexible investment in Taiwanese securities.

The political reunification of China and Taiwan is a highly problematic
issue that may not be settled in the near future. Taiwan's economic interaction
with China can take place only through indirect channels (generally via Hong
Kong) due to the official prohibitions on direct trade between the PRC and
Taiwan. Nevertheless, in fewer than four years, Taiwan has become a significant
investor in China and China has become one of the largest markets for Taiwanese
goods.

EXCHANGE CONTROL

PRC currency, the Renminbi ("RNB"), is not freely convertible. The
exchange rate of RNB against foreign currencies is regulated and published daily
by the State Administration of Exchange Control ("SAEC"). In 1986,

to help solve the foreign exchange problems of foreign investors, China
established Foreign Exchange Adjustment Centers, commonly referred to as "swap
centers," in various cities. These swap centers provide an official forum where
foreign invested enterprises may, under the supervision and control of SAEC and
its branch offices, engage in mutual adjustment of their foreign exchange
surpluses and shortfalls. More recently, regulations have been relaxed to allow
Chinese state enterprises and individuals to participate in foreign exchange
swap transactions. Trading of RNB and foreign currencies at the swap centers is
conducted at a rate determined by supply and demand rather than at the official
exchange rate. Such market exchange rates can be highly volatile and are subject
to sharp fluctuations depending on market conditions.

The Fund may use official or market rates of exchange in connection with
portfolio transactions and net asset value determinations consistent with
prevailing practices in the relevant markets or locations, except that the Fund
will not use any exchange rate if the effect of such use would be to restrict
repatriation of assets.

No exchange control approval is required for the Fund to acquire "B"
shares listed on stock exchanges. Dividends and/or proceeds from the sale of
securities purchased by the Fund in listed China companies may be remitted
outside China, subject to payment of any relevant taxes and completion of the
requisite formalities.

Shanghai securities are now being quoted in U.S. dollars and Shenzhen
securities are now being quoted in Hong Kong dollars.

RISK FACTORS AND SPECIAL CONSIDERATIONS

Investing in China, Hong Kong, Taiwan and other China Region countries
involves certain risks and special considerations not typically associated with
investing in other more established economies or securities markets. INVESTORS
SHOULD CAREFULLY CONSIDER THEIR ABILITY TO ASSUME THE FOLLOWING RISKS BEFORE
MAKING AN INVESTMENT IN THE FUND. AN INVESTMENT IN SHARES OF THE FUND SHOULD BE
CONSIDERED SPECULATIVE AND THUS MAY NOT BE APPROPRIATE FOR ALL INVESTORS. SINCE
AN INVESTMENT IN THE FUND INVOLVES THE RISK OF TOTAL LOSS, AN INVESTMENT IN
SHARES OF THE FUND SHOULD NOT BE CONSIDERED A COMPLETE INVESTMENT PROGRAM. Such
risks include:

(1) the risk that China remains a totalitarian society and changes
regarding foreign investment in China may be imposed without notice. In this
event, the Fund's assets would be exposed to nationalization, expropriation, or
confiscatory taxation;

(2) the fact that China Region securities markets are substantially
smaller, less liquid and more volatile than the securities markets of more

developed nations. Foreigners can only invest in "B" shares, and there are
currently a very limited number of China companies that issue "B" shares. The
relatively small market capitalization and trading volume of China Region
securities may cause the Fund's investments to be comparatively less liquid and
subject to greater price volatility than investments in the securities markets
of developed nations. In particular, China's markets are in their infancy and
have yet to be exposed to a major correction. In the event of such an
occurrence, the absence of various market mechanisms which are inherent in the
markets of more developed nations may lead to turmoil in the market place, as
well as the inability of the Fund to liquidate its investments;

(3) greater social, economic and political uncertainty (including the risk
of war);

(4) dependency on exports and corresponding importance of international
trade;

(5) greater price volatility, substantially less liquidity and
significantly smaller market capitalization of securities markets, particularly
in China;

(6) currency exchange rate fluctuations and the lack of available currency
hedging instruments;

(7) higher rates of inflation;

(8) controls on foreign investment and limitations on repatriation of
invested capital and on the Fund's ability to exchange local currencies for
United States dollars;

(9) greater governmental involvement in and control over the economy;

(10) the risk that the China government may decide not to continue to
support the economic reform programs implemented since 1978 and could return to
the completely centrally planned economy that existed prior to 1978;

(11) the fact that China companies may be smaller, less seasoned and newly
organized;

(12) the difference in, or lack of, auditing and financial reporting
standards which may result in unavailability of material information about
issuers, particularly in China;

(13) the fact that the securities of many companies may trade at prices
substantially above book value, at high price/earnings ratios, or at prices
which do not reflect traditional measures of value;

(14) the fact that statistical information regarding the economy of China
may be inaccurate or not comparable to statistical information regarding the
U.S. or other economies;

(15) less extensive regulation of the securities markets;

(16) certain considerations regarding the maintenance of Fund portfolio
securities and cash with foreign subcustodians and securities depositories;

(17) the risk that it may be more difficult, or impossible, to obtain
and/or enforce a judgment than in other countries;

(18) the fact that following the establishment of the People's Republic of
China by the Communist Party in 1949, the Chinese government renounced various
debt obligations incurred by China's predecessor governments, which obligations
remain in default, and expropriated assets without compensation. There can be no
assurance that the China government will not take similar action in the future;

(19) the fact that stock corporations are a relatively new concept in
China. China does not have a well developed, consolidated body of securities
laws or laws governing corporations or joint stock companies. Laws regarding
fiduciary duties of officers and directors and the protection of investors are
in the early stages of development and existing laws do not cover all
contingencies;

(20) the risk that the Fund may be subject to income or withholding taxes
imposed by China, Hong Kong, Taiwan, or other foreign governments. The Fund
intends to elect, and when eligible, to "pass through" to the Fund's
shareholders the amount of foreign income tax and similar taxes paid by the
Fund. The foreign taxes passed through to a shareholder would be included in the
shareholder's income and may be claimed as a deduction or credit. Other taxes,
such as transfer taxes, may be imposed on the Fund, but would not give rise to a
credit or be eligible to be passed through to the shareholders; or

(21) the fact that the Fund also is permitted to engage in foreign currency
hedging transactions and to enter into stock options on stock index futures
transactions, each of which may involve special risks, although these strategies
cannot at the present time be used to a significant extent by the Fund in the
markets in which the Fund will principally invest.

ADDITIONAL INVESTMENT PRACTICES

BORROWING

As a fundamental policy which cannot be changed without a vote by
shareholders, the Fund may borrow from a bank up to a limit of 5% of its total
assets for temporary or emergency purposes; and, it may borrow up to 33 1/3% of
its total assets (reduced by the amount of all liabilities and indebtedness
other than such borrowings) when deemed desirable or appropriate to meet
redemption requests. Such borrowing is intended only as a temporary solution
until securities can be sold in an orderly fashion. To the extent that the Fund
borrows money prior to selling securities, the Fund may be leveraged. At such
times, the Fund may appreciate or depreciate in

value more rapidly than an unleveraged portfolio. The Fund will repay any money
borrowed in excess of 5% of the value of its total assets prior to purchasing
additional portfolio securities.

LENDING OF PORTFOLIO SECURITIES

The Fund may lend securities to broker-dealers or institutional investors
for their use in connection with short sales, arbitrages and other securities
transactions. This is a fundamental policy which cannot be changed without a
vote by shareholders. The Fund will not lend portfolio securities unless the
loan is secured by collateral (consisting of any combination of cash, United
States Government securities or irrevocable letters of credit) in an amount at
least equal (on a daily mark-to-market basis) to the current market value of the
securities loaned. In the event of a bankruptcy or breach of agreement by the
borrower of the securities, the Fund could experience delays and costs in
recovering the securities loaned. The Fund will not enter into securities
lending agreements unless its custodian bank/lending agent will fully indemnify
the Fund against loss due to borrower default. The Fund may not lend securities
with an aggregate market value of more than one-third of the Fund's total net
assets.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES

The Fund may purchase securities on a when-issued or delayed delivery
basis. Securities purchased on a when-issued or delayed delivery basis are
purchased for delivery beyond the normal settlement date at a stated price and
yield. No income accrues to the purchaser of a security on a when-issued or
delayed delivery basis prior to delivery. Such securities are recorded as an
asset and are subject to changes in value based upon changes in the general
level of interest rates. Purchasing a security on a when-issued or delayed
delivery basis can involve a risk that the market price at the time of delivery
may be lower than the agreed upon purchase price, in which case there could be
an unrealized loss at the time of delivery. The Fund will only make commitments
to purchase securities on a when-issued or delayed delivery basis with the
intention of actually acquiring the securities, but may sell them before the
settlement date if it is deemed advisable. The Fund will restrict liquid
securities in an amount at least equal in value to the Fund's commitments to
purchase securities on a when-issued or delayed delivery basis. If the value of
these assets declines, the Fund will place additional liquid assets in the
account on a daily basis so that the value of the assets in the account is equal
to the amount of such commitments.

PORTFOLIO CONCENTRATION

As a fundamental policy which cannot be changed without a vote of
shareholders, the Fund will not invest more than 25% of its total assets in
securities issued by any single industry or government (other than obligations
issued or guaranteed by the United States Government or any of its agencies or
instrumentalities).

PORTFOLIO DIVERSIFICATION

The Fund will not purchase the securities of any one issuer (other than
obligations issued or guaranteed by the United States Government or any of its
agencies or instrumentalities) if, with respect to 75% of its total assets and
as a result of such purchase (a) more than 5% of the total assets of the Fund
(taken at current value) would be invested in the securities of such issuer, or
(b) the Fund would hold more than 10% of the outstanding voting securities of
such issuer.

FUTURES CONTRACTS AND OPTIONS

For hedging purposes only, the Fund may sell financial futures contracts,
sell call options and purchase put options. Currently there is not a well
developed market for futures contracts and options on equity securities traded
in the China Region and the Advisor does not expect to make extensive use of
such futures contracts and options until a liquid market develops. However,
there are well developed markets for futures contracts and options on foreign
currencies which the Advisor expects to use. The Advisor is not obligated to
make use of either futures contracts or options. See "Foreign Currency
Transactions" in the Statement of Additional Information.

FUTURES CONTRACTS

The Fund may sell financial futures contracts to hedge its portfolio
against a decline in the market price of securities which it owns or to defend
the portfolio against currency fluctuations. A financial futures contract is an
agreement between two parties to buy or sell a specified security at a set price
on a set future date. An index futures contract is an agreement to take or make
delivery of an amount of cash based on the difference between the value of the
index at the beginning and at the end of the contract period. A futures contract
on a foreign currency is an agreement to buy or sell a specified amount of a
currency for a set price on a set future date.

When the Fund enters into a futures contract, it must make an initial
deposit, known as "initial margin," as a partial guarantee of its performance
under the contract. As the value of the security index or currency fluctuates,
either party to the contract is required to make additional margin payments,
known as "variation margin," to cover any additional obligation it may have
under the contract. In addition, when the Fund enters into a futures contract,
it will segregate assets or "cover" its position in accordance with applicable
law. See "Segregated Assets and Covered Portfolios" in the Statement of
Additional Information.

SELLING (OR WRITING) COVERED CALL OPTIONS

The Fund may sell (or write) covered call options on individual portfolio
securities or on futures contracts (described above). A call option gives the
buyer of the option, upon payment of a premium, the right to call

upon the writer to deliver a security on or before a fixed date at a
predetermined price, referred to as the "strike price." If the price of the
hedged security or futures contract should fall or remain below the strike
price, the Fund will not be called upon to deliver the security or make a cash
payment and the Fund will retain the premium received for the option as
additional income. This additional income may offset any decline in the value of
the security or futures contract up to the amount of premium received. If the
price of the hedged security or futures contract rises or remains above the
strike price of the option, the Fund will generally be called upon to deliver
the security or make a cash payment. This will prevent the Fund from benefiting
from any gain on the security or futures contract. See "Segregated Assets and
Covered Positions" in the Statement of Additional Information.

BUYING PUT OPTIONS

The Fund may purchase put options on individual portfolio securities or on
futures contracts (described above). A put option gives the buyer of the option,
upon payment of a premium, the right to sell a security or futures contract to
the writer of the option on or before a fixed date at a predetermined price. The
Fund will realize a gain from the exercise of a put option if, during the option
period, the price of the security or futures contract declines by an amount in
excess of the premium paid. The Fund will realize a loss equal to all or a
portion of the premium paid for the option if the price of the security or
futures contract increases or does not decrease by more than the premium.

CLOSING TRANSACTIONS

The Fund may dispose of an option written by the Fund by entering into a
"closing purchase transaction" for an identical option and may dispose of an
option purchased by the Fund by entering into a "closing sale transaction" for
an identical option. In each case, the closing transaction will have the effect
of terminating the rights of the option holder and the obligations of the option
purchaser and will result in a gain or loss to the Fund based upon the relative
amount of the premiums paid or received for the original option and the closing
transaction. The Fund may sell (or write) put options solely for the purpose of
entering into closing sale transactions.

LIMITATIONS

The Fund will purchase and sell only options that are listed on a
securities exchange. The Fund will not purchase any option if, immediately
thereafter, the aggregate market value of all outstanding options purchased and
written by the Fund would exceed 5% of the Fund's total assets. The Fund will
not write any call options if, immediately thereafter, the aggregate value of
the Fund's securities subject to outstanding call options would exceed 25% of
the value of the Fund's total assets.

HOW TO PURCHASE SHARES

The minimum initial investment is $1,000 for regular accounts or $50 for
custodial accounts for minors. The minimum subsequent investment is $50. The
minimum initial investment for persons enrolled in ABC Investment Plan
(Registered Trademark) is $100, and the minimum subsequent investment pursuant
to such a plan is $30 or more per month per account. There is no minimum
purchase for retirement plan accounts, including IRAs, administered by the
Advisor or its agents and affiliates.

YOU MAY INVEST IN THE FOLLOWING WAYS:

BY MAIL

Send your application and check or money order, made payable to the Fund,
to P.O. Box 781234, San Antonio, Texas 78278-1234.

When making subsequent investments, enclose your check with the return
remittance portion of your confirmation statement or indicate on your check or a
separate piece of paper your name, address and account number and mail to the
address mentioned above. Do not use the remittance portion of your confirmation
statement for a different fund as it is pre-coded. This may cause your
investment to be invested into the wrong fund. If you wish to purchase shares in
more than one fund, send a separate check or money order for each fund. Third
party checks will not be accepted; and the Trust reserves the right to refuse to
accept second party checks.

BY TELEPHONE

Once your account is open, you may make investments by telephone by calling
1-800-US-FUNDS (1-800-873-8637). Investments by telephone are not available in
money market funds or any retirement account administered by the Advisor or its
agents. The maximum telephone purchase is ten times the value of the shares
owned, calculated at the last available net asset value. Payment for shares
purchased by telephone is due within seven business days after the date of the
transaction. You cannot exchange shares purchased by telephone until after the
payment has been received and accepted by the Trust.

BY WIRE

You may make your initial or subsequent investments in United Services
Funds by wiring funds. To do so, call United Services Funds for a confirmation
number and wiring instructions.

BY ABC INVESTMENT PLAN (Registered Trademark)

a minimum of $30 a month beginning within thirty (30) days after the account is
opened. These lower minimums are a special service bringing to small investors
the benefits of United Services Funds without requiring a $1,000 minimum initial
investment.

Your investment dollars will automatically buy more shares when the market
is undervalued and fewer shares when the market is overvalued. By investing an
equal amount at regular, periodic intervals, you avoid the extremes in the
market. Of course, using the ABC Investment Plan (Registered Trademark) does not
guarantee a profit. If you sell at the bottom, no system will give you a gain.

You may call 1-800-873-8637 to open a treasury money market fund or you
could inquire at your bank whether it will honor debits through the Automated
Clearing House ("ACH") or, if necessary, preauthorized checks. You may change
the date or amount of your investment or discontinue the Plan any time by letter
received by United Services Funds at least two weeks before the change is to
become effective.

ADDITIONAL INFORMATION ABOUT PURCHASES

All purchases of shares are subject to acceptance by the Trust and are not
binding until accepted. United Services Funds reserves the right to reject any
application or investment. Orders received by the Fund's transfer agent or a
sub-agent before 4:00 p.m. Eastern Time, Monday through Friday exclusive of
business holidays, and accepted by the Fund will receive the share price next
computed after receipt of the order. In the event that the NYSE and other
financial markets close earlier, as on the eve of a holiday, orders will become
effective earlier in the day at the close of trading on the NYSE.

If your telephone order to purchase shares is canceled due to nonpayment or
late payment (whether or not your check has been processed by the Fund), you
will be responsible for any loss incurred by the Trust by reason of such
cancellation.

If a check is returned unpaid due to nonsufficient funds, stop payment or
other reasons, the Trust will charge $20 and you will be responsible for any
loss incurred by the Trust with respect to cancelling the purchase.

To recover any such loss or charge, the Trust reserves the right, without
further notice, to redeem shares of any affiliated funds already owned by any
purchaser whose order is canceled, for whatever reason, and such purchaser may
be prohibited from placing further orders unless investments are accompanied by
full payment by wire or cashier's check.

United Services Funds charges no sales commissions or "loads" of any
kind. However, investors may purchase and sell shares through registered
broker-dealers who may charge fees for their services.

CHECKS DRAWN ON FOREIGN BANKS. To be received in good order, an investment
must be made in U.S. dollars payable through a bank in the U.S. As an
accommodation, the Fund's transfer agent may accept checks payable in a foreign
currency or drawn on a foreign bank and will attempt to convert such checks into
U.S. dollars and repatriate such amount to the Fund's account in the U.S. Your
investment in the Fund will not be considered to have been received in good
order until your foreign check has been converted into U.S. dollars and is
available to the Fund through a bank in the U.S. Your investment in the Fund may
be delayed until your foreign check has been converted into U.S. dollars and
cleared the normal collection process. Any amounts charged to the Fund for
collection procedures will be deducted from the amount invested.

If the Trust incurs a charge for locating a shareholder without a current
address, such charge will be passed through to the shareholder.

TAX IDENTIFICATION NUMBER

The Fund is required by Federal law to withhold and remit to the United
States Treasury a portion of the dividends, capital gain distributions and
proceeds of redemptions paid to any shareholder who fails to furnish the Fund
with a correct taxpayer identification number, who underreports dividend or
interest income or who fails to provide certification of tax identification
number. In order to avoid this withholding requirement, you must certify on your
application, or on a separate W-9 Form supplied by the Transfer Agent, that your
taxpayer identification number is correct and that you are not currently subject
to backup withholding or you are exempt from backup withholding. For
individuals, your taxpayer identification number is your social security number.

Instructions to exchange or transfer shares held in established accounts
will be refused until the certification has been provided. In addition, the Fund
assesses a $50 administrative fee if the taxpayer identification number is not
provided by year end.

CERTIFICATES

When you open your account, United Services Funds will send you a
confirmation statement, which will be your evidence that you have opened an
account with United Services Funds. The confirmation statement is nonnegotiable,
so if it is lost or destroyed, you will not be required to buy a lost instrument
bond or be subject to other expense or trouble, as you would with a negotiable
stock certificate. At your written request, United Services Funds will issue
negotiable stock certificates. Unless your shares are purchased with wired
funds, a certificate will not be issued until 15 days have elapsed from the time
of purchase, or United Services Funds has satisfactory proof of payment, such as
a copy of your canceled check. Negotiable certificates will not be issued for
fewer than 100 shares.

HOW TO EXCHANGE SHARES

You have the privilege of exchanging into any of the other funds in the
United Services family of funds which are registered in your state. An exchange
involves the redemption (sale) of shares of one fund and purchase of shares of
another fund at the respective closing net asset value and is a taxable
transaction.

FUNDS IN THE UNITED SERVICES FAMILY

Investing involves a trade-off between potential rewards and potential
risks. In order to achieve higher rewards on your investment, you must be
willing to take on higher risk. If you are most concerned with safety of
principal, a lower risk investment will provide greater stability but with lower
potential earnings. Another strategy for dealing with volatile markets is to use
the ABC Investment Plan (Registered Trademark). The list below is a reward and
risk guide to all of the mutual funds in the United Services family of funds.
This guide may help you decide if a fund is suitable for your investment goals.

HIGH REWARD China Region Opportunity Fund
HIGH RISK U.S. Gold Shares Fund
U.S. World Gold Fund
U.S. Global Resources Fund
Bonnel Growth Fund
U.S. Real Estate Fund
MODERATE REWARD U.S. All American Equity Fund
MODERATE RISK U.S. Income Fund
U.S. Tax Free Fund
United Services Near-Term
Tax Free Fund
United Services Intermediate
Treasury Fund
LOW REWARD U.S. Government Securities
Savings Fund
LOW RISK U.S. Treasury Securities Cash Fund

If you have additional questions, one of our professional investor
representatives will personally assist you. Call 1-800-US-FUNDS.

BY TELEPHONE

communicated by telephone are genuine (including requiring some form of personal
identification, providing written confirmations and tape recording
conversations); and if either party does not, it may be liable for losses due to
unauthorized or fraudulent transactions.

BY MAIL

You may direct United Services Funds in writing to exchange your shares
between identically registered accounts. The request must be signed exactly as
the name appears in the registration. (Read "Additional Information About
Exchanges.")

ADDITIONAL INFORMATION ABOUT EXCHANGES

(1) There is a $5 charge, which is paid to United Shareholder Services,
Inc. ("USSI" or the "Transfer Agent"), for each exchange out of any fund
account. Retirement accounts administered by the Advisor or its agents are
charged $5 for each exchange exceeding three per quarter. The exchange fee is
charged to cover administrative costs associated with handling these exchanges.

(2) An exchange involves both the redemption of shares out of the Fund and
the purchase of shares in a "Separate Fund." Like any other purchase, shares
of the Separate Fund cannot be purchased by exchange until all conditions of
purchase are met, including investable proceeds being immediately available.
Like any other redemption, the Fund reserves the right to hold exchange proceeds
for up to seven days. In general, the Fund expects to exercise this right on
exchanges of $50,000 or more. In such event, purchase of the Separate Fund
shares will be delayed until proceeds from the redemption are invested. Separate
Fund shares will be priced at their net asset value at the time of purchase.
During the period after redemption and prior to purchase, you will not be
invested in either the Fund or the Separate Fund. You will be notified
immediately if the purchase of Separate Fund shares will be delayed.

(3) If the shares you wish to exchange are represented by a negotiable
stock certificate, the certificate must be returned before the exchange can be
effected.

(4) Shares may not be exchanged unless you have furnished United Services
Funds with your tax identification number, certified as prescribed by the
Internal Revenue Code and Regulations, and the exchange is to an account with
like registration and tax identification number. (See "Tax Identification
Number.")

(5) Exchanges out of United Services Funds' equity funds of shares held
less than 180 days are subject to the redemption fee. (See "Redemption Fee Paid
to Fund.")

(6) The exchange privilege may be terminated at any time. The exchange fee
and other terms of the privilege are subject to change.

HOW TO REDEEM SHARES

You may redeem any or all of your shares at will. Redemption requests
received in proper order by the Fund's transfer agent or a sub-agent before 4:00
p.m. Eastern Time, Monday through Friday exclusive of business holidays will
receive the share price next computed after receipt of the request.

BY MAIL

Your written request for redemption, to be in "proper order," requires
delivery to the Transfer Agent of:

(1) a written request for redemption signed by each registered owner
exactly as the shares are registered, the account number and the number of
shares or the dollar amount to be redeemed;

(2) negotiable stock certificates for any shares to be redeemed for which
certificates have been issued;

(3) signature guarantees when required; and,

(4) such additional documents as are customarily required to evidence the
authority of persons effecting redemptions on behalf of corporations, executors,
trustees, and other fiduciaries. Redemptions will not become effective until all
documents, in the form required, have been received by the Transfer Agent. (Read
"Additional Information About Redemptions.")

HOW TO EXPEDITE REDEMPTIONS

To redeem your Fund shares by telephone, you may call the Fund and direct
an exchange out of the Fund into an identically registered account in a United
Services treasury money market fund ($1,000 minimum initial investment). You may
then write a check against your treasury money market fund account. See "How to
Exchange Shares" for a description of exchanges, including the $5 exchange fee.
Call 1-800-873-8637 for more information concerning telephone redemption and a
treasury money market fund prospectus.

SPECIAL REDEMPTION ARRANGEMENTS

SIGNATURE GUARANTEE

than the registered owner of the shares to be redeemed or if proceeds are to be
mailed to an address other than the registered address of record. When a
signature guarantee is required, each signature must be guaranteed by: (a) a
federally insured bank or thrift institution; (b) a broker or dealer (general
securities, municipal, or government) or clearing agency registered with the
U.S. Securities and Exchange Commission that maintains net capital of at least
$100,000; or (c) a national securities exchange or national securities
association. The guarantee must: (i) include the statement "Signature(s)
Guaranteed"; (ii) be signed in the name of the guarantor by an authorized
person, including the person's printed name and position with guarantor, and
(iii) include a recital that the guarantor is federally insured, maintains the
requisite net capital or is a national securities exchange or association.
Shareholders living abroad may acknowledge their signatures before a U.S.
consular officer. Military personnel may acknowledge their signatures before
officers authorized to take acknowledgments (e.g., legal officers and
adjutants).

REDEMPTION PROCEEDS MAY BE SENT TO YOU:

BY MAIL

If your redemption check is mailed, it is usually mailed within 48 hours;
however, the Fund reserves the right to hold redemption proceeds for up to seven
days. If the shares to be redeemed were purchased by check, the redemption
proceeds will not be mailed until the purchase check has cleared, which may take
up to seven days. You may avoid this requirement by investing by bank wire
(Federal funds). Redemption checks may be delayed if you have changed your
address in the last 30 days. Please notify the Fund promptly in writing, or by
telephone, of any change of address.

BY WIRE

You may authorize the Fund to transmit redemption proceeds by wire,
provided you send written wiring instructions with a signature guarantee at the
time of redemption. Proceeds from your redemption will usually be transmitted on
the first business day following the redemption. However, the Trust reserves the
right to hold redemptions for up to seven days. If the shares to be redeemed
were purchased by check, the redemption proceeds will not be mailed or wired
until the purchase check has cleared, which may take up to seven days. There is
a $10 charge to cover the wire, which is deducted from redemption proceeds.
International wire charges will be higher.

ADDITIONAL INFORMATION ABOUT REDEMPTIONS

The redemption price may be more or less than your cost, depending on the
net asset value of the Fund's portfolio next determined after your request is
received.

A request to redeem shares in an IRA or similar retirement account must be
accompanied by an IRS Form W4-P and a reason for withdrawal as specified by the
IRS. Proceeds from the redemption of shares from a retirement account may be
subject to withholding tax.

The Trust has the authority to redeem existing accounts and to refuse a
potential account the privilege of having an account in the Trust if the Trust
reasonably determines that the failure to so redeem, or to so prohibit, would
have a material adverse consequence to the Trust and its shareholders. The power
to redeem existing accounts will be exercised in light of the Trustees'
fiduciary duties and in conformance with Massachusetts law. The Trust will not
redeem an existing account solely to prevent the legitimate exercise of a
shareholder's rights.

Although the Fund normally expects to make payments in cash, the Fund
reserves the right, subject to compliance with applicable regulations, to
require shareholders to accept as redemption proceeds securities held in the
Fund's portfolio. The Fund will only exercise this right if it is required under
the Investment Company Act of 1940 to redeem shares and if the Fund is unable to
liquidate securities in its portfolio due to an inability to access the market
in which they trade. In that case it is likely that the shareholder would also
be unable to convert such securities into cash. The shareholder could incur
brokerage or other charges in converting the securities to cash. The Fund will
at all times endeavor to treat shareholders in a fair manner and to give each
shareholder as much as possible a proportionate distribution of the various
securities held in the Fund. Such may not be possible in light of laws and
restrictions in force in the country or countries where such shares were issued.

REDEMPTION FEE PAID TO FUND

A redemption fee of 1% of the value of shares redeemed or exchanged will be
assessed to shareholders who redeem or exchange shares of the Fund held less
than 180 calendar days. The redemption fee will be paid to the Fund to benefit
remaining shareholders by protecting them against expenses due to excessive
trading. Excessive short-term trading has an adverse impact on effective
portfolio management as well as on Fund expenses. The Fund has reserved the
right to refuse investments from shareholders who engage in short-term trading
that may be disruptive to the Fund.

ACCOUNT CLOSING FEE

the Transfer Agent's fee, including the cost of tax reporting which is based
upon the number of shareholder accounts. The account closing fee does not apply
to exchanges between the funds of United Services family of funds nor will it be
imposed on any account involuntarily redeemed.

SMALL ACCOUNTS

Fund accounts which fall, for any reason other than market fluctuations,
below $1,000 at any time during a month will be subject to a small account
charge of $5 for that month. The charge will first be deducted from dividend and
distribution amounts to be paid during the month. If dividends and distributions
are insufficient, then sufficient shares will be involuntarily redeemed from an
account to make up the difference. The charge is payable directly to the Fund's
Transfer Agent which, in turn, will reduce its charges to the Fund by an equal
amount. The purpose of the charge is to allocate the costs of maintaining
shareholder accounts more equitably among shareholders.

In order to reduce expenses of the Fund, the Trust may involuntarily redeem
all shares in any shareholder account, other than active ABC Investment Plan
(Registered Trademark) accounts, custodial accounts for minors, and retirement
plan accounts, if, for a period of more than three months, the account has a net
asset value of $500 or less and the reduction in value is not due to market
fluctuations. If the Fund elects to close such accounts, it will notify
shareholders whose accounts are below the minimum of its intention to do so, and
will provide those shareholders with an opportunity to increase their accounts
by investing a sufficient amount to bring their accounts up to the minimum
amount within ninety (90) days of the notice. No account closing fee or
redemption fee will be charged to investors whose accounts are closed under this
redemption provision.

CONFIRMATION STATEMENTS

Shareholders normally will receive a confirmation statement after each
transaction (purchase, redemption, dividend, etc.) showing activity in the
account. If you have no transactions, you will receive an annual statement only.

OTHER SERVICES

The Trust has available a number of plans and services to meet the special
needs of certain investors. Plans available include:

(1) payroll deduction plans, including military allotments;

(2) custodial accounts for minors;

(3) a flexible, systematic withdrawal plan; and

(4) various retirement plans such as IRA, 403(b)(7), 401(k) and
employer-adopted defined contribution (profit sharing) plans.

Application forms and brochures describing these plans and services can be
obtained from the Transfer Agent by calling 1-800-US-FUNDS (1-800-873-8637).

There is an annual charge for each retirement plan fund account with
respect to which Security Trust & Financial Company ("ST&FC"), a wholly-owned
subsidiary of the Advisor, acts as custodian (for example, $10 for IRAs and $15
for SEP/IRAs, 403(b)(7)s, profit sharing and other such accounts). If this
administrative charge is not paid separately prior to the last business day of a
calendar year or prior to a total redemption or exchange, it will be deducted
from the shareholder's account.

SHAREHOLDER SERVICES

United Shareholder Services, Inc. ("USSI" or "Transfer Agent"), a
wholly-owned subsidiary of the Advisor, acts as transfer and dividend paying
agent for all fund accounts. Simply write or call 1-800-US-FUNDS for prompt
service on any questions about your account.

24-HOUR ACCOUNT INFORMATION

Shareholders can also access 24 hours a day current information on yields,
share prices, latest dividends, account balances, deposits and redemptions. Just
call 1-800-US-FUNDS and press the appropriate codes into your touch-tone phone.

HOW SHARES ARE VALUED

Shares of the Fund are purchased or redeemed, on a continuing basis without
a sales charge, at their next determined net asset value per share. The net
asset value per share of the Fund is calculated separately by USSI. Net asset
value per share is determined and orders become effective as of 4:00 p.m.
Eastern Time, Monday through Friday, exclusive of business holidays on which the
NYSE is closed, by dividing the aggregate net assets of the Fund by the total
number of shares of the Fund outstanding. In the event that the NYSE and other
financial markets close earlier, as on the eve of a holiday, the net asset value
per share will be determined earlier in the day at the close of trading on the
NYSE.

Valuation shall be calculated in U.S. dollars. Securities quoted in other
currencies will be converted to U.S. dollars using the exchange rate then in
effect in the principal market in which the relevant securities are traded. A
portfolio security listed or traded on an international market, either on an
exchange or over-the-counter, is valued at the last reported sales price prior
to the time when assets are valued. A portfolio security listed or traded in the
domestic market, either on an exchange or over-the-counter, is valued at

the latest reported sale price prior to the time when assets are valued; and,
lacking any sales on that day, the security is valued at the mean between the
last reported bid and ask prices.

When market quotations are not readily available, or when restricted
securities or other assets are being valued, such assets are valued at fair
value as determined in good faith by or under procedures established by the
Board of Trustees.

Portfolio securities which are traded on more than one market are valued
according to the broadest and most representative market. Prices used to value
portfolio securities are monitored to ensure that they represent current market
values. If the price of a portfolio security is determined to be materially
different from its current market value, then such security will be valued at
fair value as determined by Management and approved in good faith by the Board
of Trustees.

Debt securities with maturities of 60 days or less at the time of purchase
are valued on the basis of the amortized cost. This involves valuing an
instrument at its cost initially and, thereafter, assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument.

DIVIDENDS AND TAXES

UNITED STATES TAXES

The Fund intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). By
complying with the applicable provisions of the Code, the Fund will not be
subject to Federal income tax on its net investment income and capital gain net
income that are distributed to shareholders.

All income dividends and capital gain distributions are normally
reinvested, without charge, in additional full and fractional shares of the
Fund. Alternatively, investors may choose: (1) automatic reinvestment of capital
gain distributions in Fund shares and payment of income dividends in cash; (2)
payment of capital gain distributions in cash and automatic reinvestment of
dividends in Fund shares; or (3) all income dividend and capital gain
distributions paid in cash. The share price of the reinvestment will be the net
asset value of the Fund shares computed at the close of business on the date the
dividend or distribution is paid. Dividend checks returned to the Fund as being
undeliverable and dividend checks not cashed after 180 days will automatically
be reinvested at the price of the Fund on the day returned or on or about the
181st day and the distribution option will be changed to "reinvest."

At the time of purchase, the share price of the Fund may reflect
undistributed income, capital gains or unrealized appreciation of securities.

Any dividend or capital gain distribution paid to a shareholder shortly after a
purchase of shares will reduce the per share net asset value by the amount of
the distribution. Although in effect a return of capital to the shareholder,
these distributions are fully taxable.

The Fund expects to distribute substantially all of its net investment
income, if any, and any net realized capital gains at least once each year.

The Fund is subject to a nondeductible 4 percent excise tax calculated as a
percentage of certain undistributed amounts of taxable ordinary income and
capital gains net of capital losses. The Fund intends to make such distributions
as may be necessary to avoid this excise tax.

Dividends from taxable net investment income and distributions of net
short-term capital gains paid by the Fund are taxable to shareholders as
ordinary income, whether received in cash or reinvested in additional shares of
the Fund. A portion of these dividends may qualify for the 70 percent dividends
received deduction available to corporations. Distributions of net capital gains
will be taxable to shareholders as long-term capital gains, whether paid in cash
or reinvested in additional shares, and regardless of the length of time the
investor has held his shares.

Each January, the Fund will report to its shareholders the Federal tax
status of dividends and distributions paid or declared by the Fund during the
preceding calendar year. This statement will also indicate whether and to what
extent distributions qualify for the 70 percent dividends received deduction
available to corporations.

There is a possibility that China exchange control regulations may restrict
or limit the ability of the Fund to distribute net investment income or the
proceeds from the sale of its investments to its shareholders. Any such
restrictions or limitations could impact the Fund's ability to meet the
distribution requirements described above.

If the Fund owns shares in a foreign corporation that constitutes a
"passive foreign investment company" for U.S. Federal income tax purposes and
the Fund does not elect to treat the foreign corporation as a "qualified
electing fund" within the meaning of the Code, the Fund may be subject to U.S.
Federal income tax on a portion of any "excess distribution" it receives from
the foreign corporation or any gain it derives from the disposition of such
shares, even if such income is distributed as a taxable dividend by the Fund to
its U.S. shareholders. The Fund may also be subject to additional tax in the
nature of an interest charge with respect to deferred taxes arising from such
distributions or gains. Any tax paid by the Fund as a result of its ownership of
shares in a "passive foreign investment company" will not give rise to any
deduction or credit to the Fund or any shareholder. If the Fund owns shares in a
"passive foreign investment company" and the Fund does elect to treat the
foreign corporation as a "qualified electing fund" under the Code, the Fund
may be required to include in its income each year a portion of the ordinary
income

and net capital gains of the foreign corporation, even if this income is not
distributed to the Fund. Any such income would be subject to the distribution
requirements described above even if the Fund did not receive any income to
distribute.

CURRENCY FLUCTUATIONS - "SECTION 988" GAINS OR LOSSES

Under the Code, gains or losses attributable to fluctuations in exchange
rates which occur between the time the Fund accrues interest or other
receivables, or accrues expenses or other liabilities denominated in a foreign
currency and the time the Fund actually collects such receivables or pays such
liabilities are treated as ordinary income or ordinary loss. Similarly, gains or
losses from the disposition of foreign currencies or from the disposition of
debt securities denominated in a foreign currency attributable to fluctuations
in the value of the foreign currency between the date of acquisition of the
currency or security and the date of disposition also are treated as ordinary
gain or loss. These gains or losses, referred to under the Code as "section
988" gains or losses, increase or decrease the amount of the Fund's net
investment income (which includes, among other things, dividends, interest and
net short-term capital gains in excess of net long-term capital losses, net of
expenses) available to be distributed to its shareholders as ordinary income,
rather than increasing or decreasing the amount of the Fund's net capital gain.
If section 988 losses exceed such other net investment income during a taxable
year, any distributions made by the Fund could be recharacterized as a return of
capital to shareholders, rather than as an ordinary dividend, reducing each
shareholder's basis in his Fund shares. To the extent that such distributions
exceed such shareholder's basis, they will be treated as a gain from the sale of
shares. As discussed below, certain gains or losses with respect to forward
foreign currency contracts, over-the-counter options or foreign currencies and
certain options graded on foreign exchanges will also be treated as section 988
gains or losses.

Forward currency contracts and certain options entered into by the Fund may
create "straddles" for U.S. Federal income tax purposes and this may affect
the character of gains or losses realized by the Fund on forward currency
contracts or on the underlying securities and cause losses to be deferred.
Transactions in forward currency contracts may also result in the loss of the
holding period of underlying securities for purposes of the 30% of gross income
test. The Fund may also be required to "mark-to-market" certain positions in
its portfolio (i.e., treat them as if they were sold at year end). This could
cause the Fund to recognize income without having the cash to meet the
distribution requirements.

FOREIGN TAXES

Income received by the Fund from sources within China and any other
countries in which the issuers of securities purchased by the Fund are

located may be subject to withholding and other taxes imposed by such countries.

If the Fund is liable for foreign income and withholding taxes that can be
treated as income taxes under U.S. Federal income tax principles, the Fund
expects to meet the requirements of the Code for "passing-through" to its
shareholders such foreign taxes paid, but there can be no assurance that the
Fund will be able to do so. Under the Code, if more than 50% of the value of the
Fund's total assets at the close of its taxable year consists of stocks or
securities of foreign corporations, the Fund will be eligible for, and intends
to file, an election with the Internal Revenue Service to "pass-through" to
the Fund's shareholders the amount of such foreign income and withholding taxes
paid by the Fund. Pursuant to this election a shareholder will be required to:
(1) include in gross income (in addition to taxable dividends actually received)
his pro rata share of such foreign taxes paid by the Fund; (2) treat his pro
rata share of such foreign taxes as having been paid by him; and (3) either
deduct his pro rata share of such foreign taxes in computing his taxable income
or use it as a foreign tax credit against his U.S. Federal income taxes. No
deduction for such foreign taxes may be claimed by a shareholder who does not
itemize deductions. Each shareholder will be notified within 60 days after the
close of the Fund's taxable year whether the foreign taxes paid by the Fund will
"pass-through" for that year and, if so, such notification will designate (a)
the shareholder's portion of the foreign taxes paid to each such country; and
(b) the portion of dividends that represents income derived from sources within
each such country.

The amount of foreign taxes for which a shareholder may claim a credit in
any year will be subject to an overall limitation which is applied separately to
"passive income," which includes, among other types of income, dividends and
interest.

The foregoing is only a general description of the foreign tax credit under
current law. Because applicability of the credit depends on the particular
circumstances of each shareholder, shareholders are advised to consult their own
tax advisers.

The foregoing discussion relates only to generally applicable Federal
income tax provisions in effect as of the date of this Prospectus. Shareholders
should consult their tax advisers about the status of distributions from the
Fund in their own states and localities.

THE TRUST

United Services Funds (the "Trust") is an open-end management investment
company, consisting of numerous separate, diversified portfolios, each of which
has its own investment objectives and policies. The portfolios are designed to
serve a wide range of investor needs.

The Trust was formed on July 31, 1984 as a "business trust" under the
laws of the Commonwealth of Massachusetts. It is a "series" company which is
authorized to issue series of shares without par value, each series representing
interests in a separate portfolio, or divide the shares of any series into
classes. Shares of numerous series have been authorized. The Board of Trustees
of the Trust has the power to create additional series, or divide existing
series into two or more classes, at any time, without a vote of shareholders of
the Trust.

Under the Trust's First Amended and Restated Master Trust Agreement (the
"Master Trust Agreement"), no annual or regular meeting of shareholders is
required, although the Trustees may authorize special meetings from time to
time. Under the terms of the Master Trust Agreement, the Trustees will be a
self-perpetuating body and will continue their positions until they resign, die
or are removed by a written instrument signed by a least two-thirds of the
Trustees, by vote of shareholders holding not less than two-thirds of the shares
then outstanding of the Trust cast at any meeting called for that purpose, or by
a written declaration signed by shareholders holding not less than two-thirds of
the shares then outstanding.

On any matter submitted to shareholders, shares of each portfolio entitle
their holder to one vote per share, irrespective of the relative net asset
values of each portfolio's shares. On matters affecting an individual portfolio,
a separate vote of shareholders of the portfolio is required. Each portfolio's
shares are fully paid and non-assessable by the Trust, have no preemptive or
subscription rights, and are fully transferable, with no conversion rights.

MANAGEMENT OF THE FUND

TRUSTEES

The business affairs of the Fund are managed by the Trust's Board of
Trustees. The Trustees establish policies, as well as review and approve
contracts and their continuance. The Trustees also elect the officers and select
the Trustees to serve as executive and audit committee members.

THE INVESTMENT ADVISOR

U.S. Global Investors, Inc., 7900 Callaghan Road, San Antonio, Texas 78229,
under an investment advisory agreement with the Trust dated October 26, 1989,
furnishes investment advice and is responsible for overall management of the
Trust's business affairs. Frank E. Holmes, Chief Executive Officer and Chairman
of the Board of Directors of the Advisor, as well as President and Trustee of
the Trust, has since October 1989, owned more than 25% of the voting stock of
the Advisor and is its controlling person. The Advisor was organized in 1968.

The Advisor provides to the Trust, and to each of the portfolios within the
Trust, management and investment advisory services. The Advisor

furnishes an investment program for each of the Funds, determines, subject to
the overall supervision and review of the Board of Trustees of the Trust, what
investments should be purchased, sold and held, and makes changes on behalf of
the Trust in the investments of each of the Funds. Mr. Bin Shi is responsible
for the day-to-day management of the Fund's portfolio. Mr. Shi has been the
portfolio manager since January, 1996. A native of Shanghai, China, Mr. Shi
joined the Advisor in January of 1994 to assist the investment division by
providing fundamental stock analysis for the China Fund. Prior to his
association with USGI, Mr. Shi earned a masters degree with a concentration in
finance and accounting from Tulane University. Mr. Shi is also a graduate of the
prestigious Fudan University in Shanghai, China.

The Advisor provides the Trust with office space, facilities and business
equipment and provides the services of executive and clerical personnel for
administering the affairs of the Trust. The Advisor pays the expense of printing
and mailing prospectuses and sales materials used for promotional purposes.

Notwithstanding the following description of fees and other expenses, the
Advisor has voluntarily guaranteed that Total Fund Operating Expenses (as a
percentage of net assets) for the China Region Opportunity Fund will not exceed
2.25% on an annualized basis through June 30, 1997 and until such later date as
the Advisor determines.

The Advisory Agreement with the Trust provides for the Fund to pay the
Advisor a management fee equal to 1.25% of the Fund's average net assets ( 1/12
of 1.25% monthly). While this management fee is higher than that of most other
mutual funds, it is comparable to management fees charged by other mutual funds
with similar investment policies. For the year ended June 30, 1996, the Fund
paid the Advisor 0.31% of average net assets due to the Advisor's guarantee.

accounts at the institutions, which payment shall not exceed $1.92 multiplied by
the average daily number of accounts holding Trust share at the institution.
These fees cover the usual transfer agency functions. In addition, the Fund
bears certain other Transfer Agent expenses such as the costs of record
retention and postage, plus the telephone and line charges (including the
toll-free 800 service) used by shareholders to contact the Transfer Agent. For
the year ended June 30, 1996, the Fund paid USSI a total of $110,732 for
transfer agency, lockbox and printing fees due USSI.

USSI performs bookkeeping and accounting services, and determines the daily
net asset value for the Fund. Bookkeeping and accounting services are provided
to the Fund for an asset based fee of 0.05% of the first $150 million average
net assets, 0.04% of the next $150 million average net assets, 0.03% of the next
$200 million average net assets, 0.02% of the next $250 million average net
assets and 0.01% of average net assets in excess of $750 million - subject to an
annual minimum fee of $28,000. For the year ended June 30, 1996, the Fund paid
USSI a total of $28,000 for portfolio accounting services.

Additionally, the Advisor is reimbursed certain costs for in-house legal
services pertaining to the Fund, which reimbursement is subject to the Advisor's
assumption of expenses for the Fund.

The Trust pays all other expenses for its operations and activities. The
Fund pays its allocable portion of these expenses. The expenses borne by the
Trust include the charges and expenses of any shareholder servicing agents,
custodian fees, legal and auditors' expenses, brokerage commissions for
portfolio transactions, the advisory fee, extraordinary expenses, expenses of
shareholder and Trustee meetings, and expenses for preparing, printing, and
mailing proxy statements, reports and other communications to shareholders, and
expenses of registering and qualifying shares for sale, among others.

PERFORMANCE INFORMATION

From time to time, in advertisements or in reports to shareholders or
prospective shareholders, the Fund may compare its performance, either in terms
of its yield, total return or its yield and total return, to that of other
mutual funds with similar investment objectives and to stock or other indices as
reported in various periodicals. Performance comparisons should not be
considered as representative of the future performance of the Fund.

The Fund's average annual total return is computed by determining the
average annual compounded rate of return for a specified period that, if applied
to a hypothetical $1,000 initial investment, would produce the redeemable value
of that investment at the end of the period, assuming reinvestment of all
dividends and distributions and with recognition of all recurring charges. The
Fund may also utilize a total return for differing

periods computed in the same manner but without annualizing the total return.

The Fund's "yield" refers to the income generated by an investment in the
Fund over a 30-day (or one month) period (which period will be stated in the
advertisement). Yield is computed by dividing the net investment income per
share earned during the most recent calendar month by the maximum offering price
per share on the last day of such month. This income is then "annualized."
That is, the amount of income generated by the investment during that 30-day
period is assumed to be generated each month over a 12-month period and is shown
as a percentage of the investment.

The standard total return and yield results do not take into account
recurring and nonrecurring charges which are billed directly to shareholders.
Such charges include: 1% redemption fee, $5 administrative exchange fee, $10
account closing fee, and $5 per month small account fee. These charges have a
greater proportional impact on smaller accounts than on larger accounts.
Therefore, the effective standard total return and yield results experienced by
any given shareholder may be less than the return or yield advertised due to
these charges.

UNITED SERVICES FUNDS

SHARES OF ALL FUNDS ARE SOLD
AT NET ASSET VALUE WITHOUT
SALES COMMISSIONS
OR 12B-1 FEES

China Region Opportunity Fund

INVESTMENT ADVISOR
U.S. Global Investors, Inc.
7900 Callaghan Road
Mailing Address: P.O. Box 29467
San Antonio, Texas 78229

TRANSFER AGENT
United Shareholder Services, Inc.
P.O. Box 781234
San Antonio, Texas 78278-1234

CUSTODIAN
Bankers Trust Company
16 Wall Street
New York, NY 10005

INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
One Riverwalk Place, Ste. 900
San Antonio, Texas 78205

100% No Load

Be Sure to Retain This Prospectus;
It Contains Valuable Information

================================================================================

UNITED SERVICES FUNDS

U.S. TAX FREE FUND
UNITED SERVICES NEAR-TERM TAX FREE FUND

P.O. BOX 781234
SAN ANTONIO, TEXAS 78278-1234

1-800-873-8637 (1-800-US-FUNDS)
(INFORMATION, SHAREHOLDER SERVICES AND REQUESTS)
INTERNET: http://www.usfunds.com

PROSPECTUS

NOVEMBER 1, 1996

This prospectus presents information that a prospective investor should
know about the U.S. Tax Free Fund (the "Tax Free Fund") and United Services
Near-Term Tax Free Fund (the "Near-Term Tax Free Fund"), two no-load mutual
funds (the "Fund(s)") of United Services Funds (the "Trust"). The investment
objectives of the Funds are to provide a high level of current income that is
exempt from Federal income taxation and to preserve capital. SHARES OF THE TRUST
ARE NOT INSURED, GUARANTEED, SPONSORED, RECOMMENDED OR APPROVED BY THE UNITED
STATES OR ANY AGENCY OR OFFICER THEREOF. Investors are responsible for
determining whether or not an investment in the fund is appropriate for their
needs. Read and retain this prospectus for future reference.

A Statement of Additional Information dated November 1, 1996 has been filed
with the Securities and Exchange Commission and is incorporated herein by
reference. This Statement is available free from United Services Funds upon
written request at the address set forth above or by calling 1-800-873-8637.

TABLE OF CONTENTS

PAGE
----
SUMMARY OF FEES AND EXPENSES .............................................. 2
FINANCIAL HIGHLIGHTS ...................................................... 4
INVESTMENT OBJECTIVES AND
CONSIDERATIONS .......................................................... 7
Tax Free Fund ........................................................ 7
Near-Term Tax Free Fund .............................................. 7
Common Practices ..................................................... 7
MUNICIPAL SECURITIES ...................................................... 8
SPECIAL CONSIDERATIONS .................................................... 9
HOW TO PURCHASE SHARES .................................................... 11
HOW TO EXCHANGE SHARES .................................................... 14
HOW TO REDEEM SHARES ...................................................... 15
HOW SHARES ARE VALUED ..................................................... 19
DIVIDENDS AND TAXES ....................................................... 20
THE TRUST ................................................................. 21
MANAGEMENT OF THE FUNDS ................................................... 22
PERFORMANCE INFORMATION ................................................... 24

SUMMARY OF FEES AND EXPENSES

The following summary, which is based on the Advisor's voluntary agreement
to cap expenses at 0.40% for the U.S. Tax Free Fund and the United Services
Near-Term Tax Free Fund until June 30, 1997 and until such later date as the
Advisor determines, is provided to assist you in understanding the various costs
and expenses a shareholder in each respective Fund could bear directly and
indirectly.

NEAR-TERM
TAX FREE TAX FREE
FUND FUND
-------- ---------
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load.............. None None
Redemption Fee.................. None None
Administrative Exchange Fee..... $5 $5
Account Closing Fee (does not
apply to exchanges).......... $10 $10
ANNUAL FUND OPERATING EXPENSES (AS A
PERCENTAGE OF AVERAGE NET
ASSETS)(1)
Management Fees (net of waivers
and reimbursements).......... 0.00%(2) 0.00%(2)
12b-1 Fees...................... None None
Other Expenses, including
Transfer Agency and
Accounting Services Fees..... 0.40%(2) 0.40%(2)
Total Fund Operating Expenses (net of
waivers and reimbursements)........ 0.40%(2) 0.40%(2)

Except for active ABC Investment Plan(Registered Trademark) accounts,
custodial accounts for minors and retirement plan accounts, if an account
balance falls, for any reason other than market fluctuations, below $1,000 at
any time during a month, that account will be subject to a small account charge
of $5 for that month. (See "Small Accounts.")

A shareholder who requests delivery of redemption proceeds by wire transfer
will be subject to a $10 charge. International wires will be charged more.

HYPOTHETICAL EXAMPLE OF EFFECT OF FUND EXPENSES

You would pay the following expenses on a $1,000 investment, assuming 5%
annual return:

NEAR-TERM
TAX FREE TAX FREE
FUND FUND
-------- ---------
1 year............................... $ 14 $ 14
3 years.............................. $ 45 $ 51
5 years.............................. $ 78 $ 91
10 years............................. $172 $ 202

(1) Annual Fund Operating Expenses are based on each Fund's historical
expenses. Management Fees, Transfer Agency Fees, and Accounting Services Fees
are paid to U.S. Global Investors, Inc. (the "Advisor") and its wholly owned
subsidiary. Please refer to the section entitled "Management of the Funds" for
further information.

(2) The Advisor has guaranteed that Total Fund Operating Expenses for the Tax
Free and Near-Term Tax Free Funds (as a percentage of net assets) will not
exceed 0.40% on an annualized basis through June 30, 1997 and until such later
date as the Advisor determines. Based on Actual Operating Expenses of the Tax
Free Fund for the year ended June 30, 1996, Management Fees, Other Expenses,
Transfer Agency Fees, Accounting Services Fees and Total Fund Operating Expenses
would be 0.75%, 0.42%, 0.14%, 0.13% and 1.44%, respectively, in the absence of
the fee waiver and expense reimbursement by the Advisor. Based on Actual
Operating Expenses of the Near-Term Tax Free Fund for the year ended June 30,
1996, Management Fees, Other Expenses, Transfer Agency Fees, Accounting Services
Fees and Total Fund Operating Expenses would be 0.50%, 0.76%, 0.12%, 0.37%, and
1.75%, respectively, in the absence of the fee waiver and expense reimbursement
by the Advisor.

FINANCIAL HIGHLIGHTS
U.S. TAX FREE FUND

Selected data for a capital share outstanding throughout each year is as
follows:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................. $ 11.55 11.40 12.16 11.69 11.31 11.11 11.27 10.75
--------- --------- --------- --------- --------- --------- --------- ---------
Net investment income(c)........... .59 .64 .67 .66 .62 .58 .62 .69
Net realized and unrealized gain
(loss)
on investments(d)................. .01 .18 (.56) .47 .59 .20 (.15) .51
--------- --------- --------- --------- --------- --------- --------- ---------
Total from investment operations..... .60 .82 .11 1.13 1.21 .78 .47 1.20
========= ========= ========= ========= ========= ========= ========= =========
Less dividends and distributions:
Dividends from net investment
income............................ -- -- -- -- -- -- -- --
-- tax exempt.................... (.55) (.62) (.59) (.63) (.62) (.58) (.57) (.64)
-- taxable....................... (.02) (.02) (.09) -- -- -- (.06) (.04)
Distributions in excess of net
investment income(e).............. -- (.03) (.06) -- -- -- -- --
Distributions from net realized
gains............................. -- -- (.06) (.03) (.21) -- -- --
Distributions in excess of realized
gains(e).......................... -- -- (.07) -- -- -- -- --
--------- --------- --------- --------- --------- --------- --------- ---------
Total dividends and distributions.... (.57) (.67) (.87) (.66) (.83) (.58) (.63) (.68)
========= ========= ========= ========= ========= ========= ========= =========
Net asset value, end of period....... $ 11.58 11.55 11.40 12.16 11.69 11.31 11.11 11.27
========= ========= ========= ========= ========= ========= ========= =========
Total Investment Return(f)........... 5.25% 7.51 0.75 9.97 11.02 7.19 4.31 11.48
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)......................... $ 19,949 18,613 18,656 17,192 7,790 7,236 7,787 10,365
Ratio of expenses to average net
assets............................. .36 (g) .22 -- .32 1.27 1.93 1.61 1.23
========= ========= ========= ========= ========= ========= ========= =========
Ratio of net income to average net
assets............................. 5.06 (g) 5.62 5.68 5.48 5.38 5.09 5.64 6.38
========= ========= ========= ========= ========= ========= ========= =========
Portfolio turnover rate.............. 69.23% 21.52 50.87 93.96 70.23 54.49 82.34 110.45
========= ========= ========= ========= ========= ========= ========= =========
</TABLE>
1988 1987
--------- ---------
Per Share Operating Performance:
Net asset value, beginning of
period............................. 10.98 11.15
--------- ---------
Net investment income(c)........... .85 .63
Net realized and unrealized gain
(loss)
on investments(d)................. .02 (.02)
--------- ---------
Total from investment operations..... .87 .61
========= =========
Less dividends and distributions:
Dividends from net investment
income............................ (1.10) (.66)
-- tax exempt.................... -- --
-- taxable....................... -- --
Distributions in excess of net
investment income(e).............. -- --
Distributions from net realized
gains............................. -- (.12)
Distributions in excess of realized
gains(e).......................... -- --
--------- ---------
Total dividends and distributions.... (1.10) (.78)
========= =========
Net asset value, end of period....... 10.75 10.98
========= =========
Total Investment Return(f)........... 8.69 5.21
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)......................... 7,749 7,470
Ratio of expenses to average net
assets............................. -- (.05)
========= =========
Ratio of net income to average net
assets............................. 7.60 6.99
========= =========
Portfolio turnover rate.............. 121.21 37.23
========= =========

(CONTINUED)

FINANCIAL HIGHLIGHTS
UNITED SERVICES NEAR-TERM TAX FREE FUND

Selected data for a capital share outstanding throughout each year is as
follows:
<TABLE>
<CAPTION>
PERIOD
YEAR ENDED JUNE 30, ENDING
----------------------------------------------------- --------
1996 1995 1994 1993 1992 1991(A)
--------- --------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................. $ 10.47 10.39 10.74 10.42 9.88 10.00
--------- --------- --------- --------- --------- --------
Net investment income(c)........... .47 .45 .43 .61 .62 .27
Net realized and unrealized gain
(loss)
on investments(d)................. (.09) .06 (.21) .31 .56 (.12 )
--------- --------- --------- --------- --------- --------
Total from investment operations..... .38 .51 .22 .92 1.18 .15
========= ========= ========= ========= ========= ========
Less dividends and distributions:
Dividends from net investment
income:
-- tax exempt.................... (.39) (.43) (.35) (.59) (.62) (.22 )
-- taxable....................... (.08) -- (.09) -- -- (.05 )
Distributions in excess of net
investment income(e).............. -- -- (.07) -- -- --
Distributions from net realized
gains............................. -- -- -- (.01) (.02) --
Distributions in excess of realized
gains(e).......................... -- -- (.06) -- -- --
--------- --------- --------- --------- --------- --------
Total dividends and distributions.... (.47) (.43) (.57) (.60) (.64) (.27 )
========= ========= ========= ========= ========= ========
Net asset value, end of period....... $ 10.38 10.47 10.39 10.74 10.42 9.88
========= ========= ========= ========= ========= ========
Total Investment Return(f)........... 3.68% 5.02 2.03 9.10 12.25 2.66
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)......................... $ 6,545 7,128 9,190 1,775 1,309 592
Ratio of expenses to average net
assets............................. .52 (g) .20 -- -- -- -- (b)
========= ========= ========= ========= ========= ========
Ratio of net income to average net
assets............................. 4.41 (g) 4.25 4.34 5.73 6.30 6.07 (b)
========= ========= ========= ========= ========= ========
Portfolio turnover rate.............. 83.39% 52.63 69.13 139.56 45.13 42.09 (b)
========= ========= ========= ========= ========= ========
</TABLE>
(FOOTNOTES ON FOLLOWING PAGE)

(CONTINUED FROM PREVIOUS PAGE)

(a) For the period from December 1, 1990 (date of commencement of
operations) to June 30, 1991; (b) Annualized; the ratios are not necessarily
indicative of twelve months of operations; (c) Net of expense reimbursements;
(d) Includes the effect of capital share transactions throughout the year; (e)
Distributions in excess of net investment income and net realized gains and tax
returns of capital are presented in accordance with SOP 93-2, Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain, and
Return of Capital Distribution by Investment Companies, which was first
implemented by the Funds in fiscal 1993. Information for prior years has not
been restated; (f) Total return does not reflect the effect of account fees; (g)
Expense ratio is net of expense reimbursements or fee waivers. Had such
reimbursements not been made, the expense ratio subject to the most restrictive
state limitation would have been 1.44% and 1.75%, and the net investment income
ratio would have been 3.98% and 3.19% for the Tax Free and Near-Term Tax Free
Funds, respectively.

INVESTMENT OBJECTIVES AND CONSIDERATIONS

The investment objectives of the Tax Free Fund and the Near-Term Tax Free
Fund are to provide a high level of current income that is exempt from Federal
income taxation and to preserve capital.

TAX FREE FUND

To maintain a high level of current income, the Tax Free Fund invests in
securities with varying periods of maturity. During periods of high or
accelerating inflation and/or interest rates, the Tax Free Fund will seek to
invest in securities with relatively short maturities. During periods when
inflation and/or interest rates are level or subsiding, the Fund will generally
seek to invest in securities with relatively longer maturities as is deemed
appropriate in the opinion of the Advisor.

NEAR-TERM TAX FREE FUND

The Near-Term Tax Free Fund will maintain an average weighted portfolio
maturity of five years or less. In appropriate circumstances, the Fund may give
effect to call, put and demand features in computing the Fund's average weighted
portfolio maturity.

COMMON PRACTICES

The Funds invest primarily in securities, the interest from which is exempt
from Federal income taxation -- debt obligations issued by or on behalf of
states, territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies and instrumentalities, or
multi-state agencies or authorities ("Municipal Securities").

The Funds invest only in debt securities which are rated one of the four
highest ratings by Moody's Investor's Services (Aaa, Aa, A, Baa) or by Standard
& Poor's Corporation (AAA, AA, A, BBB). Not more than 10% of a Fund's total net
assets will be invested in the fourth rated category. Investments in the fourth
category may have speculative characteristics and therefore, may involve higher
risks. Investments in the fourth rated category of bonds are generally regarded
as having an adequate capacity to pay interest and repay principal. However,
these investments may be more susceptible to adverse changes in the economy.
Municipal notes (including variable rate demand obligations) must be rated
MIG1/VMIG2 or MIG2/VMIG2 by Moody's or SP-1 or SP-2 by S&P. Tax exempt
commercial paper must be rated P-1 or P-2 by Moody's or A-1 or A-2 by S&P.

The Funds attempt to maintain a geographical diversity among the securities
in the portfolio which could reflect the varying sizes of the economies of
various geographical areas.

Although the Funds are invested primarily in securities which are exempt
from Federal income taxation, the Funds are authorized to invest, on a temporary
basis, up to 20% of its total net assets in U.S. Treasury

securities or repurchase agreements collateralized by U.S. Government securities
whose market values equal or exceed 102% of the principal amount of the
repurchase obligation. Such investments may be made in anticipation of
redemptions, pending investment of proceeds from subscriptions for Fund shares
or from sale of portfolio securities, or because of market conditions. Interest
income from such investments may be taxable to shareholders as ordinary income
under Federal income tax laws.

More than 25% of each Fund's total assets may be invested in any sector of
the municipal securities market, such as general obligation bonds, hospital
revenue bonds, housing revenue bonds or electric power project revenue bonds. It
is possible that an economic, business or political development or other change
affecting a bond in a sector may also affect other bonds in the same sector.

Securities of the type to be included in each Fund's portfolio are
inversely affected by changes in interest rate levels. The per share net asset
value of each Fund will fluctuate with changes in the market value of these
securities.

MUNICIPAL SECURITIES

Municipal securities are generally of two principal types, "notes" and
"bonds." Municipal notes generally have maturities of one year or less and
provide for short-term capital needs. Municipal bonds normally have maturities
of more than one year, and meet longer-term needs. Municipal bonds are
classified into two principal categories -- general obligation bonds and revenue
bonds. General obligation bonds are backed by the taxing power of the issuer and
are considered the safest type of municipal bond. Revenue bonds are backed by
the revenues derived from a project or facility.

VARIABLE RATE SECURITIES

Each Fund may purchase variable and floating rate obligations from issuers
or may acquire participation interest in pools of these obligations from banks
or other financial institutions. Variable and floating rate obligations are
municipal securities whose interest rates change periodically. They normally
have a stated maturity in excess of one year, but permit the holder to demand
payment of principal and interest at any time or at specified intervals.

WHEN-ISSUED OR FIRM COMMITMENT SECURITIES

Each Fund may purchase and sell securities on a "when-issued" or "firm
commitment" basis, subject to certain limitations and requirements. See
"When-Issued and Firm Commitment Securities" in the Statement of Additional
Information. Under these arrangements, the securities' price and yield are fixed
on the date of the commitment, but the payment and delivery are scheduled for a
future time, normally 15 to 45 days after the date of the

buyer's purchase commitment. During the period after the commitment and prior to
the payment and delivery, the value of a when-issued security may fluctuate. The
Funds will receive no interest on the security during this period.

"PUT" BONDS

Each Fund may acquire obligations with term puts attached. "Put" bonds
are tax exempt securities which may be sold back to the issuer or a third party
at face value after some period of time prior to the stated maturity. The put
feature may increase the cost of the security to the Fund, thereby reducing the
yield of the security.

MUNICIPAL LEASE OBLIGATIONS

Each Fund may purchase municipal lease obligations or certificates of
participation in municipal lease obligations. A municipal lease obligation does
not constitute a general obligation of the municipality for which the
municipality's taxing power is pledged. Ordinarily, a lease obligation will
contain a "non-appropriation" clause which provides that the municipality has
no obligation to make lease payments in future years unless money is
appropriated for such purpose on a yearly basis. Because of the risk of non-
appropriation, some lease obligations are issued with third-party credit
enhancements, such as insurance or a letter of credit. Municipal lease
obligations are a relatively new type of financing that has not yet developed
the depth of marketability associated with more conventional municipal
securities. For these reasons, before investing in a municipal lease obligation,
the Advisor will consider, among other things, whether (1) the leased property
is essential to a governmental function of the municipality, (2) the
municipality is prohibited from substituting or purchasing similar equipment if
lease payments are not appropriated, and (3) the municipality has maintained
good market acceptability for its lease obligations in the past.

SPECIAL CONSIDERATIONS

LENDING OF PORTFOLIO SECURITIES

Each Fund may lend securities to broker-dealers or institutional investors
for their use in connection with short sales, arbitrages and other securities
transactions. A Fund will not lend portfolio securities unless the loan is
secured by collateral (consisting of any combination of cash, United States
Government securities or irrevocable letters of credit) in an amount at least
equal (on a daily mark-to-market basis) to the current market value of the
securities loaned. In the event of a bankruptcy or breach of agreement by the
borrower of the securities, a Fund could experience delays and costs in
recovering the securities loaned. A Fund will not enter into securities lending
agreements unless its custodian bank/lending agent will fully indemnify the Fund
against loss due to borrower default. Each Fund may

not lend securities with an aggregate market value of more than one-third of the
respective Fund's total net assets.

REPURCHASE AGREEMENTS

Each Fund may invest a portion of its assets in repurchase agreements with
domestic broker-dealers, banks and other financial institutions, provided the
Fund's custodian always has possession of securities serving as collateral or
has evidence of book entry receipt of such securities. In a repurchase
agreement, a Fund purchases securities subject to the seller's agreement to
repurchase such securities at a specified time (normally one day) and price. The
repurchase price reflects an agreed-upon interest rate during the time of
investment. All repurchase agreements must be collateralized at least 102% by
United States Government or government agency securities. If an institution
enters an insolvency proceeding, the resulting delay in liquidation of
securities serving as collateral could cause the Fund some loss if the value of
the securities declined prior to liquidation. To minimize the risk of loss, the
Fund will enter into repurchase agreements only with institutions and dealers
which the Board of Trustees considers creditworthy.

SPECIAL LIMITATIONS

The investment objective of each Fund may not be changed without the vote
of a majority of the Fund's outstanding voting securities.

The following policies of the Funds are fundamental and may not be changed
by the Board of Trustees without shareholder approval: (1) each Fund may borrow
up to 5% of its total assets as a temporary measure (for extraordinary
purposes); (2) with respect to 75% of the Near-Term Tax Free Fund assets and all
Tax Free Fund assets, the Funds may invest up to 5% of the value of their total
assets in securities of any one issuer (except such limitation does not apply to
obligations issued or guaranteed by the United States Government, its agencies
and/or instrumentalities); and (3) each Fund may lend portfolio securities with
an aggregate market value of not more than one-third of its respective total net
assets.

Each Fund may invest more than 25% of its respective total assets in
general obligation bonds or in securities issued by states or municipalities in
connection with the financing of projects with similar characteristics, such as
hospital revenue bonds, housing revenue bonds or electric power project revenue
bonds. However, a Fund may not invest more than 25% of its total assets in
industrial revenue bonds which are based, directly or indirectly, on the credit
of private entities of any one industry.

It is each Fund's policy to invest, under normal market conditions, at
least 80% of its total net assets in securities the interest from which is
excluded from gross income for Federal tax purposes; and, with regard to the
Near-Term Tax Free Fund, the policy is fundamental.

HOW TO PURCHASE SHARES

The minimum initial investment is $1,000 for regular accounts or $50 for
custodial accounts for minors. The minimum subsequent investment is $50. The
minimum initial investment for persons enrolled in ABC Investment
Plan(Registered Trademark) is $100, and the minimum subsequent investment
pursuant to such a plan is $30 or more per month per account. There is no
minimum purchase for retirement plan accounts, including IRAs, administered by
the Advisor or its agents and affiliates.

YOU MAY INVEST IN THE FOLLOWING WAYS:

BY MAIL

Send your application and check or money order, made payable to the
respective Fund, to P.O. Box 781234, San Antonio, Texas 78278-1234.

When making subsequent investments, enclose your check with the return
remittance portion of the confirmation of your previous investment or indicate
on your check or a separate piece of paper your name, address and account number
and mail to the address mentioned above. Do not use the remittance portion of
your confirmation statement for a different fund as it is pre-coded. This may
cause your investment to be invested into the wrong fund. If you wish to
purchase shares in more than one fund, send a separate check or money order for
each Fund. Third party checks will not be accepted; and the Trust reserves the
right to refuse to accept second party checks.

BY TELEPHONE

Once your account is open, you may make investments by telephone by calling
1-800-873-8637. Investments by telephone are not available in money market funds
or any retirement account administered by the Advisor or its agents. The maximum
telephone purchase is ten times the value of the shares owned, calculated at the
last available net asset value. Payment for shares purchased by telephone is due
within seven business days after the date of the transaction. You cannot
exchange shares purchased by telephone until after the payment has been received
and accepted by the Trust.

BY WIRE

You may make your initial or subsequent investments in United Services
Funds by wiring funds. To do so, call United Services Funds for a confirmation
number and wiring instructions.

BY ABC INVESTMENT PLAN(Registered Trademark)

Your investment dollars will automatically buy more shares when the market
is undervalued and fewer shares when the market is overvalued. By investing an
equal amount at regular, periodic intervals, you avoid the extremes in the
market. Of course, using the ABC Investment Plan(Registered Trademark) does not
guarantee a profit. If you sell at the bottom, no system will give you a gain.

ADDITIONAL INFORMATION ABOUT PURCHASES

If a check is returned unpaid due to nonsufficient funds, stop payment or
other reasons, the Trust will charge $20 and you will be responsible for any
loss incurred by the Trust in respect to canceling the purchase.

To recover any such loss or charge, the Trust reserves the right, without
further notice, to redeem shares of any affiliated funds already owned by any
purchaser whose order is canceled, for whatever reason, and such a purchaser may
be prohibited from placing further orders unless investments are accompanied by
full payment by wire or cashier's check.

United Service Funds charges no sales commissions or "loads" of any kind.
However, investors may purchase and sell shares through registered
broker-dealers who may charge fees for their services.

CHECKS DRAWN ON FOREIGN BANK. To be received in good order, an investment
must be made in U.S. dollars payable through a U.S. bank. As an accommodation,
the Funds' transfer agent may accept checks made in a foreign currency or
payable through a foreign bank and will attempt to convert such checks into U.S.
dollars. Your investment in the Fund will not be considered to have been
received in good order until your foreign check has been converted into U.S.
dollars and is available through a U.S. bank. Your investment in the Fund may be
deferred until your foreign check has been converted into U.S. dollars and the
normal collection process. Any amounts charged to the Fund for collection
procedures will be deducted from the amount invested.

If the Trust incurs a charge for locating a shareholder without a current
address, such charge will be passed through to the shareholder.

TAX IDENTIFICATION NUMBER

Each Fund is required by Federal law to withhold and remit to the United
States Treasury a portion of the dividends, capital gain distributions and
proceeds of redemptions paid to any shareholder who fails to furnish the Fund
with a correct taxpayer identification number, who underreports dividend or
interest income or who fails to provide certification of tax identification
number. In order to avoid this withholding requirement, you must certify on your
application, or on a separate W-9 Form supplied by the Transfer Agent, that your
taxpayer identification number is correct and that you are not currently subject
to backup withholding or you are exempt from backup withholding. For
individuals, your taxpayer identification number is your social security number.

Instructions to exchange or transfer shares held in established accounts
will be refused until the certification has been provided. In addition, each
Fund assesses a $50 administrative fee if the taxpayer identification number is
not provided by year end.

CERTIFICATES

When you open your account, United Services Funds will send you a
confirmation statement, which will be your evidence that you have opened an
account with United Services Funds. The confirmation statement is non-
negotiable, so if it is lost or destroyed, you will not be required to buy a
lost instrument bond or be subject to other expense or trouble, as you would
with a negotiable stock certificate. At your written request, United Services
Funds will issue negotiable stock certificates. Unless your shares are purchased
with wired funds, a certificate will not be issued until 15 days have elapsed
from the time of purchase, or United Services Funds has satisfactory proof of
payment, such as a copy of your canceled check. Negotiable certificates will not
be issued for fewer than 100 shares.

HOW TO EXCHANGE SHARES

FUNDS IN THE UNITED SERVICES FAMILY

Investing involves a trade-off between potential rewards and potential
risks. In order to achieve higher rewards on your investment, you must be
willing to take on higher risk. If you are most concerned with safety of
principal, a lower risk investment will provide greater stability but with lower
potential earnings. Another strategy for dealing with volatile markets is to use
the ABC Investment Plan.T The list below is a reward and risk guide to all of
the mutual funds in the United Services family of funds. This guide may help you
decide if a fund is suitable for your investment goals.

HIGH REWARD China Region Opportunity Fund
HIGH RISK U.S. Gold Shares Fund
U.S. World Gold Fund
U.S. Global Resources Fund
Bonnel Growth Fund
U.S. Real Estate Fund
MODERATE REWARD U.S. All American Equity Fund
MODERATE RISK U.S. Income Fund
U.S. Tax Free Fund
United Services Near-Term Tax Free
Fund
United Services Intermediate Treasury
Fund
LOW REWARD U.S. Government Securities Savings
Fund
LOW RISK U.S. Treasury Securities Cash Fund

If you have additional questions, one of our professional investor
representatives will personally assist you. Call 1-800-US-FUNDS.

BY TELEPHONE

You will automatically have the privilege to direct United Services Funds
to exchange your shares by calling toll free 1-800-US-FUNDS (1-800-873-8637). In
connection with such exchanges, neither the Fund nor the Transfer Agent will be
responsible for acting upon any instructions reasonably believed by them to be
genuine. The shareholder, as a result of this policy, will bear the risk of
loss. Each Fund and/or its Transfer Agent will, however, employ reasonable
procedures to confirm that instructions communicated by telephone are genuine
(including requiring some form of personal identification, providing written
confirmation and tape recording conversations); and if either party does not
employ reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent transactions.

BY MAIL

ADDITIONAL INFORMATION ABOUT EXCHANGES

(1) There is a $5 charge, which is paid to United Shareholder Services,
Inc. ("USSI" or "Transfer Agent"), for each exchange transaction out of any
fund account. Retirement accounts administered by the Advisor or its agents are
charged $5 for each exchange exceeding three per quarter. The exchange fee is
charged to cover administrative costs associated with handling these exchanges.

(3) If the shares you wish to exchange are represented by a negotiable
stock certificate, the certificate must be returned before the exchange can be
effected.

(5) The exchange privilege may be terminated at any time. The exchange fee
and other terms of the privilege are subject to change.

HOW TO REDEEM SHARES

BY MAIL

A written request for redemption must be in "proper order," which
requires the delivery of the following to the Transfer Agent:

(1) a written request for redemption signed by each registered owner
exactly as the shares are registered, the account number and the number of
shares or the dollar amount to be redeemed;

(2) negotiable stock certificates for any shares to be redeemed for which
certificates have been issued;

(3) signature guarantees when required; and

(4) such additional documents as are customarily required to evidence the
authority of persons effecting redemptions on behalf of corporations, executors,
trustees, and other fiduciaries. Redemptions will not become effective until all
documents in the form required have been received by the Transfer Agent. (Before
writing, read "Additional Information About Redemptions.")

HOW TO EXPEDITE REDEMPTIONS

SPECIAL REDEMPTION ARRANGEMENTS

SIGNATURE GUARANTEE

least $100,000; or (c) a national securities exchange or national securities
association. The guarantee must: (i) include the statement "Signature(s)
Guaranteed"; (ii) be signed in the name of the guarantor by an authorized
person, including the person's printed name and position with guarantor; and
(iii) include a recital that the guarantor is federally insured, maintains the
requisite net capital or is a national securities exchange or association.
Shareholders living abroad may acknowledge their signatures before a U.S.
consular officer. Military personnel may acknowledge their signatures before
officers authorized to take acknowledgments (e.g., legal officers and
adjutants).

REDEMPTION PROCEEDS MAY BE SENT TO YOU:

BY MAIL

If your redemption check is mailed, it is usually mailed within 48 hours;
however, the Funds reserve the right to hold redemption proceeds for up to seven
days. If the shares to be redeemed were purchased by check, the redemption
proceeds will not be mailed until the purchase check has cleared. You may avoid
this requirement by investing by bank wire (Federal funds). Redemption checks
may be delayed if you have changed your address in the last 30 days. Please
notify the Fund promptly in writing, or by telephone, of any change of address.

BY WIRE

You may authorize the Funds to transmit redemption proceeds by wire,
provided you send written wiring instructions with a signature guarantee at the
time of redemption. Proceeds from your redemption will usually be transmitted on
the first business day following the redemption. However, the Trust reserves the
right to hold redemptions for up to seven days. If the shares to be redeemed
were purchased by check the redemption proceeds will not be wired until the
purchase check has cleared, which may take up to seven days. There is a $10
charge to cover the wire, which is deducted from redemption proceeds.
International wires will be higher.

ADDITIONAL INFORMATION ABOUT REDEMPTIONS

The redemption price may be more or less than your cost, depending on the
net asset value of the Fund's portfolio next determined after your request is
received.

account closing fee or redemption fee will be charged to investors whose
accounts are closed under this provision.

ACCOUNT CLOSING FEE

In order to reduce Fund expenses, an account closing fee of $10 will be
assessed to shareholders who redeem all shares in their Fund account and direct
that redemption proceeds be delivered to them by mail or wire. The charge is
payable directly to the Fund's Transfer Agent which, in turn, will reduce its
charges to the Fund by an equal amount. The purpose of the charge is to allocate
to redeeming shareholders a more equitable portion of the Transfer Agent's fee,
including the cost of tax reporting, which is based upon the number of
shareholder accounts. The account closing fee does not apply to exchanges
between the funds in the United Services family of funds nor does it apply to
accounts which are involuntarily redeemed.

SMALL ACCOUNTS

Fund accounts which fall, for any reason other than market fluctuations,
below $1,000 at any time during a month will be subject to a small account
charge of $5 for that month which, with respect to certain small accounts, could
be in excess of fund distributions. The charge is payable directly to the Fund's
Transfer Agent which, in turn, will reduce its charges to the Fund by an equal
amount. The purpose of the charge is to allocate the cost of maintaining
shareholder accounts more equally among shareholders.

In order to reduce expenses of the Fund, the Trust may redeem all of the
shares in any shareholder account, other than active ABC Investment
Plan(Registered Trademark) accounts, custodial accounts for minors and
retirement plan accounts, if, for a period of more than three months, the
account has a net asset value of $500 or less and the reduction in value is not
due to market action. If the Fund elects to close such accounts, it will notify
shareholders whose accounts are below the minimum of its intention to do so, and
will provide those shareholders with an opportunity to increase their accounts
by investing a sufficient amount to bring their accounts up to the minimum
amount within ninety (90) days of the notice. No account closing fee will be
charged to investors whose accounts are closed under this redemption provision.

CONFIRMATION STATEMENTS

OTHER SERVICES

The Trust has available a number of plans and services to meet the special
needs of certain investors. Plans available include:

(1) payroll deduction plans, including military allotments;

(2) custodial accounts for minors;

(3) a flexible, systematic withdrawal plan; and

(4) various retirement plans such as IRA, SEP/IRA, 403(b)(7), 401(k) and
employer-adopted defined contribution plans.

Application forms and brochures describing these plans and services may be
obtained from the Transfer Agent by calling 1-800-US-FUNDS (1-800-873-8637).

There is an annual charge for each retirement plan fund account with
respect to which Security Trust & Financial Company ("ST&FC"), a wholly-owned
subsidiary of the Advisor, acts as custodian (for example, $10 for IRAs and $15
for SEP/IRAs, 403(b)(7)s, profit sharing and other such accounts). If this
administrative charge is not paid separately prior to the last business day of
the calendar year or prior to a total redemption or exchange, it will be
deducted from the shareholder's account.

SHAREHOLDER SERVICES

24-HOUR ACCOUNT INFORMATION

HOW SHARES ARE VALUED

Shares of each Fund are purchased or redeemed, on a continuing basis
without a sales charge, at their next determined net asset value per share. The
asset value per share of the Fund is calculated by United Shareholder Services,
Inc. Net asset value per share is determined Monday through Friday, as of 4:00
p.m. Eastern Time, exclusive of business holidays on which the NYSE is closed,
by dividing the aggregate net assets of the Fund by the total number of shares
outstanding. In the event that the NYSE and other financial markets close
earlier as on the eve of a holiday, the net asset value per share will be
determined earlier in the day at the close of trading on the NYSE.

All securities (except United States Government securities and repurchase
agreements) held by each Fund are valued based on an independent pricing service
and, in the event such service is not available or if the Board of Trustees
deems it to be advisable, at the mean between the most recent bid and ask prices
as obtained from one or more dealers that make markets in the securities. Debt
securities with maturities of 60 days or less at the time of purchase are valued
on the basis of the amortized cost. This involves valuing an instrument at its
cost initially and, thereafter, assuming a constant amortization to maturity of
any discount or premium, regardless of the impact of fluctuating interest rates
on the market value of the instrument.

DIVIDENDS AND TAXES

Each Fund intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). By
complying with the applicable provisions of the Code, a Fund will not be subject
to Federal income tax on its net investment income and net capital gains that
are distributed to shareholders.

All income dividends and capital gain distributions are normally
reinvested, without charge, in additional full and fractional shares of each
Fund. Alternatively, investors may choose: (1) automatic reinvestment of capital
gain distributions in Fund shares and payment of income dividends in cash; (2)
payment of capital gain distributions in cash and automatic reinvestment of
dividends in Fund shares; or (3) all income dividend and capital gain
distributions paid in cash. The share price of the reinvestment will be the net
asset value of the Fund shares computed at the close of business on the date the
dividend or distribution is paid. Dividend checks returned to the Fund as being
undeliverable and dividend checks not cashed after 180 days will automatically
be reinvested at the price of the Fund on the day returned or on or about the
181st day and the distribution option will be changed to "reinvest."

At the time of purchase, the share price of each Fund may reflect
undistributed income, capital gains or unrealized appreciation of securities.
Any dividend or capital gain distribution paid to a shareholder shortly after a
purchase of shares will reduce the per share net asset value by the amount of
the distribution. Although in effect a return of capital to the shareholder,
these capital gain distributions are fully taxable.

Each Fund generally pays dividends monthly and capital gain distributions,
if any, annually in December.

Distribution by the Fund of net tax exempt interest income will be excluded
from a shareholder's gross income for Federal income tax purposes. Dividends
from taxable net investment income and distributions of net short-term capital
gains are taxable as ordinary income, whether received in cash or reinvested in
additional shares.

Distributions of net capital gains are taxable as long-term capital gains
whether received in cash or reinvested in additional shares, and regardless of
the length of time the investor has held his shares of the Fund. However, it is
expected that any taxable income will be insubstantial in relation to the tax
exempt interest income generated by the Fund.

Tax exempt interest from "private activity" bonds (for example,
industrial development revenue bonds) issued after August 7, 1986 is considered
a tax preference item for purposes of the alternative minimum tax. For
corporations, all tax exempt interest will be considered in calculating the
alternative minimum tax as part of the book income or adjusted current earnings
adjustments.

The exemption of interest income for Federal income tax purposes does not
necessarily result in exemption under the income or other tax laws of any state
or local taxing authority. The foregoing discussion relates only to generally
applicable Federal income tax provisions in effect as of the date of this
prospectus. Therefore, shareholders should consult their tax advisers about the
status of distributions from the Fund in their own states and localities.

Each January, each Fund will report to its shareholders the Federal tax
status of dividends and distributions paid or declared by the Fund during the
preceding calendar year, including the portion of the dividends constituting
interest on "private activity" bonds, and the percentage and source, on a
state-by-state basis, of interest income earned on tax exempt securities held by
the Fund during the preceding year.

THE TRUST

United Services Funds (the "Trust") is an open-end management investment
company, consisting of numerous separate, diversified portfolios each of which
has its own investment objectives and policies. The portfolios are designed to
serve a wide range of investor needs.

The Trust was formed July 31, 1984 as a "business trust" under the laws
of the Commonwealth of Massachusetts. It is a "series" company which is
authorized to issue series of shares without par value, each series representing
interests in a separate portfolio, or divide the shares of any series into
classes. Shares of numerous series have been authorized. The Board of Trustees
of the Trust has the power to create additional series, or divide existing
series into two or more classes, at any time, without a vote of shareholders of
the Trust.

least two-thirds of the Trustees, by vote of shareholders holding not less than
two-thirds of the shares then outstanding of the Trust cast at any meeting
called for that purpose, or by a written declaration signed by shareholders
holding not less than two-thirds of the shares then outstanding.

MANAGEMENT OF THE FUNDS

TRUSTEES

The business affairs of the Funds are managed by the Trust's Board of
Trustees. The Trustees establish policies, as well as review and approve
contracts and their continuance. The Trustees also elect the officers and select
the Trustees to serve as executive and audit committee members.

THE INVESTMENT ADVISOR

U.S. Global Investors, Inc., 7900 Callaghan Road, San Antonio, Texas 78229,
under an investment advisory agreement with the Trust dated October 26, 1989,
furnishes investment advice and is responsible for overall management of the
Trust's business affairs. Frank E. Holmes, Chief Executive Officer and Chairman
of the Board of Directors of the Advisor, as well as President and a Trustee of
the Trust has, since October 1989, owned more than 25% of the voting stock of
the Advisor and is its controlling person. The Advisor was organized in 1968.

The Advisor provides to the Trust, and to each of the portfolios within the
Trust, management and investment advisory services. The Advisor furnishes an
investment program for each of the funds, determines, subject to the overall
supervision and review of the Board of Trustees of the Trust, what investments
should be purchased, sold and held, and makes changes on behalf of the Trust in
the investments of each of the funds. The Advisor utilizes a team approach to
manage the assets of the Funds. The team meets regularly to review portfolio
holdings and to discuss purchase and sale activity. Creston King has been
appointed team leader for the Funds. Mr. King, a Certified Financial Analyst,
has been the Advisor's assistant portfolio manager for fixed income funds since
September 1993. Prior to joining the Advisor Mr. King worked in the brokerage
industry for over 5 years.

of printing and mailing prospectuses and sales materials used for promotional
purposes.

WITH RESPECT TO THE TAX FREE FUND AND THE NEAR-TERM TAX FREE FUND AND
NOTWITHSTANDING THE FOLLOWING DESCRIPTION OF FEES AND OTHER EXPENSES, THE
ADVISOR HAS GUARANTEED THAT TOTAL FUND OPERATING EXPENSES, (AS A PERCENTAGE OF
NET ASSETS) WILL NOT EXCEED 0.40% ON AN ANNUALIZED BASIS THROUGH JUNE 30, 1997
AND UNTIL SUCH LATER DATE AS THE ADVISOR DETERMINES.

With regard to the Tax Free Fund, the Advisory Agreement with the Trust
provides for the Fund to pay the Advisor a management fee equal to 0.75% of the
first $250 million average net assets and 0.50% of average net assets in excess
of $250 million. The fee paid to the Advisor for managing the U.S. Tax Free Fund
for the fiscal period ended June 30, 1996 was 0.00% of average net assets due to
Advisor guarantees.

With regard to the Near-Term Tax Free Fund, the Advisory Agreement with the
Trust provides for the Fund to pay the Advisor a management fee equal to 0.50%
of the Fund's average net assets ( 1/12 of 0.50% monthly). The fee paid to the
Advisor for managing the Near-Term Tax Free Fund for the fiscal period ended
June 30, 1996 was 0.00% of average net assets due to Advisor guarantees.

The Transfer Agency Agreement with the Trust provides for each Fund to pay
USSI an annual fee of $23.00 per account ( 1/12 of $23.00 monthly). In
connection with obtaining/providing administrative services to the beneficial
owners of Trust shares through broker-dealers, banks, trust companies and
similar which provide such services and maintain an omnibus account with the
Transfer Agent, each Fund shall pay to the Transfer Agent a monthly fee equal to
one-twelfth ( 1/12) of 12.5 basis points (.00125) of the value of the shares of
the Funds held in accounts at the institutions, which payment shall not exceed
$1.92 multiplied by the average daily number of accounts holding Trust share at
the institution. These fees cover the usual transfer agency functions. In
addition, each Fund bears certain other Transfer Agent expenses such as the
costs of record retention and postage, plus the telephone and line charges
(including the toll-free 800 service) used by shareholders to contact the
Transfer Agent. For the fiscal period ended June 30, 1996, the Tax Free Fund and
Near-Term Tax Free

Funds paid USSI a total of $0.00 and $0.00, respectively, for the transfer
agency, lockbox and printing fees due USSI. Transfer Agent fees, including
reimbursed expenses, are reduced by the amount of small account charges and
account closing fees the Transfer Agent is paid.

USSI performs bookkeeping and accounting services, and determines the daily
net asset value for each of the Funds. Bookkeeping and accounting services are
provided to the Funds for an asset based fee of 0.04% of the first $200 million
average net assets, 0.03% of the next $200 million average net assets, 0.02% of
the next $350 million average net assets and 0.01% of average net assets in
excess of $750 million -- subject to an annual minimum fee of $26,000 per Fund.
USSI received fees of $0.00 and $0.00 for the U.S. Tax Free Fund and Near-Term
Tax Free Fund, respectively for the year ended June 30, 1996.

Additionally, the Advisor is reimbursed certain costs for in-house legal
services pertaining to each Fund, which reimbursement is subject to the
Advisor's assumption of expenses for each Fund.

The Trust pays all other expenses for its operations and activities. Each
Fund pays its allocable portion of these expenses. The expenses borne by the
Trust include the charges and expenses of any shareholder servicing agents,
custodian fees, legal and auditors' expenses, brokerage commissions for
portfolio transactions, the advisory fee, extraordinary expenses, expenses of
shareholders and trustee meetings, expenses for preparing, printing and mailing
proxy statements, reports and other communications to shareholders, and expenses
of registering and qualifying shares for sale, among others.

PERFORMANCE INFORMATION

Each Fund's average annual total return is computed by determining the
average annual compounded rate of return for a specified period that, if applied
to a hypothetical $1,000 initial investment, would produce the redeemable value
of that investment at the end of the period, assuming reinvestment of all
dividends and distributions and with recognition of all recurring charges. The
Fund may also utilize a total return for differing periods computed in the same
manner but without annualizing the total return.

Each Fund's "yield" refers to the income generated by an investment in
the Fund over a 30-day (or one month) period (which period will be

stated in the advertisement). Yield is computed by dividing the net investment
income per share earned during the most recent calendar month by the maximum
offering price per share on the last day of such month. This income is then
"annualized." That is, the amount of income generated by the investment during
that 30-day period is assumed to be generated each month over a 12-month period
and is shown as a percentage of the investment.

For purposes of the yield calculation, interest income is computed based on
the yield to maturity of each debt obligation and dividend income is computed
based upon the stated dividend rate of each security in the Fund's portfolio and
all recurring charges are recognized. The maturity of an obligation with a call
provision is the next call date on which the obligation reasonably may be
expected to be called or, if none, the stated maturity.

Each Fund may also utilize tax equivalent yields computed in the same
manner, with adjustment for a stated income tax rate.

The standard total return and yield results do not take into account
recurring and nonrecurring charges for optional services which only certain
shareholders elect and which involve nominal fees such as the $5 fee for
exchanges.

[THIS PAGE INTENTIONALLY LEFT BLANK]

UNITED SERVICES FUNDS

SHARES OF THE FUNDS ARE SOLD AT NET ASSET
VALUE WITHOUT SALES COMMISSIONS,
REDEMPTION FEES OR 12B-1 FEES

U.S. Tax Free Fund
United Services Near-Term Tax Free Fund

INVESTMENT ADVISOR
U.S. Global Investors, Inc.
7900 Callaghan Road
Mailing Address: P.O. Box 29467
San Antonio, Texas 78229

TRANSFER AGENT
United Shareholder Services, Inc.
P.O. Box 781234
San Antonio, Texas 78278-1234

CUSTODIAN
Bankers Trust Company
16 Wall Street
New York, NY 10005

LEGAL COUNSEL
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109

INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
One Riverwalk Place, Ste. 900
San Antonio, Texas 78205

100% No Load

Be Sure to Retain This Prospectus;
It Contains Valuable Information.

================================================================================

UNITED SERVICES FUNDS

U.S. ALL AMERICAN EQUITY FUND

P.O. BOX 781234
SAN ANTONIO, TEXAS 78278-1234

1-800-US-FUNDS (1-800-873-8637)
(INFORMATION, SHAREHOLDER SERVICES AND REQUESTS)
INTERNET: http://www.usfunds.com

PROSPECTUS

NOVEMBER 1, 1996

This prospectus presents information that a prospective investor should
know about the U.S. All American Equity Fund (the "All American Equity Fund"
or the "Fund"), a fund of United Services Funds (the "Trust"). The Fund is
one of numerous portfolios of the Trust, a diversified, open-end management
investment company. SHARES OF THE TRUST ARE NOT INSURED, GUARANTEED, SPONSORED,
RECOMMENDED OR APPROVED BY THE UNITED STATES OR ANY AGENCY OR OFFICER THEREOF.
Investors are responsible for determining whether or not an investment in the
fund is appropriate for their needs. Read and retain this prospectus for future
reference.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

TABLE OF CONTENTS

PAGE
----
SUMMARY OF FEES AND EXPENSES......... 2
FINANCIAL HIGHLIGHTS................. 4
INVESTMENT OBJECTIVES AND
CONSIDERATIONS..................... 6
SPECIAL CONSIDERATIONS............... 6
HOW TO PURCHASE SHARES............... 10
HOW TO EXCHANGE SHARES............... 13
HOW TO REDEEM SHARES................. 15
HOW SHARES ARE VALUED................ 19
DIVIDENDS AND TAXES.................. 20
THE TRUST............................ 21
MANAGEMENT OF THE FUND............... 22
PERFORMANCE INFORMATION.............. 24

SUMMARY OF FEES AND EXPENSES

The following summary, which is based on the Advisor's voluntary agreement
to cap expenses at 0.70% of average net assets of the Fund until June 30, 1997,
is provided to assist you in understanding the various costs and expenses a
shareholder in the Fund could bear directly or indirectly.
<TABLE>
<CAPTION>
ALL AMERICAN
EQUITY FUND
------------
SHAREHOLDER TRANSACTION EXPENSES
<S> <C>
Maximum Sales Load............................................... None
Redemption Fee................................................... None
Trader's Fee (on the redemption or exchange of shares held less
than 14 days)................................................. 0.10%
Administrative Exchange Fee...................................... $5
Account Closing Fee (does not apply to exchanges)................ $10
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET
ASSETS)(1)
Management Fees (net of waivers and
reimbursements)............................................... 0.00% (2)
12b-1 Fees....................................................... None
Other Expenses including Transfer Agency and Accounting Services
Fees.......................................................... 0.70%
Total Fund Operating Expenses (net of waivers and reimbursements)..... 0.70% (2)
</TABLE>
The Fund assesses an account maintenance fee of $3 per quarter, for a total
of $12 annually. The purpose of the fee is to allocate part of the cost of
maintaining shareholder accounts equally to all accounts. This fee will be
deducted first from the annual dividends paid by the Fund to each shareholder
account. See "Account Maintenance Fee" for more information on this fee.

Except for active ABC Investment PlanT accounts, custodial accounts for
minors, and retirement accounts, if an account balance falls, for any reason
other than market fluctuations, below $1,000 at any time during a month, that
account will be subject to a monthly small account charge of $1 which will be
payable quarterly. See "Small Accounts".

A shareholder who requests delivery of redemption proceeds by wire transfer
will be subject to a $10 charge. International wires will be higher.

HYPOTHETICAL EXAMPLE OF EFFECT OF FUND EXPENSES:

You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return and redemption at the end of each period.

1 year............................... $ 29
3 years.............................. 93
5 years.............................. 160
10 years............................. 339

Included in these estimates are account maintenance fees of $12, $36, $60 and
$120, respectively, for the periods shown and the account closing fee of $10 for
each period. These fees are flat charges which do not vary with the size of your
investment. Accordingly, for investments larger than $1,000, your total expenses
will be substantially lower in percentage terms than this illustration implies.
The examples should not be considered a representation of past or future
expenses. Actual expenses may be more or less than those shown.
- -------------------

(1) Annual Fund Operating Expenses are based on the Fund's historical expenses.
Management Fees, Transfer Agency Fees, and Accounting Services Fees are paid to
U.S. Global Investors, Inc. (the "Advisor") and its wholly owned subsidiary.
Please refer to the section entitled "Management of the Fund" for further
information.

(2) The Advisor has guaranteed that Total Fund Operating Expenses of the All
American Equity Fund (as a percentage of net assets) will not exceed 0.70% on an
annualized basis through June 30, 1997 and until such later date as the Advisor
determines. Based on actual operating expenses of the Fund for the year ended
June 30, 1996, Management Fees, Other Expenses, Transfer Agency Fees, Accounting
Service Fees and Total Fund Operating Expenses would be 0.75%, 0.74%, 0.22%,
0.18%, and 1.89%, respectively, in the absence of the fee waiver and expense
reimbursement by the Advisor.

FINANCIAL HIGHLIGHTS
U.S. ALL AMERICAN EQUITY FUND

The following per share data and ratios for a share of beneficial interest
outstanding throughout each of the five years ended June 30, 1996 has been
audited by Price Waterhouse LLP, the Fund's Independent Accountants. The related
financial statements and the report of Independent Accountants are included in
the Fund's 1996 Annual Report to Shareholders and are incorporated by reference
into the Statement of Additional Information ("SAI"). In addition to the data
set forth below, further information about the performance of the Fund is
contained in the Annual Report to Shareholders and SAI which may be obtained
without charge.

Selected data for a capital share outstanding throughout each year is as
follows:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................. $ 20.08 $ 19.52 $ 20.60 $ 18.79 $ 17.12 $ 16.11 $ 16.67 $ 16.44
--------- --------- --------- --------- --------- --------- --------- ---------
Net investment income(a)........... .41 .44 .44 .36 .17 .14 .49 .43
Net realized and unrealized gain
(loss) on investments(b).......... 4.44 2.68 (.75) 1.91 1.62 .97 (.55) .28
--------- --------- --------- --------- --------- --------- --------- ---------
Total from investment operations..... 4.85 3.12 (.31) 2.27 1.79 1.11 (.06) .71
--------- --------- --------- --------- --------- --------- --------- ---------
Less dividends and distributions:
Dividends from net investment
income............................ (.38) (.39) (.44) (.37) (.12) (.10) (.50) (.48)
Distributions in excess of net
investment income(c).............. -- -- (.02) (.09) -- -- -- --
Distributions from net realized
gains............................. -- -- (.31) -- -- -- -- --
Distributions in excess of net
realized gain(c).................. -- (2.17) -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- --------- ---------
Total dividends and distributions.... (.38) (2.56) (.77) (.46) (.12) (.10) (.50) (.48)
--------- --------- --------- --------- --------- --------- --------- ---------
Net asset value, end of period....... $ 24.55 $ 20.08 $ 19.52 $ 20.60 $ 18.79 $ 17.12 $ 16.11 $ 16.67
========= ========= ========= ========= ========= ========= ========= =========
Total Investment Return(d)........... 24.31% 17.98 (1.67) 12.15 10.51 6.84 (0.40) 4.45
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)......................... $ 15,220 11,931 10,227 12,331 11,825 10,306 9,763 11,992
Ratio of expenses to average net
assets............................. 0.68 (e) 0.70 0.61 1.03 2.03 2.80 2.10 1.97
Ratio of net income to average net
assets............................. 1.84 (e) 2.33 2.11 1.86 .78 .83 2.63 2.62
Portfolio turnover rate.............. 16.01% 96.92 116.61 11.55 34.83 209.26 258.30 113.24
Average commission rate paid(f)...... $ 0.1000 NA NA NA NA NA NA NA
</TABLE>
Year Ended June 30,
--------------------
1988 1987
--------- ---------
Per Share Operating Performance:
Net asset value, beginning of
period............................. $ 20.24 $ 18.38
--------- ---------
Net investment income(a)........... .40 .32
Net realized and unrealized gain
(loss) on investments(b).......... (3.46) 1.92
--------- ---------
Total from investment operations..... 3.06 2.24
--------- ---------
Less dividends and distributions:
Dividends from net investment
income............................ (.74) (.38)
Distributions in excess of net
investment income(c).............. -- --
Distributions from net realized
gains............................. -- --
Distributions in excess of net
realized gain(c).................. -- --
--------- ---------
Total dividends and distributions.... (.74) (.38)
--------- ---------
Net asset value, end of period....... $ 16.44 $ 20.24
========= =========
Total Investment Return(d)........... (15.45) 12.59
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)......................... 16,817 36,368
Ratio of expenses to average net
assets............................. 1.43 1.35
Ratio of net income to average net
assets............................. 1.68 1.68
Portfolio turnover rate.............. 179.67 58.26
Average commission rate paid(f)...... NA NA

(FOOTNOTES ON FOLLOWING PAGE)

(CONTINUED FROM PREVIOUS PAGE)

(a) Net of expense reimbursements; (b) Includes the effect of capital share
transactions throughout the year; (c) Distributions in excess of net investment
income and net realized gains and tax returns of capital are presented in
accordance with SOP 93-2, Determination, Disclosure, and Financial Statement
Presentation of Income, Capital Gain, and Return of Capital Distribution by
Investment Companies, which was first implemented by the Funds in fiscal 1993.
Information for prior years has not been restated; (d) Total return does not
reflect the effect of account fees; (e) Expense ratio is net of expense
reimbursements or fee waivers. Had such reimbursements not been made, the
expense ratio would have been 1.90% and the net investment income ratio would
have been 0.62%. (f) Represents total commissions paid on portfolio securities
divided by the total number of shares purchased or sold on which commissions
were charged. This information was not required prior to 1996. Note: For the
period November 2, 1990 to November 22, 1993, the Fund was passively managed as
an index fund.

INVESTMENT OBJECTIVES AND CONSIDERATIONS

United Services Funds (the "Trust") is an open-end management investment
company consisting of various separate, diversified portfolios managed by U.S.
Global Investors, Inc. (the "Advisor"). The U.S. All American Equity Fund (the
"Fund") is a sub-trust or series of the Trust.

The Fund's investment objective is to seek capital appreciation by
investing primarily in a broadly diversified portfolio of domestic common
stocks. Although many of the common stocks the Fund invests in will produce
dividends, the Fund seeks capital appreciation and does not emphasize income.
There is no assurance that the Fund will achieve its objective. The Fund's
objective is not a fundamental policy and may be changed by the Board of
Trustees without shareholder approval. However, shareholders will be notified in
writing at least 60 days prior to any material change to the Fund's objective.

The Fund will invest at least 75% of its total assets in common stocks
under normal conditions. The Fund will seek to generate a return which exceeds
that of the Standard & Poor's 500 Composite Stock Price Index (the "S&P 500").
In pursuing this goal, the Fund attempts to maintain an industry diversification
similar to that of the S&P 500. However, the individual stocks the Fund
purchases within each industry may differ and are expected to cover a broad
range of domestic companies of all sizes.

Although the Fund will invest primarily in common stocks, the Fund may also
maintain a reasonable position in high quality short-term debt securities and
money market instruments to be prepared to meet redemption requests or in
preparation for investment in common stocks. These securities and money market
instruments may include obligations of the U.S. Government and its agencies and
instrumentalities and repurchase agreements. Under normal conditions, the Fund
will not invest more than 25% of its total net assets in such securities. In
addition, the Fund may purchase and sell index options, stock index futures
contracts or purchase or write options on such futures contracts to manage cash
flow and to remain fully invested in equity securities, instead of or in
addition to buying and selling the underlying securities. See "Special
Considerations -- Futures Contracts and Related Options."

SPECIAL CONSIDERATIONS

PORTFOLIO TURNOVER

The Fund's total portfolio turnover rate is shown in the "Financial
Highlights Table". It is the policy of the Fund to seek capital appreciation.
The Fund will effect portfolio transactions without regard to its holding
period, if, in the judgment of the Advisor, such transactions are advisable.

BORROWING

The Fund may borrow from a bank up to a limit of 5% of its total assets for
temporary or emergency purposes; and, it may borrow up to 33 1/3% of its total
assets (reduced by the amount of all liabilities and indebtedness other than
such borrowings) when deemed desirable or appropriate to meet redemption
requests. To the extent that the Fund borrows money prior to selling securities,
the Fund may be leveraged. At such times, the Fund may appreciate or depreciate
in value more rapidly than its benchmark index. The All American Equity Fund
will repay any money borrowed in excess of 5% of the value of its total assets
prior to purchasing additional portfolio securities.

LENDING OF PORTFOLIO SECURITIES

The Fund may lend securities to broker-dealers or institutional investors
for their use in connection with short sales, arbitrages and other securities
transactions. The Fund will not lend portfolio securities unless the loan is
secured by collateral (consisting of any combination of cash, U.S. Government
securities or irrevocable letters of credit) in an amount at least equal (on a
daily mark-to-market basis) to the current market value of the securities
loaned. In the event of a bankruptcy or breach of agreement by the borrower of
the securities, the Fund could experience delays and costs in recovering the
securities loaned. The Fund will not enter into securities lending agreements
unless its custodian bank/lending agent will fully indemnify the Fund against
loss due to borrower default. The Fund may not lend securities with an aggregate
market value of more than one-third of the Fund's total net assets.

REPURCHASE AGREEMENTS

The Fund may invest a portion of its assets in repurchase agreements with
United States broker-dealers, banks and other financial institutions, provided
the Fund's custodian always has possession of securities serving as collateral
or has evidence of book entry receipt of such securities. In a repurchase
agreement, the Fund purchases securities subject to the seller's agreement to
repurchase such securities at a specified time (normally one day) and price. The
repurchase price reflects an agreed-upon interest rate during the time of
investment. All repurchase agreements must be collateralized by U.S. Government
or government agency securities, the market values of which equal or exceed 102%
of the principal amount of the repurchase obligation. If an institution enters
an insolvency proceeding, the resulting delay in liquidation of securities
serving as collateral could cause the Fund some loss if the value of the
securities declined prior to liquidation. To minimize the risk of loss, the Fund
will enter into repurchase agreements only with institutions and dealers which
the Board of Trustees considers creditworthy.

FUTURES CONTRACTS AND RELATED OPTIONS

The Fund may invest in stock index futures contracts and related options. A
stock index futures contract is a bilateral agreement pursuant to which two
parties agree to take or make delivery of an amount of cash equal to a specified
dollar amount multiplied by the difference between the index value at the close
of the last trading day of the contract and the price at which the futures
contract is originally struck. No physical delivery of underlying stocks in the
index is made. The Fund may purchase stock index futures contracts and purchase
options thereon in anticipation of an increase in the market price of securities
it intends to acquire. When the Fund anticipates a significant market or market
sector advance, the purchase of a stock index futures contract or related option
protects against not participating in such advance at a time when the Fund is
not fully invested. There is a risk that futures contract price movements will
not correlate perfectly with movements in the value of the underlying stock
index. There is a further risk that a liquid secondary trading market may not
exist at all times for these contracts, in which event the Fund might be unable
to terminate a futures position at the desired time.

The Fund may use stock index futures and related options contracts in only
a portion of its portfolio. The underlying value of all such futures contracts
will not exceed 35% of the Fund's total net assets. Furthermore, the Fund will
not commit more than 5% of its total net assets to premiums on options and
initial margin on futures contracts. The Fund will not borrow money to purchase
futures or options, and will segregate cash or cash equivalents or cover its
potential obligations in conformance with Securities and Exchange Commission
guidelines. For a full description of these procedures see "Stock Index Futures
Contracts and Related Options" in the Statement of Additional Information.

PUT AND CALL OPTIONS

SELLING (OR WRITING) COVERED CALL OPTIONS. The Fund may sell (or write)
covered call options on portfolio securities to hedge against adverse movements
in the prices of these securities. A call option gives the buyer of the option,
upon payment of a premium, the right to call upon the writer to deliver a
security on or before a fixed date at a predetermined price, referred to as the
strike price. If the price of the hedged security should fall or remain below
the strike price, the Fund will not be called upon to deliver the security and
the Fund will retain the premium received for the option as additional income,
offsetting all or part of any decline in the value of the security. The hedge
provided by writing covered call options is limited to a price decline in the
security of no more than the option premium received by the Fund for writing the
option. If the security owned by the Fund appreciates above the options strike
price the Fund will generally be called upon to deliver the security, which will
prevent the Fund from receiving the benefit of any price appreciation above the
strike price.

BUYING CALL OPTIONS. The Fund may purchase call options on securities
which the Fund intends to purchase to take advantage of anticipated positive
movements in the prices of these securities. The Fund will realize a gain from
the exercise of a call option if, during the option period, the price of the
underlying security to be purchased increases by more than the amount of the
premium paid. The Fund will realize a loss equal to all or a portion of the
premium paid for the option if the price of the underlying security decreases or
does not increase by more than the premium.

BUYING PUT OPTIONS. The Fund may purchase put options on portfolio
securities to hedge against adverse movements in the prices of these securities.
A put option gives the buyer of the option, upon payment of a premium, the right
to sell a security to the writer of the option on or before a fixed date at a
predetermined price. The fund will realize a gain from the exercise of a put
option if, during the option period, the price of the security declines by an
amount in excess of the premium paid. The Fund will realize a loss equal to all
or a portion of the premium paid for the option if the price of the security
increases or does not decrease by more than the premium.

CLOSING TRANSACTIONS. The Fund may dispose of an option written by the
Fund by entering into a "closing purchase transaction" for an identical option
and may dispose of an option purchased by the Fund by entering into a "closing
sale transaction" for an identical option. In each case, the closing
transaction will have the effect of terminating the rights of the option holder
and the obligations of the option purchaser and will result in a gain or loss to
the Fund based upon the relative amount of the premiums paid or received for the
original option and the closing transaction. The Fund may sell (or write) put
options solely for the purpose of entering into closing sale transactions.

INDEX OPTIONS. The Fund may purchase and sell call options and purchase
put options on stock indices in order to manage cash flow, reduce equity
exposure, or to remain fully invested in equity securities. Options on
securities indices are similar to options on a security except that, upon the
exercise of an option on a securities index, settlement is made in cash rather
than in specific securities.

SPECIAL LIMITATIONS

The Fund may: (1) borrow up to 5% of the value of the total assets of the
Fund from banks as a temporary measure (for extraordinary purposes). The All
American Equity Fund may borrow up to 33 1/3% of the amount of its total assets
(reduced by the amount of all liabilities and indebtedness other than such
borrowings) when deemed desirable or appropriate to effect redemptions,
provided, however, that the Fund will not purchase additional securities while
borrowings exceed 5% of the Fund's total assets; (2) invest up to 5% of the
value of the total assets of the Fund in securities of any one issuer (except
such limitation does not apply to obligations issued or

guaranteed by the United States Government, its agencies and/or
instrumentalities); (3) not acquire more than 10% of the voting securities of
any one issuer; and (4) lend portfolio securities with an aggregate market value
of not more than one-third of the Fund's total net assets.

HOW TO PURCHASE SHARES

The minimum initial investment is $1,000 for regular accounts or $50 for
custodial accounts for minors. The minimum subsequent investment is $50. The
minimum initial investment for persons enrolled in ABC Investment Plan
(Registered Trademark) (Automatically Building Capital) is $100, and the minimum
subsequent investment pursuant to such a plan is $30 or more per month per
account. There is no minimum purchase for retirement plan accounts, including
IRAs, administered by the Advisor or its agents and affiliates.

YOU MAY INVEST IN THE FOLLOWING WAYS:

BY MAIL

Send your application and check, made payable to the Fund, to P.O. Box
781234, San Antonio, Texas 78278-1234.

When making subsequent investments, enclose your check with the return
remittance portion of the confirmation of your previous investment or indicate
on your check or a separate piece of paper your name, address and account number
and mail to the address mentioned above. Do not use the remittance portion of
your confirmation statement for a different fund as it is pre-coded. This may
cause your investment to be invested into the wrong fund. If you wish to
purchase shares in more than one fund, send a separate check or money order for
each fund. Third party checks will not be accepted; and the Trust reserves the
right to refuse to accept second party checks.

BY TELEPHONE

Once your account is open, you may make investments by telephone by calling
1-800-US-FUNDS (1-800-873-8637). Investments by telephone are not available in
money market funds or any retirement account, administered by the Advisor or its
agents. The maximum telephone purchase is ten times the value of the shares
owned, calculated at the last available net asset value. Payment for shares
purchased by telephone is due within seven business days after the date of the
transaction. You cannot exchange shares purchased by telephone until after the
payment has been received and accepted by the Trust.

BY WIRE

You may make your initial or subsequent investments in United Services
Funds by wiring funds. To do so, call United Services Funds at 1-800-US-FUNDS
(1-800-873-8637) for a confirmation number and wiring instructions.

BY ABC INVESTMENT PLAN (Registered Trademark)

The ABC Investment Plan (Registered Trademark) (Automatically Building
Capital) is offered as a special service allowing you to build a position in any
of the United Services family of funds over time without trying to outguess the
market. Once your account is open, you may make investments automatically by
completing the ABC Investment Plan (Registered Trademark) form authorizing
United Services Funds to draw on your money market or bank account monthly for a
minimum of $30 a month beginning within thirty (30) days after the account is
opened. These lower minimums are a special service bringing to small investors
the benefits of United Services Funds without requiring a $1,000 minimum initial
investment.

ADDITIONAL INFORMATION ABOUT PURCHASES

such a purchaser may be prohibited from placing further orders unless
investments are accompanied by full payment by wire or cashier's check.

United Services Funds charges no sales commissions or "loads" of any
kind. However, investors may purchase and sell shares through registered
broker-dealers who may charge fees for their services.

CHECKS DRAWN ON FOREIGN BANKS. To be received in good order, an investment
must be made in U.S. dollars payable through a bank in the U.S. As an
accommodation, the Fund's transfer agent may accept checks payable in a foreign
currency or drawn on a foreign bank and will attempt to convert such checks into
U.S. dollars and repatriate such amount to the Fund's account in the U.S. Your
investment in the Fund will not be considered to have been received in good
order until your foreign check has been converted into U.S. dollars and is
available to the Funds through a bank in the U.S. Your investment in the Fund
may be delayed until your foreign check has been converted into U.S. dollars and
cleared the normal collection process. Any amounts charged to the Fund for
collection procedures will be deducted from the amount invested.

If the Trust incurs a charge for locating a shareholder without a current
address, such charge will be passed through to the shareholder.

TAX IDENTIFICATION NUMBER

The Fund is required by Federal law to withhold and remit to the United
States Treasury a portion of the dividends, capital gain distributions and
proceeds of redemptions paid to any shareholder who fails to furnish the Fund
with a correct taxpayer identification number, who underreports dividend or
interest income or who fails to provide certification of tax identification
number. In order to avoid this withholding requirement, you must certify on your
application, or on a separate Form W-9 supplied by the Transfer Agent, that your
taxpayer identification number is correct and that you are not currently subject
to backup withholding or you are exempt from backup withholding. For
individuals, your taxpayer identification number is your social security number.

CERTIFICATES

Funds will issue negotiable stock certificates. Unless your shares are purchased
with wired funds, a certificate will not be issued until 15 days have elapsed
from the time of purchase, or United Services Funds has satisfactory proof of
payment, such as a copy of your canceled check. Negotiable certificates will not
be issued for fewer than 100 shares.

HOW TO EXCHANGE SHARES

FUNDS IN THE UNITED SERVICES FAMILY

HIGH REWARD China Region Opportunity Fund
HIGH RISK U.S. Gold Shares Fund
U.S. World Gold Fund
U.S. Global Resources Fund
Bonnel Growth Fund
U.S. Real Estate Fund
MODERATE REWARD U.S. All American Equity Fund
MODERATE RISK U.S. Income Fund
U.S. Tax Free Fund
United Services Near-Term Tax Free
Fund
United Services Intermediate Treasury
Fund
LOW REWARD U.S. Government Securities Savings
Fund
LOW RISK U.S. Treasury Securities Cash Fund

If you have additional questions, one of our professional investor
representatives will personally assist you. Call 1-800-US-FUNDS.

BY TELEPHONE

this policy, will bear the risk of loss. The Fund and/or its Transfer Agent
will, however, employ reasonable procedures to confirm that instructions
communicated by telephone are genuine (including requiring some form of personal
identification, providing written confirmation and tape recording
conversations); and if either party does not employ reasonable procedures, it
may be liable for losses due to unauthorized or fraudulent transactions.

BY MAIL

ADDITIONAL INFORMATION ABOUT EXCHANGES

(2) An exchange involves both the redemption of shares out of the Fund and
the purchase of shares in a "Separate Fund." Like any other purchase, shares
of the Separate Fund cannot be purchased by exchange until all conditions of
purchase are met, including investable proceeds being immediately available.
Like any other redemption, the Fund reserves the right to hold exchange proceeds
for up to seven days. In general, the Fund expects to exercise this right on
exchanges of $50,000 or more. In such event, purchase of the Separate Fund
shares will also be delayed. Separate Fund shares will be priced at their net
asset value at the time of purchase. Redemption proceeds will not be invested in
either fund during this period. In all cases Fund shares will be redeemed
immediately, however Separate Fund shares will not be purchased until investable
proceeds are available. You will be notified immediately if the purchase will be
delayed.

(3) If the shares you wish to exchange are represented by a negotiable
stock certificate, the certificate must be returned before the exchange can be
effected.

(5) Exchanges out of United Services Funds' equity funds of shares held
less than 14 days are subject to a trader's fee. (See "Trader's Fee Paid to
Funds.")

(6) The exchange privilege may be terminated at any time. The exchange fee
and other terms of the privilege are subject to change.

HOW TO REDEEM SHARES

You may redeem any or all of your shares at will. Redemption requests
received in proper order by the Trust's transfer agent or a sub-agent before
4:00 p.m. Eastern Time, Monday through Friday exclusive of business holidays,
will receive the share price next computed after receipt of the request.

BY MAIL

A written request for redemption must be in "proper order," which
requires the delivery of the following to the Transfer Agent:

(1) a written request for redemption signed by each registered owner
exactly as the shares are registered, the account number and the number of
shares or the dollar amount to be redeemed;

(2) negotiable stock certificates for any shares to be redeemed for which
certificates have been issued;

(3) signature guarantees when required; and

(4) such additional documents as are customarily required to evidence the
authority of persons effecting redemptions on behalf of corporations, executors,
trustees, and other fiduciaries. Redemptions will not become effective until all
documents, in the form required, have been received by the Transfer Agent.
(Before writing, read "Additional Information About Redemptions.")

HOW TO EXPEDITE REDEMPTIONS

SPECIAL REDEMPTION ARRANGEMENTS

SIGNATURE GUARANTEE

Redemptions in excess of $15,000 currently require a signature guarantee. A
signature guarantee is required for all redemptions, regardless of the amount
involved, when the proceeds are to be paid to someone other than the registered
owner of the shares to be redeemed or if proceeds are to be mailed to an address
other than the registered address of record. When a signature guarantee is
required, each signature must be guaranteed by: (a) a federally insured bank or
thrift institution; (b) a broker or dealer (general securities, municipal, or
government) or clearing agency registered with the U.S. Securities and Exchange
Commission that maintains net capital of at least $100,000; or (c) a national
securities exchange or national securities association. The guarantee must: (i)
include the statement "Signature(s) Guaranteed"; (ii) be signed in the name of
the guarantor by an authorized person, including the person's printed name and
position with guarantor; and (iii) include a recital that the guarantor is
federally insured, maintains the requisite net capital or is a national
securities exchange or association. Shareholders living abroad may acknowledge
their signatures before a U.S. consular officer. Military personnel may
acknowledge their signatures before officers authorized to take acknowledgments
(e.g., legal officers and adjutants).

REDEMPTION PROCEEDS MAY BE SENT TO YOU:

BY MAIL

BY WIRE

ADDITIONAL INFORMATION ABOUT REDEMPTIONS

The redemption price may be more or less than your cost, depending on the
net asset value of the Fund's portfolio next determined after your request is
received.

The Trust has the authority to redeem existing accounts and to refuse a
potential account the privilege of having an account in the Trust if the Trust
reasonably determines that the failure to so redeem, or to so prohibit, would
have a material adverse consequence to the Trust and its shareholders. No
account closing fee or redemption fee will be charged to investors whose
accounts are closed under this provision.

TRADER'S FEE PAID TO FUND

A trader's fee of 10 basis points or 0.10% of the value of shares redeemed
or exchanged will be assessed to shareholders who redeem or exchange shares of
the Fund held less than fourteen (14) calendar days. The trader's fee will be
paid to the Fund to benefit remaining shareholders by protecting them against
expenses due to excessive trading. Excessive short-term trading has an adverse
impact on effective portfolio management as well as on Fund expenses. The Fund
has reserved the right to refuse investments from shareholders who engage in
short-term trading that may be disruptive to the Fund.

ACCOUNT CLOSING FEE

In order to reduce Fund expenses an account closing fee of $10 will be
assessed to shareholders who redeem all shares in their Fund account and direct
that redemption proceeds be delivered to them by mail or wire. The charge is
payable directly to the Fund's Transfer Agent which, in turn, will reduce its
charges to the Fund by an equal amount. The purpose of the charge is to allocate
to redeeming shareholders a more equitable portion of the Transfer Agent's fee,
including the cost of tax reporting, which is based upon the number of
shareholder accounts. The account closing fee does not apply to exchanges
between the funds in the United Services family of funds nor does it apply to
any account which is involuntarily redeemed.

SMALL ACCOUNTS

Fund accounts which fall, for any reason other than market fluctuations,
below $1,000 at any time during the month, will be subject to a monthly small
account charge of $1 which will be payable quarterly. The charge is payable
directly to the Fund's Transfer Agent which, in turn, will reduce its charges to
the Fund by an equal amount. The purpose of the

charge is to allocate the costs of maintaining shareholder accounts more equally
among shareholders.

In order to reduce expenses of the Fund, the Trust may redeem all shares in
any shareholder account, other than active ABC Investment Plan (Registered
Trademark) accounts, custodial accounts for minors and retirement plan accounts,
if, for a period of more than three months, the account has a net asset value of
$500 or less and the reduction in value is not due to market fluctuations. If
the Fund elects to close such accounts, it will notify shareholders whose
accounts are below the minimum of its intention to do so, and will provide those
shareholders with an opportunity to increase their accounts by investing a
sufficient amount to bring their accounts up to the minimum amount within ninety
(90) days of the notice. No account closing fee will be charged to investors
whose accounts are closed under this redemption provision.

ACCOUNT MAINTENANCE FEE

The Fund will automatically deduct a $3 per quarter ($12 annually) account
maintenance fee from the dividend income paid to each shareholder account. If
the dividend to be paid to an account is less than the fee to be deducted,
sufficient shares will be redeemed from an account to make up the difference.
Redeeming shares is a taxable event which may result in taxable gains or losses.
The account maintenance fee is payable directly to the Fund's Transfer Agent
which, in turn, will reduce its charge to the Fund by an equal amount.

CONFIRMATION STATEMENTS

OTHER SERVICES

The Trust has available a number of plans and services to meet the special
needs of certain investors. Plans available include:

(1) payroll deduction plans, including military allotments;

(2) custodial accounts for minors;

(3) a flexible, systematic withdrawal plan; and

(4) various retirement plans such as IRA, SEP/IRA, 403(b)(7), 401(k) and
employer-adopted defined contribution plans.

Application forms and brochures describing these plans and services can be
obtained from the Transfer Agent by calling 1-800-US-FUNDS (1-800-873-8637).

There is an annual charge for each retirement plan fund account with
respect to which Security Trust & Financial Company ("ST&FC"), a wholly-owned
subsidiary of the Advisor, acts as custodian (for example, $10 for IRAs and $15
for SEP/IRAs, 403(b)(7)s, profit sharing and other such accounts). If this
administrative charge is not paid separately prior to the last business day of a
calendar year or prior to a total redemption, it will be deducted from the
shareholder's account.

SHAREHOLDER SERVICES

United Shareholder Services, Inc. ("USSI"), a wholly-owned subsidiary of
the Advisor, acts as transfer and dividend paying agent for all fund accounts.
Simply write or call 1-800-US-FUNDS for prompt service on any questions about
your account.

24-HOUR ACCOUNT INFORMATION

HOW SHARES ARE VALUED

Shares of the Fund are purchased or redeemed, on a continuing basis without
a sales charge, at their next determined net asset value per share. The net
asset value per share of the Fund is calculated separately by United Shareholder
Services, Inc. Net asset value per share is determined and orders become
effective as of 4:00 p.m. Eastern Time, Monday through Friday, exclusive of
business holidays on which the NYSE is closed, by dividing the aggregate net
assets of the Fund by the total number of shares of the Fund outstanding. In the
event that the NYSE and other financial markets close earlier, as on the eve of
a holiday, the net asset value per share will be determined earlier in the day
at the close of trading on the NYSE.

DIVIDENDS AND TAXES

At the time of purchase, the share price of the Fund may reflect
undistributed income, capital gains or unrealized appreciation of securities.
Any dividend or capital gain distribution paid to a shareholder shortly after a
purchase of shares will reduce the per share net asset value by the amount of
the distribution. Although in effect a return of capital to the shareholder,
these distributions are fully taxable.

The Fund generally pays dividends quarterly and distributes capital gains,
if any, annually.

Dividends from taxable net investment income and distributions of net
short-term capital gains paid by the Fund are taxable to shareholders as
ordinary income, whether received in cash or reinvested in additional shares of
the Fund. A portion of these dividends may qualify for the 70 percent dividends
received deduction available to corporations. Distributions of net capital gains
will be taxable to shareholders as long-term capital gains, whether paid in cash
or reinvested in additional shares, regardless of the length of time the
investor has held his shares.

The foregoing discussion relates only to generally applicable Federal
income tax provisions in effect as of the date of this prospectus. Shareholders
should consult their tax advisers about the status of distributions from the
Fund in their own states and localities.

THE TRUST

MANAGEMENT OF THE FUND

TRUSTEES

THE INVESTMENT ADVISOR

U.S. Global Investors, Inc., 7900 Callaghan Road, San Antonio, Texas 78229,
under an investment advisory agreement with the Trust dated October 26, 1989,
furnishes investment advice and is responsible for overall management of the
Trust's business affairs. Frank E. Holmes is Chief Executive Officer and
Chairman of the Board of Directors of the Advisor, as well as President and
Trustee of the Trust. Since October 1989, Mr. Holmes has owned more than 25% of
the voting stock of the Advisor and is its controlling person. The Advisor was
organized in 1968.

The Advisor provides to the Trust, and to each of the funds within the
Trust, management and investment advisory services. The Advisor furnishes an
investment program for each of the funds, determines, subject to the overall
supervision and review of the Board of Trustees of the Trust, what investments
should be purchased, sold and held, and makes changes on behalf of the Trust in
the investments of each of the funds. The Advisor utilizes a team approach to
manage the assets of the Fund. The team meets regularly to review portfolio
holdings and to discuss purchase and sale activity. Mr. Bin Shi has been team
leader of the Fund since July, 1995, and he has been a research analyst for the
Advisor since January 1994, focusing on equity securities. Mr. Shi was a
doctoral candidate in business administration at Freeman School of Business of
Tulane University from 1990 to 1994. He received a Masters of Arts degree in
Economics while enrolled in the doctoral program.

NOTWITHSTANDING THE FOLLOWING DESCRIPTION OF FEES AND OTHER EXPENSES, THE
ADVISOR HAS GUARANTEED THAT TOTAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF
NET ASSETS) FOR THE ALL AMERICAN EQUITY FUND WILL NOT EXCEED 0.70% ON AN
ANNUALIZED BASIS THROUGH JUNE 30, 1997 OR UNTIL SUCH LATER DATE AS THE ADVISOR
DETERMINES.

The Advisory Agreement with the Trust provides for the Fund to pay the
Advisor an annual management fee based upon the average net assets of the Fund
of 0.75% of average net assets up to and including $250 million and 0.50% of
average net assets over $250 million. The fee paid to the Advisor for managing
the Fund for the fiscal year ended June 30, 1996 was 0.00% of average net assets
due to Advisor waivers.

The Transfer Agency Agreement with the Trust provides for each fund to pay
USSI an annual fee of $23.00 per account ( 1/12 of $23.00 monthly). In
connection with obtaining and/or providing administrative services to the
beneficial owners of Trust shares through broker-dealers, banks, trust companies
and similar institutions which provide such services and maintain an omnibus
account with the Transfer Agent, each fund shall pay to the Transfer Agent a
monthly fee equal to one-twelfth ( 1/12) of 12.5 basis points (.00125) of the
value of the shares of the funds held in accounts at the institutions, which
payment shall not exceed $1.92 multiplied by the average daily number of
accounts holding Trust shares at the institution. These fees cover the usual
transfer agency functions. In addition, the funds bear certain other Transfer
Agent expenses such as the costs of record retention and postage, plus the
telephone and line charges (including the toll-free 800 service) used by
shareholders to contact the Transfer Agent. For the fiscal period ending June
30, 1996, the All American Equity Fund paid USSI a total of $0 for the transfer
agency, lockbox and printing fees due USSI. Transfer Agent fees and expenses
including reimbursed expenses, are reduced by the amount of small account
charges, account closing fees, and account maintenance fees the Transfer Agent
is paid.

USSI performs bookkeeping and accounting services, and determines the daily
net asset value for the Fund. Bookkeeping and accounting services are provided
to the Fund for an asset based fee of 0.03% of the first $250 million in average
net assets, 0.02% of the next $250 million in average net assets, and 0.01% of
assets in excess of $500 million -- subject to an annual minimum fee of $24,000.
USSI received fees of $0 with respect to the Fund for the year ended June 30,
1996.

Additionally, the Advisor is reimbursed certain costs for in-house legal
services pertaining to the Fund.

PERFORMANCE INFORMATION

Effective November 22, 1993, the Fund changed investment objectives and
policies from passive to active management of the portfolio.

UNITED SERVICES FUNDS

SHARES OF THE FUND ARE SOLD
AT NET ASSET VALUE WITHOUT
SALES COMMISSIONS,
REDEMPTION FEES OR 12B-1 FEES

U.S. All American Equity Fund

INVESTMENT ADVISOR
U.S. Global Investors, Inc.
7900 Callaghan Road
Mailing Address: P.O. Box 29467
San Antonio, Texas 78229

TRANSFER AGENT
United Shareholder Services, Inc.
P.O. Box 781234
San Antonio, Texas 78278-1234

CUSTODIAN
Bankers Trust Company
16 Wall Street
New York, New York 10005

LEGAL COUNSEL
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109

INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
One Riverwalk Place, Ste. 900
San Antonio, Texas 78205

100% No Load

Be Sure to Retain This Prospectus;
It Contains Valuable Information.

================================================================================

UNITED SERVICES FUNDS

U.S. GOLD SHARES FUND, U.S. GLOBAL RESOURCES FUND,
U.S. WORLD GOLD FUND

P.O. BOX 781234
SAN ANTONIO, TEXAS 78278-1234
1-800-873-8637 (1-800-US-FUNDS)
(INFORMATION, SHAREHOLDER SERVICES AND REQUESTS)
INTERNET: http://www.usfunds.com

PROSPECTUS

NOVEMBER 1, 1996

This prospectus presents information that a prospective investor should
know about the U.S. Gold Shares Fund, the U.S. Global Resources Fund and the
U.S. World Gold Fund, three no-load mutual funds (the "Fund(s)") of United
Services Funds (the "Trust"). Each Fund has a different investment objective
and is designed to meet different investment needs. SOME OF THESE FUNDS INVOLVE
SPECIAL RISKS AND ARE HIGHLY SPECULATIVE. EACH OF THE FUNDS MAY INVEST UP TO 10%
OF THE VALUE OF THEIR RESPECTIVE NET ASSETS IN RESTRICTED SECURITIES. (SEE
SECTION ENTITLED "SPECIAL RISKS.") SHARES OF THE TRUST ARE NOT INSURED,
GUARANTEED, SPONSORED, RECOMMENDED OR APPROVED BY THE UNITED STATES OR ANY
AGENCY OR OFFICER THEREOF. Investors are responsible for determining whether or
not an investment in the fund is appropriate for their needs. Read and retain
this prospectus for future reference.

A Statement of Additional Information dated November 1, 1996, has been
filed with the Securities and Exchange Commission and is incorporated herein by
reference. This Statement is available free from United Services Funds upon
written request at the address set forth above or by calling 1-800-873-8637.

TABLE OF CONTENTS

PAGE
----
SUMMARY OF FEES AND EXPENSES...................... 2
FINANCIAL HIGHLIGHTS.............................. 4
INVESTMENT OBJECTIVES AND
CONSIDERATIONS.................................. 8
U.S. Gold Shares Fund........................... 8
U.S. Global Resources Fund...................... 8
U.S. World Gold Fund............................ 9
COMMON INVESTMENT POLICIES........................ 9
SPECIAL RISKS..................................... 11
HOW TO PURCHASE SHARES............................ 15
HOW TO EXCHANGE SHARES............................ 18
HOW TO REDEEM SHARES.............................. 20
HOW SHARES ARE VALUED............................. 24
DIVIDENDS AND TAXES............................... 25
THE TRUST......................................... 27
MANAGEMENT OF THE FUNDS........................... 28
PERFORMANCE INFORMATION........................... 30

SUMMARY OF FEES AND EXPENSES

The following summary, which is based on actual expenses and average net
assets for each Fund for the year ended June 30, 1996, is provided to assist you
in understanding the various costs and expenses a shareholder in each respective
Fund could bear directly and indirectly.

GOLD GLOBAL WORLD
SHARES RESOURCES GOLD
FUND FUND FUND
----- --------- -----
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load.............. None None None
Redemption Fee.................. None None None
Administrative Exchange Fee..... $5 $5 $5
Trader's Fee (on the
redemption or the exchange of
shares held less than 14
calendar days)............... 0.25% 0.25% 0.25%
Account Closing Fee (does not
apply to exchanges).......... $10 $10 $10
ANNUAL FUND OPERATING EXPENSES (AS A
PERCENTAGE OF AVERAGE NET
ASSETS)(1)
Management Fees................. 75% 1.00% 0.98%
12b-1 Fees...................... None None None
Other Expenses.................. .29% .73% .21%
Transfer Agency Fees............ .44% .71% .27%
Accounting Services Fees........ .05% .13% .05%
Total Fund Operating Expenses........ 1.53% 2.57% 1.51%

A shareholder who requests delivery of redemption proceeds by wire transfer
will be subject to a $10 charge. International wires will be charged more.

HYPOTHETICAL EXAMPLE OF EFFECT OF FUND EXPENSES:

You would pay the following expenses on a $1,000 investment, assuming 5%
annual return:

GOLD GLOBAL WORLD
SHARES RESOURCES GOLD
FUND FUND FUND
--------- --------- ---------
1 year............................... $26 $36 $25
3 years.............................. 58 90 58
5 years.............................. 94 146 92
10 years............................. 193 300 190

FINANCIAL HIGHLIGHTS
U.S. GOLD SHARES FUND

YEAR ENDED JUNE 30,
-------------------
1988 1987
--------- ---------
Per Share Operating Performance:
Net asset value, beginning of
period............................. 6.32 3.32
--------- ---------
Net investment income(a)........... .30 .33
Net realized and unrealized gain
(loss) on investments(b).......... (2.48) 3.02
--------- ---------
Total from investment operations..... (2.18) 3.35
--------- ---------
Less dividends and distributions:
Dividends from net investment
income............................ (.40) (.35)
Distributions in excess of net
investment income(c).............. -- --
Distributions from net realized
gains............................. -- --
--------- ---------
Total dividends and distributions.... (.40) (.35)
--------- ---------
Net asset value, end of period....... 3.74 6.32
========= =========
Total Investment Return(d)........... (36.44) 105.96
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)......................... 238,051 407,603
Ratio of expenses to average net
assets............................. 1.31 1.32
Ratio of net income to average net
assets............................. 5.10 6.45
Portfolio turnover rate.............. 18.05 23.75
Average commission rate paid(f)...... NA NA
(CONTINUED)

FINANCIAL HIGHLIGHTS
U.S. GLOBAL RESOURCES FUND

The following per share data and ratios for a share of beneficial interest
outstanding throughout each of the five years ended June 30, 1996 have been
audited by Price Waterhouse LLP, the Fund's Independent Accountants. The related
financial statements and the report of Independent Accountants are included in
the Fund's 1996 Annual Report to Shareholders and are incorporated by reference
into the Statement of Additional Information ("SAI"). In addition to the data
set forth below, further information about the performance of the Fund is
contained in the Annual Report to Shareholders and SAI which may be obtained
without charge.
Selected data for a capital share outstanding throughout each year is as
follows:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................. $ 5.76 $ 5.74 $ 6.10 5.78 5.76 6.31 7.07 7.67
--------- --------- --------- --------- --------- --------- --------- ---------
Net investment income(a)........... (.01) (.03) (.02) .01 .00 .03 .12 .13
Net realized and unrealized gain
(loss) on investments(b).......... 1.31 .36 (.18) .35 .25 (.12) .02 (.33)
--------- --------- --------- --------- --------- --------- --------- ---------
Total from investment operations..... 1.30 .33 (.20) .36 .25 (.09) .14 (.20)
========= ========= ========= ========= ========= ========= ========= =========
Less dividends and distributions:
Dividends from net investment
income............................ -- -- -- (.01) (.07) (.04) (.50) --
Distributions in excess of net
investment income(c).............. (.01) -- (.01) (.03) -- -- -- --
Distributions from net realized
gains............................. (.07) -- (.15) -- (.16) (.42) (.40) (.40)
Distributions in excess of net
realized gain(c).................. -- (.31) -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- --------- ---------
Total dividends and distributions.... (.08) (.31) (.16) (.04) (.23) (.46) (.90) (.40)
========= ========= ========= ========= ========= ========= ========= =========
Net asset value, end of period....... $ 6.98 5.76 5.74 6.10 5.78 5.76 6.31 7.07
--------- --------- --------- --------- --------- --------- --------- ---------
Total Investment Return(d)........... 22.80% 5.94 (3.73) 6.46 4.31 (1.26) (.47) (2.36)
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)......................... $ 24,534 21,452 21,620 23,939 25,384 28,157 31,694 31,694
Ratio of expenses to average net
assets............................. 2.57%(e) 2.49 2.43 2.46 2.33 2.43 2.10 2.04
Ratio of net income to average net
assets............................. (0.13)%(e) (.60) (.34) .17 .61 .58 1.37 1.78
Portfolio turnover rate.............. 116.77% 50.24 57.74 119.69 55.07 81.80 70.22 21.31
Average commission rate paid(f)...... $ 0.0306 NA NA NA NA NA NA NA
</TABLE>
YEAR ENDED JUNE 30,
-------------------

1988 1987
--------- ---------
Per Share Operating Performance:
Net asset value, beginning of
period............................. 11.00 5.29
--------- ---------
Net investment income(a)........... .14 (.19)
Net realized and unrealized gain
(loss) on investments(b).......... (2.77) 5.90
--------- ---------
Total from investment operations..... (2.63) 5.71
========= =========
Less dividends and distributions:
Dividends from net investment
income............................ -- --
Distributions in excess of net
investment income(c).............. -- --
Distributions from net realized
gains............................. (.70) --
Distributions in excess of net
realized gain(c).................. -- --
--------- ---------
Total dividends and distributions.... (.70) --
========= =========
Net asset value, end of period....... 7.67 11.00
--------- ---------
Total Investment Return(d)........... (24.01) 107.55
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)......................... 37,064 44,930
Ratio of expenses to average net
assets............................. (.49) 2.90
Ratio of net income to average net
assets............................. 1.78 (1.64)
Portfolio turnover rate.............. 26.78 7.98
Average commission rate paid(f)...... NA NA
(CONTINUED)

FINANCIAL HIGHLIGHTS
U.S. WORLD GOLD FUND

The following per share data and ratios for a share of beneficial interest
outstanding throughout each of the five years ended June 30, 1996 have been
audited by Price Waterhouse LLP, the Fund's Independent Accountants. The related
financial statements and the report of Independent Accountants are included in
the Fund's 1996 Annual Report to Shareholders and are incorporated by reference
into the Statement of Additional Information ("SAI"). In addition to the data
set forth below, further information about the performance of the Fund is
contained in the Annual Report to Shareholders and SAI which may be obtained
without charge.
Selected data for a capital share outstanding throughout each year is as
follows:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................. $ 15.81 15.63 14.59 9.51 10.04 10.77 11.57 14.03
--------- --------- --------- --------- --------- --------- --------- ---------
Net investment income(a)........... (.08) (.12) (.09) (.12) (.13) (.10) (.04) .02
Net realized and unrealized gain
(loss) on investments(b).......... 5.39 .33 1.13 5.20 (.40) (.63) (.66) (2.48)
--------- --------- --------- --------- --------- --------- --------- ---------
Total from investment operations..... 5.31 .21 1.04 5.08 (.53) (.73) (.70) (2.46)
--------- --------- --------- --------- --------- --------- --------- ---------
Less dividends and distributions:
Dividends from net investment
income............................ -- -- -- -- -- -- (.10) --
Distributions in excess of net
investment income(c).............. -- (.03) -- -- -- -- -- --
Distributions from net realized
gains............................. -- -- -- -- -- -- -- (2.30)
--------- --------- --------- --------- --------- --------- --------- ---------
Total dividends and distributions.... -- (.03) -- -- -- -- (.10) --
--------- --------- --------- --------- --------- --------- --------- ---------
Net asset value, end of period....... $ 21.12 15.81 15.63 14.59 9.51 10.04 10.77 11.57
========= ========= ========= ========= ========= ========= ========= =========
Total Investment Return(d)........... 33.59% 1.36 7.13 53.58 (5.37) (7.03) (7.02) (16.42)
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)......................... $ 248,781 181,473 202,819 109,805 57,942 65,423 72,626 85,119
Ratio of expenses to average net
assets............................. 1.51%(e) 1.55 1.53 2.00 2.20 2.22 1.95 2.00
Ratio of net income to average net
assets............................. (.40)%(e) (.66) 0.66 (1.15) (1.18) (.95) (.24) .13
Portfolio turnover rate.............. 25.97% 28.02 19.65 26.05 47.28 44.46 25.52 0.02
Average commission rate paid(f)...... $ 0.0202 NA NA NA NA NA NA NA
</TABLE>
YEAR ENDED JUNE 30,
-------------------
1988 1987
--------- ---------
Per Share Operating Performance:
Net asset value, beginning of
period............................. 20.47 9.61
--------- ---------
Net investment income(a)........... .00 .00
Net realized and unrealized gain
(loss) on investments(b).......... (4.14) 11.06
--------- ---------
Total from investment operations..... (4.14) 11.06
--------- ---------
Less dividends and distributions:
Dividends from net investment
income............................ -- --
Distributions in excess of net
investment income(c).............. -- --
Distributions from net realized
gains............................. (.20) --
--------- ---------
Total dividends and distributions.... (2.30) (.20)
--------- ---------
Net asset value, end of period....... 14.03 20.47
========= =========
Total Investment Return(d)........... (21.29) 116.80
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)......................... 104,273 126,839
Ratio of expenses to average net
assets............................. 1.47 1.47
Ratio of net income to average net
assets............................. .04 (.05)
Portfolio turnover rate.............. 39.20 43.66
Average commission rate paid(f)...... NA NA

(FOOTNOTES ON FOLLOWING PAGE)

(CONTINUED FROM PREVIOUS PAGE)

(a) Net of expense reimbursements; (b) Includes the effect of capital share
transactions throughout the year; (c) Distributions in excess of net investment
income and net realized gains and tax returns of capital are presented in
accordance with SOP 93-2, Determination, Disclosure, and Financial Statement
Presentation of Income, Capital Gain, and Return of Capital Distribution by
Investment Companies, which was first implemented by the Funds in fiscal 1993.
Information for prior years has not been restated; (d) Total return does not
reflect the effect of account fees; (e) Expense ratio is net of expense
reimbursements or fee waivers by the Advisor. Had such reimbursements not been
made, the expense ratio subject to the most restrictive state limitation would
have been 1.58%, 2.58% and 1.53%, and the net investment income ratio would have
been 1.76%, (0.14)% and (0.42)% for the Gold Shares, Global Resources and World
Gold Funds, respectively; (f) Represents total commissions paid on portfolio
securities divided by the total number of shares purchased or sold on which
commissions were charged. This information was not required prior to 1996.

INVESTMENT OBJECTIVES AND CONSIDERATIONS

United Services Funds (the "Trust") offers investors three natural
resources funds: the U.S. Gold Shares Fund ("Gold Shares Fund"), U.S. Global
Resources Fund ("Global Resources Fund") and U.S. World Gold Fund ("World
Gold Fund"). Each Fund has a principal objective of long-term growth of capital
as well as protection against inflation and monetary instability. The Gold
Shares Fund has a secondary objective of current income. The Gold Shares Fund
invests a substantial portion of its assets in issuers located in the Republic
of South Africa, and while the World Gold Fund may invest in South African
issuers, typically it does not. The Gold Shares Fund and the World Gold Fund
invest primarily in gold-related issuers; the Global Resources Fund may
diversify its investments substantially among all natural resources.

U.S. GOLD SHARES FUND

The primary investment objective of the Gold Shares Fund is to seek
long-term growth of capital as well as protection against inflation and monetary
instability. Current income is a secondary objective.

The Gold Shares Fund concentrates its investments in common stocks of
companies involved in exploration for, mining of, processing of, or dealing in
gold with emphasis on stocks of foreign companies. Normally, at least 65% of the
Gold Shares Fund's total net assets will be invested in securities of companies
involved in gold operations. The Gold Shares Fund may also invest in the
securities of issuers engaged in operations related to silver and other precious
metals and may be subject to risks not present with other mutual funds. See
"Special Risks."

The Advisor believes that, over the long term, the value of gold and other
precious metals will increase and the value of securities of companies involved
in gold operations will also increase.

The Gold Shares Fund may invest 10% of the value of its net assets in
securities which are subject to legal or contractual restrictions on resale and
may also invest in warrants. See "Special Risks."

U.S. GLOBAL RESOURCES FUND

The principal objective of the Global Resources Fund is to provide
long-term growth of capital as well as protection against inflation and monetary
instability. Current income is not a consideration.

The Global Resources Fund concentrates its investments in the equity
securities of large capitalization companies primarily engaged in the
exploration, mining, processing, fabrication and distribution of natural
resources of any kind, including timber, hydrocarbons, minerals and metals such
as platinum, uranium, strategic metals, gold, silver, diamonds, coal, oil and
phosphates. Consistent with its investment objectives, the Global Resources Fund
may diversify its investments substantially among all natural

resources. The Global Resources Fund may invest in small issuers and may also
invest up to 5% of its total net assets in warrants.

The Global Resources Fund may invest in issuers located in any part of the
world. There is no limit on the Global Resources Fund's investment in the
securities of foreign issuers. The Global Resources Fund is highly speculative.
See "Special Risks."

U.S. WORLD GOLD FUND

The principal objective of the World Gold Fund is to provide long-term
growth of capital as well as protection against inflation and monetary
instability. Current income is not a consideration.

The World Gold Fund concentrates its investments in the equity securities
of companies primarily engaged in the exploration, mining, processing,
fabrication and distribution of gold or other metals, such as silver, platinum,
uranium, strategic metals, and natural resources such as diamonds, coal, oil and
phosphates.

The World Gold Fund seeks to achieve this investment objective by investing
at least 25% of its total assets in the securities of companies principally
engaged in natural resource operations. Under normal circumstances, at least 65%
of its total net assets will be invested in the securities of companies involved
in the exploration for, mining and processing of, or dealing in, gold.

The World Gold Fund may invest in issuers located in any part of the world.
There is no limit on the World Gold Fund's investment in securities of foreign
issuers. The World Gold Fund may also invest up to 5% of its total net assets in
warrants. The World Gold Fund is highly speculative. The World Gold Fund may
invest in small issuers. See "Special Risks."

COMMON INVESTMENT POLICIES

DEFENSIVE INVESTMENT STRATEGY

Each Fund can be temporarily invested, without limitation, other than its
investment restrictions, in short-term money market instruments, if in the
opinion of the Advisor, market conditions warrant.

ILLIQUID SECURITIES

Subject to any other investment restrictions, each Fund's investments in
illiquid securities (which includes securities without readily available market
quotations, repurchase agreements with maturities in excess of seven days, and
restricted securities) is limited, in the aggregate, to 10% of total net assets.

PUT AND CALL OPTIONS

SELLING (OR WRITING) COVERED CALL OPTIONS. Each Fund may sell (or write)
covered call options on portfolio securities to hedge against adverse movements
in the prices of these securities. A call option gives the buyer of the option,
upon payment of a premium, the right to call upon the writer to deliver a
security on or before a fixed date at a predetermined price, referred to as the
strike price. If the price of the hedged security should fall or remain below
the strike price, the Fund will not be called upon to deliver the security, and
the Fund will retain the premium received for the option as additional income,
offsetting all or part of any decline in the value of the security. The hedge
provided by writing covered call options is limited to a price decline in the
security of no more than the option premium received by the Fund for writing the
option. If the security owned by the Fund appreciates above the option's strike
price, the Fund will generally be called upon to deliver the security, which
will prevent the Fund from receiving the benefit of any price appreciation above
the strike price.

BUYING CALL OPTIONS. Each Fund may purchase call options on securities
which each Fund intends to purchase to take advantage of anticipated positive
movements in the prices of these securities. Each Fund will realize a gain from
the exercise of a call option if, during the option period, the price of the
underlying security to be purchased increases by more than the amount of the
premium paid. A Fund will realize a loss equal to all or a portion of the
premium paid for the option if the price of the underlying security decreases or
does not increase by more than the premium.

BUYING PUT OPTIONS. Each Fund may purchase put options on portfolio
securities to hedge against adverse movements in the prices of these securities.
Each Fund may also purchase put options on securities the Fund does not
currently hold if the Fund anticipates that the price of such securities may
decrease during the option period. A put option gives the buyer of the option,
upon payment of a premium, the right to sell a security to the writer of the
option on or before a fixed date at a predetermined price. Each Fund will
realize a gain from the exercise of a put option if, during the option period,
the price of the security declines by an amount in excess of the premium paid.
Each Fund will realize a loss equal to all or a portion of the premium paid for
the option if the price of the security increases or does not decrease by more
than the premium.

CLOSING TRANSACTIONS. Each Fund may dispose of an option written by the
Fund by entering into a "closing purchase transaction" for an identical option
and may dispose of an option purchased by the Fund by entering into a "closing
sale transaction" for an identical option. In each case, the closing
transactions will have the effect of terminating the rights of the option holder
and the obligations of the option purchaser and will result in a gain or loss to
the Fund based upon the relative amount of the

premiums paid or received for the original option and the closing transaction.
Each Fund may sell (or write) put options solely for the purpose of entering
into closing sale transactions.

INDEX OPTIONS. Each Fund may purchase and sell call options and purchase
put options on stock indices in order to manage cash flow, reduce equity
exposure, or to remain fully invested in equity securities. Options on
securities indices are similar to options on a security except that, upon the
exercise of an option on a securities index, settlement is made in cash rather
than in specific securities.

LIMITATIONS. Each Fund may purchase and sell only call options that are
listed on a securities exchange. Each Fund may also purchase put options that
are listed and traded on securities exchanges or quoted on NASDAQ. Not more than
2% of each Fund's total net assets may be invested in premiums on put options,
and not more than 25% of the Fund's total net assets may be subject to put
options. A Fund will not purchase any option if, immediately thereafter, the
aggregate market value of all outstanding options purchased and written by the
Fund would exceed 5% of the Fund's total assets. A Fund will not write any call
option if, immediately thereafter, the aggregate value of the Fund's securities
subject to outstanding call options would exceed 25% of the value of each Fund's
total assets.

GOLD AND GOLD BULLION

The Gold Shares Fund and the World Gold Fund may invest up to 10% of each
Fund's respective total net assets in gold or gold bullion.

SPECIAL RISKS

GOLD AND SILVER SECURITIES

Investment in gold and silver securities presents risks because the price
of gold and silver has fluctuated substantially over short periods of time.

Prices may be affected by unpredictable international monetary and
political policies, such as currency devaluations or revaluations, economic and
social conditions within an individual country, trade imbalances or trade or
currency restrictions between countries. The price of gold and silver mining
shares frequently fluctuates even more dramatically than the price of gold and
silver. THE GOLD SHARES FUND HAS SIGNIFICANT INVESTMENTS IN SOUTH AFRICAN
ISSUERS. THE UNSTABLE POLITICAL AND SOCIAL CONDITIONS IN SOUTH AFRICA AND THE
UNSETTLED POLITICAL CONDITIONS PREVAILING IN NEIGHBORING COUNTRIES MAY HAVE
DISRUPTIVE EFFECTS ON THE MARKET PRICES OF THE INVESTMENTS OF THE GOLD SHARES
FUND AND MAY IMPAIR ITS ABILITY TO HOLD INVESTMENTS IN SOUTH AFRICAN ISSUERS.

GOLD AND GOLD BULLION

Because gold and gold bullion do not generate investment income, the return
to the Gold Shares Fund or the World Gold Fund from such investments will be
derived solely from the gains and losses realized by the Fund upon the sale of
the gold and gold bullion. Each Fund may also incur storage and other costs
relating to its investments in gold and gold bullion. Under certain
circumstances, these costs may exceed the custodial and brokerage costs
associated with investments in portfolio securities.

FOREIGN SECURITIES

Investment in foreign securities may involve risks not present in domestic
investment. These include fluctuating exchange rates, the fact that foreign
issuers may be subject to different, and in some cases, less comprehensive
accounting, financial reporting and disclosure standards than are domestic
issuers; the risk of adverse changes in foreign investment or exchange control
regulations; expropriation or confiscatory taxation; political or financial
instability; or other developments which can affect investments. All of the
Funds may invest in the securities of foreign issuers that are listed on a
domestic or foreign exchange, quoted on NASDAQ, or traded in the domestic or
foreign over-the-counter market.

INVESTMENT IN SMALL ISSUERS

The Global Resources Fund and the World Gold Fund may invest in small
companies for which it is difficult to obtain reliable information and financial
data. The securities of these smaller companies may not be readily marketable,
making it difficult to dispose of shares when it may otherwise be advisable. In
addition, certain issuers in which a Fund may invest may face difficulties in
obtaining the capital necessary to continue in operation and may become
insolvent, which may result in a complete loss of the Fund's investment in such
issuers.

RESTRICTED SECURITIES

Investment in restricted securities, that is, securities which are subject
to legal or contractual restrictions on resale, may present certain risks due to
the difficulty a Fund may have in disposing of such securities at a specified
time. The disposition of these securities may be restricted under Federal
securities laws, and, as a result, a Fund may either be unable to dispose of
such investments or be forced to dispose of them at less than their fair value.
A Fund may be subject to time delays and incur costs or losses as a result of
having to hold the restricted securities in its portfolio for a longer period
than intended.

BORROWING

As a fundamental policy, the Gold Shares Fund and World Gold Fund may
borrow money only for temporary or emergency purposes (not for

leveraging or investment) and the amount of such borrowings may not exceed 33
1/3% of a Fund's total assets (including the amount borrowed) less liabilities
(other than borrowings). In addition, as a matter of nonfundamental policy, the
Gold Shares Fund and World Gold Fund will not purchase any security while
borrowings represent more than 5% of its total assets outstanding. As a
fundamental policy, the Global Resources Fund may borrow from a bank up to a
limit of 5% of the total assets of the Fund as a temporary measure (for
emergency purposes).

Such borrowings may be deemed desirable or appropriate to meet redemption
requests or other temporary demands for cash. For example, rather than incurring
the trading costs associated with liquidating portfolio securities to raise cash
to pay for shareholder redemptions, the Fund may temporarily borrow cash and, if
subsequent shareholder purchases do not provide the cash to cover the
redemptions, liquidate portfolio securities in an orderly manner to repay the
borrowed cash. To the extent that a Fund borrows money prior to selling
securities, the Fund would be leveraged such that the Fund's net assets may
appreciate or depreciate in value more than an unleveraged portfolio of similar
securities.

LENDING OF PORTFOLIO SECURITIES

Each Fund may lend securities to broker-dealers or institutional
investors for their use in connection with short sales, arbitrages and other
securities transactions. A Fund will not lend portfolio securities unless the
loan is secured by collateral (consisting of any combination of cash, United
States Government securities or irrevocable letters of credit) in an amount at
least equal (on a daily mark-to-market basis) to the current market value of the
securities loaned. In the event of a bankruptcy or breach of agreement by the
borrower of the securities, a Fund could experience delays and costs in
recovering the securities loaned. A Fund will not enter into securities lending
agreements unless its custodian bank/lending agent will fully indemnify the Fund
against loss due to borrower default. A Fund may not lend securities with an
aggregate market value of more than one-third of the Fund's total net assets.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES

only make commitments to purchase securities on a when-issued or delayed
delivery basis with the intention of actually acquiring the securities, but may
sell them before the settlement date if it is deemed advisable. The Fund will
restrict liquid securities in an amount at least equal in value to the Fund's
commitments to purchase securities on a when-issued or delayed delivery basis.
If the value of these assets declines, the Fund will place additional liquid
assets in the account on a daily basis so that the value of the assets in the
account is equal to the amount of such commitments.

REPURCHASE AGREEMENTS

Each Fund may invest a portion of its assets in repurchase agreements with
domestic broker-dealers, banks and other financial institutions, provided the
Fund's custodian always has possession of securities serving as collateral or
has evidence of book entry receipt of such securities. In a repurchase
agreement, a Fund purchases securities subject to the seller's agreement to
repurchase such securities at a specified time (normally one day) and price. The
repurchase price reflects an agreed-upon interest rate during the time of
investment. All repurchase agreements must be collateralized by United States
Government or government agency securities, the market values of which equal or
exceed 102% of the principal amount of the repurchase obligation. If an
institution enters an insolvency proceeding, the resulting delay in liquidation
of securities serving as collateral could cause the Fund some loss if the value
of the securities declined prior to liquidation. To minimize the risk of loss, a
Fund will enter into repurchase agreements only with institutions and dealers
which the Board of Trustees considers creditworthy.

The Global Resources Fund and the World Gold Fund may invest up to 10% of
their respective total net assets in repurchase agreements of more than seven
days maturity.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS -- U.S. GOLD SHARES AND U.S.
WORLD GOLD FUNDS

The U.S. Gold Shares Fund and the U.S. World Gold Fund are permitted to
purchase and sell futures contracts and options on futures contracts. Currently,
the Advisor does not intend to purchase or sell futures contracts or options on
futures contracts on behalf of either Fund. Neither Fund will invest in such
instruments without first amending the Fund's prospectus to provide shareholders
with additional disclosure concerning these investment practices.

SPECIAL LIMITATIONS

The investment objective of each Fund may not be changed without the vote
of a majority of that Fund's outstanding voting securities.

Each Fund may: (1) invest up to 5% of the value of the total assets of
that Fund in securities of any one issuer (except such limitation does not

apply to obligations issued or guaranteed by the U.S. Government, its agencies
and/or instrumentalities); (2) not acquire more than 10% of the voting
securities of any one issuer; (3) lend portfolio securities with an aggregate
market value of not more than one-third of such Fund's total net assets; and (4)
invest up to 5% of the total net assets in securities of companies (including
predecessors) that have been in continuous operation for less than three years.

HOW TO PURCHASE SHARES

The minimum initial investment is $1,000 for regular accounts or $50 for
custodial accounts for minors. The minimum subsequent investment is $50. The
minimum initial investment for persons enrolled in the ABC Investment Plan(R)
is $100, and the minimum subsequent investment pursuant to such a plan is $30 or
more per month per account. There is no minimum purchase for retirement plan
accounts, including IRAs, administered by the Advisor or its agents and
affiliates.

YOU MAY INVEST IN THE FOLLOWING WAYS:

BY MAIL

Send your application and check or money order, made payable to the
respective Fund, to P.O. Box 781234, San Antonio, Texas 78278-1234.

When making subsequent investments, enclose your check with the return
remittance portion of the confirmation of your previous investment or indicate
on your check or a separate piece of paper your name, address and account number
and mail to the address mentioned above. Do not use the remittance portion of
your confirmation statement for a different fund as it is pre-coded. This may
cause your investment to be invested into the wrong fund. If you wish to
purchase shares in more than one fund, send a separate check or money order for
each fund. Third party checks will not be accepted; and, the Trust reserves the
right to refuse to accept second party checks.

BY TELEPHONE

Once your account is open, you may make investments by telephone by calling
1-800-US-FUNDS (1-800-873-8637). Investments by telephone are not available in
money market funds or any retirement account administered by the Advisor or its
agents. The maximum telephone purchase is ten times the value of the shares
owned, calculated at the last available net asset value. Payment for shares
purchased by telephone is due within seven (7) business days after the date of
the transaction. You cannot exchange shares purchased by telephone until after
the payment has been received and accepted by the Trust.

BY WIRE

You may make your initial or subsequent investments in United Services
Funds by wiring funds. To do so, call United Services Funds for a confirmation
number and wiring instructions.

BY ABC INVESTMENT PLAN (Registered Trademark)

You may call 1-800-873-8637 to open a treasury money market fund or inquire
at your bank whether it will honor debits through the Automated Clearing House
("ACH") or, if necessary, preauthorized checks. You may change the date or
amount of your investment or discontinue the Plan any time by letter received by
United Services Funds at least two weeks before the change is to become
effective.

ADDITIONAL INFORMATION ABOUT PURCHASES

All purchases of shares are subject to acceptance by the Trust and are not
binding until accepted. United Services Funds reserves the right to reject any
application or investment. Orders received by the Funds' transfer agent or a
sub-agent before 4:00 p.m. Eastern Time, Monday through Friday exclusive of
business holidays, and accepted by the Fund will receive the share price next
computed after receipt of the order. Orders to purchase shares of U.S. Gold
Shares Fund will not be accepted after 3:00 p.m. Eastern Time. In the event that
the NYSE and other financial markets close earlier, as on the eve of a holiday,
orders will become effective earlier in the day at the close of trading on the
NYSE.

To recover any such loss or charge, the Trust reserves the right, without
further notice, to redeem shares of any affiliated funds already owned by any
purchaser whose order is canceled, for whatever reason, and such a purchaser may
be prohibited from placing further orders unless investments are accompanied by
full payment by wire or cashier's check.

United Services Funds charges no sales commissions or "loads" of any
kind. However, investors may purchase and sell shares through registered
broker-dealers who may charge for their services.

CHECKS DRAWN ON FOREIGN BANKS. To be received in good order, an investment
must be made in U.S. dollars payable through a bank in the U.S. As an
accommodation, the Funds' transfer agent may accept checks payable in a foreign
currency or drawn on a foreign bank and will attempt to convert such checks into
U.S. dollars and repatriate such amount to the Fund's account in the U.S. Your
investment in the Fund will not be considered to have been received in good
order until your foreign check has been converted into U.S. dollars and is
available to the Funds through a bank in the U.S. Your investment in the Fund
may be delayed until your foreign check has been converted into U.S. dollars and
cleared the normal collection process. Any amounts charged to the Fund for
collection procedures will be deducted from the amount invested.

If the Trust incurs a charge for locating a shareholder without a current
address, such charge will be passed through to the shareholder.

TAX IDENTIFICATION NUMBER

Instructions to exchange or transfer shares held in established accounts
will be refused until the certification has been provided. In addition, the
Funds assess a $50 administrative fee if the taxpayer identification number is
not provided by year end.

CERTIFICATES

When you open your account, United Services Funds will send you a
confirmation statement, which will be your evidence that you have opened an
account with United Services Funds. The confirmation statement is
non-negotiable, so if it is lost or destroyed, you will not be required to buy a
lost instrument bond or be subject to other expense or trouble, as you would
with a negotiable stock certificate. At your written request, United Services
Funds will issue negotiable stock certificates. Unless your shares are purchased
with wired funds, a certificate will not be issued until 15 days have elapsed
from the time of purchase, or United Services Funds has satisfactory proof of
payment, such as a copy of your canceled check. Negotiable certificates will not
be issued for fewer than 100 shares.

HOW TO EXCHANGE SHARES

FUNDS IN THE UNITED SERVICES FAMILY

High Reward China Region Opportunity Fund
High Risk U.S. Gold Shares Fund
U.S. World Gold Fund
U.S. Global Resources Fund
Bonnel Growth Fund
U.S. Real Estate Fund
Moderate Reward U.S. All American Equity Fund
Moderate Risk U.S. Income Fund
U.S. Tax Free Fund
United Services Near-Term Tax Free Fund
United Services Intermediate Treasury Fund
Low Reward U.S. Government Securities Savings Fund
Low Risk U.S. Treasury Securities Cash Fund

If you have additional questions, one of our professional investor
representatives will personally assist you. Call 1-800-US-FUNDS.

BY TELEPHONE

You will automatically have the privilege to direct United Services
Funds to exchange your shares by calling toll free 1-800-US-FUNDS
(1-800-873-8637). Orders to exchange shares of U.S. Gold Shares Fund will not be
accepted after 3:00 p.m. Eastern Time or at such earlier time in the day as the
net asset value per share is determined. In connection with such exchanges,
neither the Fund nor the Transfer Agent will be responsible for acting upon any
instructions reasonably believed by them to be genuine. The shareholder, as a
result of this policy, will bear the risk of loss. Each Fund and/or its Transfer
Agent will, however, employ reasonable procedures to confirm that instructions
communicated by telephone are genuine (including requiring some form of personal
identification, providing written confirmation and tape recording
conversations); and if either party does not employ reasonable procedures, it
may be liable for losses due to unauthorized or fraudulent transactions.

BY MAIL

ADDITIONAL INFORMATION ABOUT EXCHANGES

(1) There is a $5 charge, which is paid to United Shareholder Services,
("USSI" or the "Transfer Agent"), for each exchange transaction out of any
fund account. Retirement accounts administered by the Advisor or its agents are
charged $5 for each exchange exceeding three per quarter. The exchange fee is
charged to cover administrative costs associated with handling these exchanges.

(3) If the shares you wish to exchange are represented by a negotiable
stock certificate, the certificate must be returned before the exchange can be
effected.

(5) Exchanges out of United Services Funds' equity funds of shares held
less than 14 days are subject to a trader's fee. (See "Traders's Fee Paid to
the Fund.")

(6) The exchange privilege may be terminated at any time. The exchange fee
and other terms of the privilege are subject to change.

HOW TO REDEEM SHARES

You may redeem any or all of your shares at will. Redemption requests
received in proper order by the Funds' transfer agent or a sub-agent before 4:00
p.m. Eastern Time, Monday through Friday exclusive of business holidays will
receive the share price next computed after receipt of the request. Orders to
purchase shares of U.S. Gold Shares Fund will not be accepted after 3:00 p.m.
Eastern Time.

BY MAIL

A written request for redemption must be in "proper order," which
requires delivery of the following to the Transfer Agent:

(1) a written request for redemption signed by each registered owner
exactly as the shares are registered, the account number and the number of
shares or the dollar amount to be redeemed;

(2) negotiable stock certificates for any shares to be redeemed for which
certificates have been issued;

(3) signature guarantees when required; and

(4) such additional documents as are customarily required to evidence the
authority of persons effecting redemptions on behalf of corporations, executors,
trustees, and other fiduciaries. Redemptions will not become effective until all
documents, in the form required, have been received by the Transfer Agent.
(Before writing, read "Additional Information About Redemptions.")

HOW TO EXPEDITE REDEMPTIONS

To redeem your Fund shares by telephone, you may call the Fund and direct
an exchange out of the Fund into an identically registered account in a United
Services treasury money market fund ($1,000 minimum initial investment). You may
then write a check against your treasury money market fund account. See "How to
Exchange Shares" in the prospectus for a description of exchanges, including
the $5 exchange fee. Call 1-800-873-8637 for more information concerning
telephone redemption and a treasury money market fund prospectus.

SPECIAL REDEMPTION ARRANGEMENTS

Special arrangements may be made by institutional investors, or on behalf
of accounts established by brokers, advisers, banks or similar institutions, to
have redemption proceeds transferred by wire to preestablished accounts upon
telephone instructions. For further information call the Trust at
1-800-873-8637. Telephone redemptions are available for accounts with a balance
of at least $50,000. To establish telephone redemption privileges, call
1-800-873-8637 for information. Telephone redemptions are available for
Chairman's Circle accounts.

SIGNATURE GUARANTEE

Redemptions in excess of $15,000 require a signature guarantee. A signature
guarantee is required for all redemptions, regardless of the amount involved,
when the proceeds are to be paid to someone other than the registered owner of
the shares to be redeemed or if proceeds are to be mailed to an address other
than the registered address of record. When a signature guarantee is required,
each signature must be guaranteed by: (a) a federally insured bank or thrift
institution; (b) a broker or dealer (general securities, municipal, or
government) or clearing agency registered with the U.S. Securities and Exchange
Commission that maintains net capital of at least $100,000; or (c) a national
securities exchange or national securities association. The guarantee must: (i)
include the statement "Signature(s) Guaranteed"; (ii) be signed in the name of
the guarantor by an authorized person, including the person's printed name and
position with guarantor; and (iii) include a recital that the guarantor is
federally insured, maintains the requisite net capital or is a national
securities exchange or association. Shareholders living abroad may acknowledge
their signatures before a U.S. consular officer. Military personnel may
acknowledge their signatures before officers authorized to take acknowledgments
(e.g., legal officers and adjutants).

REDEMPTION PROCEEDS MAY BE SENT TO YOU:

BY MAIL

If your redemption check is mailed, it is usually mailed within 48 hours;
however, the Fund reserves the right to hold redemption proceeds for up to seven
days. If the shares to be redeemed were purchased by check, the redemption
proceeds will not be mailed until the purchase check has cleared. You may avoid
this requirement by investing by bank wire (Federal funds). Redemption checks
may be delayed if you have changed your address in the last 30 days. Please
notify the Fund promptly in writing, or by telephone, of any change of address.

BY WIRE

You may authorize the Fund to transmit redemption proceeds by wire,
provided you send written wiring instructions with a signature guarantee at

the time of redemption. Proceeds from your redemption will usually be
transmitted on the first business day following the redemption. However, the
Trust reserves the right to hold redemptions for up to seven days. If the shares
to be redeemed were purchased by check the redemption proceeds will not be wired
until the purchase check has cleared, which may take up to seven days. There is
a $10 charge to cover the wire, which is deducted from redemption proceeds.
International wires will be higher.

ADDITIONAL INFORMATION ABOUT REDEMPTIONS

The redemption price may be more or less than your cost, depending on the
net asset value of the Fund's portfolio next determined after your request is
received. A request to redeem shares in an IRA or similar retirement account
must be accompanied by an IRS Form W4-P and a reason for withdrawal as specified
by the IRS. Proceeds from the redemption of shares from a retirement account may
be subject to withholding tax.

The Trust has the authority to redeem existing accounts and to refuse a
potential account the privilege of having an account in the Trust if the Trust
reasonably determines that the failure to so redeem, or to so prohibit, would
have a material adverse consequence to the Trust and its shareholders. No
account closing fee will be charged to investors whose accounts are closed under
this provision.

TRADER'S FEE PAID TO THE FUND

A trader's fee of 25 basis points or 0.25% of the value of shares redeemed
or exchanged will be assessed to shareholders who redeem or exchange shares of a
Fund held less than fourteen (14) days. The trader's fee will be paid to the
Fund to benefit remaining shareholders by protecting them against expenses due
to excessive trading. Excessive short-term trading has an adverse impact on
effective portfolio management as well as upon Fund expenses. The Funds have
reserved the right to refuse investments from shareholders who engage in
short-term trading that may be disruptive to a Fund.

ACCOUNT CLOSING FEE

In order to reduce Fund expenses an account closing fee of $10 will be
assessed to shareholders who redeem all shares in their Fund account and direct
that redemption proceeds be directed to them by mail or wire. The charge is
payable directly to the Fund's Transfer Agent which, in turn, will reduce its
charge to the Fund by an equal amount. The purpose of the charge is to allocate
to the redeeming shareholders a more equitable portion of the Transfer Agent's
fee, including the cost of tax reporting, which is based upon the number of
shareholder accounts. The account closing fee does not apply to exchanges
between the funds of United Services family of funds. This fee will not be
imposed on any account which is involuntarily redeemed.

SMALL ACCOUNTS

Fund accounts which fall, for any reason other than market fluctuations,
below $1,000 at any time during the month will be subject to a monthly small
account charge of $1 which will be payable quarterly. The charge is payable
directly to the Fund's Transfer Agent which, in turn, will reduce its charges to
the Fund by an equal amount. The purpose of the charge is to allocate the costs
of maintaining shareholder accounts more equally among shareholders.

As a special service for small investors, active ABC Investment Plan
(Registered Trademark) accounts, custodial accounts for minors, and retirement
plan accounts administered by the Advisor or its agents and affiliates will not
be subject to the small account charge. In order to reduce expenses of the Fund,
the Trust may redeem all shares in any shareholder account, other than active
ABC Investment Plan (Registered Trademark) accounts, custodial accounts for
minors and retirement plan accounts, if, for any period of more than three
months, the account has a net value of $500 or less and the reduction in value
is not due to market fluctuation. If the Fund elects to close such accounts, it
will notify shareholders whose accounts are below the minimum of its intention
to do so, and will provide those shareholders with an opportunity to increase
their accounts by investing a sufficient amount to bring their accounts up to
the minimum amount within ninety (90) days of the notice. No account closing fee
will be charged to investors whose accounts are closed under this redemption
provision.

CONFIRMATION STATEMENTS

OTHER SERVICES

The Trust has available a number of plans and services to meet the special
needs of certain investors. Plans available include:

(1) payroll deduction plans, including military allotments;

(2) custodial accounts for minors;

(3) a flexible, systematic withdrawal plan; and

(4) various retirement plans such as IRA, SEP/IRA, 403(b)(7), 401(k) and
employer-adopted defined contribution plans.

Application forms and brochures describing these plans and services may be
obtained from the Transfer Agent 1-800-US-FUNDS (1-800-873-8637).

There is an annual charge for each retirement plan fund account with
respect to which Security Trust & Financial Company ("ST&FC"), a

wholly-owned subsidiary of the Advisor, acts as custodian (for example, $10 for
IRAs and $15 for SEP/IRAs, 403(b)(7)s, profit sharing and other such accounts).
If this administrative charge is not paid separately prior to the last business
day of a calendar year or prior to a total redemption, it will be deducted from
the shareholder's account.

SHAREHOLDER SERVICES

United Shareholder Services, Inc., a wholly-owned subsidiary of the
Advisor, acts as transfer and dividend paying agent for all fund accounts.
Simply write or call 1-800-US-FUNDS for prompt service on any question about
your account.

24-HOUR ACCOUNT INFORMATION

HOW SHARES ARE VALUED

Shares of each Fund are purchased or redeemed, on a continuing basis
without a sales charge, at their next determined net asset value per share. The
net asset value per share of each Fund is calculated separately by United
Shareholder Services, Inc. Net asset value per share is determined and orders
become effective as of 4:00 p.m. Eastern Time, Monday through Friday, exclusive
of business holidays on which the NYSE is closed, by dividing the aggregate net
assets of each Fund by the total number of shares of that Fund outstanding. In
the event that the NYSE and other financial markets close earlier, as on the eve
of a holiday, the net asset value per share will be determined earlier in the
day at the close of trading on the NYSE.

Valuation shall be calculated in U.S. dollars. Securities quoted in
other currencies will be converted to U.S. dollars using the exchange rate then
in effect in the principal market in which the relevant securities are traded. A
portfolio security listed or traded on an international market, either on an
exchange or over-the-counter, is valued at the last reported sales price prior
to the time when assets are valued. A portfolio security listed or traded in the
domestic market, either on an exchange or over-the-counter, is valued at the
latest reported sale price prior to the time when assets are valued; and,
lacking any sales on that day, the security is valued at the mean between the
last reported bid and ask prices.

DIVIDENDS AND TAXES

Each Fund intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). By
complying with the applicable provisions of the Code, a Fund will not be subject
to Federal income tax on its net investment income and capital gain net income
that are distributed to shareholders.

All income dividends and capital gain distributions are normally
reinvested, without charge, in additional full and fractional shares of the
Funds. Alternatively, investors may choose: (1) automatic reinvestment of
capital gain distributions in Fund shares and payment of income dividends in
cash; (2) payment of capital gain distributions in cash and automatic
reinvestment of dividends in Fund shares; or (3) all income dividend and capital
gain distributions paid in cash. The share price of the reinvestment will be the
net asset value of the Fund shares computed at the close of business on the date
the dividend or distribution is paid. Dividend checks returned to the Funds as
being undeliverable and dividend checks not cashed after 180 days will
automatically be reinvested at the price of the Fund on the day returned or on
or about the 181st day, and the distribution option will be changed to
"reinvest."

At the time of purchase, the share price of a Fund may reflect
undistributed income, capital gain or unrealized appreciation of securities. Any
dividend or capital gain distribution paid to a shareholder shortly after a
purchase of shares will reduce the per share net asset value by the amount of
the distribution. Although in effect a return of capital to the shareholder,
these capital gain distributions are fully taxable.

Each Fund expects to distribute substantially all of its net investment
income, if any, and any net realized capital gains at least once each year.

Each Fund is subject to a nondeductible 4 percent excise tax calculated as
a percentage of certain undistributed amounts of taxable ordinary income

and capital gain net of capital losses. The Funds intend to make such
distributions as may be necessary to avoid this excise tax.

Dividends from taxable net investment income and distributions of net
short-term capital gain paid by each Fund are taxable to shareholders as
ordinary income, whether received in cash or reinvested in additional shares of
a Fund. A portion of these dividends may qualify for the 70 percent dividends
received deduction available to corporations. Distributions of net capital gain
will be taxable to shareholders as long-term capital gain, whether paid in cash
or reinvested in additional shares, and regardless of the length of time the
investor has held his shares. Each January, each Fund will report to its
shareholders the Federal tax status of dividends and distributions paid or
declared by the Fund during the preceding calendar year. This statement will
also indicate whether and to what extent distributions qualify for the 70
percent dividends received deduction available to corporations.

Each of the Funds may be subject to foreign withholding or other taxes. If
more than 50 percent in value of a Fund's total assets at the close of any
taxable year consists of securities of foreign corporations, the Fund may file
an election with the Internal Revenue Service (the "Foreign Election") that
would permit shareholders to take a credit (or a deduction) for foreign taxes
paid by the Fund. If the Foreign Election is made, shareholders would include in
their gross income both dividends received from the Fund and foreign withholding
taxes paid by the Fund. Shareholders of the Fund would be entitled to treat the
foreign taxes withheld as a credit against their United States Federal income
taxes, subject to the limitations set forth in the Code with respect to the
foreign tax credit generally. Alternatively, shareholders could, if to their
advantage, treat the foreign taxes withheld as a deduction from gross income in
computing taxable income rather than as a tax credit. Each Fund that qualifies
will make the Foreign Election and will advise its shareholders annually of
their share of the amount of foreign taxes paid by the Fund.

to deferred taxes arising from such distributions or gains. Any tax paid by the
Fund as a result of its ownership of shares in a "passive foreign investment
company" will not give rise to any deduction or credit to the Fund or any
shareholder. If the Fund owns shares in a "passive foreign investment company"
and the Fund does elect to treat the foreign corporation as a "qualified
electing fund" under the Code, the Fund may be required to include in its income
each year a portion of the ordinary income and net capital gains of the foreign
corporation, even if this income is not distributed to the Fund. Any such income
would be subject to the distribution requirements described above even if the
Fund did not receive any income to distribute.

THE TRUST

Under the Trust's First Amended and Restated Master Trust Agreement (the
"Master Trust Agreement"), no annual or regular meeting of shareholders is
required, although the Trustees may authorize special meetings from time to
time. Under the terms of the Master Trust Agreement, the Trustees will be a
self-perpetuating body and will continue their positions until they resign, die
or are removed by a written instrument signed by at least two-thirds of the
Trustees, by vote of shareholders holding not less than two-thirds of the shares
then outstanding of the Trust cast at any meeting called for that purpose, or by
a written declaration signed by shareholders holding not less than two-thirds of
the shares then outstanding.

On any matter submitted to shareholders, shares of each portfolio entitle
their holder to one vote per share, irrespective of the relative net asset value
of the portfolio's shares. On matters affecting an individual portfolio, a
separate vote of shareholders of the portfolio is required. Each portfolio's
shares are fully paid and non-assessable by the Trust, have no preemptive or
subscription rights, and are fully transferable, with no conversion rights.

MANAGEMENT OF THE FUNDS

TRUSTEES

The business affairs of each Fund are managed by the Trust's Board of
Trustees. The Trustees establish policies, as well as review and approve
contracts and their continuance. The Trustees also elect the officers and select
the Trustees to serve as executive and audit committee members.

THE INVESTMENT ADVISOR

U.S. Global Investors, Inc., 7900 Callaghan Road, San Antonio, Texas 78229,
under an investment advisory agreement with the Trust dated October 26, 1989,
furnishes investment advice and is responsible for overall management of the
Trust's business affairs. Frank E. Holmes, Chief Executive Officer and Chairman
of the Board of Directors of the Advisor, as well as President and a Trustee of
the Trust, owns more than 25% of the voting stock of the Advisor and is its
controlling person. The Advisor was organized in 1968.

The Advisor provides to the Trust, and to each of the portfolios within the
Trust, management and investment advisory services. The Advisor furnishes an
investment program for each of the Funds, determines, subject to the overall
supervision and review of the Board of Trustees of the Trust, what investments
should be purchased, sold and held, and makes changes on behalf of the Trust in
the investments of each of the Funds. Victor Flores, Executive Vice President
and Chief Investment Officer of the Advisor, is responsible for the day-to-day
management of the Gold Shares and World Gold Funds' portfolios. Mr. Flores has
been a portfolio manager since December 1989. Prior thereto he was an Investment
Analyst for the Advisor. Ralph P. Aldis is the portfolio manager for the Global
Resources Fund. He has been the Advisor's director of research from April 1989
to present and has been a portfolio manager since November 1991. Prior thereto
Mr. Aldis was a research analyst for a consulting firm specializing in energy
economics.

The Advisory Agreement with the Trust provides for each Fund to pay the
Advisor a management fee based upon the average net assets of that Fund
separately. The fee for managing each of the Gold Shares Fund, Global Resources
Fund, and World Gold Fund for the fiscal period ended June 30, 1996, was .75%,
1.00%, and .98%, respectively, of average net assets. The fee charged the Global
Resources Fund and the World Gold Fund is higher than that charged by most other
investment companies.

The Transfer Agency Agreement with the Trust provides for each Fund to
pay USSI an annual fee of $23.00 per account ( 1/12 of $23.00 monthly). In
connection with obtaining and/or providing administrative services to the
beneficial owners of Trust shares through broker-dealers, banks, trust companies
and similar institutions which provide such services and maintain an omnibus
account with the Transfer Agent, each Fund shall pay to the Transfer Agent a
monthly fee equal to one-twelfth ( 1/12) of 12.5 basis points (.00125) of the
value of the shares of the Funds held in accounts at the institutions, which
payment shall not exceed $1.92 multiplied by the average daily number of
accounts holding Trust shares at the institution. These fees cover the usual
transfer agency functions. In addition, the Funds bear certain other Transfer
Agent expenses such as the costs of record retention and postage, plus the
telephone and line charges (including the toll-free 800 service) used by
shareholders to contact the Transfer Agent. For the fiscal period ended June 30,
1996, the Gold Shares Fund, the Global Resources Fund and the World Gold Fund
paid a total of $1,040,959, $156,329 and $635,901, respectively, for transfer
agency, lock box and printing services.

USSI performs bookkeeping and accounting services, and determines the daily
net asset value for each of the Funds. Bookkeeping and accounting services are
provided to the Funds for an asset based fee of 0.05% of the first $150 million
average net assets, 0.04% of the next $150 million average net assets, 0.03% of
the next $200 million average net assets, 0.02% of the next $250 million average
net assets and 0.01% of average net assets in excess of $750 million -- subject
to an annual minimum fee of $28,000 per Fund. USSI received $107,330, $28,000,
and $106,293 for the Gold Shares Fund, Global Resources Fund and World Gold
Fund, respectively, for the year ended June 30, 1996.

Additionally, the Advisor is reimbursed certain costs for in-house legal
services pertaining to each Fund.

The Trust pays all other expenses for its operations and activities. Each
Fund of the Trust pays its allocable portion of these expenses. The expenses
borne by the Trust include the charges and expenses of any shareholder servicing
agents, custodian fees, legal and auditors' expenses, brokerage commissions for
portfolio transactions, the advisory fee, extraordinary expenses, expenses of
shareholder and trustee meetings, expenses for

preparing, printing and mailing proxy statements, reports and other
communications to shareholders, and expenses of registering and qualifying
shares for sale, among others.

PERFORMANCE INFORMATION

From time to time, in advertisements or in reports to shareholders or
prospective shareholders, a Fund may compare its performance, either in terms of
its yield, total return or its yield and total return, to that of other mutual
funds with similar investment objectives and to stock or other indices as
reported in various periodicals. Performance comparisons should not be
considered as representative of the future performance of a Fund.

A Fund's average annual total return is computed by determining the average
annual compounded rate of return for a specified period that, if applied to a
hypothetical $1,000 initial investment, would produce the redeemable value of
that investment at the end of the period, assuming reinvestment of all dividends
and distributions and with recognition of all recurring charges. Each Fund may
also utilize a total return for differing periods computed in the same manner
but without annualizing the total return.

The standard total return results do not take into account recurring and
nonrecurring charges for optional services which only certain shareholders elect
and which involve nominal fees such as the $5 fee for exchanges.

UNITED SERVICES FUNDS

SHARES OF THE FUNDS ARE SOLD
AT NET ASSET VALUE WITHOUT
SALES COMMISSIONS,
REDEMPTION FEES OR 12B-1 FEES

U.S. Gold Shares Fund
U.S. Global Resources Fund
U.S. World Gold Fund

INVESTMENT ADVISOR
U.S. Global Investors, Inc.
7900 Callaghan Road
Mailing Address: P.O. Box 29467
San Antonio, Texas 78229

TRANSFER AGENT
United Shareholder Services, Inc.
P.O. Box 781234
San Antonio, Texas 78278-1234

CUSTODIAN
Bankers Trust Company
16 Wall Street
New York, New York 10005

LEGAL COUNSEL
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109

INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
One Riverwalk Place, Ste. 900
San Antonio, Texas 78205

100% No Load

Be Sure to Retain This Prospectus;
It Contains Valuable Information.

================================================================================

UNITED SERVICES FUNDS

UNITED SERVICES INTERMEDIATE TREASURY FUND

P.O. BOX 781234
SAN ANTONIO, TEXAS 78278-1234

1-800-873-8637 (1-800-US-FUNDS)
(INFORMATION, SHAREHOLDER SERVICES AND REQUESTS)
INTERNET: http://www.usfunds.com

UNITED SERVICES INTERMEDIATE TREASURY FUND - A MUTUAL FUND DESIGNED TO PROVIDE A
HIGH CURRENT RETURN AND PRESERVATION OF CAPITAL BY INVESTING IN UNITED STATES
TREASURY SECURITIES.

PROSPECTUS

NOVEMBER 1, 1996

This prospectus presents information that a prospective investor should
know before investing in the United Services Intermediate Treasury Fund (the
"Fund"), a no-load mutual fund of United Services Funds (the "Trust").
Investors are responsible for determining whether or not an investment in the
fund is appropriate for their needs. Read and retain this prospectus for future
reference.

TABLE OF CONTENTS

PAGE
----
SUMMARY OF FEES AND EXPENSES .............................................. 2
FINANCIAL HIGHLIGHTS ...................................................... 4
INVESTMENT OBJECTIVES AND
CONSIDERATIONS .......................................................... 6
HOW TO PURCHASE SHARES .................................................... 8
HOW TO EXCHANGE SHARES .................................................... 11
HOW TO REDEEM SHARES ...................................................... 13
HOW SHARES ARE VALUED ..................................................... 17
DIVIDENDS AND TAXES ....................................................... 17
THE TRUST ................................................................. 19
MANAGEMENT OF THE FUND .................................................... 19
PERFORMANCE INFORMATION ................................................... 21

SUMMARY OF FEES AND EXPENSES

The following summary, which is based on the Advisor's voluntary agreement
to cap expenses at 0.40% until June 30, 1997 or until such later date as the
Advisor determines, is provided to assist you in understanding the various costs
and expenses a shareholder in the Fund could bear directly and indirectly.

SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load .................................... None
Redemption Fee ........................................ None
Administrative Exchange Fee ........................... $ 5
Account Closing Fee (does not apply to exchanges) ..... $ 10
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET
ASSETS)(1)
Management Fees (net of waivers and reimbursements) ... 0.00%(2)
12b-1 Fees ............................................ None
Other Expenses, including Transfer Agency and
Accounting Services Fees ........................... 0.40%
Total Fund Operating Expenses (net of
waivers and reimbursements) .............................. 0.40%(2)

Except for active ABC Investment Plan (Registered Trademark) accounts,
custodial accounts for minors and retirement plan accounts, if an account
balance falls, for any reason other than market fluctuations, below $1,000 at
any time during a month, that account will be subject to a small account charge
of $5 for that month. (See "Small Accounts.")

A shareholder who requests delivery of redemption proceeds by wire will be
subject to a $10 charge. International wires will be charged more.

HYPOTHETICAL EXAMPLE OF EFFECT OF FUND EXPENSES:

You would pay the following expenses on a $1,000 investment, assuming 5%
annual return:

1 year.............................. $ 14
3 years............................. $ 62
5 years............................. $ 112
10 years............................. $ 251

(2) The Advisor has guaranteed that Total Fund Operating Expenses of the Fund
(as a percentage of net assets) will not exceed 0.40% on an annualized basis
through June 30, 1997 or until such later date as the Advisor determines. Based
on actual operating expenses of the Fund for the year ended June 30, 1996,
Management Fees, Other Expenses, Transfer Agency Fees, Accounting Service Fees
and Total Operating Expenses would have been 0.50%, 0.98%, 0.22%, 0.56% and
2.26%, respectively, in the absence of fee waivers and expense reimbursements by
the Advisor.

FINANCIAL HIGHLIGHTS
UNITED SERVICES INTERMEDIATE TREASURY

The following per share data and ratios for a share of beneficial interest
outstanding throughout the period ended June 30, 1992 and the four years ended
June 30, 1996 have been audited by Price Waterhouse LLP, the Fund's Independent
Accountants. The related financial statements and the report of Independent
Accountants are included in the Fund's 1996 Annual Report to Shareholders and
are incorporated by reference into the Statement of Additional Information
("SAI"). In addition to the data set forth below, further information about
the performance of the Fund is contained in the Annual Report to Shareholders
and SAI which may be obtained without charge.

Selected data for a capital share outstanding throughout each year is as
follows:

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
------------------------------------------ PERIOD
1996 1995 1994 1993 ENDING(A)
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................. $ 10.47 10.16 11.21 10.26 10.00
--------- --------- --------- --------- ---------
Net investment income(c)........... .67 .66 .64 .60 .05
Net realized and unrealized gain
(loss) on investments(d)......... (.39) .27 (.91) .90 .26
--------- --------- --------- --------- ---------
Total from investment operations..... .28 .93 (.27) 1.50 .31
--------- --------- --------- --------- ---------
Less dividends and distributions:
Dividends from net investment
income........................... (.67) (.62) (.64) (.49) (.05)
Distributions in excess of net
investment income(e)............. -- -- (.12) (.02) --
Distributions from net realized
gain(e).......................... -- -- -- (.04) --
Tax return of capital
distributions(e)................. -- -- (.02) -- --
--------- --------- --------- --------- ---------
Total dividends and distributions.... (.67) (.62) (.78) (.55) (.05)
--------- --------- --------- --------- ---------
Net asset value, end of period....... $ 10.08 10.47 10.16 11.21 10.26
========= ========= ========= ========= =========
Total Investment Return(f)........... 2.48% 9.62 (2.68) 14.96 22.94
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)......................... $ 3,645 4,580 4,340 4,581 1,078
Ratio of expenses to average net
assets............................. .43%(g)(h) .20 -- .64 .66(b)
Ratio of net income to average net
assets............................. 6.15 6.49 5.99 5.44 6.14(b)
Portfolio turnover rate.............. 595.45% 152.39 92.60 206.56 553.92(b)
</TABLE>
(FOOTNOTES ON FOLLOWING PAGE)

(CONTINUED FROM PREVIOUS PAGE)

(a) For the period from May 8, 1992 (date of commencement of operations)
to June 30, 1992.

(b) Annualized; the ratios are not necessarily indicative of twelve months
of operation.

(d) Includes the effect of capital share transactions throughout the year.

(e) Distributions in excess of net investment income and net realized
gains and tax returns of capital are presented in accordance with SOP 93-2,
Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distribution by Investments Companies which
was first implemented by the Funds in fiscal 1993. Information for prior years
has not been restated.

(f) Total return does not reflect the effect of account fees.

(g) Expense ratio is net of expense reimbursement and fee waivers by the
Advisor. Had such reimbursements been made, the expense ratio subject to the
most restrictive state limitation would have been 2.26% and the net investment
income ratio would have been 4.22%.

(h) Includes .10% of expenses resulting from inclusion of fees paid with
expense offset arrangements.

INVESTMENT OBJECTIVES AND CONSIDERATIONS

United Services Funds (the "Trust") is an open-end management investment
company managed by U.S. Global Investors, Inc. (the "Advisor"). United
Services Intermediate Treasury Fund (the "Fund") is a sub-trust or series of
the Trust.

The Fund's investment objective is to seek high current income and
preservation of capital by investing in United States Treasury securities. The
Fund will invest 100% of its portfolio in United States Treasury securities and
will invest at least 65% of its portfolio in United States Treasury securities
that have a remaining maturity from one to ten years. The weighted average
maturity of the portfolio will range between three and ten years.

The Fund's Advisor will actively manage the portfolio in an effort to
obtain high current income derived primarily from interest on Treasury
securities. The Fund will maintain a flexible policy of investing in securities
of different maturities, and the Fund's weighted average maturity will change in
response to actual and/or perceived changes in interest rates.

United States Treasury securities differ only in their interest rates and
maturities at time of issuance. Maturities upon issuance, for example, are:
United States Treasury bills, one year or less; United States Treasury notes,
one to ten years; and United States Treasury bonds, generally greater than ten
years.

United States Treasury securities are, in the Advisor's opinion, the safest
securities in the world and are backed by the "full faith and credit" pledge
of the United States Treasury. Of course, like any other debt securities, the
market value of United States Treasury securities is subject to fluctuation when
interest rates change. Generally, as prevailing interest rates decline the value
of such securities will increase, and as prevailing interest rates increase, the
value of such securities will decline. Further, securities in which the Fund
invests may not earn as high a level of current income as longer term or lower
quality securities which generally have less liquidity, greater market risk, and
more fluctuation in market value.

STATE TAXATION

Under Federal law, income derived from obligations issued by the United
States Government is exempt from state income tax. All states that tax personal
income permit mutual funds to pass through this tax exemption to shareholders
provided applicable diversification/threshold limits and reporting requirements
are satisfied. To maximize the tax-effective yield for shareholders, the Fund
will invest only in obligations that qualify for the exemption from taxation.

LENDING OF PORTFOLIO SECURITIES

The Fund may lend securities to broker-dealers or institutional investors
for their use in connection with short sales, arbitrages and other securities
transactions. The Fund will not lend portfolio securities unless the loan is
secured by collateral (consisting of any combination of cash, United States
Government securities or irrevocable letters of credit) in an amount at least
equal (on a daily mark-to-market basis) to the current market value of the
securities loaned. In the event of a bankruptcy or breach of agreement by the
borrower of the securities, the Fund could experience delays and costs in
recovering the securities loaned. The Fund will not enter into securities
lending agreements unless its custodian bank/lending agent will fully indemnify
the Fund against loss due to borrower default. The Fund may not lend securities
with an aggregate market value of more than one-third of the Fund's total net
assets.

SPECIAL LIMITATIONS

The investment objective of the Fund is not a fundamental policy and may be
changed by the Board of Trustees without shareholder approval, provided that the
change is permitted without shareholder approval under the laws of all states in
which the Fund's shares are offered. If there is a change in investment
objective, shareholders should consider whether the Fund remains an appropriate
investment in light of their then current financial position and needs.

The following policies of the Fund are fundamental and may not be changed
by the Board of Trustees without shareholder approval: (1) the Fund may borrow
up to 33 1/3% of the total assets of that Fund as a temporary measure (for
extraordinary purposes) although the Fund may not purchase additional securities
during such time as its borrowings exceeds 5% of total assets; (2) the Fund may
lend portfolio securities with an aggregate market value of not more than
one-third of its total net assets; and (3) with respect to 75% of its total
assets, the Fund may invest up to 5% of the value of its total assets in the
securities of any one issuer (except such limitation does not apply to
obligations issued or guaranteed by the United States Government or its agencies
or instrumentalities).

The Fund may not invest more than 10% of its total net assets in illiquid
securities, including securities that are not readily marketable.

In the event of a major disruption in the currency or money markets, which
in the Advisor's opinion might seriously adversely affect the Fund's assets or
share price, the Advisor may place some or all of the Fund's assets in
repurchase agreements secured by United States Treasury securities and/or cash.
In such event the Fund's custodian always has possession of securities serving
as collateral or has evidence of book entry receipt of such securities. In a
repurchase agreement, a Fund purchases securities subject to the seller's
agreement to repurchase such securities at a specified time

(normally one day) and price. The repurchase price reflects an agreed-upon
interest rate during the time of investment. All Fund repurchase agreements must
be collateralized by United States Treasury securities, the market values of
which equal or exceed 102% of the principal amount of the repurchase obligation.
If an institution enters into an insolvency proceeding, the resulting delay in
liquidation of securities serving as collateral could cause the Fund some loss
if the value of the securities declined prior to liquidation. To minimize the
risk of loss, the Fund will enter into repurchase agreements only with domestic
broker-dealers, banks and other financial institutions which the Board of
Trustees considers creditworthy.

HOW TO PURCHASE SHARES

YOU MAY INVEST IN THE FOLLOWING WAYS:

BY MAIL

Send your application and check or money order, made payable to the Fund,
to P.O. Box 781234, San Antonio, Texas 78278-1234.

When making subsequent investments, enclose your check with the return
remittance portion of the confirmation of your previous investment or indicate
on your check or a separate piece of paper your name, address and account number
and mail to the address mentioned above. Do not use the remittance portion of
your confirmation statement for a different fund as it is pre-coded. This may
cause your investment to be invested into the wrong fund. If you wish to
purchase shares in more than one fund, send a separate check or money order for
each fund. Third-party checks will not be accepted, and the Trust reserves the
right to refuse to accept second-party checks.

BY TELEPHONE

Once your account is open, you may make investments by telephone by calling
1-800-US-FUNDS (1-800-873-8637). Investments by telephone are not available for
money market funds or any retirement account administered by the Advisor or its
agents. The maximum telephone purchase is ten times the value of the shares
owned, calculated at the last available net asset value. Payment for shares
purchased by telephone is due within seven business days after the date of the
transaction. You cannot exchange shares purchased by telephone until after the
payment has been received and accepted by the Trust.

BY WIRE

BY ABC INVESTMENT PLAN (Registered Trademark)

ADDITIONAL INFORMATION ABOUT PURCHASES

If your telephone order to purchase shares is canceled due to nonpayment
(whether or not your check has been processed by the Fund), you will be
responsible for any loss incurred by the Trust by reason of such cancellation.

If a check is returned unpaid due to nonsufficient funds, stop payment or
other reasons, the Trust will charge $20, and you will be responsible for any
loss incurred by the Trust with respect to cancelling the purchase.

To recover any such loss or charge, the Trust reserves the right, without
further notice, to redeem shares of any affiliated funds already owned by any
purchaser whose order is canceled, for whatever reason, and such a purchaser may
be prohibited from placing further orders unless investments are accompanied by
full payment by wire or cashier's check.

United Services Funds charges no sales commissions or "loads" of any
kind. However, investors may purchase and sell shares through registered
broker-dealers who may charge fees for their services.

If the Trust incurs a charge for locating a shareholder without a current
address, such charge will be passed through to the shareholder.

TAX IDENTIFICATION NUMBER

The Fund is required by Federal law to withhold and remit to the United
States Treasury a portion of the dividends, capital gains distributions and
proceeds of redemptions paid to any shareholder who fails to furnish the Fund
with a correct taxpayer identification number, who underreports dividend or
interest income or who fails to provide certification of tax identification
number. In order to avoid this withholding requirement, you must certify on your
application, or on separate W-9 Form supplied by the Transfer Agent, that your
taxpayer identification number is correct and that you are not currently subject
to backup withholding or you are exempt from backup withholding. For
individuals, your taxpayer identification number is your social security number.

CERTIFICATES

When you open your account, United Services Funds will send you a
confirmation statement which will be your evidence that you have opened an
account with United Services Funds. The confirmation statement is nonnegotiable,
so if it is lost or destroyed, you will not be required to buy a lost instrument
bond or be subject to other expense or trouble, as you would with a negotiable
stock certificate. At your written request, United Services Funds will issue
negotiable stock certificates. Unless your shares are purchased with wired
funds, a certificate will not be issued until 15 days have elapsed from the time
of purchase, or United Services Funds has satisfactory proof of payment, such as
a copy of your canceled check. Negotiable certificates will not be issued for
fewer than 100 shares.

HOW TO EXCHANGE SHARES

FUNDS IN THE UNITED SERVICES FAMILY

HIGH REWARD China Region Opportunity Fund
HIGH RISK U.S. Gold Shares Fund
U.S. World Gold Fund
U.S. Global Resources Fund
Bonnel Growth Fund
U.S. Real Estate Fund
MODERATE REWARD U.S. All American Equity Fund
MODERATE RISK U.S. Income Fund
U.S. Tax Free Fund
United Services Near-Term Tax Free
Fund
United Services Intermediate Treasury
Fund
LOW REWARD U.S. Government Securities Savings
Fund
LOW RISK U.S. Treasury Securities Cash Fund

If you have additional questions, one of our professional investor
representatives will personally assist you. Call 1-800-US-FUNDS.

BY TELEPHONE

You will automatically have the privilege to direct United Services Funds
to exchange your shares by calling toll free 1-800-US-FUNDS (1-800-873-8637). In
connection with such exchanges, neither the Fund nor the Transfer Agent will be
responsible for acting upon any instructions reasonably believed by them to be
genuine. The shareholder, as a result of this policy, will bear the risk of
loss. The Fund and/or its Transfer Agent will, however, employ reasonable
procedures to confirm that instructions communicated by telephone are genuine
(including requiring some form of personal identification, providing written
confirmation and tape recording conversations); and if either party does not
employ reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent transactions.

BY MAIL

ADDITIONAL INFORMATION ABOUT EXCHANGES

(1) There is a $5 charge, which is paid to United Shareholder Services,
Inc. (the "Transfer Agent" or "USSI"), for each exchange transaction out of
any fund account. Retirement accounts administered by the Advisor or its agents
are charged $5 for each exchange in excess of three per quarter. The exchange
fee is charged to cover administrative costs associated with handling these
exchanges.

(2) An exchange involves both the redemption of shares out of the Fund and
the purchase of shares in a "Separate Fund." Like any other purchase, shares
of the Separate Fund cannot be purchased by exchange until all conditions of
purchase are met, including investable proceeds being immediately available.
Like any other redemption, the Fund reserves the right to hold exchange proceeds
for up to seven days. In general, the Fund expects to exercise this right on
exchanges of $50,000 or more. In such event, purchase of the Separate Fund
shares will also be delayed. Separate Fund shares will be priced at their net
asset value at the time of purchase. Redemption proceeds will not be invested in
either fund during this period. In all cases Fund shares will be redeemed
immediately, however Separate Fund shares will not be purchased until investable
proceeds are available. You will be notified immediately if the purchase will be
delayed.

(3) If the shares you wish to exchange are represented by a negotiable
stock certificate, the certificate must be returned before the exchange can be
effected.

(5) The exchange privilege may be terminated at any time. The exchange fee
and other terms of the privilege are subject to change.

(6) The Fund will not permit shareholders to exchange into any fund unless
that fund is registered in the state of that shareholder's residence.

HOW TO REDEEM SHARES

BY MAIL

A written request for redemption must be in "proper order," which
requires delivery of the following to the Transfer Agent:

(1) a written request for redemption signed by each registered owner
exactly as the shares are registered, the account number and the number of
shares or the dollar amount to be redeemed;

(2) negotiable stock certificates for any shares to be redeemed for which
certificates have been issued;

(3) signature guarantees when required; and

(4) such additional documents as are customarily required to evidence the
authority of persons effecting redemptions on behalf of corporations, executors,
trustees and other fiduciaries. Redemptions will not become effective until all
documents in the form required have been received by the Transfer Agent. (Before
writing, read "Additional Information About Redemptions.")

HOW TO EXPEDITE REDEMPTIONS

SPECIAL REDEMPTION ARRANGEMENTS

Special arrangements may be made by institutional investors, or on behalf
of accounts established by brokers, advisers, banks or similar institutions, to
have redemption proceeds transferred by wire to pre-established accounts upon
telephone instructions. For further information call the Trust at 1-800-US-FUNDS
(1-800-873-8637). Telephone redemptions are available for Chairman's Circle
accounts.

SIGNATURE GUARANTEE

REDEMPTION PROCEEDS MAY BE SENT TO YOU:

BY MAIL

If your redemption check is mailed, it is usually mailed within 48 hours of
receipt of the redemption request; however, the Fund reserves the right to hold
redemption proceeds for up to seven days. If the shares to be redeemed were
purchased by check, the redemption proceeds will not be mailed until the
purchase check has cleared. Redemption checks may be delayed if you have changed
your address in the last 30 days. Please notify the Fund promptly in writing, or
by telephone, of any change of address.

BY WIRE

shares to be redeemed were purchased by check, the redemption proceeds will not
be wired until the purchase check has cleared, which may take up to seven days.
There is a $10 charge to cover the wire, which is deducted from redemption
proceeds. International wire charges will be higher.

ADDITIONAL INFORMATION ABOUT REDEMPTIONS

The redemption price may be more or less than your cost, depending on the
net asset value of the Fund's portfolio next determined after your request is
received.

The Trust has the authority to redeem existing accounts and to refuse a
potential account holder the privilege of having an account in the Trust if the
Trust reasonably determines that the failure to so redeem, or to so prohibit,
would have a material adverse consequence to the Trust and its shareholders. No
account closing fee or redemption fee will be charged to investors whose
accounts are closed under this provision.

ACCOUNT CLOSING FEE

In order to reduce Fund expenses, an account closing fee of $10 will be
assessed to shareholders who redeem all shares in their Fund account and direct
that redemption proceeds be directed to them by mail or wire. The charge is
payable directly to the Fund's Transfer Agent which, in turn, will reduce its
charge to the Fund by an equal amount. The account closing fee does not apply to
exchanges between the funds in the United Services family of funds nor does it
apply to accounts which are involuntarily redeemed.

The purpose of the charge is to allocate to redeeming shareholders a more
equitable portion of the Transfer Agent's fee which is based upon the number of
shareholder accounts. When a shareholder closes an account, the Fund must
continue to carry the account on its books, maintain the account records and
complete year-end tax reporting. With no assets, the account cannot pay its own
expenses and imposes an unfair burden on remaining shareholders.

SMALL ACCOUNTS

Fund accounts which fall, for any reason other than market fluctuations,
below $1,000 at any time during a month will be subject to a small account
charge of $5 for that month. The charge is payable directly to the Fund's
Transfer Agent which, in turn, will reduce its charges to the Fund by an equal
amount. The purpose of the charge is to allocate the cost of maintaining
shareholder accounts more equally among shareholders.

In order to reduce expenses of the Fund, the Trust may redeem all of the
shares in any shareholder account, other than an active ABC Investment Plan
(Registered Trademark), IRA or other tax-deferred retirement plan, if, for a
period of more than three months, the account has a net asset value of $500 or
less and the reduction in value is not due to market action. If the Fund elects
to close such accounts, it will notify shareholders whose accounts are below the
minimum of its intention to do so, and will provide those shareholders with an
opportunity to increase their accounts by investing a sufficient amount to bring
their accounts up to the minimum amount within ninety (90) days of the notice.
No account closing fee will be charged to investors whose accounts are closed
under this redemption provision.

CONFIRMATION STATEMENTS

OTHER SERVICES

The Trust has available a number of plans and services to meet the special
needs of certain investors. Plans available include:

(1) payroll deduction plans, including military allotments;

(2) custodial accounts for minors;

(3) a flexible, systematic withdrawal plan; and

(4) various retirement plans such as IRA, SEP/IRA, 403(b)(7), 401(k) and
employer-adopted defined benefit and defined contribution plans.

There is an annual charge for each retirement plan fund account with
respect to which Security Trust & Financial Company ("ST&FC"), a wholly-owned
subsidiary of the Advisor, acts as custodian (for example, $10 for IRAs and $15
for SEP/IRAs, 403(b)(7)s, profit sharing and other such accounts). If this
administrative charge is not paid separately prior to the last business day of a
calendar year or prior to a total redemption, it will be deducted from the
shareholder's account.

Application forms and brochures describing these plans and services can be
obtained from the Transfer Agent 1-800-US-FUNDS (1-800-873-8637).

SHAREHOLDER SERVICES

United Shareholder Services, Inc. ("USSI"), a wholly-owned subsidiary of
the Advisor, acts as transfer and dividend-paying agent for all fund accounts.
Simply write or call 1-800-US-FUNDS (1-800-873-8637) for prompt service on any
questions about your account.

24-HOUR ACCOUNT INFORMATION

HOW SHARES ARE VALUED

Shares of the Fund are purchased or redeemed on a continuing basis without
a sales charge, at their next determined net asset value per share. The net
asset value per share is calculated by United Shareholder Services, Inc. Net
asset value per share is determined Monday through Friday, and orders become
effective as of 4:00 p.m. Eastern Time, exclusive of business holidays on which
the NYSE is closed, by dividing the aggregate fair value of the Fund's assets,
less liabilities, by the total number of shares outstanding. In the event that
the NYSE and other financial markets close earlier as on the eve of a holiday,
the net asset value per share will be determined earlier in the day at the
close, of trading on the NYSE.

The value of the Fund's assets is determined in accordance with certain
procedures and policies established by the Board of Trustees. All securities
(except securities with less than 60 days to maturity and repurchase agreements)
held by the Fund are valued based on an independent pricing service, and in the
event such service is not available, at the mean between the most recent bid and
ask prices as obtained from one or more dealers that make markets in the
securities. Debt securities with maturities of 60 days or less at the time of
purchase ordinarily are valued on the basis of the amortized cost. This involves
valuing an instrument at its cost initially and, thereafter assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument. If the Advisor
determines that amortized cost does not reflect the fair value of a security,
the Board may select an alternative method of valuing the security.

DIVIDENDS AND TAXES

All income dividends and capital gain distributions are normally
reinvested, without charge, in additional full and fractional shares of the
Fund. Alternatively, investors may choose: (1) automatic reinvestment of capital
gain distributions in Fund shares and payment of income dividends in cash; (2)
payment of capital gain distributions in cash and automatic reinvestment of
dividends in Fund shares; or (3) all income dividend and capital gain
distributions paid in cash. The share price of the reinvestment will be the net
asset value of the Fund shares computed at the close of business on the date the
dividend or distribution is paid. Dividend checks returned to the Fund as being
undeliverable and dividend checks not cashed after 180 days will automatically
be reinvested at the price of the Fund on the day returned or on the 181st day,
and the distribution option will be changed to "reinvest."

At the time of purchase the share price of a Fund may reflect undistributed
income, capital gains or unrealized appreciation of securities. Any dividend or
capital gains distribution paid to a shareholder shortly after a purchase of
shares will reduce the per share net asset value by the amount of the
distribution. Although in effect a return of capital to the shareholder, these
capital gain distributions are fully taxable.

The Fund generally pays dividends monthly and distributes capital gains, if
any, annually in December.

The Fund is subject to a non-deductible 4% excise tax calculated as a
percentage of certain undistributed amounts of taxable ordinary income and
capital gains net of capital losses. The Fund intends to make such distributions
as may be necessary to avoid this excise tax.

Dividends from taxable net investment income and distributions of net
short-term capital gains paid by the Fund are taxable to shareholders as
ordinary income, whether received in cash or reinvested in additional shares of
the Fund. None of the dividends paid by the Fund is expected to qualify for the
70% dividends received deduction available to corporations. Distributions of net
capital gains will be taxable to shareholders as long-term capital gains,
whether paid in cash or reinvested in additional shares, and regardless of the
length of time the investor has held his shares.

Under Federal law, the income derived from obligations issued by the United
States Government and certain of its agencies and instrumentalities is exempt
from state income taxes. All states that tax personal income permit mutual funds
to pass through this tax exemption to shareholders provided applicable
diversification/threshold limits and reporting requirements are satisfied.

Each January, the Fund will report to its shareholders the Federal tax
status of dividends and distributions paid or declared by the Fund during the
preceding calendar year.

The foregoing discussion relates only to generally applicable Federal
income tax provisions in effect as of the date of this prospectus. Therefore,
shareholders should consult their tax advisers about the status of distributions
from the Fund in their own states and localities. To assist in this regard, each
January the Fund will provide shareholders with a breakdown of Fund assets and
income from the year.

THE TRUST

United Services Funds is an open-end management investment company,
consisting of numerous separate, diversified portfolios, each of which has its
own investment objectives and policies. The portfolios are designed to serve a
wide range of investor needs.

MANAGEMENT OF THE FUND

TRUSTEES

THE INVESTMENT ADVISOR

U.S. Global Investors, Inc. (the "Advisor"), 7900 Callaghan Road, San
Antonio, Texas 78229, under an investment advisory agreement with the Trust
dated October 26, 1989, furnishes investment advice and is responsible for
overall management of the Trust's business affairs. Frank E. Holmes is Chief
Executive Officer and Chairman of the Board of Directors of the Advisor, as well
as President and a Trustee of the Trust. Since October 1989, Mr. Holmes has
owned more than 25% of the voting stock of the Advisor and is its controlling
person. The Advisor was organized in 1968.

The Advisor provides to the Trust, and to each of the portfolios within the
Trust, management and investment advisory services. The Advisor furnishes an
investment program for the Fund, determines, subject to the overall supervision
and review of the Board of Trustees of the Trust, what investments should be
purchased, sold and held, and makes changes on behalf of the Trust in the
investments of the Fund. The Advisor utilizes a team approach to manage the
assets of the Fund. The team meets regularly to review portfolio holdings and to
discuss purchase and sale activity. The team adjusts holdings in the Fund's
portfolio as it deems appropriate in pursuit of the Fund's investment
objectives.

THE ADVISOR HAS GUARANTEED THAT TOTAL FUND OPERATING EXPENSES (AS A
PERCENTAGE OF NET ASSETS) WILL NOT EXCEED 0.40% ON AN ANNUALIZED BASIS THROUGH
JUNE 30, 1997 OR UNTIL SUCH LATER DATE AS THE ADVISOR DETERMINES.

The Advisory Agreement with the Trust provides for the Fund to pay the
Advisor an annual management fee equal to 0.50% of the Fund's average net assets
( 1/12 of 0.50% monthly). The fee paid to the Advisor for managing the Fund for
the fiscal year ended June 30, 1996 was 0.00% of average net assets due to
Advisor waivers.

The Transfer Agency Agreement with the Trust provides for each Fund to pay
USSI an annual fee of $23.00 per account ( 1/12 of $23.00 monthly). In
connection with obtaining and/or providing administrative services to the
beneficial owners of Trust shares through broker-dealers, banks, trust companies
and similar institutions which provide such services and maintain an omnibus
account with the Transfer Agent, each Fund shall pay to the Transfer Agent a
monthly fee equal to one-twelfth ( 1/12) of 12.5 basis points (.00125) of the
value of the shares of the Funds held in accounts at the institutions, which
payment shall not exceed $1.92 multiplied by the average daily number of
accounts holding Trust share at the institution. These fees cover the usual
transfer agency functions. In addition, the Fund bears certain other transfer
agent expenses such as the costs of record retention and postage, plus the
telephone and line charges (including the toll-free 800 service) used by
shareholders to contact the Transfer Agent. For the fiscal period ended, June
30, 1996, the Fund paid a total of $0.00 for transfer agency, lockbox and
printing services due USSI. Transfer Agent fees and expenses, including
reimbursed expenses, are reduced by the amount of small account charges and
account closing fees the Transfer Agent is paid.

USSI performs bookkeeping and accounting services, and determines the daily
net asset value for the Fund. Bookkeeping and accounting services are provided
to the Fund for an asset based fee of 0.04% of the first $200 million average
net assets, 0.03% of the next $200 million average net assets, 0.02% of the next
$350 million average net assets and 0.01% of average net assets in excess of
$750 million -- subject to an annual minimum fee of $26,000. USSI received fees
of $0.00 for the Intermediate Treasury Fund for the year ended June 30, 1996.

Additionally, the Advisor is reimbursed certain costs for in-house legal
services pertaining to the Fund.

The Trust pays all other expenses for its operations and activities. The
Fund pays its allocable portion of these expenses. The expenses borne by the
Trust include the charges and expenses of any shareholder servicing agents,
custodian fees, legal and auditors' expenses, brokerage commissions for
portfolio transactions, the advisory fee, extraordinary expenses, expenses of
shareholder and trustee meetings, expenses for preparing, printing and mailing
proxy statements, reports and other communications to shareholders, and expenses
of registering and qualifying shares for sale, among others.

PERFORMANCE INFORMATION

indices as reported in various periodicals. Performance comparisons should not
be considered as representative of the future performance of the Fund.

The Fund's "yield" refers to the income generated by an investment in the
Fund over a 30-day (or one month) period (which period will be stated in the
advertisement). Yield is computed by dividing the net investment income per
share earned during the most recent calendar month by the maximum offering price
per share on the last day of such month. This income is then "annualized".
That is, the amount of income generated by the investment during that 30-day
period is assumed to be generated each month over a 12-month period and is shown
as a percentage of the investment.

The Fund may also utilize tax equivalent yields computed in the same manner
with adjustments for a stated income tax rate.

UNITED SERVICES FUNDS

SHARES OF THE FUNDS ARE SOLD
AT NET ASSET VALUE WITHOUT
SALES COMMISSIONS,
REDEMPTION FEES OR 12B-1 FEES

United Services Intermediate Treasury Fund

INVESTMENT ADVISOR
U.S. Global Investors, Inc.
7900 Callaghan Road
Mailing Address: P.O. Box 29467
San Antonio, Texas 78229

TRANSFER AGENT
United Shareholder Services, Inc.
P.O. Box 781234
San Antonio, Texas 78278-1234

CUSTODIAN
Bankers Trust Company
16 Wall Street
New York, New York 10005

LEGAL COUNSEL
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109

INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
One Riverwalk Place, Ste. 900
San Antonio, TX 78205

100% No Load

Be Sure to Retain This Prospectus;
It Contains Valuable Information.

================================================================================

UNITED SERVICES FUNDS

U.S. INCOME FUND
U.S. REAL ESTATE FUND

P.O. BOX 781234
SAN ANTONIO, TEXAS 78278-1234
1-800-873-8637 (1-800-US-FUNDS)
(INFORMATION, SHAREHOLDER SERVICES AND REQUESTS)
INTERNET: http://www.usfunds.com

PROSPECTUS

NOVEMBER 1, 1996

This prospectus presents information that a prospective investor should
know about the U.S. Income Fund ("Income Fund"), and the U.S. Real Estate Fund
("Real Estate Fund"), two no-load mutual funds (the "Fund(s)") of United
Services Funds (the "Trust"). Each Fund has a different investment objective
and is designed to meet different investment needs. SHARES OF THE TRUST ARE NOT
INSURED, GUARANTEED, SPONSORED, RECOMMENDED OR APPROVED BY THE UNITED STATES OR
ANY AGENCY OR OFFICER THEREOF. Investors are responsible for determining whether
or not an investment in the fund is appropriate for their needs. Read and retain
this prospectus for future reference.

TABLE OF CONTENTS

PAGE
----
SUMMARY OF FEES AND EXPENSES.................................. 2
FINANCIAL HIGHLIGHTS.......................................... 4
INVESTMENT OBJECTIVES AND
CONSIDERATIONS.............................................. 7
U.S. Income Fund......................................... 7
U.S. Real Estate Fund.................................... 7
SPECIAL CONSIDERATIONS........................................ 9
HOW TO PURCHASE SHARES........................................ 11
HOW TO EXCHANGE SHARES........................................ 14
HOW TO REDEEM SHARES.......................................... 16
HOW SHARES ARE VALUED......................................... 21
DIVIDENDS AND TAXES........................................... 21
THE TRUST..................................................... 23
MANAGEMENT OF THE FUNDS....................................... 24
PERFORMANCE INFORMATION....................................... 26

SUMMARY OF FEES AND EXPENSES

REAL
INCOME ESTATE
FUND FUND
------ ------
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load.............. None None
Redemption Fee.................. None None
Trader's Fee (on the redemption
or exchange of shares held
less than 14 days)........... 0.10% 0.10%
Administrative Exchange Fee..... $5 $5
Account Closing Fee (does not
apply to exchanges).......... $10 $10
ANNUAL FUND OPERATING EXPENSES (AS A
PERCENTAGE OF AVERAGE NET
ASSETS)(1)
Management Fees................. 0.75% 0.75%
12b-1 Fees...................... None None
Other Expenses.................. 0.70% 0.82%
Transfer Agency Fees............ 0.38% 0.41%
Accounting Services Fees........ 0.25% 0.28%
Total Fund Operating Expenses (net of
waivers and reimbursements)........ 2.08% 2.26%

Except for active ABC Investment Plan accounts, custodial accounts for
minors and retirement accounts, if an account balance falls, for any reason
other than market fluctuations, below $1,000 at any time during a month, that
account will be subject to a monthly small account charge of $1 which will be
paid quarterly. (See "Small Accounts.")

A shareholder who requests delivery of redemption proceeds by wire transfer
will be subject to a $10 charge. International wires will be higher.

HYPOTHETICAL EXAMPLE OF EFFECT OF FUND EXPENSES

You would pay the following expenses on a $1,000 investment, assuming 5%
annual return and redemption at the end of the period.

INCOME REAL ESTATE
------ -----------
1 year.................................. $ 31 $ 33
3 years................................. 75 81
5 years................................. 122 131
10 years................................ 251 269

(1) Annual Fund Operating Expenses are based on each Fund's historical
expenses. Management Fees, Transfer Agency Fees and Accounting Services Fees are
paid to U.S. Global Investors, Inc. (the "Advisor") and its wholly owned
subsidiary. Please refer to the section entitled "Management of the Funds" for
further information.

FINANCIAL HIGHLIGHTS
U.S. INCOME FUND

The following per share data and ratios for a share of beneficial interest
outstanding throughout each of the five years ended June 30, 1996 have been
audited by Price Waterhouse LLP, the Fund's Independent Accountants. The related
financial statements and the report of Independent Accountants are included in
the Funds' 1996 Annual Report to Shareholders and are incorporated by reference
into the Statement of Additional Information ("SAI"). In addition to the data
set forth below, further information about the performance of the Fund is
contained in the Annual Report to Shareholders and SAI which may be obtained
without charge.
Selected data for a capital share outstanding throughout each year is as
follows:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................. $ 13.35 12.57 14.06 12.65 11.32 12.23 11.61 9.64
--------- --------- --------- --------- --------- --------- --------- ---------
Net investment income(c)........... .35 .35 .31 .30 .29 .36 .43 .48
Net realized and unrealized gain
(loss) on investments(d).......... 1.84 .79 (1.06) 2.19 1.40 (.62) .61 1.96
--------- --------- --------- --------- --------- --------- --------- ---------
Total from investment operations..... 2.19 1.14 (.75) 2.49 1.69 (.26) 1.04 2.44
--------- --------- --------- --------- --------- --------- --------- ---------
Less dividends and distributions:
Dividends from net investment
income............................ (.35) (.34) (.31) (.27) (.35) (.36) (.42) (.47)
Distributions in excess of net
investment income(e).............. -- -- (.03) -- -- -- -- --
Distributions from net realized
gains............................. (.25) (.02) (.01) (.79) (.01) (.29) -- --
Distributions in excess of realized
gains(e).......................... -- -- (.39) (.02) -- -- -- --
--------- --------- --------- --------- --------- --------- --------- ---------
Total dividends and distributions.... (.60) (.36) (.74) (1.08) (.36) (.65) (.42) (.47)
--------- --------- --------- --------- --------- --------- --------- ---------
Net asset value, end of period....... $ 14.94 13.35 12.57 14.06 12.65 11.32 12.23 11.61
========= ========= ========= ========= ========= ========= ========= =========
Total Investment Return(f)........... 16.60% 9.31 (5.83) 20.68 15.02 (2.07) 8.89 26.02
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)......................... $ 9,698 10,230 11,865 11,009 7,845 7,456 8,137 5,317
Ratio of expenses to average net
assets............................. 2.08%(g) 1.98 1.74 1.83 1.95 2.22 1.94 2.00
Ratio of net income to average net
assets............................. 2.45%(g) 2.59 2.27 2.34 2.47 2.99 3.55 4.61
Portfolio turnover rate.............. 50.89% 7.02 6.91 44.18 76.15 109.85 19.29 17.59
Average Commission Rate Paid(h)...... $ 0.0941 NA NA NA NA NA NA NA
</TABLE>
YEAR ENDED JUNE 30,
-------------------
1988 1987
--------- ---------
Per Share Operating Performance:
Net asset value, beginning of
period............................. 10.50 11.20
--------- ---------
Net investment income(c)........... .63 .63
Net realized and unrealized gain
(loss) on investments(d).......... (.38) (.27)
--------- ---------
Total from investment operations..... .25 .36
--------- ---------
Less dividends and distributions:
Dividends from net investment
income............................ (.76) (.50)
Distributions in excess of net
investment income(e).............. -- --
Distributions from net realized
gains............................. (.35) (.32)
Distributions in excess of realized
gains(e).......................... -- (.24)
--------- ---------
Total dividends and distributions.... (1.11) (1.06)
--------- ---------
Net asset value, end of period....... 9.64 10.50
========= =========
Total Investment Return(f)........... 3.13 3.32
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)......................... 4,450 3,572
Ratio of expenses to average net
assets............................. 1.73 1.60
Ratio of net income to average net
assets............................. 6.19 6.14
Portfolio turnover rate.............. 126.56 173.91
Average Commission Rate Paid(h)...... NA NA
(CONTINUED)

FINANCIAL HIGHLIGHTS
U.S. REAL ESTATE FUND

YEAR ENDED JUNE 30,
-------------------
PERIOD
ENDED(A)
--------
Per Share Operating Performance:
Net asset value, beginning of
period............................. 10.00
--------
Net investment income(c)........... .45
Net realized and unrealized gain
(loss) on investments(d).......... (.78)
--------
Total from investment operations..... (.33)
--------
Less dividends and distributions:
Dividends from net investment
income............................ (.38)
Distributions in excess of net
investment income(e).............. --
Distributions from net realized
gains............................. --
Tax return of capital
distributions(e).................. --
--------
Total dividends and distributions.... (.38)
--------
Net asset value, end of period....... 9.29
========
Total Investment Return(f)........... (2.99)
Ratios/supplemental data:
Net assets, end of period (in
thousands)......................... 3,237
Ratio of expenses to average net
assets............................. --(b)
Ratio of net income to average net
assets............................. 6.76(b)
Portfolio turnover rate.............. 51.01(b)
Average commission rate paid (h)..... NA
(FOOTNOTES ON FOLLOWING PAGE)

(CONTINUED FROM PREVIOUS PAGE)

(a) For the period July 2, 1987 (date of commencement of operations) to
June 30, 1988; (b) Annualized; the ratios are not necessarily indicative of
twelve months of operation; (c) Net of expense reimbursements; (d) Includes the
effect of capital share transactions throughout the year; (e) Distributions in
excess of net investment income and net realized gains and tax returns of
capital are presented in accordance with SOP 93-2, Determination, Disclosure,
and Financial Statement Presentation of Income, Capital Gain, and Return of
Capital Distribution by Investment Companies, which was first implemented by the
Funds in fiscal 1993. Information for prior years has not been restated; (f)
Total return does not reflect the effect of account fees; (g) Expense ratio is
net of expense reimbursements or fee waivers. Had such reimbursements not been
made, the expense ratio subject to the most restrictive state limitation would
have been 2.10% and 2.27% and the net investment income ratio would have been
2.42% and 3.62% for the Income and Real Estate Funds, respectively. (h)
Represents total commissions paid on portfolio securities divided by the total
number of shares purchased or sold on which commissions were charged. This
information was not required prior to 1996.

INVESTMENT OBJECTIVES AND CONSIDERATIONS

United Services Funds (the "Trust") offers investors several growth and
income funds, two of which are included in this prospectus, the Income Fund and
the Real Estate Fund. Each Fund has a different investment objective and is
designed to satisfy different needs. The Income Fund seeks to preserve capital,
consistent with production of current income. Long-term capital appreciation is
a secondary consideration. The Income Fund may invest in a broad range of equity
and debt securities. The Real Estate Fund's principal objective is long-term
capital appreciation; current income is a secondary consideration. The Real
Estate Fund invests primarily in equity securities of companies in the real
estate or real estate related industry.

U.S. INCOME FUND

The investment objectives of the Income Fund are preservation of capital
and, consistent with that objective, production of current income. Long-term
capital appreciation is a secondary consideration.

The Income Fund will invest in the following types of securities: common
stocks, including, but not limited to, shares of beneficial interest of real
estate investment trusts; corporate bonds; senior securities convertible into
common stocks (convertible preferred stocks and convertible bonds or
debentures); United States Treasury bills; United States Treasury bonds; and
obligations issued, guaranteed or otherwise backed by United States Government
agencies and instrumentalities. The Fund may also invest in the securities of
foreign issuers which are listed on domestic national securities exchanges,
quoted on NASDAQ, or traded in the domestic over-the-counter market. The Fund
purchases only those preferred stocks, bonds and debentures that, in the opinion
of the Advisor, meet a credit standard which is consistent with the objective of
preservation of capital. The distribution of investments between different types
of securities is governed by an investment policy, which can be changed by the
Board of Trustees, that at least 80% of the Income Fund's total net assets will
be invested in income-producing securities. The common stocks in which the
Income Fund ordinarily invests are those of issuers with a long-established
record of paying cash dividends, such as companies that provide essentials, such
as electricity, gas and telephone services. Investments will be diversified
among a variety of industries to limit risk; however, up to 10% of the total net
assets of the Income Fund may be invested in securities that are not readily
marketable. To increase current income, the Income Fund may write (sell) covered
call options on common stocks in its portfolio.

U.S. REAL ESTATE FUND

The primary investment objective of the Real Estate Fund is long-term
capital appreciation. Current income is a secondary consideration. The Fund

will seek to achieve its objectives by investing primarily in equity securities
of companies in the real estate or real estate related industry.

The Fund will invest not less than 65% of its total assets in common and
preferred stocks of companies listed on national securities exchanges or NASDAQ
which have at least 50% of the value of their assets in, or which derive at
least 50% of their revenues from, the ownership, construction, management or
sale of residential, commercial or industrial real estate. Such stocks may
include publicly traded or listed equity real estate investment trusts which own
properties and mortgage real estate investment trusts which make short-term
construction and development mortgage loans or which invest in long-term
mortgages or mortgage pools. The Fund may also invest up to 35% of total net
assets in real estate or real estate related securities of foreign issuers
listed on domestic or foreign exchanges, quoted on NASDAQ, or traded in the
domestic over-the-counter market.

The Fund may also invest in equity, debt, or convertible securities of
issuers whose products and services are related to the real estate industry such
as manufacturers and distributors of building supplies and financial
institutions which issue or service mortgages. In addition, the Fund may, from
time to time, seek investment in the securities of companies unrelated to the
real estate industry but which have significant real estate holdings believed to
be undervalued relative to the price of the companies'securities.

There may be periods when investments in such securities should be reduced
due to unusual or adverse economic conditions. Thus, the Real Estate Fund may
temporarily invest, without limitation other than the Real Estate Fund's
investment restrictions, in short-term money market instruments if, in the
opinion of the Advisor, market conditions warrant. The Fund may invest more than
25% of its total assets in any one sector of the real estate or real estate
related industries. See "Special Risks" in the Statement of Additional
Information.

The Real Estate Fund may be subject to the risks associated with the direct
ownership of real estate because of its policy of concentration in the
securities of companies which own, construct, manage or sell residential,
commercial or industrial real estate. Additional risks include declines in the
value of real estate, risks related to general and local economic conditions,
overbuilding and increased competition, increases in property taxes and
operating expenses, changes in zoning laws, casualty or condemnation losses,
limitations on rents, changes in neighborhood values, the appeal of properties
to tenants, and increase in interest rates. The value of securities of companies
which serve the real estate industry may also be affected by such risks.

SPECIAL CONSIDERATIONS

FOREIGN SECURITIES

Investment in foreign securities may involve risks not present in domestic
investment. These include fluctuating exchange rates; the fact that foreign
issuers may be subject to different, and in some cases, less comprehensive
accounting, financial reporting and disclosure standards than are domestic
issuers; the risk of adverse changes in foreign investment or exchange control
regulations, expropriation or confiscatory taxation; political or financial
instability; or other developments which can affect investments. The Income Fund
and the Real Estate Fund may invest in the securities of foreign issuers that
are listed on a domestic exchange, quoted on NASDAQ, or traded in the domestic
over-the-counter market. The Real Estate Fund may also invest in securities of
foreign issuers that are listed on foreign securities exchanges.

PORTFOLIO TURNOVER

Each Fund's total portfolio turnover rate is shown in the "Financial
Highlights Table." A Fund's annual rate of portfolio turnover may vary widely
from year to year depending on market conditions and prospects and may be higher
than those of other mutual funds with similar investment objectives to each
Fund. High portfolio turnover in any given year indicates a substantial amount
of short-term trading, which may result in payment by the Funds of above-average
amounts of brokerage commissions and could result in the payment by shareholders
of above-average amounts of taxes on realized investment gain. Any short-term
gain realized on securities will be taxed to shareholders as ordinary income.
See "Dividends and Taxes."

LENDING OF PORTFOLIO SECURITIES

REPURCHASE AGREEMENTS

Each Fund may invest a portion of its assets in repurchase agreements with
United States broker-dealers, banks and other financial institutions,

provided the Fund's custodian always has possession of securities serving as
collateral or has evidence of book entry receipt of such securities. In a
repurchase agreement, a Fund purchases securities subject to the seller's
agreement to repurchase such securities at a specified time (normally one day)
and price. The repurchase price reflects an agreed-upon interest rate during the
time of investment. All repurchase agreements must be collateralized by United
States Government or government agency securities the market values of which
equal or exceed 102% of the principal amount of the repurchase obligation. If an
institution enters an insolvency proceeding, the resulting delay in liquidation
of securities serving as collateral could cause the Fund some loss if the value
of the securities declined prior to liquidation. To minimize the risk of loss, a
Fund will enter into repurchase agreements only with institutions and dealers
which the Board of Trustees considers creditworthy.

PUT AND CALL OPTIONS

BUYING CALL OPTIONS. Each Fund may purchase call options on securities
movements in the prices of these securities. Each Fund will realize a gain from
the exercise of a call option if, during the option period, the price of the
underlying security to be purchased increases by more than the amount of the
premium paid. A Fund will realize a loss equal to all or a portion of the
premium paid for the option if the price of the underlying security decreases or
does not increase by more than the premium.

BUYING PUT OPTIONS. Each Fund may purchase put options on portfolio
securities to hedge against adverse movements in the prices of these securities.
A put option gives the buyer of the option, upon payment of a premium, the right
to sell a security to the writer of the option on or before a fixed date at a
predetermined price. A Fund will realize a gain from the exercise of a put
option if, during the option period, the price of the security declines by an
amount in excess of the premium paid. A Fund will

realize a loss equal to all or a portion of the premium paid for the option if
the price of the security increases or does not decrease by more than the
premium.

CLOSING TRANSACTIONS. Each Fund may dispose of an option written by the
Fund by entering into a "closing purchase transaction" for an identical option
and may dispose of an option purchased by the Fund by entering into a "closing
sale transaction" for an identical option. In each case, the closing
transaction will have the effect of terminating the rights of the option holder
and the obligations of the option purchaser and will result in a gain or loss to
the Fund based upon the relative amount of the premiums paid or received for the
original option and the closing transaction. A Fund may sell (or write) put
options solely for the purpose of entering into closing sale transactions.

INDEX OPTIONS. Each Fund may purchase and sell call options and purchase
put options on stock indices in order to manage cash flow, reduce equity
exposure, or remain fully invested in equity securities. Options on securities
indices are similar to options on a security except that, upon the exercise of
an option on a securities index, settlement is made in cash rather than in
specific securities.

SPECIAL LIMITATIONS

The investment objectives of the Income and Real Estate Funds may not be
changed without the vote of a majority of the Fund's outstanding voting
securities.

Each Fund may: (1) borrow up to 5% of the total assets of that Fund as a
temporary measure (for extraordinary purposes); (2) invest up to 5% of the value
of the total assets of that Fund in securities of any one issuer (except such
limitation does not apply to obligations issued or guaranteed by the U.S.
Government, its agencies and/or instrumentalities); (3) not acquire more than
10% of the voting securities of any one issuer; and (4) lend portfolio
securities with an aggregate market value of not more than one-third of such
Fund's total net assets.

HOW TO PURCHASE SHARES

The minimum initial investment is $1,000 for regular accounts or $50 for
custodial accounts for minors. The minimum subsequent investment is $50. The
minimum initial investment for persons enrolled in the ABC Investment Plan is
$100, and the minimum subsequent investment pursuant to such a plan is $30 or
more per month per account. There is no minimum purchase for retirement plan
accounts, including IRAs, administered by the Advisor or its agents and
affiliates.

YOU MAY INVEST IN THE FOLLOWING WAYS:

BY MAIL

Send your application and check or money order, made payable to the
respective Fund, to P.O. Box 781234, San Antonio, Texas 78278-1234.

When making subsequent investments, enclose your check with the return
remittance portion of the confirmation of your previous investment or indicate
on your check or a separate piece of paper your name, address and account number
and mail to the address mentioned above. Do not use the remittance portion of
your confirmation statement for a different fund as it is pre-coded. This may
cause your investment to be invested into the wrong fund. If you wish to
purchase shares in more than one fund, send a separate check or money order for
each fund. Third party checks will not be accepted; and the Trust reserves the
right to refuse to accept second party checks.

BY TELEPHONE

BY WIRE

You may make your initial or subsequent investments in United Services
Funds by wiring funds. To do so, call United Services Funds for a confirmation
number and wiring instructions.

BY ABC INVESTMENT PLAN (Registered Trademark)

extremes in the market. Of course, using the ABC Investment Plan
(Registered Trademark) does not guarantee a profit. If you sell at the bottom,
no system will give you a gain.

ADDITIONAL INFORMATION ABOUT PURCHASES

All purchases of shares are subject to acceptance by the Trust and are not
binding until accepted. United Services Funds reserves the right to reject any
application or investment. Orders received by the Funds' transfer agent or a
sub-agent before 4:00 p.m. Eastern Time, Monday through Friday exclusive of
business holidays, and accepted by the Funds will receive the share price next
computed after receipt of the order. In the event that the NYSE and other
financial markets close earlier, as on the eve of a holiday, orders will become
effective earlier in the day at the close of trading on the NYSE.

United Services Funds charges no sales commissions or "loads" of any
kind. However, investors may purchase and sell shares through registered
broker-dealers who may charge fees for their services.

To recover any such loss or charge, the Trust reserves the right, without
further notice, to redeem shares of any affiliated funds already owned by any
purchaser whose order is canceled, for whatever reason, and such a purchaser may
be prohibited from placing further orders unless investments are accompanied by
full payment by wire or cashier's check.

check has been converted into U.S. dollars and cleared the normal collection
process. Any amounts charged to the Fund for collection procedures will be
deducted from the amount invested.

If the Trust incurs a charge for locating a shareholder without a current
address, such charge will be passed through to the shareholder.

TAX IDENTIFICATION NUMBER

CERTIFICATES

When you open your account, United Services Funds will send you a
confirmation statement, which will be your evidence that you have opened an
account with United Services Funds. The confirmation statement is
non-negotiable, so if it is lost or destroyed, you will not be required to buy a
lost instrument bond or be subject to other expense or trouble, as you would
with a negotiable stock certificate. At your written request, United Services
Funds will issue negotiable stock certificates. Unless your shares are purchased
with wired funds, a certificate will not be issued until 15 days have elapsed
from the time of purchase, or United Services Funds has satisfactory proof of
payment, such as a copy of your canceled check. Negotiable certificates will not
be issued for fewer than 100 shares.

HOW TO EXCHANGE SHARES

FUNDS IN THE UNITED SERVICES FAMILY

HIGH REWARD China Region Opportunity Fund
HIGH RISK U.S. Gold Shares Fund
U.S. World Gold Fund
U.S. Global Resources Fund
Bonnel Growth Fund
U.S. Real Estate Fund
MODERATE REWARD U.S. All American Equity Fund
MODERATE RISK U.S. Income Fund
U.S. Tax Free Fund
United Services Near-Term Tax Free Fund
United Services Intermediate Treasury Fund
LOW REWARD U.S. Government Securities Savings Fund
LOW RISK U.S. Treasury Securities Cash Fund

If you have additional questions, one of our professional investor
representatives will personally assist you. Call 1-800-US-FUNDS.

BY TELEPHONE

BY MAIL

ADDITIONAL INFORMATION ABOUT EXCHANGES

(1) There is a $5 charge, which is paid to United Shareholder Services,
Inc. (the "Transfer Agent" or "USSI"), for each exchange transaction out of
any fund account. Retirement accounts administered by the Advisor or its agents
are charged $5 for each exchange exceeding three per quarter. The exchange fee
is charged to cover administrative costs associated with handling these
exchanges.

(2) An exchange involves both the redemption of shares out of the Fund and
the purchase of shares in a "Separate Fund." Like any other purchase, shares
of the Separate Fund cannot be purchased by exchange until all conditions of
purchase are met, including investable proceeds being immediately available.
Like any other redemption, the Fund reserves the right to hold exchange proceeds
for up to seven days. In general, the Fund expects to exercise this right on
exchanges of $50,000 or more. In such event, purchase of the Separate Fund
shares will also be delayed. Separate Fund shares will be priced at their net
asset value at the time of purchase. Redemption proceeds will not be invested in
either fund during this period. In all cases Fund shares will be redeemed
immediately, however Separate Fund shares will not be purchased until investable
proceeds are available. You will be notified immediately if the purchase will be
delayed.

(3) If the shares you wish to exchange are represented by a negotiable
stock certificate, the certificate must be returned before the exchange can be
effected.

(5) Exchanges out of United Services Funds' equity funds of shares held
less than 14 days are subject to a trader's fee. (See "Trader's Fee Paid to
Fund.")

(6) The exchange privilege may be terminated at any time. The exchange fee
and other terms of the privilege are subject to change.

HOW TO REDEEM SHARES

BY MAIL

A written request for redemption must be in "proper order," which
requires delivery of the following to the Transfer Agent:

(1) a written request for redemption signed by each registered owner
exactly as the shares are registered, the account number and the number of
shares or the dollar amount to be redeemed;

(2) negotiable stock certificates for any shares to be redeemed for which
certificates have been issued;

(3) signature guarantees when required; and

(4) such additional documents as are customarily required to evidence the
authority of persons effecting redemptions on behalf of corporations, executors,
trustees, and other fiduciaries. Redemptions will not become effective until all
documents in the form required have been received by the Transfer Agent. (Before
writing, read "Additional Information About Redemptions.")

HOW TO EXPEDITE REDEMPTIONS

SPECIAL REDEMPTION ARRANGEMENTS

Special arrangements may be made by institutional investors or on behalf of
accounts established by brokers, advisers, banks or similar institutions to have
redemption proceeds transferred by wire to pre-established accounts upon
telephone instructions. For further information call the Trust at
1-800-873-8637. Telephone redemptions are available for Chairman's Circle
accounts.

SIGNATURE GUARANTEE

$100,000; or (c) a national securities exchange or national securities
association. The guarantee must: (i) include the statement "Signature(s)
Guaranteed"; (ii) be signed in the name of the guarantor by an authorized
person, including the person's printed name and position with guarantor; and
(iii) include a recital that the guarantor is federally insured, maintains the
requisite net capital or is a national securities exchange or association.
Shareholders living abroad may acknowledge their signatures before a U.S.
consular officer. Military personnel may acknowledge their signatures before
officers authorized to take acknowledgments (e.g., legal officers and
adjutants).

REDEMPTION PROCEEDS MAY BE SENT TO YOU:

BY MAIL

BY WIRE

You may authorize the Fund to transmit redemption proceeds by wire,
provided you send written wiring instructions with a signature guarantee at the
time of redemption. Proceeds from your redemption will usually be transmitted on
the first business day following the redemption. However, the Trust reserves the
right to hold redemptions for up to seven days. If the shares to be redeemed
were purchased by check, the redemption proceeds will not be wired until the
purchase check has cleared, which may take up to seven days. There is a $10
charge to cover the wire, which is deducted from redemption proceeds.
International wires will be higher.

ADDITIONAL INFORMATION ABOUT REDEMPTIONS

The redemption price may be more or less than your cost, depending on the
net asset value of the Fund's portfolio next determined after your request is
received.

account closing fee or redemption fee will be charged to investors whose
accounts are closed under this provision.

TRADER'S FEE PAID TO THE FUND

A Trader's fee of 10 basis points or 0.10% of the value of shares redeemed
or exchanged will be assessed to shareholders who redeem or exchange shares of
the Fund held less than fourteen (14) calendar days. The Trader's Fee will be
paid to the Fund to benefit remaining shareholders by protecting them against
expenses due to excessive trading. Excessive short-term trading has an adverse
impact on effective portfolio management as well as upon Fund expenses. The Fund
has reserved the right to refuse investments from shareholders who engage in
short-term trading that may be disruptive to the Fund.

ACCOUNT CLOSING FEE

In order to reduce Fund expenses an account closing fee of $10 will be
assessed to shareholders who redeem all shares in their Fund account and direct
that redemption proceeds be delivered to them by mail or wire. The charge is
payable directly to the Fund's Transfer Agent which, in turn, will reduce its
charges to the Fund by an equal amount. The purpose of the charge is to allocate
to redeeming shareholders a more equitable portion of the Transfer Agent's fee,
including the cost of tax reporting, which is based upon the number of
shareholder accounts. The account closing fee does not apply to exchanges
between the funds in United Services family of funds nor will it be imposed on
any account which is involuntarily redeemed.

SMALL ACCOUNTS

Fund accounts which fall, for any reason other than market fluctuations,
below $1,000 at any time during a month will be subject to a monthly small
account charge of $1 which will be payable quarterly. The charge is payable
directly to the Fund's Transfer Agent which, in turn, will reduce its charges to
the Fund by an equal amount. The purpose of the charge is to allocate the costs
of maintaining shareholder accounts more equally among shareholders.

those shareholders with an opportunity to increase their accounts by investing a
sufficient amount to bring their accounts up to the minimum amount within ninety
(90) days of the notice. No account closing fee will be charged to investors
whose accounts are closed under this redemption provision.

CONFIRMATION STATEMENTS

OTHER SERVICES

The Trust has available a number of plans and services to meet the special
needs of certain investors. Plans available include:

(1) payroll deduction plans, including military allotments;

(2) custodial accounts for minors;

(3) a flexible, systematic withdrawal plan; and

(4) various retirement plans such as IRA, SEP/IRA, 403(b)(7), 401(k) and
employer-adopted defined contribution plans.

Application forms and brochures describing these plans and services may be
obtained from the Transfer Agent at 1-800-US-FUNDS (1-800-873-8637).

SHAREHOLDER SERVICES

United Shareholder Services, Inc. ("USSI"), a wholly-owned
subsidiary of the Advisor, acts as transfer and dividend paying agent for all
fund accounts. Simply write or call 1-800-US-FUNDS for prompt service on any
questions about your account.

24-HOUR ACCOUNT INFORMATION

HOW SHARES ARE VALUED

Shares of each Fund are purchased or redeemed, on a continuing basis
without a sales charge, at their next determined net asset value per share. The
net asset value per share of each Fund is calculated separately by United
Shareholder Services, Inc. Net asset value per share is determined as of 4:00
p.m. Eastern Time, Monday through Friday, exclusive of business holidays on
which the NYSE is closed, by dividing the aggregate net assets of each Fund by
the total number of shares of that Fund outstanding. In the event that the NYSE
and other financial markets close earlier as on the eve of a holiday, the net
asset value per share will be determined earlier in the day at the close of
trading on the NYSE.

Valuation shall be calculated in U.S. dollars. Securities quoted in other
currencies will be converted to U.S. dollars using the exchange rate then in
effect in the principal market in which the relevant securities are traded. A
portfolio security listed or traded on an international market, either on an
exchange or over- the-counter, is valued at the last reported sales price prior
to the time when assets are valued. A portfolio security listed or traded in the
domestic market, either on an exchange or over-the-counter, is valued at the
latest reported sale price prior to the time when assets are valued; and,
lacking any sales on that day, the security is valued at the mean between the
last reported bid and ask prices.

DIVIDENDS AND TAXES

will not be subject to Federal income tax on its net investment income and
capital gain net income that are distributed to shareholders.

All income dividends and capital gain distributions are normally
reinvested, without charge, in additional full and fractional shares of the
Fund. Alternatively, investors may choose: (1) automatic reinvestment of capital
gain distributions in Fund shares and payment of income dividends in cash; (2)
payment of capital gain distributions in cash and automatic reinvestment of
dividends in Fund shares; or (3) all income dividend and capital gain
distributions paid in cash. The share price of the reinvestment will be the net
asset value of the Fund shares computed at the close of business on the date the
dividend or distribution is paid. Dividend checks returned to the Fund as being
undeliverable and dividend checks not cashed after 180 days will automatically
be reinvested at the price of the Fund on the day returned or on or about the
181st day, and the distribution option will be changed to reinvest.

At the time of purchase, the share price of a Fund may reflect
undistributed income, capital gains or unrealized appreciation of securities.
Any dividend or capital gain distribution paid to a shareholder shortly after a
purchase of shares will reduce the per share net asset value by the amount of
the distribution. Although in effect a return of capital to the shareholder,
these dividends and distributions are fully taxable.

The Income Fund generally pays dividends quarterly (usually in March, June,
September and December). The Real Estate Fund generally pays dividends twice
each year (usually in June and December). Capital gains, if any, will be
distributed annually in December.

Each Fund is subject to a nondeductible 4 percent excise tax calculated as
a percentage of certain undistributed amounts of taxable ordinary income and
capital gains net of capital losses. The Funds intend to make such distributions
as may be necessary to avoid this excise tax.

Dividends from taxable net investment income and distributions of net
short-term capital gains paid by each Fund are taxable to shareholders as
ordinary income, whether received in cash or reinvested in additional shares of
a Fund. A portion of these dividends may qualify for the 70 percent dividends
received deduction available to corporations. Distributions of net capital gains
will be taxable to shareholders as long-term capital gains, whether paid in cash
or reinvested in additional shares, and regardless of the length of time the
investor has held his shares.

Each January, each Fund will report to its shareholders the Federal tax
status of dividends and distributions paid or declared by the Fund during the
preceding calendar year. This statement will also indicate whether and to what
extent distributions qualify for the 70 percent dividends received deduction
available to corporations.

THE TRUST

Under the Trust's First Amended and Restated Master Trust Agreement (the
"Master Trust Agreement"), no annual or regular meeting of shareholders is
required, although the Trustees may authorize special meetings from time to
time. Under the terms of the Master Trust Agreement, the Trustees will be a
self-perpetuating body and will continue their positions until they resign, die
or are removed by a written instrument signed by at least two-thirds of the
Trustees, by vote of shareholders holding not less than two-thirds of the shares
then outstanding of the Trust cast at any meeting called for that purpose, or by
a written declaration signed by shareholders holding not less than two-thirds of
the shares then outstanding.

On any matter submitted to shareholders, shares of each portfolio entitle
their holder to one vote per share, irrespective of the relative net asset value
of each portfolio's shares. On matters affecting an individual portfolio, a
separate vote of shareholders of the portfolio is required. Each portfolio's
shares are fully paid and non-assessable by the Trust, have no preemptive or
subscription rights, and are fully transferable, with no conversion rights.

MANAGEMENT OF THE FUNDS

TRUSTEES

THE INVESTMENT ADVISOR

U.S. Global Investors, Inc., 7900 Callaghan Road, San Antonio, Texas 78229,
under an investment advisory agreement with the Trust dated October 26, 1989,
furnishes investment advice and is responsible for overall management of the
Trust's business affairs. Frank E. Holmes is Chief Executive Officer and
Chairman of the Board of Directors of the Advisor, as well as President and a
Trustee of the Trust. Since October 1989, Mr. Holmes has owned more than 25% of
the voting stock of the Advisor and is its controlling person. The Advisor was
organized in 1968.

The Advisor utilizes a team approach to manage the assets of the U.S.
Income and the U.S. Real Estate Funds. The teams meet regularly to review
portfolio holdings and to discuss purchase and sale activity. Timothy Reynolds
has been team leader for the Real Estate Fund since January 1996 and has been
team leader of the Income Fund since August 1996. Mr. Reynolds, a Certified
Financial Analyst, joined the Advisor as a senior research analyst in June 1995.
He was employed by another investment advisory firm with responsibilities
involving management of a real estate investment trust and debt securities for
the two years prior to joining the Advisor. Prior to June 1993 Mr. Reynolds was
completing an MBA program and, prior thereto, was employed as a financial
analyst for large consumer products companies.

The Transfer Agency Agreement with the Trust provides for each Fund to pay
USSI an annual fee of $23.00 per account ( 1/12 of $23.00 monthly). In
connection with obtaining and/or providing administrative services to the
beneficial owners of Trust shares through broker-dealers, banks, trust companies
and similar institutions which provide such services and maintain an omnibus
account with the Transfer Agent, each Fund shall pay to the Transfer Agent a
monthly fee equal to one-twelfth ( 1/12) of 12.5 basis points (.00125) of the
value of the shares of the Funds held in accounts at the institutions, which
payment shall not exceed $1.92 multiplied by the average daily number of
accounts holding Trust shares at the institution. These fees cover the usual
transfer agency functions. In addition, the Funds bear certain other Transfer
Agent expenses such as the costs of record retention and postage, plus the
telephone and line charges (including the toll-free 800 service) used by
shareholders to contact the Transfer Agent. For the fiscal period ended June 30,
1996, the Income and Real Estate Funds paid to USSI a total of $38,228 and
$35,728, respectively for the transfer agency, lockbox and printing fees.
Transfer Agent fees, including reimbursed expenses, are reduced by the amount of
small account charges, account maintenance fees and account closing fees the
Transfer Agent is paid.

USSI performs bookkeeping and accounting services, and determines the daily
net asset value for each of the Funds. With regard to the Income Fund and Real
Estate Fund, bookkeeping and accounting services are provided to each Fund for
an asset based fee of 0.03% of the first $250 million average net assets, 0.02%
of the next $250 million average net assets and 0.01% of average net assets in
excess of $500 million -- subject to an annual minimum fee of $24,000 per Fund.
USSI received fees of $24,000 each for the Income Fund and Real Estate Fund for
the year ended June 30, 1996.

Additionally, the Advisor is reimbursed certain costs for in-house legal
services pertaining to each Fund.

printing and mailing proxy statements, reports and other communications to
shareholders, and expenses of registering and qualifying shares for sale, among
others.

PERFORMANCE INFORMATION

A Fund's average annual total return is computed by determining the average
annual compounded rate of return for a specified period that, if applied to a
hypothetical $1,000 initial investment, would produce the redeemable value of
that investment at the end of the period, assuming reinvestment of all dividends
and distributions and with recognition of all recurring charges. A Fund may also
utilize a total return for differing periods computed in the same manner but
without annualizing the total return.

A Fund's "yield" refers to the income generated by an investment in the
Fund over a 30-day (or one month) period (which period will be stated in the
advertisement). Yield is computed by dividing the net investment income per
share earned during the most recent calendar month or 30-day period by the
maximum offering price per share on the last day of such period. This income is
then "annualized." That is, the amount of income generated by the investment
during that period is assumed to be generated each month over a 12-month period
and is shown as a percentage of the investment.

[THIS PAGE INTENTIONALLY LEFT BLANK]

UNITED SERVICES FUNDS

SHARES OF THE FUNDS ARE SOLD
AT NET ASSET VALUE WITHOUT
SALES COMMISSIONS,
REDEMPTION FEES OR 12B-1 FEES

U.S. Income Fund
U.S. Real Estate Fund

INVESTMENT ADVISOR
U.S. Global Investors, Inc.
7900 Callaghan Road
Mailing Address: P.O. Box 29467
San Antonio, Texas 78229-0467

TRANSFER AGENT
United Shareholder Services, Inc.
P.O. Box 781234
San Antonio, Texas 78278-1234

CUSTODIAN
Bankers Trust Company
16 Wall Street
New York, NY 10005

LEGAL COUNSEL
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109

INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
One Riverwalk Place, Ste. 900
San Antonio, Texas 78205

100% No Load

Be Sure to Retain This Prospectus;
It Contains Valuable Information.

================================================================================

UNITED SERVICES FUNDS

U.S. TREASURY SECURITIES CASH FUND
U.S. GOVERNMENT SECURITIES SAVINGS FUND

P.O. BOX 781234
SAN ANTONIO, TEXAS 78278-1234
1-800-873-8637 (1-800-US-FUNDS)
(INFORMATION, SHAREHOLDER SERVICES AND REQUESTS)
INTERNET: http://www.usfunds.com

PROSPECTUS

NOVEMBER 1, 1996

This prospectus presents information that a prospective investor should
know about the U.S. Treasury Securities Cash Fund and the U.S. Government
Securities Savings Fund, two no-load mutual funds (the "Fund(s)") of United
Services Funds (the "Trust"). Each Fund has a different investment objective
and is designed to meet different investment needs. Investors are responsible
for determining whether or not an investment in the fund is appropriate for
their needs. Read and retain this prospectus for future reference.

The Funds are money market funds that endeavor to maintain a constant per
share net asset value. SHARES OF THE TRUST ARE NOT INSURED, GUARANTEED,
SPONSORED, RECOMMENDED OR APPROVED BY THE UNITED STATES OR ANY AGENCY OR OFFICER
THEREOF; THERE IS NO ASSURANCE THAT THE FUNDS WILL BE ABLE TO MAINTAIN STABLE
NET ASSET VALUES OF $1.00 PER SHARE.

TABLE OF CONTENTS

PAGE
----
SUMMARY OF FEES AND EXPENSES...................... 2
FINANCIAL HIGHLIGHTS.............................. 4
INVESTMENT OBJECTIVES AND
CONSIDERATIONS
U.S. Treasury Securities Cash
Fund......................................... 7
U.S. Government Securities Savings
Fund......................................... 8
ADDITIONAL INFORMATION............................ 8
HOW TO PURCHASE SHARES............................ 9
HOW TO EXCHANGE SHARES............................ 11
HOW TO REDEEM SHARES.............................. 13
HOW SHARES ARE VALUED............................. 18
DIVIDENDS AND TAXES............................... 18
THE TRUST......................................... 19
MANAGEMENT OF THE FUNDS........................... 20
PERFORMANCE INFORMATION........................... 22

SUMMARY OF FEES AND EXPENSES

The following summary, which is based on actual expenses and average net
assets for the U.S. Treasury Securities Cash Fund for the year ended June 30,
1996 and the Advisor's voluntary agreement to cap expenses at 0.40% for the U.S.
Government Securities Saving Fund until June 30, 1997, is provided to assist you
in understanding the various costs and expenses a shareholder in each respective
Fund could bear directly and indirectly.

U.S. U.S.
TREASURY GOVERNMENT
SECURITIES SECURITIES
CASH FUND SAVINGS FUND
---------- ------------
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load.............. None None
Redemption Fee.................. None None
Administrative Exchange Fee..... $5 $5
Account Closing Fee (does not
apply to exchanges).......... $10 $10
ANNUAL FUND OPERATING EXPENSES (AS A
PERCENTAGE OF AVERAGE NET
ASSETS)(1)
Management Fees (after reduction
or
waiver)...................... 0.50% 0.12%
Other Expenses.................. 0.36% 0.18%
Transfer Agency Fees............ 0.14% 0.08%
Accounting Services Fees........ 0.03% 0.02%
Total Fund Operating Expenses (after
reduction or waiver)............... 1.03% 0.40%(2)

Except for active ABC Investment Plan (Registered Trademark) accounts,
custodial accounts for minors and retirement accounts, if an account falls, for
any reason other than market fluctuations, below $1,000 at any time during a
month, that account will be subject to a small account charge of $5 for that
month. (See "Small Accounts.")

A shareholder who requests delivery of redemption proceeds by wire will be
subject to a $10 charge. International wires will be charged more.

HYPOTHETICAL EXAMPLE OF EFFECT ON FUND EXPENSES

You would pay the following expenses on a $1,000 investment, assuming 5%
annual return:

U.S. TREASURY U.S. GOVERNMENT
SECURITIES SECURITIES
CASH FUND SAVINGS FUND
-------------- ----------------
1 year............................... $ 21 $ 14
3 years.............................. 43 29
5 years.............................. 67 46
10 years............................. 136 95

Included in these estimates is the account closing fee of $10 for each period.
This is a flat charge which does not vary with the size of your investment.
Accordingly, for investments larger than $1,000, your total expenses will be
substantially lower in percentage terms than this illustration. The examples
should not be considered a representation of past or future expenses. Actual
expenses may be more or less than those shown.
- --------------------------------------------------------------------------------
(1) Annual Fund Operating Expenses are based on each Fund's historical
expenses. Management Fees, Transfer Agency Fees, and Accounting Services Fees
are paid to U.S. Global Investors, Inc. (the "Advisor") and its wholly owned
subsidiary. Please refer to the section entitled "Management of the Funds" for
further information.

(2) The Advisor guaranteed that the Total Fund Operating Expenses of the U.S.
Government Securities Savings Fund (as a percentage of net assets) will not
exceed 0.40% of net assets until June 30, 1997 or until such later date as the
Advisor determines. Based on actual operating expenses of the Fund for the year
ended June 30, 1996, Management Fees, Other Expenses, Transfer Agency Fees,
Accounting Services Fees and Total Fund Operating Expenses were 0.43%, 0.18%,
0.08%, 0.02%, and 0.71%, respectively, in the absence of the fee waiver and
reimbursement of expenses by the Advisor.

FINANCIAL HIGHLIGHTS
U.S. TREASURY SECURITIES CASH FUND

1988 1987
--------- ---------
Per Share Operating Performance:
Net asset value, beginning of
period............................. 1.00 1.00
--------- ---------
Net investment income(b)........... .06 .05
Net realized and unrealized gain
(loss) on investments(c).......... -- --
--------- ---------
Total from investment operations..... .06 .05
--------- ---------
Less dividends and distributions:
Dividends from net investment
income............................ (.06) (.05)
Distributions from net realized
gains............................. -- --
--------- ---------
Total dividends and distributions.... (.06) (.05)
--------- ---------
Net asset value, end of period....... 1.00 1.00
========= =========
Total Investment Return(e)........... 6.07 4.74
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)......................... 158,883 104,356
Ratio of expenses to average net
assets............................. .68 1.12
Ratio of net income to average net
assets............................. 5.85 4.89
Portfolio turnover rate.............. -- --
(CONTINUED)

FINANCIAL HIGHLIGHTS
U.S. GOVERNMENT SECURITIES SAVINGS FUND

Selected data for a capital share outstanding throughout each year is as
follows:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990(A) 1989(A)
--------- --------- --------- --------- --------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period............................. $ 1.00 1.00 1.00 1.00 1.00 1.01 1.03 1.01
--------- --------- --------- --------- --------- --------- ------- -------
Net investment income(b)........... .05 .05 .03 .04 .05 .08 .07 .08
Net realized and unrealized gain
(loss) on investments(c).......... -- (.01) -- -- -- .02 .01 .02
--------- --------- --------- --------- --------- --------- ------- -------
Total from investment operations..... .05 .04 .03 .04 .05 .06 .08 .10
--------- --------- --------- --------- --------- --------- ------- -------
Less dividends and distributions:
Dividends from net investment
income............................ (.05) (.05) (.03) (.04) (.05) (.07) (.08) (.08)
Distributions from net realized
gains............................. -- -- -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- ------- -------
Total dividends and distributions.... (.05) (.05) (.03) (.04) (.05) (.07) (.08) (.08)
Capital contribution by manager...... -- .01(d) -- -- -- -- -- --
Net asset value, end of period....... $ 1.00 1.00 1.00 1.00 1.00 1.00 1.01 1.03
========= ========= ========= ========= ========= ========= ======= =======
Total Investment Return(e)........... 5.34% 5.09(g) 3.34 3.79 5.30 5.47 6.70 10.69
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)......................... $ 588,409 529,372 610,229 445,418 117,092 22,291 4,992 6,507
Ratio of expenses to average net
assets............................. .26%(f) .23 .16 .19 -- .47 2.17 1.13
Ratio of net income to average net
assets............................. 5.28%(f) 5.03 3.34 3.61 5.02 6.24 7.07 8.15
Portfolio turnover rate.............. -- -- -- -- -- -- -- --
</TABLE>
YEAR ENDED JUNE 30,
-------------------
1988(A) 1987(A)
------- -------
Per Share Operating Performance:
Net asset value, beginning of
period............................. 1.02 1.07
------- -------
Net investment income(b)........... .09 .08
Net realized and unrealized gain
(loss) on investments(c).......... .00 (.05)
------- -------
Total from investment operations..... .09 .03
------- -------
Less dividends and distributions:
Dividends from net investment
income............................ (.09) (.08)
Distributions from net realized
gains............................. (.01) --
------- -------
Total dividends and distributions.... (.10) (.08)
Capital contribution by manager...... -- --
Net asset value, end of period....... 1.01 1.02
======= =======
Total Investment Return(e)........... 8.79 3.20
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)......................... 6,753 6,743
Ratio of expenses to average net
assets............................. -- (.08)
Ratio of net income to average net
assets............................. 8.78 8.24
Portfolio turnover rate.............. 90.31 106.68
(FOOTNOTES ON FOLLOWING PAGE)

(CONTINUED FROM PREVIOUS PAGE)

(a) Adjusted to reflect a 9.2448 2-for-1 stock split as of October 31,
1990. Prior to the split the Fund was not a constant $1.00 Fund; (b) Net of
expense reimbursements; (c) Includes the effect of capital share transactions
throughout the year; (d) During the year ended June 30, 1995, the Advisor
purchased directly from the Government Securities Savings Fund $130,525,000 par
amount of securities at the Fund's amortized cost of $130,113,712 so that the
Fund would continue to maintain a stable net asset value of $1.00 per share. The
market value of these securities at the time of purchase was $124,738,432 plus
accrued interest. For financial reporting purposes, the $5,375,280 difference
between amortized cost and market value was recorded as a capital loss and a
corresponding capital contribution by the Manager. For tax purposes, these
reimbursements were applied against the realized losses for the year ended June
30, 1995. In accordance with Statement of Position 93-2, Determination,
Disclosure and Financial Statement Presentation of Income, Capital Gains, and
Return of Capital Distributions by Investment Companies, such amounts have been
reclassified from additional paid-in capital to accumulated undistributed net
realized loss from investments in the Statement of Assets and Liabilities; (e)
Total return does not reflect the effect of account fees; (f) Expense ratio is
net of expense reimbursements or fee waivers. Had such reimbursements and fee
waivers not been made, the expense ratio subject to the most restrictive state
limitation would have been 0.71% and the net investment income ratio would have
been 4.83%; (g) Total return includes the effect of the voluntary capital
contribution from the Advisor (see note (d) above). Without this capital
contribution, total return would have been approximately 4.19%.

INVESTMENT OBJECTIVES AND CONSIDERATIONS

United Services Funds offers investors two money market funds, each of
which is designed to satisfy different needs. The U.S. Treasury Securities Cash
Fund invests exclusively in United States Treasury obligations and repurchase
agreements that are collateralized by such obligations. The Fund is designed for
investors who anticipate making frequent deposits and withdrawals from the Fund
and desire maximum safety of principal and liquidity. The U.S. Government
Securities Savings Fund invests exclusively in United States Treasury
obligations, obligations of agencies and instrumentalities of the United States
Government, the income from which is exempt from state income taxes, and
repurchase obligations which are collateralized by such obligations. The Fund is
designed to provide a higher yield than the U.S. Treasury Securities Cash Fund,
but with slightly less safety of principal and liquidity. Both Funds use their
best efforts to maintain a constant net asset value of $1.00 per share, although
there can be no assurance that either Fund will be able to do so on a continuing
basis.

U.S. TREASURY SECURITIES CASH FUND

The U.S. Treasury Securities Cash Fund's investment objective is to obtain
a high level of current income while maintaining the highest degree of safety
and liquidity. The U.S. Treasury Securities Cash Fund invests in United States
Treasury debt securities with 397 days or less remaining to maturity which are
protected by the "full faith and credit" of the United States Government and
in repurchase agreements that are collateralized with such obligations. The Fund
seeks to maintain a stable net asset value per share of $1.00 and a dollar
weighted average portfolio maturity of 90 days or less.

The Fund may invest all or any portion of its assets in repurchase
agreements with domestic broker-dealers, banks and other financial institutions,
provided the Fund's custodian always has possession of securities serving as
collateral or has evidence of book entry receipt of such securities. In a
repurchase agreement, the Fund purchases securities subject to the seller's
agreement to repurchase such securities at a specified time (normally one day)
and price. The repurchase price reflects an agreed-upon interest rate during the
time of investment. All repurchase agreements are collateralized by United
States Treasury securities whose market values equal or exceed 102% of the
principal amount of the repurchase obligation. If an institution enters an
insolvency proceeding, any delay in liquidation of securities serving as
collateral could cause the Fund some loss if the value of the securities were to
decline prior to liquidation. The Fund anticipates that any such delays would be
less than 10 days. To minimize the risk of loss, the Fund will enter into
repurchase agreements only with institutions and dealers which the Board of
Trustees considers creditworthy. The Fund will not invest more than 10% of its
total assets in repurchase agreements with maturities in excess of seven days.

U.S. GOVERNMENT SECURITIES SAVINGS FUND

The U.S. Government Securities Savings Fund's objective is to provide the
highest yield consistent with safety of principal and maintenance of liquidity
that is obtainable by investing exclusively in short-term obligations of the
United States Government and its agencies and instrumentalities. The Fund may
invest in fixed-rate, floating-rate and adjustable-rate securities issued by the
United States Treasury and various United States Government agencies, including
the Federal Home Loan Banks, the Federal Farm Credit Banks and the Student Loan
Marketing Association. The Fund may also invest in repurchase agreements secured
by United States Treasury securities and cash if the Advisor believes that a
major disruption in the currency or money market may adversely affect the Fund's
assets.

The Fund seeks to maintain a stable net asset value per share of $1.00 and
a dollar weighted average portfolio maturity of 90 days or less. The Fund
invests exclusively in securities with remaining maturities of 397 days or less.
In determining maturity, an adjustable-rate security is ordinarily treated as
having a maturity equal to its next interest-rate adjustment date.

Under Federal law, the income derived from obligations issued by the
United States Government and certain of its agencies and instrumentalities is
exempt from state income taxes. All states that tax personal income permit
mutual funds to pass through this tax exemption to shareholders. To maximize the
tax-effective yield for shareholders under normal circumstances, the Fund will
invest only in obligations that qualify for the exemption from state taxation.

The Trustees may also seek to maximize yield by adopting procedures and
policies that reduce operational expenses of the Fund. For example, the Trustees
have imposed minimum investment requirements and limitations on check writing
privileges. The Trustees may also require shareholders to pay fees in connection
with certain transactions, such as exchanges and redemptions. For these reasons,
the Fund may not be an appropriate investment vehicle for market traders or
transaction oriented investors.

ADDITIONAL INFORMATION

LENDING OF PORTFOLIO SECURITIES

Each Fund may lend securities to broker-dealers or institutional investors
for their use in connection with short sales, arbitrages and other securities
transactions. A Fund will not lend portfolio securities unless the loan is
secured by collateral (consisting of any combination of cash and United States
Government securities) in an amount at least equal (on a daily mark-to-market
basis) to the current market value of the securities loaned. In the event of a
bankruptcy or breach of agreement by the borrower of the securities, a Fund
could experience delays and costs in recovering the securities loaned. A Fund
will not enter into securities lending agreements

unless its custodian bank/lending agent will fully indemnify the Fund against
loss due to borrower default. A Fund may not lend securities with an aggregate
market value of more than one-third of the Fund's total assets.

POLICY CHANGES

Neither Fund may change its investment objective, or its policy to use its
best efforts to maintain a constant net asset value of $1.00 per share, without
the affirmative vote of a majority of the Fund's outstanding voting securities.

HOW TO PURCHASE SHARES

The minimum initial investment is $1,000 for regular accounts or $50 for
custodial accounts for minors. The minimum subsequent investment is $50. The
minimum initial investment for persons enrolled in the ABC Investment Plan
(Registered Trademark) is $100, and the minimum subsequent investment pursuant
to such a plan is $30 or more per month per account. There is no minimum
purchase for retirement plan accounts, including IRAs, administered by the
Advisor or its agents and affiliates.

YOU MAY INVEST IN THE FOLLOWING WAYS:

BY MAIL

Send your application and check or money order, made payable to the
respective Fund, to P.O. Box 781234, San Antonio, Texas 78278-1234.

When making subsequent investments, enclose your check with the return
remittance portion of the confirmation of your previous investment or indicate
on your check or a separate piece of paper your name, address and account number
and mail to the address mentioned above. Do not use the remittance portion of
your confirmation statement for a different fund as it is pre-coded. This may
cause your investment to be invested into the wrong fund. If you wish to
purchase shares in more than one fund send a separate check or money order for
each fund. Third party checks will not be accepted; and the Trust reserves the
right to refuse to accept second party checks.

BY WIRE

You may make your initial or subsequent investments in United Services
Funds by wiring funds. To do so, call United Services Funds for a confirmation
number and wiring instructions.

BY ABC INVESTMENT PLAN (Registered Trademark)

market. Once your account is open, you may make investments automatically
by completing the ABC Investment Plan (Registered Trademark) form authorizing
United Services Funds to draw on your money market or bank account monthly for a
minimum of $30 a month beginning within thirty (30) days after the account is
opened. These lower minimums are a special service bringing to small investors
the benefits of United Services Funds without requiring a $1,000 minimum initial
investment.

ADDITIONAL INFORMATION ABOUT PURCHASES

Shares will be purchased for your account when all conditions of purchase
are met, including investable proceeds being immediately available. When payment
is received by wire, shares will be purchased the same day. When payment is
received by check, shares will be purchased the next business day. When payment
is received by exchange out of another fund, shares will be purchased when the
other fund distributes investable proceeds, which may be delayed for up to seven
days.

such a purchaser may be prohibited from placing further orders unless
investments are accompanied by full payment by wire or cashier's check.

United Services Funds charges no sales commissions or "loads" of any
kind. However, investors may purchase and sell shares through registered
broker-dealers who may charge fees for their services.

CHECKS DRAWN ON FOREIGN BANK. To be received in good order, an
investment must be made in U.S. dollars payable through a U.S. bank. As an
accommodation, the Funds' transfer agent may accept checks made in a foreign
currency or payable through a foreign bank and will attempt to convert such
checks into U.S. dollars. Your investment in the Fund will not be considered to
have been received in good order until your foreign check has been converted
into U.S. dollars and is available through a U.S. bank. Your investment in the
Fund may be deferred until your foreign check has been converted into U.S.
dollars and cleared the normal collection process. Any amounts charged to the
Fund for collection procedures will be deducted from the amount invested.

If the Trust incurs a charge for locating a shareholder without a current
address, such charge will be passed through to the shareholder.

TAX IDENTIFICATION NUMBER

HOW TO EXCHANGE SHARES

FUNDS IN THE UNITED SERVICES FAMILY

HIGH REWARD China Region Opportunity Fund
HIGH RISK U.S. Gold Shares Fund
U.S. World Gold Fund
U.S. Global Resources Fund
Bonnel Growth Fund
U.S. Real Estate Fund
MODERATE REWARD U.S. All American Equity Fund
MODERATE RISK U.S. Income Fund
U.S. Tax Free Fund
United Services Near-Term Tax Free Fund
United Services Intermediate Treasury Fund
LOW REWARD U.S. Government Securities Savings Fund
LOW RISK U.S. Treasury Securities Cash Fund

If you have additional questions, one of our professional investor
representatives will personally assist you. Call 1-800-US-FUNDS.

BY TELEPHONE

You will automatically have the privilege to direct United Services Funds
to exchange your shares by calling toll free 1-800-US-FUNDS (1-800-873-8637). In
connection with such exchanges, neither the Fund nor the Transfer Agent will be
responsible for acting upon any instructions reasonably believed by them to be
genuine. Each Fund and/or its Transfer Agent will, however, employ reasonable
procedures to confirm that instructions communicated by telephone are genuine
(including requiring some form of personal identification, providing written
confirmation and tape recording conversations); and if either party does not
employ reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent transactions.

BY MAIL

You may direct United Services Funds in writing to exchange your shares
between identically registered accounts. The request must be signed exactly as
the name appears on the registration. (Before writing, read "Additional
Information About Exchanges.")

ADDITIONAL INFORMATION ABOUT EXCHANGES

(1) There is a $5 charge, which is paid to United Shareholder Services,
Inc. ("USSI" or the "Transfer Agent"), for each exchange transaction out of
any fund account. Retirement accounts administered by the Advisor or its agents
are charged $5 for each exchange exceeding three per quarter. The exchange fee
is charged to cover administrative costs associated with handling these
exchanges.

(2) Shares may not be exchanged unless you have furnished United Services
Funds with your tax identification number, certified as prescribed by the
Internal Revenue Code and Regulations, and the exchange is to an account with
like registration and tax identification number. (See "Tax Identification
Number.")

(3) The exchange privilege may be modified or terminated at any time. The
exchange fee and other terms of the privilege are subject to change.

HOW TO REDEEM SHARES

BY MAIL

A written request for redemption must be in "proper order," which
requires delivery of the following to the Transfer Agent:

(1) a written request for redemption signed by each registered owner
exactly as the shares are registered, the account number and the number of
shares or the dollar amount to be redeemed;

(2) signature guarantees when required; and

(3) such additional documents as are customarily required to evidence the
authority of persons effecting redemptions on behalf of corporations, executors,
trustees and other fiduciaries. Redemptions will not become effective until all
documents in the form required have been received by the Transfer Agent. (Before
writing, read "Additional Information About Redemptions.")

BY TELEPHONE

Redemptions may be made by telephone, provided you have completed the
Telephone Redemption Authorization section of the purchase application. Upon
proper authority and instruction, redemptions will be wired (for a separate bank
wire charge) to the bank account identified on the account registration or, for
amounts of $15,000 or less, redemptions will

be mailed to the address on the account registration. In connection with
telephone redemptions, neither the Fund nor the Transfer Agent will be
responsible for acting upon any instructions reasonably believed by them to be
genuine. Each Fund and/or its Transfer Agent will, however, employ reasonable
procedures to confirm that instructions communicated by telephone are genuine
(including requiring some form of personal identification, providing written
confirmation and tape recording conversations); and if either party does not
employ reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent transactions.

SIGNATURE GUARANTEE

Redemptions in excess of $15,000 currently require a signature guarantee. A
signature guarantee is required for all redemptions, regardless of the amount
involved, when proceeds are to be paid to someone other than the registered
owner of the shares to be redeemed or if proceeds are to be mailed to an address
other than the registered address of record. When a signature guarantee is
required, each signature must be guaranteed by: (a) a federally insured bank or
thrift institution; (b) a broker or dealer (general securities, municipal, or
government) or clearing agency registered with the U.S. Securities and Exchange
Commission that maintains net capital of at least $100,000; or (c) a national
securities exchange or national securities association. The guarantee must: (i)
include the statement "Signature(s) Guaranteed"; (ii) be signed in the name of
the guarantor by an authorized person, including the person's printed name and
position with guarantor; and (iii) include a recital that the guarantor is
federally insured, maintains the requisite net capital or is a national
securities exchange or association. Shareholders living abroad may acknowledge
their signatures before a U.S. Consular officer. Military personnel may
acknowledge their signatures before officers authorized to take acknowledgments
(e.g., legal officers and adjutants).

BY CHECK WRITING

You may redeem shares of a Fund by writing a draft ("check") against your
account balance. For U.S. Treasury Securities Cash Fund, there is no limit on
the number of checks you may write and checks may be written for any amount. For
U.S. Government Securities Savings Fund, there is no limit on the number of
checks you may write, but there is a minimum check amount of $500.

If you want to add check writing to an existing Fund account, contact USSI
by phone or mail for the appropriate form. New accounts may elect

check writing on the purchase application. You will receive a free initial
supply of temporary checks usually within 14 days after your account has been
established and your completed signature card is on file with the Fund. You may
thereafter order permanent checks for a nominal charge.

Check writing is not available for an ABC Investment Plan (Registered
Trademark) account or a retirement plan account administered by the Advisor or
its agent. Further, the check writing privilege is only available for those
accounts that elect to have their dividends reinvested.

Checks will clear through Bankers Trust Company - Delaware. When checks
are presented, USSI will redeem a sufficient number of shares from your account
to pay the check amount. Canceled checks will not automatically be returned to
you; however, USSI will retain microfilmed copies of canceled checks for your
emergency needs and will provide a copy upon written request. You may, however,
request that your checks be returned on a monthly basis for a fee of $5 per
month. Further, you may request research services from USSI or the clearing bank
for which the Fund will charge your account fees based on the bank's current
schedule, currently $15 per hour or $1 per draft, whichever is higher.

You will continue to receive dividends on all shares until your check is
presented for payment. You cannot use a check to close an account because when
the check is written, you will not know what the exact account balance will be
on the date the check clears.

The Fund returns checks drawn on insufficient funds, funds not "matured"
or other irregularities and charges the account fees for such based on the
clearing bank's current schedule, currently $20. Purchases by check are not
considered "matured" until seven days after the purchase. Neither the Fund,
nor USSI, nor the clearing bank will be liable for any loss or expense
associated with returned checks.

You may request a stop payment on a check by providing the Fund with
authorization to do so. The Fund will use its best effort to execute stop
payment instructions but does not promise or guarantee that such efforts will be
effective. The Fund will charge your account fees for such based on the clearing
bank's current schedule, currently $20 for each stop payment instruction
received.

REDEMPTION PROCEEDS MAY BE SENT TO YOU:

BY MAIL

If your redemption check is mailed, it is usually mailed within 48 hours;
however, the Fund reserves the right to hold redemption proceeds for up to seven
days. If the shares to be redeemed were purchased by check, the redemption
proceeds will not be mailed until the purchase check has cleared. You may avoid
this requirement by investing by bank wire (Federal funds). Redemption checks
may be delayed if you have changed your

address in the last 30 days. Please notify the Fund promptly in writing, or by
telephone, of any change of address.

BY WIRE

You may authorize the Fund to transmit redemption proceeds by wire provided
you have completed the banking information portion of the Telephone Redemption
Authorization. Proceeds from your redemption will usually be transmitted on the
first business day following the redemption. However, the Trust reserves the
right to hold redemptions for up to seven days. If the shares to be redeemed
were purchased by check the redemption proceeds will not be wired until the
purchase check has cleared, which may take up to seven days. There is a $10
charge to cover the wire, which is deducted from redemption proceeds.
International wire charges will be higher.

ADDITIONAL INFORMATION ABOUT REDEMPTIONS

A request to redeem shares in an IRA or similar retirement account must be
accompanied by an IRS Form W4-P and must state a reason for withdrawal as
specified by the IRS. Proceeds from the redemption of shares from a retirement
account may be subject to withholding tax.

The Trust has the authority to redeem existing accounts and to refuse a
potential account the privilege of having an account in the Trust if the Trust
reasonably determines that the failure to so redeem, or to so prohibit, would
have a material adverse consequence to the Trust and its shareholders. No
account closing fee or redemption fee will be charged to investors whose
accounts are closed under this provision.

ACCOUNT CLOSING FEE

In order to reduce Fund expenses, an account closing fee of $10 will be
assessed to shareholders who redeem all shares in their Fund account and direct
that redemption proceeds be directed to them by mail or wire. The charge is
payable directly to the Fund's Transfer Agent which, in turn, will reduce its
charges to the Fund by an equal amount. The purpose of the charge is to allocate
to the redeeming shareholders a more equitable portion of the Transfer Agent's
fee, including the cost of tax reporting, which is based upon the number of
shareholders accounts. This will not be imposed on any account which is
involuntarily redeemed nor does it apply to exchanges between funds in the
United Services family of funds.

SMALL ACCOUNTS

Fund accounts which fall, for any reason other than market fluctuations,
below $1,000 at any time during a month will be subject to a small account
charge of $5 which is deducted the next business day. If an account does not
have sufficient funds to cover the $5 monthly charge, the Trust reserves the
right without further notice to such shareholder to redeem

shares of any other fund owned by the shareholder to pay such fee. The charge is
payable directly to the Fund's Transfer Agent which, in turn, will reduce its
charges to the Fund by an equal amount. The purpose of the charge is to allocate
the cost of maintaining shareholder accounts more equally among shareholders.

In order to reduce expenses of the Fund, the Trust may redeem all of the
shares in any shareholder account, other than active ABC Investment Plan
(Registered Trademark) accounts, custodial accounts for minors, and retirement
plan accounts, if, for a period of more than three months, the account has a net
value of $500 or less and the reduction in value is not due to market
fluctuations. If the Fund elects to close such accounts, it will notify
shareholders whose accounts are below the minimum of its intention to do so, and
will provide those shareholders with an opportunity to increase their accounts
by investing a sufficient amount to bring their accounts up to the minimum
amount within ninety (90) days of the notice. No account closing fee will be
charged to investors whose accounts are closed under this redemption provision.

CONFIRMATION STATEMENTS

Shareholders normally will receive a confirmation statement after each
transaction (purchase, redemption, other than checks, dividend, etc.) showing
activity in the account. If you have no transactions, you will receive an annual
statement only.

OTHER SERVICES

The Trust has available a number of plans and services to meet the special
needs of certain investors. Plans available include:

(1) payroll deduction plans, including military allotments;

(2) custodial accounts for minors;

(3) a flexible, systematic withdrawal plan; and

(4) various retirement plans such as IRA, SEP/IRA, 403(b)(7), 401(k) and
employer-adopted defined contribution plans.

Application forms and brochures describing these plans and services can be
obtained from the Transfer Agent by calling 1-800-US-FUNDS (1-800-873-8637).

such accounts). If this administrative charge is not paid separately prior to
the last business day of a calendar year or prior to a total redemption, it will
be deducted from the shareholder's account.

SHAREHOLDER SERVICES

24-HOUR ACCOUNT INFORMATION

HOW SHARES ARE VALUED

Shares of each Fund are purchased or redeemed on a continuing basis without
a sales charge at their next determined net asset value per share. The net asset
value per share of each Fund is calculated separately by United Shareholder
Services, Inc. Net asset value per share is determined and orders become
effective as of 4:00 p.m. Eastern Time, Monday through Friday, exclusive of
business holidays on which the NYSE is closed, by dividing the aggregate net
assets of each Fund by the total number of shares of that Fund outstanding. In
the event that the NYSE and other financial markets close earlier, as on the eve
of a holiday, the net asset value per share will be determined earlier in the
day at the close of trading on the NYSE.

The assets of each Fund are valued on the basis of amortized cost, which
involves valuing a portfolio instrument at its cost initially and, thereafter,
assuming a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market value of
the instrument. This valuation method results in a constant per share value of
$1.00 for each Fund.

DIVIDENDS AND TAXES

Each Fund intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). By
complying with the applicable provisions of the Code, a Fund will not be subject
to Federal income tax on its net investment income and capital gains net income
that are distributed to shareholders.

All of the net income of the U.S. Treasury Securities Cash Fund and the
U.S. Government Securities Savings Fund is declared and distributed as a daily
dividend. Net income may be reduced by losses, if any, realized

upon the sale of securities. Net income of each Fund will be computed, and
dividends declared, as of 4:00 p.m. Eastern Time on each business day.
Investments in each Fund made prior to 4:00 p.m. Eastern Time will receive
dividends the next business day, and redemptions and exchanges effected prior to
4:00 p.m. Eastern Time will receive that day's dividend (other than redemptions
under the check writing privilege which receive dividends until the check is
presented for payment). Investors may request automatic redemption of dividend
income at each month or quarter end. Dividend checks returned to the Fund as
being undeliverable and dividend checks not cashed after 180 days will
automatically be reinvested at the price of the Fund on the day returned or on
or about the 181st day, and the distribution option will be changed to
"reinvest."

Dividends from taxable net investment income and distributions of net
short-term capital gains paid by each Fund are taxable to shareholders as
ordinary income, whether received in cash or reinvested in additional shares of
a Fund. None of the dividends paid by the Funds are expected to qualify for the
70 percent dividends received deduction available to corporations. Distributions
of net capital gains will be taxable to shareholders as long- term capital
gains, whether paid in cash or reinvested in additional shares, and regardless
of the length of time the investor has held his shares.

Under Federal law, the income derived from obligations issued by the United
States Government and certain of its agencies and instrumentalities is exempt
from state income taxes. All states that tax personal income permit mutual funds
to pass through this tax exemption to shareholders. The U.S. Government
Securities Savings Fund will invest only in obligations that the Advisor
reasonably determines qualify for this exemption from state taxation.

Each January, each Fund will report to its shareholders the Federal tax
status of dividends and distributions paid or declared by the Fund during the
preceding calendar year.

THE TRUST

series into classes. Shares of numerous series have been authorized. The Board
of Trustees of the Trust has the power to create additional series, or divide
existing series into two or more classes, at any time, without a vote of
shareholders of the Trust.

MANAGEMENT OF THE FUNDS

TRUSTEES

THE INVESTMENT ADVISOR

U.S. Global Investors, Inc., 7900 Callaghan Road, San Antonio, Texas 78229,
under an investment advisory agreement with the Trust dated October 26, 1989,
furnishes investment advice and is responsible for overall management of the
Trust's business affairs. Frank E. Holmes is Chief Executive Officer and
Chairman of the Board of Directors of the Advisor, as well as President and a
Trustee of the Trust. Since October 1989, Mr. Holmes has owned more than 25% of
the voting stock of the Advisor and is its controlling person. The Advisor was
organized in 1968.

WITH RESPECT TO THE U.S. GOVERNMENT SECURITIES SAVINGS FUND AND
NOTWITHSTANDING THE FOLLOWING DESCRIPTION OF FEES AND OTHER EXPENSES, THE
ADVISOR HAS VOLUNTARILY GUARANTEED THAT TOTAL FUND OPERATING EXPENSES (AS A
PERCENTAGE OF AVERAGE NET ASSETS) OF THE U.S. GOVERNMENT SECURITIES SAVINGS FUND
WILL NOT EXCEED 0.40% ON AN ANNUALIZED BASIS UNTIL JUNE 30, 1997 OR UNTIL SUCH
LATER DATE AS THE ADVISOR DETERMINES.

The Advisory Agreement with the Trust provides for each Fund to pay the
Advisor an annual management fee equal to 0.50% of the first $250 million in
average net assets of the Fund and 0.375% of the average net assets of the Fund
in excess of $250 million. The fees paid to the Advisor for managing the U.S.
Treasury Securities Cash Fund and the U.S. Government Securities Savings Fund
for the fiscal period ended June 30, 1996, after such reimbursements, were 0.50%
and 0.12%, respectively, of average net assets.

The Transfer Agency Agreement with the Trust provides for each Fund to pay
USSI an annual fee of $23.00 per account ( 1/12 of $23.00 monthly), except for
accounts with monthly zero balances. In connection with obtaining and/or
providing administrative services to the beneficial owners of Trust shares
through broker-dealers, banks, trust companies and similar institutions which
provide such services and maintain an omnibus account with the Transfer Agent,
each Fund shall pay to the Transfer Agent a monthly fee equal to one-twelfth
( 1/12) of 12.5 basis points (.00125) of the value of the shares of the funds
held in accounts at the institutions, which payment shall not exceed $1.92
multiplied by the average daily number of accounts holding Trust shares at the
institution. These fees cover the usual transfer agency functions. In addition,
the Funds bear certain other Transfer Agent expenses such as the costs of record
retention and postage, plus the telephone and line charges (including the
toll-free 800 service) used by shareholders to contact the Transfer Agent. For
the fiscal period ended June

30, 1996, the U.S. Treasury Securities Cash Fund and the U.S. Government
Securities Savings Fund paid a total of $279,929 and $409,487 respectively, for
transfer agency, lockbox and printing services. Transfer Agent fees and
expenses, including reimbursed expenses, are reduced by the amount of small
account charges and account closing fees the Transfer Agent is paid.

USSI performs bookkeeping and accounting services, and determines the daily
net asset value for each of the Funds. Bookkeeping and accounting services are
provided to the Fund for an asset based fee of 0.03% of first $250 million
average net assets, 0.02% of next $250 million average net assets, 0.01% of
average net assets in excess of $500 million -- subject to an annual minimum fee
of $24,000 per Fund. USSI received fees of $50,115 and $131,727 for the U.S.
Treasury Securities Cash Fund and the U.S. Government Securities Savings Fund,
respectively, for the year ended June 30, 1996.

Additionally, the Advisor is reimbursed certain costs for in-house legal
services pertaining to each Fund, which reimbursement is subject to the
Advisor's assumption of expenses for the Fund. The Trust pays all other expenses
for its operations and activities. Each of the Funds of the Trust pays its
allocable portion of these expenses. The expenses borne by the Trust include the
charges and expenses of any shareholder servicing agents, custodian fees, legal
and auditor expenses, brokerage commissions for portfolio transactions, the
advisory fee, extraordinary expenses, expenses of shareholder and trustee
meetings, expenses for preparing, printing and mailing proxy statements, reports
and other communications to shareholders, and expenses of registering and
qualifying shares for sale, among others.

PERFORMANCE INFORMATION

The "yield" for each Fund refers to the income generated by an investment
in the Fund over a seven-day period (which period will be stated in the
advertisement). This yield is calculated by determining the net change,
exclusive of capital changes, in the value of a hypothetical pre-existing
account having a balance of one share at the beginning of the period,
subtracting a hypothetical charge reflecting deductions from shareholder
accounts, and dividing the difference by the value of the account at the
beginning of the base period to obtain the base return. This figure is then
"annualized." That is, the amount of income generated by the investment during
that week is assumed to be generated each week over a 52-

week period and is shown as a percentage of the investment. The "effective
yield" is calculated similarly but, when annualized, the income earned by an
investment in the Fund is assumed to be reinvested. The "effective yield" will
be slightly higher than the "yield" because of the compounding effect of this
assumed reinvestment. For the seven-day period ending June 30, 1996, the
annualized yield of the U.S. Treasury Securities Cash Fund was 4.19%, and its
effective annualized yield was 4.28%. For the seven-day period ending June 30,
1996, the annualized yield of the U.S. Government Savings Fund was 5.03%; and
its effective annualized yield was 5.16%.

The Fund may also utilize tax equivalent yields computed in the same
manner, with adjustment for a stated income tax rate.

The standard yield results do not take into account recurring and
nonrecurring charges for optional services which only certain shareholders elect
and which involve nominal fees such as the $5 fee for exchanges.

UNITED SERVICES FUNDS

SHARES OF THE FUNDS ARE SOLD
AT NET ASSET VALUE WITHOUT
SALES COMMISSIONS,
REDEMPTION FEES OR 12B-1 FEES

U.S. Treasury Securities
Cash Fund
U.S. Government Securities
Savings Fund

INVESTMENT ADVISOR
U.S. Global Investors, Inc.
7900 Callaghan Road
Mailing Address: P.O. Box 29467
San Antonio, Texas 78229

TRANSFER AGENT
United Shareholder Services, Inc.
P.O. Box 781234
San Antonio, Texas 78278-1234

CUSTODIAN
Bankers Trust Company
16 Wall Street
New York, NY 10005

LEGAL COUNSEL
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109

INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
One Riverwalk Place, Ste. 900
San Antonio, Texas 78205

100% No Load

Be Sure to Retain This Prospectus;
It Contains Valuable Information.

================================================================================

STATEMENT OF ADDITIONAL INFORMATION

UNITED SERVICES FUNDS

U.S. ALL AMERICAN EQUITY FUND
("ALL AMERICAN EQUITY FUND") (THE "FUND")

This Statement of Additional Information is not a prospectus but should be
read in conjunction with the appropriate Fund prospectus dated November 1, 1996,
(the "prospectus"), which may be obtained from U.S. Global Investors, Inc.
(formerly United Services Advisors, Inc.) (the "Advisor"), P.O. Box 29467, San
Antonio, Texas 78229-0467.

The date of this Statement of Additional Information is November 1, 1996.

STATEMENT OF ADDITIONAL INFORMATION

TABLE OF CONTENTS

PAGE

GENERAL INFORMATION............................................................3

INVESTMENT OBJECTIVES AND POLICIES.............................................4
Investment Restrictions...................................................4

SPECIAL RISK CONSIDERATIONS....................................................6

PORTFOLIO TRANSACTIONS.........................................................6

MANAGEMENT OF THE FUND.........................................................7

PRINCIPAL HOLDERS OF SECURITIES................................................9

INVESTMENT ADVISORY SERVICES...................................................9

TRANSFER AGENCY AND OTHER SERVICES............................................11

CERTAIN PURCHASES OF SHARES OF THE FUND.......................................11

ADDITIONAL INFORMATION ON REDEMPTIONS.........................................12
Suspension of Redemption Privileges......................................12

CALCULATION OF PERFORMANCE DATA...............................................12

TAX STATUS....................................................................14
Taxation of the Fund -- In General.......................................14
Taxation of the Fund's Investments.......................................14
Taxation of the Shareholder..............................................14

CUSTODIAN.....................................................................15

INDEPENDENT ACCOUNTANTS AND LEGAL COUNSEL.....................................15

FINANCIAL STATEMENTS..........................................................15

GENERAL INFORMATION

United Services Funds (the "Trust') is an open-end management investment
company and is a voluntary association of the type known as a "business trust"
organized under the laws of the Commonwealth of Massachusetts. The U.S. All
American Equity Fund (hereinafter sometimes referred to as the "Fund") is one of
numerous series of the Trust, each of which represents a separate, diversified
portfolio of securities (collectively referred to herein as the "Portfolios" and
individually as a "Portfolio").

The assets received by the Trust from the issue or sale of shares of each
of the Funds, and all income, earnings, profits and proceeds thereof, subject
only to the rights of creditors, are separately allocated to such Fund. They
constitute the underlying assets of each Fund, are required to be segregated on
the books of accounts, and are to be charged with the expenses with respect to
such Fund. Any general expenses of the Trust, not readily identifiable as
belonging to a particular Fund, shall be allocated by or under the direction of
the Board of Trustees in such manner as the Board determines to be fair and
equitable.

Each share of each of the Funds represents an equal proportionate interest
in that Fund with each other share and is entitled to such dividends and
distributions, out of the income belonging to that Fund, as are declared by the
Board. Upon liquidation of the Trust, shareholders of each Fund are entitled to
share pro rata in the net assets belonging to the Fund available for
distribution.

The Trustees have exclusive power, without the requirement of shareholder
approval, to issue series of shares without par value, each series representing
interests in a separate portfolio, or divide the shares of any portfolio into
classes, each class having such different dividend, liquidation, voting and
other rights as the Trustees may determine, and may establish and designate the
specific classes of shares of each portfolio. Before establishing a new class of
shares in an existing portfolio, the Trustees must determine that the
establishment and designation of separate classes would not adversely affect the
rights of the holders of the initial or previously established and designated
class or classes.

As described under "The Trust" in the prospectus, under the Trust's First
Amended and Restated Master Trust Agreement (the "Master Trust Agreement"), no
annual or regular meeting of shareholders is required. In addition, after the
Trustees were initially elected by the shareholders, the Trustees became a
self-perpetuating body. Thus, there will ordinarily be no shareholder meetings
unless otherwise required by the Investment Company Act of 1940.

On any matter submitted to shareholders, the holder of each share is
entitled to one vote per share (with proportionate voting for fractional
shares). On matters affecting any individual Portfolio, a separate vote of that
Portfolio would be required. Shareholders of any Portfolio are not entitled to
vote on any matter which does not affect their Fund but which requires a
separate vote of another Portfolio.

Shares do not have cumulative voting rights, which means that in situations
in which shareholders elect Trustees, holders of more than 50% of the shares
voting for the election of Trustees can elect 100% of the Trust's Trustees, and
the holders of less than 50% of the shares voting for the election of Trustees
will not be able to elect any person as a Trustee.

Shares have no preemptive or subscription rights and are fully
transferable. There are no conversion rights.

Under Massachusetts law, the shareholders of the Trust could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Master Trust Agreement disclaims shareholder liability for acts or
obligations of the Trust and requires that notice of such disclaimer be given in
each agreement, obligation or instrument entered into or executed by the Trust
or the Trustees. The Master Trust Agreement provides for indemnification out of
the Trust's property for all losses and expenses of any shareholder held
personally liable for the obligations of the Trust. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Trust itself would be unable to meet its
obligations.

INVESTMENT OBJECTIVES AND POLICIES

The following information supplements the discussion of the Fund's
investment objectives and policies discussed in the Fund's prospectus.

INVESTMENT RESTRICTIONS

The All American Equity Fund will not change any of the following
investment restrictions without the affirmative vote of a majority of the
outstanding voting securities of the Fund, which, as used herein, means the
lesser of (1) 67% of the Fund's outstanding shares present at a meeting at which
more than 50% of the outstanding shares of the Fund are represented either in
person or by proxy, or (2) more than 50% of the Fund's outstanding shares.

THE FUND MAY NOT:

(1) Issue senior securities.
(2) Borrow money, except that the Fund may borrow not in excess of
5% of its total assets from banks as a temporary measure for
extraordinary purposes, may borrow up to 33 1/3% of the amount
of its total assets (reduced by the amount of all liabilities
and indebtedness other than such borrowing) when deemed
desirable or appropriate to effect redemptions, provided,
however, that the Fund will not purchase additional securities
while borrowings exceed 5% of the total assets of the Fund.
(3) Underwrite the securities of other issuers.
(4) Invest in real estate.
(5) Engage in the purchase or sale of commodities or commodity
futures contracts, except that the Fund may invest in futures
contracts and options thereon.
(6) Lend its assets, except that the Fund may purchase money market
debt obligations and repurchase agreements secured by money
market obligations, and except for the purchase or acquisition
of bonds, debentures or other debt securities of a type
customarily purchased by institutional investors and except that
the Fund may lend portfolio securities with an aggregate market
value of not more than one-third of the Fund's total net assets.
(Accounts receivable for shares purchased by telephone shall not
be deemed loans.)
(7) Purchase any security on margin, except that it may obtain such
short-term credits as are necessary for clearance of securities
transactions.
(8) Make short sales.
(9) Invest in securities which are subject to legal or contractual
restrictions on resale ("restricted securities"). (10) Invest
more than 25% of its total assets in securities of companies
principally engaged in any one industry. (11) (a) Invest more
than 5% of the value of its total assets in securities of any
one issuer, except such limitation shall not apply to
obligations issued or guaranteed by the United States
Government, its agencies or instrumentalities, or (b) acquire
more than 10% of the voting securities of any one issuer.

The following discussion of the investment objectives, policies and risks
associated with the Fund supplements the discussion in the prospectus.

STOCK INDEX FUTURES CONTRACTS AND RELATED OPTIONS: The Fund may purchase
stock index futures contracts and purchase options thereon in anticipation of an
increase in the market price of the security it intends to acquire. Unlike when
a Fund security is purchased, no price is paid by the Fund upon the purchase of
a futures contract. Initially, the Fund will be required to deposit with the
broker an amount of cash or U.S. Treasury bills equal to approximately 5% of the
contract amount ("initial margin"). The nature of initial margin in futures
transactions is different from that of margin in securities transactions in that
futures contract margin does not involve the borrowing of funds by the customer
to finance the transactions. Rather, initial margin is in the nature of a
performance bond or good faith deposit on the contract which is returned to the
Fund upon termination of the futures contract assuming all the Fund's
contractual obligations have been satisfied. Subsequent payments, called
variation margin, to and from the broker will be made on a daily basis as the
price of the underlying stock index fluctuates making a long position in the
futures contract more or less valuable, a process known as "mark-to-market." For
example, when the Fund has purchased a stock index futures contract and the
prices of the stocks included in the underlying stock index have risen, that
position will have increased in value and the Fund will receive from the broker
a variation margin payment equal to that increase in value. Conversely, when the
Fund has purchased a stock

index futures contract and the prices of the stocks included in the underlying
stock index have declined, the position would be less valuable and the Fund
would be required to make a variation margin payment to the broker. At any time
prior to expiration of the futures contract, the Fund may elect to close the
position by taking an opposite position, which will operate to terminate the
Fund's position in the futures contract. A final determination of variation
margin is then made, additional cash is required to be paid by or released to
the Fund, and it realizes a loss or a gain.

Currently, stock index futures contracts can be purchased with respect to
the Standard & Poor's 500 Index on the Chicago Mercantile Exchange.

There is a risk that futures contract price movements will not correlate
perfectly with movements in the value of the underlying stock index. For a
number of reasons the price of the stock index future may move more than or less
than the price of the securities that make up the index. First, all participants
in the futures market are subject to margin deposit and maintenance
requirements. Rather than meeting additional margin deposit requirements,
investors may close futures contracts through offsetting transactions which
could distort the normal relationship between the index and futures markets.
Secondly, from the point of view of speculators, the deposit requirements in the
futures market are less onerous than margin requirements in the stock market.
Therefore, increased participation by speculators in the futures market may also
cause temporary price distortions.

There is a further risk that a liquid secondary trading market may not
exist at all times for these futures contracts, in which event the Fund might be
unable to terminate a futures position at a desired time. Positions in stock
index futures may be closed out only on an exchange or board of trade which
provides a secondary market for such futures. Although the Fund intends to
purchase futures only on exchanges or boards of trade where there appears to be
an active secondary market, there is no assurance that a liquid secondary market
on an exchange or board of trade will exist for any particular contract or at
any particular time. If there is not a liquid secondary market at a particular
time, it may not be possible to close a futures position at such time, and in
the event of adverse price movements, the Fund would continue to be required to
make daily cash payments of variation margin.

When purchasing a stock index futures contract, the Fund will deposit cash
or cash equivalents into a segregated account equal to the purchase price of the
futures contract less any margin on deposit with the broker.

When selling a call option the Fund will deposit cash or cash equivalents
into a segregated account which, when added to the amount deposited with the
broker as margin, equals the market value of the securities or futures contract
underlying call options, but not less than the strike price of the call option.

Fund assets need not be segregated if the Fund "covers" the futures
contract purchased or call option sold. For example, the Fund could purchase a
put option on the same futures contract purchased with a strike price as high or
higher than the price of the futures contract held by the Fund. The Fund could
cover a call option which it has sold by holding the same security (or, in the
case of a stock index, a portfolio or stock substantially replicating the
movement of the index) underlying the call option. The Fund may also cover by
holding a separate call option of the same security or stock index with a strike
price no higher than the strike price of the call option sold by the Fund. The
Fund could cover a call option which it has sold on a futures contract by
entering into a long position in the same futures contract at a price no higher
than the strike price of the call option or by owning the securities futures
contract. The Fund could also cover a call option which it has sold by holding a
separate call option permitting it to purchase the same futures contract at a
price no higher than the strike price of the call option sold by the Fund.

SPECIAL RISK CONSIDERATIONS

The following are among the most significant risks associated with an
investment in the Fund.

EQUITY PRICE FLUCTUATIONS. Equity securities are subject to price
fluctuations depending on a variety of factors, including market, business and
economic conditions. Particularly, the equity securities of companies involved
in natural resources may be subject to greater than average price fluctuations
because of the scarcity or surplus of the natural resources in which such
companies are engaged, governmental policies in the countries in which such
natural resources are located, technological changes and speculation by traders
in such resources.

OPTIONS ON STOCK INDEXES. Options on stock indexes are based on indexes of
stock prices that change in value according to the market values of the
underlying stock. Some stock index options are based on a broad market index
such as the New York Stock Exchange composite index of Standard & Poor's
Corporation. Other index options are based on a market segment or on stocks in a
single industry. Stock index options are traded primarily on securities
exchanges. Options on stock indexes differ from options on securities in that
the exercise of an option on a stock index does not involve delivery of the
actual underlying security. Index options are settled in cash only. The
purchaser of an option receives a cash settlement amount and the writer of an
option is required, in return for the premium received, to make delivery of a
certain amount if the option is exercised. A position in a stock index option
may be offset by either the purchaser or writer by entering into a closing
transaction, or the purchaser may terminate the option by exercising it or
allowing it to expire. The Fund may write (sell) call options, write put
options, purchase put options, and purchase call options on stock indexes when
appropriate to hedge investments against a decline in value, or to reduce the
risk of missing a broad market advance or an advance in an industry or market
segment.

The risks associated with the purchase and sale of options on stock indexes
is generally the same as those relating to options on securities. However, the
value of a stock index option depends primarily on movements in the value of an
index rather than in the price of a single security. Accordingly, the Fund will
realize a gain or loss from purchasing or writing an option on a stock index as
a result of movements in the level of stock prices in the stock market
generally, or in the case of certain indexes, in an industry or market segment,
rather than changes in the price for a particular security. Therefore,
successful use of stock index options by the Fund will depend on the Advisor's
ability to predict movements in the direction of the stock market generally, or
in a particular industry. The ability to predict these movements requires
different skills and techniques than predicting changes in the value of
individual securities.

Because index options are settled in cash, the Fund cannot be assured of
covering its potential settlement obligations under call options it writes on
indexes by acquiring and holding the underlying securities. Unless the Fund has
cash on hand that is sufficient to cover the cash settlement amount, it would be
required to sell securities owned in order to satisfy the exercise of the
option.

The Fund will adhere to the following non-fundamental limitations with
respect to investments in options on stock indexes: (1) the Fund will purchase
or write only those options on stock indexes that are traded on U.S. securities
exchanges or quoted on NASDAQ; and (2) the Fund will not invest more than 5% of
its total net assets in options on stock indexes.

PORTFOLIO TRANSACTIONS

The Advisory Agreement between the Trust and the Advisor requires that the
Advisor, in executing portfolio transactions and selecting brokers or dealers,
seeks the best overall terms available. In assessing the terms of a transaction,
consideration may be given to various factors, including the breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer (for a specified transaction and on
a continuing basis), the reasonableness of the commission, if any, and the
brokerage and research services provided to the Trust and/or other accounts over
which the Advisor or an affiliate of the Advisor exercises investment
discretion. Under the Advisory Agreement, the Advisor is permitted, in certain
circumstances, to pay a higher commission than might otherwise be obtained in
order to acquire brokerage and research services. The Advisor must determine in
good faith, however, that such commission is reasonable in relation to the value
of the brokerage and research services provided -- viewed in terms of that
particular transaction or in terms of all the accounts over which investment

discretion is exercised. In such case, the Board of Trustees will review the
commissions paid by each Fund of the Trust to determine if the commissions paid
over representative periods of time were reasonable in relation to the benefits
obtained. The advisory fee of the Advisor would not be reduced by reason of its
receipt of such brokerage and research services. To the extent that research
services of value are provided by broker-dealers through or with whom the Trust
places portfolio transactions the Advisor may be relieved of expenses which it
might otherwise bear.

The brokerage fees paid by the Fund for the three fiscal periods ended June
30, 1994, 1995 and 1996 were $18,741, $20,744 and $9,800, respectively.

MANAGEMENT OF THE FUND

The Trustees and Officers of the Trust and their principal occupations
during the past five years are set forth below. Except as otherwise indicated,
the business address of each is 7900 Callaghan Road, San Antonio, Texas 78229.

NAME AND ADDRESS TRUST POSITION PRINCIPAL OCCUPATION
- --------------------------------------------------------------------------------
John P. Allen Trustee President, Deposit Development
5600 San Pedro Associates Inc., a bank
San Antonio, TX marketing firm. President,
Paragon Press. Partner, Rio
Cibolo Ranch, Inc.

William A. Fagan, Jr. Chairman of Chairman of the Board of
P.O. Box 17903 the Board of Trustees since January 1, 1989.
San Antonio, TX Trustees Business consultant since 1976.

E. Douglas Hodo Trustee Chief Executive Officer of
7706 Fondren Houston Baptist University.
Houston, TX Formerly Dean and Professor of
Economics and Finance, College
of Business, University of
Texas at San Antonio.

Charles Z. Mann Trustee Business consultant since
13 Knapton Estates Road January 1, 1993. Chairman,
Turning Point Bermuda Monetary Authority from
Smith Parish HS01 1986 to 1992. Executive Vice
Bermuda, FLBX President of International
Median Limited, a private
investment holding company,
from 1979 to 1985 and
previously general manager of
Bank of N.T. Butterfield & Son,
Ltd., a Bermuda-based bank.
Currently a Director of Bermuda
Electric Light Company, Ltd.;
Overseas Imports, Ltd.; Tyndall
International (Bermuda) Ltd.;
Old Court International
Reserves Ltd.; XL Investments
Limited, Glaxo (Bermuda)
Limited.

W.C.J. van Rensburg Trustee Professor of Geological Science
6010 Sierra Arbor Court and Petroleum Engineering,
Austin, TX University of Texas at Austin.
Former Associate Director,
Bureau of Economic Geology,
University of Texas. Former
Chairman, Department of
Geosciences, West Texas State
University. Former technical
director of South African
Minerals Bureau and British
Petroleum Professor of Energy
Economics at the Ran Afrikaans
University, Johannesburg, South
Africa.

Frank E. Holmes* Trustee, Chairman of the Board of
President and Directors, and Chief Executive
Chief Officer of the Advisor since
Executive October 27, 1989. President
Officer from October 1989 to September
1995. Director of Security
Trust & Financial Company
("ST&FC"), a wholly-owned
subsidiary of Advisor, since
November 1991. President, Chief
Executive Officer and Trustee
of Accolade Funds, a
Massachusetts business trust
consisting of no-load mutual
funds, since April 1993.
Director of U.S. Advisors
(Guernsey) Limited, a
wholly-owned subsidiary of the
Advisor, and of the Guernsey
Funds managed by that Company
since August 1993. Director of
Marleau, Lemire Inc. from
January 1995 to December 1995.
Director of Franc-Or Resources
Corp since November 1994.
Director of United Services
Canada, Inc. (formerly United
Services Advisors Wealth
Management Corp.) since
February 1995 and Chief
Executive Officer from February
to August 1995. Trustee of
Pauze/Swanson United Services
Funds from November 1993 to
February 1996. Independent
business consultant and
financial adviser from July
1978 to October 1989. From July
1978 to October 1989, held
various positions with Merit
Investment Corporation, a
Canadian investment dealer,
including the latest position
as Executive Vice
President-Corporate Finance.
Formerly a member of the
Toronto Stock Exchange Listing
Committee, Registered Portfolio
Manager with the Toronto Stock
Exchange, and former President
and Chairman of the Toronto
Society of Investment Dealers
Association. Formerly a
Director of Merit Investment
Corporation.
----------
* This Trustee may be deemed an
"interested person" of the
Trust as defined in the
Investment Company Act of 1940.

Bobby D. Duncan Executive Vice President of the Advisor since
President, September 1995 and Chief
Chief Financial Officer since August
Operating 1996. Executive Vice President
Officer, Chief and Chief Financial Officer of
Financial the Advisor from October 27,
Officer 1989 to September 1995. Chief
Operating Officer since
November 1, 1993. President,
Chief Executive Officer, Chief
Operating Officer, Chief
Financial Officer and Treasurer
of the Advisor from January 1,
1989 to October 27, 1989. Prior
to January 1990 held various
positions with the Trust,
including Executive Vice
President, Treasurer, Chief
Operating Officer and Chief
Financial Officer. Served as
sole Director and Chief
Executive Officer of USSI from
September 1988 to November
1989. Director of A&B Mailers,
Inc. since February 1988 and
Chairman since July 1991. Chief
Executive Officer, President,
Chief Operating Officer, Chief
Financial Officer, and a
Director of USSI. Director of
the Advisor since 1986.
President of ST&FC since
January 1996. Director,
Executive Vice President, and
Chief Financial Officer of
ST&FC from November 1991 to
March 1994. Executive Vice
President, Chief Financial
Officer of Accolade Funds since
April 1993. Vice President,
Chief Financial Officer, and
Trustee of Pauze/Swanson United
Services Funds from November 1,
1993 to February 1996.
President, Chief Executive
Officer and Trustee of United
Services Insurance Fund since
July 22, 1994. Director and
Chief Financial Officer of
United Services Canada Inc.
(formerly United Services
Advisors Wealth Management
Corp.) since February 1995.

Victor Flores Executive Vice Executive Vice President, Chief
President, Investment Officer of the Funds
Chief since February 1994. Portfolio
Investment Manager U.S. Gold Shares Fund
Officer since November 1992 and U.S.
World Gold Fund since January
1990. Portfolio Manager, U.S.
Global Resources Fund, from
January 1990 to November 1992.
Vice President, Chief
Investment Officer and Director
of U.S. Global Investors, Inc.
(formerly United Services
Advisors, Inc.) since February
1994. Formerly Vice President,
Portfolio Manager of U.S.
Global Investors, Inc.(July
1993-February 1994). Served as
Resource Analyst for United
Services Funds and U.S. Global
Investors, Inc. from January
1988 to December 1989.

Susan B. McGee Vice President, Vice President and Secretary of
Secretary the Trust from September 1995.
Vice President and Secretary of
the Advisor since September
1995. Vice President and
Secretary of USSI since
September 1995. Vice President
and Assistant Secretary of
Accolade Funds since September
1995. Vice
President-Operations, Secretary
and Associate Counsel of ST&FC
since September 1992 to
present; Vice
President-Operations of ST&FC
from May 1993 to December 1994.
Associate Counsel from August
1994 to present.

Thomas D. Tays Vice President, Vice President - Special
Securities Counsel, Securities Specialist,
Specialist, Director of Compliance,
Director of Assistant Secretary of the
Compliance Advisor from September 1995 to
present; Associate Counsel,
Assistant Secretary of the
Advisor from September 1993 to
September 1995. Vice President,
Securities Specialist, Director
of Compliance and Assistant
Secretary of USF since
September 1995. Vice President
and Secretary of Accolade Funds
since September 1995, was
Assistant Secretary from
September 1994 to September
1995. Vice President, Secretary
of United Services Insurance
Funds from June 1994 to
present. Private practice of
law from 1990 to August 1993.

Kevin C. White Chief Chief Accounting Officer of the
Accounting Advisor from October 1996 to
Officer present. Chief Accounting
Officer of USF from October
1996 to present. Principal
Accounting Officer of Accolade
Funds from September 1996 to
present. Employee of the
Advisor from November 1995 to
present. Closing Manager for
World Savings and Loan from
January 1995 to November 1995.
Controller of Swearingen
Aircraft from December 1991 to
January 1995. Financial Analyst
for Fox Photo from February
1991 to December 1991.

PRINCIPAL HOLDERS OF SECURITIES

As of August 26, 1996 the officers and Trustees of the Trust, as a group,
owned less than 1% of the outstanding shares of the Fund. The Trust is not aware
of any persons who owned of record, or beneficially, more than 5% of the
outstanding shares of the Fund at August 26, 1996

INVESTMENT ADVISORY SERVICES

The investment adviser to the Funds is U.S. Global Investors, Inc.
(formerly United Services Advisors, Inc)) (the "Advisor"), a Texas corporation,
pursuant to an Advisory Agreement dated as of October 27, 1989. Frank E. Holmes,
Chief Executive Officer and a Director of the Advisor, as well as a Trustee,
President and Chief Executive

Officer of the Trust, beneficially owns more than 25% of the outstanding voting
stock of the Advisor and may be deemed to be a controlling person of the
Advisor.

In addition to the services described in the Fund's prospectus, the Advisor
will provide the Trust with office space, facilities and simple business
equipment, and will provide the services of executive and clerical personnel for
administering the affairs of the Trust. It will compensate all personnel,
Officers and Trustees of the Trust if such persons are employees of the Advisor
or its affiliates, except that the Trust will reimburse the Advisor for a
portion of the compensation of the Advisor's employees who perform certain legal
services for the Trust, including state securities law regulatory compliance
work, based upon the time spent on such matters for the Trust. The Advisor pays
the expense of printing and mailing prospectuses and sales materials used for
promotional purposes.

The Trust pays all other expenses for its operations and activities. Each
of the Funds of the Trust pays its allocable portion of these expenses. The
expenses borne by the Trust include the charges and expenses of any transfer
agents and dividend disbursing agents, custodian fees, legal and auditors'
expenses, bookkeeping and accounting expenses, brokerage commissions for
portfolio transactions, taxes, if any, the advisory fee, extraordinary expenses,
expenses of issuing and redeeming shares, expenses of shareholder and trustee
meetings, and of preparing, printing and mailing proxy statements, reports and
other communications to shareholders, expenses of registering and qualifying
shares for sale, fees of Trustees who are not "interested persons" of the
Advisor, expenses of attendance by Officers and Trustees at professional
meetings of the Investment Company Institute, the No-Load Mutual Fund
Association or similar organizations, and membership or organization dues of
such organizations, expenses of preparing and setting in type prospectuses and
periodic reports and expenses of mailing them to current shareholders, fidelity
bond premiums, cost of maintaining the books and records of the Trust, and any
other charges and fees not specifically enumerated.

For the services and facilities provided to the Funds by the Advisor, the
Fund may pay to the Advisor a monthly fee at the rate based upon the monthly
average net assets of the Fund for such calendar month: up to and including $250
million, 1/12 of 75% and over $250 million, 1/12 of 0.50%. The Advisor has
voluntarily agreed to bear certain Fund expenses. See the prospectus section -
"The Investment Advisor."

The Advisor may, out of profits derived from its management fee, pay
certain financial institutions (which may include banks, securities dealers and
other industry professionals) a "servicing fee" for performing certain
administrative servicing functions for Fund shareholders to the extent these
institutions are allowed to do so by applicable statute, rule or regulation.
These fees will be paid periodically and will generally be based on a percentage
of the value of the institutions' client Fund shares. The Glass-Steagall Act
prohibits banks from engaging in the business of underwriting, selling or
distributing securities. However, in the Advisor's opinion, such laws should not
preclude a bank from performing shareholder administrative and servicing
functions as contemplated herein.

The securities laws of certain states in which shares of the Trust may,
from time to time, be qualified for sale require that the Advisor reimburse the
Trust for any excess of the Fund's expenses over prescribed percentages of the
Fund's average net assets. Thus, the Advisor's compensation under the Advisory
Agreement is subject to reduction in any fiscal year to the extent that total
expenses of the Fund for such year (including the Advisor's compensation but
exclusive of taxes, brokerage commission, extraordinary expenses, and other
permissible expenses) exceed the most restrictive applicable expense limitation
prescribed by any state in which the Trust's shares are qualified for sale. The
Advisor may obtain waivers of these state expense limitations from time to time.
Such limitation is currently 2.5% of the first $30 million of average net
assets, 2% of the next $70 million of average net assets and 1.5% of the
remaining average net assets.

The Board of Trustees of the Trust (including a majority of the
"disinterested Trustees") recently approved continuation of the October 1989
Advisory Agreement through October 1996. The Advisory Agreement provides that it
will continue initially for two years, and from year to year thereafter, with
respect to each Fund, as long as it is approved at least annually both (I) by a
vote of a majority of the outstanding voting securities of such Fund (as defined
in the Investment Company Act of 1940 [the "Act"]) or by the Board of Trustees
of the Trust, and (ii) by a vote of a majority of the Trustees who are not
parties to the Advisory Agreement or "interested persons" of any party thereto,
cast in person at a meeting called for the purpose of voting on such approval.
The Advisory Agreement may be terminated on 60 days' written notice by either
party and will terminate automatically if it is assigned.

The Trust pays the Advisor a separate management fee for each Portfolio in
the Trust. Such fee is based on varying percentages of average net assets. For
the three fiscal periods ended June 30, 1994, June 30, 1995 and June 30, 1996,
the Trust incurred advisory fees (net of expenses paid by the Advisor or
voluntary fee waivers) of $5,021,807, $5,233,507 and $5,216,589, respectively,
for all funds. For the three fiscal periods ended June 30 1994, June 30, 1995
and June 30, 1996, the Fund paid the Advisor no advisory fees (net of expenses
paid by the Advisor or voluntary fee waivers).

TRANSFER AGENCY AND OTHER SERVICES

In addition to the services performed for the Funds and the Trust under the
Advisory Agreement, the Advisor, through its subsidiary USSI, provides transfer
agent and dividend disbursement agent services pursuant to the Transfer Agency
Agreement as described in the Fund's prospectus under "Management of the Fund --
The Investment Advisor." In addition, lockbox and statement printing services
are provided by USSI. The Board of Trustees recently approved the Transfer
Agency and related agreements through October 30, 1996. For the three fiscal
years ended June 30, 1994, 1995 and 1996, the Trust paid USSI total transfer
agency, lockbox and printing fees of $2,313,933, $2,557,846 and $2,707,293,
respectively.

USSI also maintains the books and records of the Trust and of each Fund
of the Trust and calculates their daily net asset value as described in the
Fund's prospectus under "Management of the Fund -- The Investment Advisor."
Total reimbursements and fees for such services for the fiscal years ending June
30, 1994, 1995 and 196 were $354,278, $502,994 and $499,465, respectively.

A & B Mailers, Inc., a wholly-owned corporation of the Advisor,
provides the Trust with certain mail handling services. The charges for such
services have been negotiated by the Audit Committee and A & B Mailers, Inc.
Each service is priced separately.

CERTAIN PURCHASES OF SHARES OF THE FUND

Shares of the Fund are continuously offered by the Trust at their net asset
value next determined after an order is accepted. The methods available for
purchasing shares of the Fund are described in the prospectus. In addition,
shares of the Fund may be purchased using stock, so long as the securities
delivered to the Trust meet the investment objectives and concentration policies
of the Fund, and are otherwise acceptable to the Advisor, which reserves the
right to reject all or any part of the securities offered in exchange for shares
of the Fund. On any such "in kind" purchase, the following conditions will
apply:

(1) the securities offered by the investor in exchange for shares of
the Fund must not be in any way restricted as to resale or
otherwise be illiquid;

(2) securities of the same issuer must already exist in the Fund's
portfolio;

(3) the securities must have a value which is readily ascertainable
(and not established only by/ evaluation procedures) as evidenced
by a listing on the AMEX, the NYSE, or NASDAQ;

(4) any securities so acquired by any Fund shall not comprise over 5%
of that Fund's net assets at the time of such exchange;

(5) no over-the-counter securities will be accepted unless the
principal over-the-counter market is in the United States; and

(6) the securities are acquired for investment and not for resale.

The Trust believes that this ability to purchase shares of the Fund using
securities provides a means by which holders of certain securities may obtain
diversification and continuous professional management of their investments
without the expense of selling those securities in the public market.

An investor who wishes to make an "in kind" purchase should furnish (either
in writing or by telephone) to the Trust a list with a full and exact
description of all of the securities which he or she proposes to deliver. The
Trust will advise him or her as to those securities which it is prepared to
accept and will provide the investor with the necessary forms to be completed
and signed by the investor. The investor should then send the securities, in
proper form for transfer, with the necessary forms to the Trust and certify that
there are no legal or contractual restrictions on the free transfer and sale of
the securities. The securities will be valued as of the close of business on the
day of receipt by the Trust in the same manner as portfolio securities of the
Fund are valued. See the section entitled "How Shares Are Valued" in the
prospectus. The number of shares of the Fund, having a net asset value as of the
close of business on the day of receipt equal to the value of the securities
delivered by the investor, will be issued to the investor, less applicable stock
transfer taxes, if any.

The exchange of securities by the investor pursuant to this offer will
constitute a taxable transaction and may result in a gain or loss for Federal
income tax purposes. Each investor should consult his or her tax adviser to
determine the tax consequences under Federal and state law of making such an "in
kind" purchase.

ADDITIONAL INFORMATION ON REDEMPTIONS

SUSPENSION OF REDEMPTION PRIVILEGES. The Trust may suspend redemption
privileges or postpone the date of payment for up to seven days, but cannot do
so for more than seven days after the redemption order is received except during
any period (1) when the NYSE is closed, other than customary weekend and holiday
closings, or trading on the Exchange is restricted as determined by the
Securities and Exchange Commission ("SEC"), (2) when an emergency exists, as
defined by the SEC, which makes it not reasonably practicable for the Trust to
dispose of securities owned by it or fairly to determine the value of its
assets, or (3) as the SEC may otherwise permit.

CALCULATION OF PERFORMANCE DATA

TOTAL RETURN

The Fund may advertise performance in terms of average annual total return
for 1-, 5- and 10-year periods, or for such lesser periods as the Fund has been
in existence. Average annual total return is computed by finding the average
annual compounded rates of return over the periods that would equate the initial
amount invested to the ending redeemable value, according to the following
formula:

n
P(1 + T) = ERV

Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the 1, 5 or 10
year periods at the end of the year or period.

The calculation assumes all charges are deducted from the initial $1,000
payment and assumes all dividends and distributions by the Fund are reinvested
at the price stated in the prospectus on the reinvestment dates during the
period, and includes all recurring fees that are charged to all shareholder
accounts.

The average annual compounded rate of return for the Fund for the following
years ended as of June 30, 1995 is as follows: one year 24.31%; five years
12.31% and ten years 6.58%.

YIELD

The Fund may advertise performance in terms of a 30-day yield quotation.
The 30-day yield quotation is computed by dividing the net investment income per
share earned during the period by the maximum offering price per share on the
last day of the period, according to the following formula:

A - B
----- 6
YIELD = 2 [ ( + 1) - 1]
CD

Where: A = dividends and interest earned during the period
B = expenses accrued for the period (net of reimbursement)
C = the average daily number of shares outstanding during the
period that were entitled to receive dividends
D = the maximum offering price per share on the last day of
the period

The Fund's 30-day yield for the 30 days ended June 30, 1996 was 1.66%.

NONSTANDARDIZED TOTAL RETURN

The Fund may provide the above described standard total return results for
a period which ends as of not earlier than the most recent calendar quarter end
and which begins either twelve months before or at the time of commencement of
the Fund's operations. In addition, the Fund may provide nonstandardized total
return results for differing periods, such as for the most recent six months.
Such nonstandardized total return is computed as otherwise described under
"Total Return" except that no annualization is made.

DISTRIBUTION RATES

In its sales literature, the Fund may also quote its distribution rate
along with the above described standard total return and yield information. The
distribution rate is calculated by annualizing the latest distribution and
dividing the result by the offering price per share as of the end of the period
to which the distribution relates. A distribution can include gross investment
income from debt obligations purchased at a premium and in effect include a
portion of the premium paid. A distribution can also include gross short-term
capital gains without recognition of any unrealized capital losses. Further, a
distribution can include income from the sale of options by the Fund even though
such option income is not considered investment income under generally accepted
accounting principals.

Because a distribution can include such premiums, capital gain and option
income, the amount of the distribu tion may be susceptible to control by the
Advisor through transactions designed to increase the amount of such items.
Also, because the distribution rate is calculated in part by dividing the latest
distribution by net asset value, the distribution rate will increase as the net
asset value declines. A distribution rate can be greater than the yield rate
calculated as described above.

Effective November 1, 1993 the Fund changed investment objectives and
policies from passive to active management of the portfolio.

EFFECT OF FEE WAIVER AND EXPENSE REIMBURSEMENT

All calculations of performance data in this section reflect the Advisor's
fee waivers or reimbursement of a portion of the Fund's expenses, as the case
may be. See "Management of the Funds" in the prospectus.

TAX STATUS

TAXATION OF THE FUND -- IN GENERAL

As stated in its prospectus, the Fund intends to qualify as a "regulated
investment company" under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). Accordingly, the Fund will not be liable for Federal
income taxes on its taxable net investment income and capital gain net income
that are distributed to shareholders, provided that the Fund distributes at
least 90% of its net investment income and net short-term capital gain for the
taxable year.

To qualify as a regulated investment company, the Fund must, among other
things, (a) derive in each taxable year at least 90% of its gross income from
dividends, interest, payments with respect to securities loans, gains from the
sale or other disposition of stock, securities or foreign currencies, or other
income derived with respect to its business of investing in such stock,
securities or currencies (the "90% test"); (b) derive in each taxable year less
than 30% of its gross income from the sale or other disposition of stock or
securities held less than three months (the "30% test"), and (c) satisfy certain
diversification requirements at the close of each quarter of the Fund's taxable
year.

The Code imposes a non-deductible 4% excise tax on a regulated investment
company that fails to distribute during each calendar year an amount equal to
the sum of (1) at least 98% of its ordinary income for the calendar year, (2) at
least 98% of its capital gain net income for the twelve-month period ending on
October 31 of the calendar year and (3) any portion (not taxable to the Fund) of
the respective balance from the preceding calendar year. The Fund intends to
make such distributions as are necessary to avoid imposition of this excise tax.

TAXATION OF THE FUND'S INVESTMENTS

The Fund's ability to make certain investments may be limited by provisions
of the Code that require inclusion of certain unrealized gains or losses in the
Fund's income for purposes of the 90% test, the 30% test and the distribution
requirements of the Code, and by provisions of the Code that characterize
certain income or loss as ordinary income or loss rather than capital gain or
loss. Such recognition, characterization and timing rules generally apply to
investments in certain forward currency contracts, foreign currencies and debt
securities denominated in foreign currencies.

TAXATION OF THE SHAREHOLDER

Distributions by the Fund will result in a reduction in the fair market
value of the Fund's shares. Should a distribution reduce the fair market value
below a shareholder's cost basis, such distribution nevertheless would be
taxable to the shareholder as ordinary income or long-term capital gain, even
though, from an investment standpoint, it may constitute a partial return of
capital. In particular, investors should be careful to consider the tax
implications of buying shares of the Fund just prior to a distribution. The
price of such shares purchased at that time includes the amount of any
forthcoming distribution. Those investors purchasing the Fund's shares just
prior to a distribution may receive a return of investment upon distribution
which will nevertheless be taxable to them.

A shareholder of the Fund should be aware that a redemption of shares
(including any exchange into another United Services Fund) is a taxable event
and, accordingly, a capital gain or loss may be recognized. If a shareholder of
the Fund receives a distribution taxable as long-term capital gain with respect
to shares of the Fund and redeems or exchanges shares before he has held them
for more than six months, any loss on the redemption or exchange (not otherwise
disallowed as attributable to an exempt-interest dividend) will be treated as
long-term capital loss to the extent of the long-term capital gain recognized.

CUSTODIAN

Bankers Trust Company acts as Custodian for the Fund. Services with respect
to the retirement accounts are provided by Security Trust and Financial Company
of San Antonio, Texas, a wholly-owned subsidiary of the Advisor.

INDEPENDENT ACCOUNTANTS AND LEGAL COUNSEL

Price Waterhouse LLP, One Riverwalk Place, Ste. 900, San Antonio, Texas
78205, serves as the independent accountants for the Trust.

Goodwin, Procter & Hoar LLP, Exchange Place, Boston, Massachusetts 02109,
are legal counsel to the Trust.

FINANCIAL STATEMENTS

The financial statements for year ended June 30, 1996 are hereby
incorporated by reference from the Annual Report to Shareholders of that date
which has been delivered with this Statement of Additional Information [unless
previously provided, in which event the Trust will promptly provide another
copy, free of charge, upon request to: U.S. Global Investors, Inc. , P.O. Box
29467, San Antonio, Texas 78229-0467, 1-800-873-8637 or (210) 308- 1234].October
29, 1996

================================================================================

STATEMENT OF ADDITIONAL INFORMATION

UNITED SERVICES FUNDS

CHINA REGION OPPORTUNITY FUND

(THE "FUND")

This Statement of Additional Information is not a prospectus but should be
read in conjunction with the appropriate Fund prospectus dated November 1, 1996
(the "prospectus"), which may be obtained from U.S. Global Investors, Inc.
(formerly United Services Advisors, Inc.) (the "Advisor"), P.O. Box 29467, San
Antonio, Texas 78229-0467.

The date of this Statement of Additional Information is November 1,
1996.

STATEMENT OF ADDITIONAL INFORMATION

TABLE OF CONTENTS

PAGE

GENERAL INFORMATION...........................................................3

INVESTMENT OBJECTIVES AND POLICIES............................................4
Investment Restrictions..................................................4

SPECIAL RISK CONSIDERATIONS...................................................4

PORTFOLIO TRANSACTIONS........................................................8

MANAGEMENT OF THE FUND........................................................9

PRINCIPAL HOLDERS OF SECURITIES..............................................11

INVESTMENT ADVISORY SERVICES.................................................12

TRANSFER AGENCY AND OTHER SERVICES...........................................13

ADDITIONAL INFORMATION ON REDEMPTIONS........................................13

CALCULATION OF PERFORMANCE DATA..............................................14

TAX STATUS...................................................................14
Taxation of the Fund -- In General......................................14
Taxation of the Fund's Investments......................................15
Taxation of the Shareholder.............................................15

CUSTODIAN....................................................................15

INDEPENDENT ACCOUNTANT ......................................................16

FINANCIAL STATEMENTS.........................................................16

GENERAL INFORMATION

United Services Funds (the "Trust") is an open-end management investment
company and is a voluntary association of the type known as a "business trust"
organized under the laws of the Commonwealth of Massachusetts. The China Region
Opportunity Fund (hereinafter sometimes referred to as the "Fund") is one of
several series of the Trust, each of which represents a separate, diversified
portfolio of securities (collectively referred to herein as the "Portfolios" and
individually as a "Portfolio").

The assets received by the Trust from the issue or sale of shares of each
of the funds, and all income, earnings, profits and proceeds thereof, subject
only to the rights of creditors, are separately allocated to such fund. They
constitute the underlying assets of each fund, are required to be segregated on
the books of accounts, and are to be charged with the expenses with respect to
such fund. Any general expenses of the Trust, not readily identifiable as
belonging to a particular fund, shall be allocated by or under the direction of
the Board of Trustees in such manner as the Board determines to be fair and
equitable.

Each share of each of the funds represents an equal proportionate interest
in that fund with each other share and is entitled to such dividends and
distributions, out of the income belonging to that fund, as are declared by the
Board. Upon liquidation of the Trust, shareholders of each fund are entitled to
share pro rata in the net assets belonging to the fund available for
distribution.

On any matter submitted to shareholders, the holder of each share is
entitled to one vote per share (with proportionate voting for fractional
shares). On matters affecting any individual fund, a separate vote of that fund
would be required. Shareholders of any fund are not entitled to vote on any
matter which does not affect their fund but which requires a separate vote of
another fund.

Shares have no preemptive or subscription rights and are fully
transferable. There are no conversion rights.

INVESTMENT OBJECTIVES AND POLICIES

The following information supplements the discussion of the Fund's
investment objectives and policies discussed in the Fund's prospectus.

INVESTMENT RESTRICTIONS

The Fund will not change any of the following investment restrictions,
without the affirmative vote of a majority of the outstanding voting securities
of the Fund, which, as used herein, means the lesser of (1) 67% of the Fund's
outstanding shares present at a meeting at which more than 50% of the
outstanding shares of the Fund are represented either in person or by proxy, or
(2) more than 50% of the Fund's outstanding shares.

The Fund may not:

(1) Issue senior securities.
(2) Borrow money, except that the Fund may borrow not in excess of
5% of its total assets from banks as a temporary measure for
extraordinary purposes and may borrow up to 33 1/3% of the
amount of its total assets (reduced by the amount of all
liabilities and indebtedness other than such borrowing) when
deemed desirable or appropriate to effect redemptions.
However, the Fund may not purchase additional securities while
borrowing exceeds 5% of the total assets of the Fund.
(3) Underwrite the securities of other issuers.
(4) Invest in real estate.
(5) Engage in the purchase or sale of commodities or commodity
futures contracts, except that the Fund may invest in futures
contracts and options thereon.
(6) Lend its assets, except that the Fund may purchase money
market debt obligations and repurchase agreements secured by
money market obligations, and except for the purchase or
acquisition of bonds, debentures or other debt securities of a
type customarily purchased by institutional investors and
except that the Fund may lend portfolio securities with an
aggregate market value of not more than one-third of the
Fund's total net assets. (Accounts receivable for shares
purchased by telephone shall not be deemed loans.)
(7) Purchase any security on margin, except that it may obtain
such short-term credits as are necessary for clearance of
securities transactions.
(8) Make short sales.
(9) Invest more than 15% of net assets in illiquid securities,
including securities which are subject to legal or contractual
restrictions on resale.
(10) Invest more than 25% of its total assets in securities of
companies principally engaged in any one industry (other than
obligations issued or guaranteed by the U.S. Government or any
of its agencies or instrumentalities). For purposes of this
restriction, a foreign government is deemed to be an
"industry."
(11) (a) Invest more than 5% of the value of its total assets in
securities of any one issuer, except such limitation shall not
apply to obligations issued or guaranteed by the United States
Government, its agencies or instrumentalities, or (b) acquire
more than 10% of the voting securities of any one issuer as
discussed in the prospectus, such limitations apply to only
75% of the value of the Fund's total assets.

SPECIAL RISK CONSIDERATIONS

The following discussion of some of the most significant risks associated
with an investment in the Fund supplements the discussion in the prospectus.

FOREIGN INVESTMENTS: 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 United States 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 of the removal
of funds or other assets of the Fund, political or financial instability or
diplomatic and other developments which could affect such investment. Further,
economies of particular countries or areas of the world may differ favorably or
unfavorably from the economy of the United States. It is anticipated that in
most cases the best available market for foreign securities will be on exchanges
or in over-the-counter markets located outside of the United States. Foreign
stock markets, while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some foreign issuers
(particularly those located in developing countries) may be less liquid and more
volatile than securities of comparable United States companies. In addition,
foreign brokerage commissions are generally higher than commissions on
securities traded in the United States and may be non-negotiable. In general,
there is less overall governmental supervision and regulation of foreign
securities markets, broker-dealers and issuers than in the United States.

CHINA'S LEGAL SYSTEM: China does not have a comprehensive system of laws,
although substantial changes have occurred in this regard in recent years. The
corporate form of organization has only recently been permitted in China. Laws
regarding fiduciary duties of officers and directors and the protection of
shareholders are not well developed. China's judiciary is relatively
inexperienced in enforcing the laws that exist, leading to a higher than usual
degree of uncertainty as to the outcome of any litigation.

TAIWAN INVESTMENT LIMITATIONS: As of the date of this registration
statement, Taiwan limits a foreign institution's investments in Taiwan to no
more than $ 400 million.

FUTURES CONTRACTS: The Fund may sell futures contracts to hedge against a
decline in the market price of securities which it owns or to defend the
portfolio against currency fluctuations. When the Fund establishes a short
position by selling a futures contract, the Fund will be required to deposit
with the broker an amount of cash or U.S. Treasury bills equal to approximately
5% of the contract amount ("initial margin"). The nature of initial margin in
futures transactions is different from that of margin in securities transactions
in that futures contract margin does not involve the borrowing of funds by the
customer to finance the transactions. Rather, initial margin is in the nature of
a performance bond or good faith deposit on the contract which is returned to
the Fund upon termination of the futures contract assuming all the Fund's
contractual obligations have been satisfied. Subsequent payments, called
variation margin, to and from the broker will be made on a daily basis as the
price of the underlying currency or stock index fluctuates making a short
position in the futures contract more or less valuable, a process known as
"marking-to-market." For example, when the Fund has sold a currency futures
contract and the prices of the stocks included in the underlying currency has
fallen, that position will have increased in value and the Fund will receive
from the broker a variation margin payment equal to that increase in value.
Conversely, when the Fund has sold a currency futures contract and the prices of
the underlying currency has risen, the position would be less valuable and the
Fund would be required to make a variation margin payment to the broker. At any
time prior to expiration of the futures contract, the Fund may elect to close
the position by taking an opposite position, which will operate to terminate the
Fund's position in the futures contract. A final determination of variation
margin is then made, additional cash is required to be paid by or released to
the Fund, and it realizes a loss or a gain.

There is a risk that futures price movements will not correlate perfectly
with movements in the value of the underlying stock index. For a number of
reasons the price of the stock index future may move more than or less than the
price of the securities that make up the index. First, all participants in the
futures market are subject to margin deposit and maintenance requirements.
Rather than meeting additional margin deposit requirements, investors may close
futures contracts through offsetting transactions which could distort the normal
relationship between the index and futures markets. Secondly, from the point of
view of speculators, the deposit requirements in the futures market are less
onerous than margin requirements in the stock market. Therefore, increased
participation by speculators in the futures market may also cause temporary
price distortions.

there is no assurance that a liquid secondary market on an exchange or board of
trade will exist for any particular contract or at any particular time. If there
is not a liquid secondary market at a particular time, it may not be possible to
close a futures position at such time, and in the event of adverse price
movements, the Fund would continue to be required to make daily cash payments of
variation margin.

OPTIONS: The Fund may sell call options or purchase put options on futures
contracts to hedge against a decline in the market price of securities which it
owns or to defend the portfolio against currency fluctuations. Options on
futures contracts differ from options on individual securities in that the
exercise of an option on a futures contract does not involve delivery of an
actual underlying security. Options on futures contracts are settled in cash
only. The purchaser of an option receives a cash settlement amount and the
writer of an option is required, in return for the premium received, to make
delivery of a certain amount if the option is exercised. A position in an option
on a futures contract may be offset by either the purchaser or writer by
entering into a closing transaction, or the purchaser may terminate the option
by exercising it or allowing it to expire.

The risks associated with the purchase and sale of options on futures
contracts are generally the same as those relating to options on individual
securities. However, the value of an option on a futures contract depends
primarily on movements in the value of the currency or the stock index
underlying the futures contract rather than in the price of a single security.
Accordingly, the Fund will realize a gain or loss from purchasing or writing an
option on a futures contract as a result of movements in the related currency or
in the stock market generally, rather than changes in the price for a particular
security. Therefore, successful use of options on futures contracts by the Fund
will depend on the Advisor's ability to predict movements in the direction of
the currency or stock market underlying the futures contract. The ability to
predict these movements requires different skills and techniques than predicting
changes in the value of individual securities.

Because index options are futures contracts settled in cash, the Fund
cannot be assured of covering its potential settlement obligations under call
options it writes on futures contracts by acquiring and holding the underlying
securities. Unless the Fund has cash on hand that is sufficient to cover the
cash settlement amount, it would be required to sell securities owned in order
to satisfy the exercise of the option.

As a non-fundamental policy the Fund will not invest more than 5% of its
total net assets in options.

SEGREGATED ASSETS AND COVERED POSITIONS

When purchasing a stock index futures contract, selling an uncovered call
option, or purchasing securities on a when-issued or delayed delivery basis, the
Fund will restrict cash, which may be invested in repurchase obligations) or
liquid securities. When purchasing a stock index futures contract, the amount of
restricted cash or liquid securities, when added to the amount deposited with
the broker as margin, will be at least equal to the market value of the futures
contract and not less than the market price at which the futures contract was
established. When selling an uncovered call option, the amount of restricted
cash or liquid securities, when added to the amount deposited with the broker as
margin, will be at least equal to the value of securities underlying the call
option and not less than the strike price of the call option. When purchasing
securities on a when-issued or delayed delivery basis, the amount of restricted
cash or liquid securities will be at least equal to the Fund's when-issued or
delayed delivery commitments.

The restricted cash or liquid securities will either be identified as being
restricted in the Fund's accounting records or physically segregated in a
separate account at Bankers Trust Company, the Fund's custodian. For the purpose
of determining the adequacy of the liquid securities which have been restricted,
the securities will be valued at market or fair value. If the market or fair
value of such securities declines, additional cash or liquid securities will be
restricted on a daily basis so that the value of the restricted cash or liquid
securities, when added to the amount deposited with the broker as margin, equals
the amount of such commitments by the Fund.

Fund assets need not be segregated if the Fund "covers" the futures
contract or call option sold. For example, the Fund could cover a futures or
forward contract which it has sold short by owning the securities or currency
underlying the contract. The Fund may also cover this position by holding a call
option permitting the Fund to purchase the same futures or forward contract at a
price no higher than the price at which the sell position was established.

The Fund could cover a call option which it has sold by holding the same
currency or security (or, in the case of a stock index, a portfolio of stock
substantially replicating the movement of the index) underlying the call option.
The Fund may also cover by holding a separate call option of the same security
or stock index with a strike price no higher than the strike price of the call
option sold by the Fund. The Fund could cover a call option which it has sold on
a futures contract by entering into a long position in the same futures contract
at a price no higher than the strike price of the call option or by owning the
securities or currency underlying the futures contract. The Fund could also
cover a call option which it has sold by holding a separate call option
permitting it to purchase the same futures contract at a price no higher than
the strike price of the call option sold by the Fund.

FOREIGN CURRENCY TRANSACTIONS: Investments in foreign companies usually
involve use of currencies of foreign countries. The Fund also may hold cash and
cash-equivalent investments in foreign currencies. The value of the Fund's
assets as measured in U.S. dollars will be affected by changes in currency
exchange rates and exchange control regulations. The Fund may, as appropriate
markets are developed, but is not required to, engage in currency transactions
including cash market purchases at the spot rates, forward currency contracts,
exchange listed currency futures, exchange listed and over-the-counter options
on currencies, and currency swaps for two purposes. One purpose is to settle
investment transactions. The other purpose is to try to minimize currency risks.

All currency transactions involve a cost. Although foreign exchange dealers
generally do not charge a fee, they do realize a profit based on the difference
(spread) between the prices at which they are buying and selling various
currencies. Commissions are paid on futures options and swaps transactions, and
options require the payment of a premium to the seller.

A forward contract involves a privately negotiated obligation to purchase
or sell at a price set at the time of the contract with delivery of the currency
generally required at an established future date. A futures contract is a
standardized contract for delivery of foreign currency traded on an organized
exchange that is generally settled in cash. An option gives the right to enter
into a contract. A swap is an agreement based on a nominal amount of money to
exchange the differences between currencies.

The Fund will generally use spot rates or forward contracts to settle a
security transaction or handle dividend and interest collection. When the Fund
enters into a contract for the purchase or sale of a security denominated in a
foreign currency or has been notified of a dividend or interest payment, it may
desire to lock in the price of the security or the amount of the payment in
dollars. By entering into a spot rate or forward contract, the Fund will be able
to protect itself against a possible loss resulting from an adverse change in
the relationship between different currencies from the date the security is
purchased or sold to the date on which payment is made or received or when the
dividend or interest is actually received.

The Fund may use forward or futures contracts, options, or swaps when the
investment manager believes the currency of a particular foreign country may
suffer a substantial decline against another currency. For example, it may enter
into a currency transaction to sell, for a fixed amount of dollars, the amount
of foreign currency approximating the value of some or all of the Fund's
portfolio securities denominated in such foreign currency. The precise matching
of the securities transactions and the value of securities involved generally
will not be possible. The projection of short-term currency market movements is
extremely difficult and successful execution of a short-term strategy is highly
uncertain.

The Fund may cross-hedge currencies by entering into transactions to
purchase or sell one or more currencies that are expected to decline in value
relative to other currencies in which the Fund has (or expects to have)
portfolio exposure.

The Fund may engage in proxy hedging. Proxy hedging is often used when the
currency to which a fund's portfolio is exposed is difficult to hedge. Proxy
hedging entails entering into a forward contract to sell a currency whose
changes in value are generally considered to be linked to a currency or
currencies in which some or all of the Fund's portfolio securities are or are
expected to be denominated, and simultaneously buy U.S. dollars. The amount of
the contract would not exceed the value of the Fund's securities denominated in
linked securities.

The Fund will not enter into a currency transaction or maintain an exposure
as a result of the transaction when it would obligate the Fund to deliver an
amount of foreign currency in excess of the value of the Fund's portfolio
securities or other assets denominated in that currency. The Fund will designate
cash or securities in an amount equal to the value of the Fund's total assets
committed to consummating the transaction. If the value of the securities
declines, additional cash or securities will be designated on a daily basis so
that the value of the cash or securities will equal the amount of the Fund's
commitment.

On the settlement date of the currency transaction, the Fund may either
sell portfolio securities and make delivery of the foreign currency or retain
the securities and terminate its contractual obligation to deliver the foreign
currency by purchasing an offsetting position. It is impossible to forecast what
the market value of portfolio securities will be on the settlement date of a
currency transaction. Accordingly, it may be necessary for the Fund to buy
additional foreign currency on the spot market (and bear the expense of such
purchase) if the market value of the securities are less than the amount of
foreign currency the Fund is obligated to deliver and a decision is made to sell
the securities and make delivery of the foreign currency. Conversely, it may be
necessary to sell on the spot market some of the foreign currency received on
the sale of the portfolio securities if its market value exceeds the amount of
foreign currency the Fund is obligated to deliver. The Fund will realize gains
or losses on currency transactions.

The Fund may also buy put options and write covered call options on foreign
currencies to try to minimize currency risks. The risk of buying an option is
the loss of premium. The risk of selling (writing) an option is that the
currency option will minimize the currency risk only up to the amount of the
premium, and then only if rates move in the expected direction. If this does not
occur, the option may be exercised and the Fund would be required to buy the
underlying currency at the loss which may not be offset by the amount of the
premium. Through the writing of options on foreign currencies, the Fund may also
be required to forego all or a portion of the benefits which might otherwise
have been obtained from favorable movements on exchange rates. All options
written on foreign currencies will be covered; that is, the Fund will own
securities denominated in the foreign currency, hold cash equal to its
obligations or have contracts that offset the options.

The Fund may construct a synthetic foreign currency investment, sometimes
called a structured note, by (a) purchasing a money market instrument which is a
note denominated in one currency, generally U.S. dollars, and (b) concurrently
entering into a forward contract to deliver a corresponding amount of that
currency in exchange for a different currency on a future date and at a
specified rate of exchange. Because the availability of a variety of highly
liquid short-term U.S. dollar market instruments, or notes, a synthetic money
market position utilizing such U.S. dollar instruments may offer greater
liquidity than direct investment in foreign currency.

PORTFOLIO TRANSACTIONS

The Advisory Agreement between the Trust and the Advisor requires (and the
Sub-Advisory Agreement imposes the same requirements upon the Sub-Adviser, who
will direct the execution of portfolio transactions) that the Advisor, in
executing portfolio transactions and selecting brokers or dealers, seeks the
best overall terms available. In assessing the terms of a transaction,
consideration may be given to various factors, including the breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer (for a specified transaction and on
a continuing basis), the reasonableness of the commission, if any, and the
brokerage and research services provided to the Trust and/or other accounts over
which the Advisor or an affiliate of the Advisor exercises investment
discretion. Under the Advisory Agreement, the Advisor is permitted, in certain
circumstances, to pay a higher commission than might otherwise be obtained in
order to acquire brokerage and research services. The Advisor must determine in
good faith, however, that such commission is reasonable in relation to the value
of the

brokerage and research services provided -- viewed in terms of that particular
transaction or in terms of all the accounts over which investment discretion is
exercised. In such case, the Board of Trustees will review the commissions paid
by each Fund of the Trust to determine if the commissions paid over
representative periods of time were reasonable in relation to the benefits
obtained. The advisory fee of the Advisor would not be reduced by reason of its
receipt of such brokerage and research services. To the extent that research
services of value are provided by broker-dealers through or with whom the Trust
places portfolio transactions, the Advisor may be relieved of expenses which it
might otherwise bear.

The Trust may, in some instances, purchase securities that are not listed
on a national securities exchange or quoted on NASDAQ, but rather are traded in
the over-the-counter market. When the transactions are executed in the
over-the-counter market, it is intended generally to seek first to deal with the
primary market makers. However, the services of brokers will be utilized if it
is anticipated that the best overall terms can thereby be obtained. The Fund
paid a total of $78,918 in brokerage fees for the year ended June 30, 1996.

MANAGEMENT OF THE FUND

William A. Fagan, Jr. Chairman of Chairman of the Board of
P.O. Box 17903 the Board of Trustees since January 1, 1989.
San Antonio, TX Trustees Business consultant since 1976.

PRINCIPAL HOLDERS OF SECURITIES

As of August 26, 1996, the officers and trustees of the Fund, as a
group, owned less then 1% of the outstanding shares of the Fund. The Fund is
aware of the following person who owned of record, or beneficially, more than 5%
of the outstanding shares of the Fund at August 26, 1996:

NAME AND ADDRESS TYPE OF
OF OWNER % OWNED OWNERSHIP

Charles Schwab & Co., Inc. 27.43% Record (1)
San Francisco, CA 94104-4175

- ----------
1 Charles Schwab & Co., Inc., a broker-dealer, has advised that no individual
client owns more than 5% of the Fund.

INVESTMENT ADVISORY SERVICES

The investment adviser to the Funds is U.S. Global Investors, Inc.
(formerly United Services Advisors, Inc.) (the "Advisor"), a Texas corporation,
pursuant to an Advisory Agreement dated October 27, 1989. Frank E. Holmes, Chief
Executive Officer and Director of the Advisor, as well as a Trustee, President
and Chief Executive Officer of the Trust, beneficially owns more than 25% of the
outstanding voting stock of the Advisor and may be deemed to be a controlling
person of the Advisor.

In addition to the services described in the Fund's prospectus, the Advisor
will provide the Trust with office space, facilities and simple business
equipment, and will provide the services of executive and clerical personnel for
administering the affairs of the Trust. It will compensate all personnel,
officers and Trustees of the Trust if such persons are employees of the Advisor
or its affiliates, except that the Trust will reimburse the Advisor for a
portion of the compensation of the Advisor's employees who perform certain legal
services for the Trust, including state securities law regulatory compliance
work, based upon the time spent on such matters for the Trust. The Advisor pays
the expense of printing and mailing prospectuses and sales materials used for
promotional purposes.

The Trust pays all other expenses for its operations and activities. Each
of the funds of the Trust pays its allocable portion of these expenses. The
expenses borne by the Trust include the charges and expenses of any transfer
agents and dividend disbursing agents, custodian fees, legal and auditors'
expenses, bookkeeping and accounting expenses, brokerage commissions for
portfolio transactions, taxes, if any, the advisory fee, extraordinary expenses,
expenses of issuing and redeeming shares, expenses of shareholder and trustee
meetings, the expenses of preparing, printing and mailing proxy statements,
reports and other communications to shareholders, expenses of registering and
qualifying shares for sale, fees of Trustees who are not "interested persons" of
the Advisor, expenses of attendance by officers and Trustees at professional
meetings of the Investment Company Institute, the No-Load Mutual Fund
Association or similar organizations, and membership or organizational dues of
such organizations, expenses of preparing and setting in type prospectuses and
periodic reports and expenses of mailing them to current shareholders, fidelity
bond premiums, cost of maintaining the books and records of the Trust, and any
other charges and fees not specifically enumerated.

For the services and facilities provided to the Fund by the Advisor, the
Fund may pay to the Advisor a monthly fee at the rate of 1/12 of 1.25% based
upon the monthly average net assets of the Fund for such calendar month. The
Advisor has voluntarily agreed to bear certain Fund expenses. See the prospectus
section - "The Investment Advisor."

The securities laws of certain states in which shares of the Trust may,
from time to time, be qualified for sale require that the investment adviser
reimburse the Trust for any excess of the Fund's expenses over prescribed
percentages of the Fund's average net assets. Thus, the Advisor's and
Sub-Advisor's compensation under the agreements is subject to reduction in any
fiscal year to the extent that total expenses of the Fund for such year
(including an investment adviser's compensation but exclusive of taxes,
brokerage commissions, extraordinary expenses, and other permissible expenses)
exceed the most restrictive applicable expense limitation prescribed by any
state in which the Trust's shares are qualified for sale. The Advisor may obtain
waivers of these state expense limitations from time to

time. Such limitation is currently 2.5% of the first $30 million of average net
assets, 2% of the next $70 million of average net assets and 1.5% of the
remaining average net assets.

The Board of Trustees of the Trust (including a majority of the
"disinterested Trustees") recently approved continuation of the Advisory
Agreement through October 1996. The Advisory Agreement provides that it will
continue initially for two years, and from year to year thereafter, with respect
to each Fund, as long as it is approved at least annually both (I) by a vote of
a majority of the outstanding voting securities of such Fund (as defined in the
Investment Company Act of 1940) or by the Board of Trustees of the Trust, and
(ii) by a vote of a majority of the Trustees who are not parties to the Advisory
Agreement or "interested persons" of any party thereto, cast in person at a
meeting called for the purpose of voting on such approval. The Advisory
Agreement may be terminated on 60 days' written notice by either party and will
terminate automatically if it is assigned.

TRANSFER AGENCY AND OTHER SERVICES

In addition to the services performed for the funds and the Trust under the
Advisory Agreement, the Advisor, through its subsidiary USSI, provides transfer
agent and dividend disbursement agent services pursuant to the Transfer Agency
Agreement as described in the Fund's prospectus under "Management of the Fund --
The Investment Advisor." In addition, lockbox and statement printing services
are provided by USSI. The Board of Trustees approved the Transfer Agency and
related agreements through October 31, 1996. For the three fiscal years ended
June 30, 1994, 1995, and 1996, the Trust paid USSI total transfer agency,
lockbox and printing fees of $2,313,933 $2,557,846, and $2,707,293 respectively.

USSI also maintains the books and records of the Trust and of each Fund of
the Trust and calculates their daily net asset value as described in the Fund's
prospectus under "Management of the Fund -- The Investment Advisor." Total
reimbursements and fees for such services for the fiscal years ending June 30,
1994, 1995, and 1996 were $354,278, $502,944, and $499,465 respectively.

A & B Mailers, Inc., a wholly-owned subsidiary of the Advisor, provides the
Trust with certain mail handling services. The charges for such services are
compared to bids from competitive services on a periodic basis by the Board of
Trustees. Each service is priced separately.

ADDITIONAL INFORMATION ON REDEMPTIONS

SUSPENSION OF REDEMPTION PRIVILEGES: The Trust may suspend redemption
privileges or postpone the date of payment for up to seven days, but cannot do
so for more than seven days after the redemption order is received except during
any period (1) when the NYSE is closed, other than customary weekend and holiday
closings, or trading on the Exchange is restricted as determined by the
Securities and Exchange Commission ("SEC"), (2) when an emergency exists, as
defined by the SEC, which makes it not reasonably practicable for the Trust to
dispose of securities owned by it or fairly to determine the value of its
assets, or (3) as the SEC may otherwise permit.

CALCULATION OF PERFORMANCE DATA

TOTAL RETURN

n
P(1 + T) = ERV

Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the 1-, 5- or 10-
year periods at the end of the year or period.

The rate of return for the Fund for the year ended June 30, 1996 was
(2.07%).

NONSTANDARDIZED TOTAL RETURN

EFFECT OF FEE WAIVER AND EXPENSE REIMBURSEMENT

All calculations of performance data in this section reflect the Advisor's
fee waivers or reimbursement of a portion of the Fund's expenses, as the case
may be. See "Management Of The Fund(s)" in the prospectus.

TAX STATUS

TAXATION OF THE FUND -- IN GENERAL

gross income from the sale or other disposition of stock or securities held less
than three months (the "30% test"), and (c) satisfy certain diversification
requirements at the close of each quarter of the Fund's taxable year.

The Code imposes a non-deductible 4% excise tax on a regulated investment
company that fails to distribute during each calendar year an amount equal to
the sum of (1) at least 98% of its ordinary income for the calendar year, (2) at
least 98% of its capital gain net income for the twelve-month period ending on
October 31 of the calendar year and (3) any portion of the respective balance of
ordinary income or capital gain net income of the prior year that was not
previously distributed. The Fund intends to make such distributions as are
necessary to avoid imposition of this excise tax.

TAXATION OF THE FUND'S INVESTMENTS

TAXATION OF THE SHAREHOLDER

OTHER TAX CONSIDERATIONS

Distributions to shareholders may be subject to additional state, local and
non-U.S. taxes, depending on each shareholder's particular tax situation.
Shareholders subject to tax in certain states may be exempt from state income
tax on distributions made by the Fund to the extent such distributions are
derived from interest on direct obligations of the United States Government.
Shareholders are advised to consult their own tax advisers with respect to the
particular tax consequences to them of an investment in shares of the Fund.

CUSTODIAN

Bankers Trust Company acts as custodian for the Fund and, pursuant to
sub-custodian agreements, the Fund will maintain its foreign securities and cash
in the custody of certain eligible non-United States banks and securities
depositories. Services with respect to the retirement accounts will be provided
by Security Trust and Financial Company of San Antonio, Texas, a wholly-owned
subsidiary of the Advisor.

INDEPENDENT ACCOUNTANT

Price Waterhouse LLP, One Riverwalk Place, Ste. 900, San Antonio, Texas
78205 serves as the independent accountants for the Trust.

FINANCIAL STATEMENTS

The Fund was established on October 20, 1993. The audited financial
statement for the year ended June 30, 1995 is herein incorporated by reference
from the Annual Report to Shareholders of that date which has been delivered
with this Statement of Additional Information [unless previously provided, in
which event the Trust will promptly provide another copy, free of charge, upon
request to: U.S. Global Investors, Inc., P.O. Box 29467, San Antonio, Texas
78229-0467, 1-800-873-8637 or (210) 308-1234].

================================================================================

STATEMENT OF ADDITIONAL INFORMATION

UNITED SERVICES FUNDS

U.S. GOLD SHARES FUND ("GOLD SHARES FUND")

U.S. GLOBAL RESOURCES FUND ("GLOBAL RESOURCES FUND")

U.S. WORLD GOLD FUND ("WORLD GOLD FUND")

U.S. TREASURY SECURITIES CASH FUND ("TREASURY SECURITIES CASH FUND")

U.S. INCOME FUND ("INCOME FUND")

U.S. TAX FREE FUND ("TAX FREE FUND")

U.S. GOVERNMENT SECURITIES SAVINGS FUND ("GOVERNMENT SECURITIES SAVINGS FUND")

U.S. REAL ESTATE FUND ("REAL ESTATE FUND")

UNITED SERVICES INTERMEDIATE TREASURY FUND ("INTERMEDIATE TREASURY FUND")

UNITED SERVICES NEAR-TERM TAX FREE FUND ("NEAR-TERM TAX FREE FUND")

(THE "FUNDS")

The date of this Statement of Additional Information is November 1, 1996.

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Statement of Additional Information
Page 1

STATEMENT OF ADDITIONAL INFORMATION

TABLE OF CONTENTS

PAGE

GENERAL INFORMATION..........................................................3

INVESTMENT OBJECTIVES AND POLICIES...........................................4
Investment Restrictions.............................................4

SPECIAL RISK CONSIDERATIONS.................................................11

PORTFOLIO TRANSACTIONS......................................................16

MANAGEMENT OF THE FUNDS.....................................................17

PRINCIPAL HOLDERS OF SECURITIES.............................................20

INVESTMENT ADVISORY SERVICES................................................20

TRANSFER AGENCY AND OTHER SERVICES..........................................23

CERTAIN PURCHASES OF SHARES OF THE FUNDS....................................23

ADDITIONAL INFORMATION ON REDEMPTIONS.......................................24

CALCULATION OF PERFORMANCE DATA.............................................25

TAX STATUS..................................................................28
Taxation of the Funds -- In General................................28
Taxation of the Funds' Investments.................................28
Taxation of the Shareholder........................................29

CUSTODIAN...................................................................30

INDEPENDENT ACCOUNTANTS AND LEGAL COUNSEL...................................30

INFORMATION ABOUT SECURITIES RATINGS........................................30

FINANCIAL STATEMENTS........................................................31

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Statement of Additional Information
Page 2

GENERAL INFORMATION

United Services Funds (the "Trust") is an open-end management investment
company and is a voluntary association of the type known as a "business trust"
organized under the laws of the Commonwealth of Massachusetts. There are
numerous series within the Trust, each of which represents a separate
diversified portfolio of securities (collectively referred to herein as the
"Portfolios" or "Funds" and individually as a "Portfolio" or "Fund").

On any matter submitted to shareholders, the holder of each share is
entitled to one vote per share (with proportionate voting for fractional
shares). On matters affecting any individual Fund, a separate vote of that Fund
would be required. Shareholders of any Fund are not entitled to vote on any
matter which does not affect their Fund but which requires a separate vote of
another Fund.

Shares have no preemptive or subscription rights and are fully
transferable. There are no conversion rights.

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Statement of Additional Information
Page 3

INVESTMENT OBJECTIVES AND POLICIES

The following information supplements the discussion of the Funds'
investment objectives and policies discussed in the Trust's prospectuses.

INVESTMENT RESTRICTIONS

None of the Funds will change its investment objectives as set forth in the
prospectus, and none of the Funds will change any of the following investment
restrictions, without, in either case, the affirmative vote of a majority of the
outstanding voting securities of that Fund, which, as used herein, means the
lesser of (1) 67% of that Fund's outstanding shares present at a meeting at
which more than 50% of the outstanding shares of that Fund are represented
either in person or by proxy, or (2) more than 50% of that Fund's outstanding
shares.

A Fund may not:

(1) Issue senior securities.

(2) Borrow money, except that (i) a Fund may borrow not in excess of 5% of
the total assets of that Fund from banks as a temporary measure for
extraordinary purposes, and (ii) the Intermediate Treasury Fund, Gold
Shares Fund, and World Gold Fund may borrow money only for temporary
or emergency purposes (not for leveraging or investment), provided
that the amount of such borrowings may not exceed 33 1/3% of the
Intermediate Treasury, Gold Shares, and World Gold Fund total assets
(including the amount borrowed) less liabilities (other than
borrowings).

(3) Underwrite the securities of other issuers, except for the GOLD SHARES
FUND, GLOBAL RESOURCES FUND and WORLD GOLD FUND, to the extent that
these Funds may be deemed to act as an underwriter in certain cases
when disposing of restricted securities.

(4) Invest in real estate, except as may be represented by securities for
which there is an established market or, with respect to the GOLD
SHARES FUND, when such interests are an incidental part of assets
acquired through merger or consolidation, and except that this
restriction shall not prevent the REAL ESTATE FUND from making any
investment which is otherwise consistent with its investment
objectives and policies.

(5) Engage in the purchase or sale of commodities or commodity futures
contracts, except that the Gold Shares Fund and World Gold Fund may
(i) invest not more than 10% of its total net assets in gold and gold
bullion and (ii) invest in futures contracts, options on futures
contracts and similar instruments.

(6) Lend its assets, except that any Fund may purchase money market debt
obligations and repurchase agreements secured by money market
obligations, and except for the purchase or acquisition of bonds,
debentures or other debt securities of a type customarily purchased by
institutional investors and except that any Fund may lend portfolio
securities with an aggregate market value of not more than one-third
of such Fund's total net assets. (Accounts receivable for shares
purchased by telephone shall not be deemed loans.) The NEAR-TERM TAX
FREE FUND may not lend its assets, except that purchases of debt
securities in furtherance of the Fund's investment objectives will not
constitute lending of assets.

(7) Purchase any security on margin, except that it may obtain such
short-term credits as are necessary for clearance of securities
transactions.

(8) Make short sales.

(9) Invest in securities which are subject to legal or contractual
restrictions on resale ("restricted securities"), except that the GOLD
SHARES FUND, the GLOBAL RESOURCES FUND and the WORLD GOLD FUND may
invest up to 10% of the value of their respective net assets in such
restricted securities. Any such investments by the GOLD SHARES FUND
will be in companies that have been in existence for two consecutive
years or more,

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Statement of Additional Information
Page 4

including the operation of predecessors, and that have not defaulted
in the payment of any debt within such two years. (This 10%
restriction includes the 2% restriction on warrants described in (12)
below.)

(10) Invest more than 25% of its total assets in securities of companies
principally engaged in any one industry, except that the GOLD SHARES
FUND will invest primarily in securities of companies involved in the
exploration for, mining of, processing of or dealing in gold; the
GLOBAL RESOURCES FUND and the WORLD GOLD FUND will invest at least 25%
of the value of their respective total assets in securities of
companies principally engaged in natural resource operations; the
TREASURY SECURITIES CASH FUND will invest exclusively in short-term
debt obligations of the United States Treasury which are protected by
the full faith and credit of the United States Government, and
including repurchase agreements collateralized by such Government
obligations; the INTERMEDIATE TREASURY FUND will invest exclusively in
debt obligations of the United States Government which are protected
by the full faith and credit of the United States Government and
including repurchase agreements collateralized by such government
obligations; the GOVERNMENT SECURITIES SAVINGS FUND will invest
exclusively in short-term obligations of the United States Government
and its agencies and instrumentalities; the TAX FREE FUND and the
NEAR-TERM TAX FREE FUND may invest more than 25% of its total assets
in general obligation bonds or in securities issued by states or
municipalities in connection with the financing of projects with
similar characteristics, such as hospital revenue bonds, housing
revenue bonds or electric power project bonds; and the REAL ESTATE
FUND will invest at least 65% of its assets in securities of companies
engaged principally in or related to the real estate industry. The TAX
FREE FUND and the NEAR-TERM TAX FREE FUND will consider industrial
revenue bonds where payment of principal and interest is the ultimate
responsibility of companies within the same industry as securities
from one industry. For purposes of determining industry concentration,
each Fund relies on the Standard Industrial Classification as compiled
by Standard & Poor's Compustat Services, Inc., as in effect from time
to time.

(11) (a) Invest more than 5% of the value of its total assets in securities
of any one issuer, except such limitation shall not apply to
obligations issued or guaranteed by the United States Government, its
agencies or instrumentalities, or (b) acquire more than 10% of the
voting securities of any one issuer. (These limitations as to the GOLD
SHARES FUND and the NEAR-TERM TAX FREE FUND apply to only 75% of the
value of their respective gross assets.)

(12) The GOLD SHARES FUND may not invest more than 2% of the value of its
net assets in marketable warrants.

If a percentage restriction is adhered to at the time of investment, a
later increase or decrease in percentage resulting from a change in values of
portfolio securities or amount of net assets, will not be considered a violation
of any of the foregoing restrictions.

The following discussion of the investment objectives, policies and risks
associated with each particular Fund supplements the discussions in the
prospectuses.

GOLD SHARES FUND

The Gold Shares Fund intends to concentrate its investments in common
stocks of companies involved in exploration for, mining of, processing of, or
dealing in gold, with emphasis on stock of foreign companies. The Gold Shares
Fund may also invest in the securities of issuers engaged in operations related
to silver and other precious metals. The Gold Shares Fund may also invest in the
securities of closed-end investment companies, provided its investments in these
securities do not exceed 3% of the total voting stock of such closed-end
investment company.

The Advisor believes that securities of companies engaged in gold
operations offer an opportunity to achieve long-term capital appreciation and
protection of wealth from eroding monetary values. In recent years, governments
of nations throughout the world have had increasing government deficits
accompanied by increases in their money supplies. A concomitant of this
world-wide and resurgent inflation has been increased world-wide demand for
gold. In addition, demand for gold has been stimulated by unstable political,
monetary and social conditions. As a result, when the rate of inflation
increased between 1972 and 1974, the prices of gold and gold mining stock
increased rapidly. On the other hand, in 1975

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Statement of Additional Information
Page 5

and 1976 when inflation leveled off, gold and stock of gold mining companies
declined. The years from the end of 1976 to September 1981 were years of
increasing inflation and uncertain monetary conditions. The price of gold
generally rose until January 1980 and the price of gold mining stock generally
rose until September 1981. Since September 1981, inflation has moderated and
both gold and gold mining stocks have generally declined. The prices of gold
mining stocks are volatile and there can be no assurance that they will rise in
the future. See "Volatility of Gold Company Stocks" under Special Risk
Considerations Section.

The investment philosophy of the Gold Shares Fund is that in times of
severe economic and monetary instability, people have historically tended to buy
gold and other precious metals as a "store of value" to the extent that they
lose confidence in the purchasing power of the currencies of their countries. As
a consequence, in times of economic and monetary instability, it is expected
that the long-term earnings and market prices of companies that mine and process
precious metals, especially gold, may perform better than certain other types of
investments. People and governments who have studied the historical role of gold
as money acquire gold in times of monetary inflation because of an increase in
the purchasing power of gold in relation to paper money. Gold can be purchased
in bullion form, in coins, in futures contracts or in the form of stock of gold
mining companies. Selected gold mining companies are the most attractive vehicle
for gold investment because of the high earnings and yields the mines provide
and because unmined gold securely held in its natural state in mines provides a
call on future earnings and dividends.

GLOBAL RESOURCES FUND

The concentration of the Global Resources Fund's investments in the common
stock of companies engaged in the exploration, mining, processing, fabrication
and distribution of natural resources of any kind is premised on the Advisor's
belief that over the long term the value of certain metals, minerals, gold and
other natural resources will increase, and that the value of securities of
companies involved in such natural resources operations will also increase.
There may be temporary periods, however, when investments in such securities
should be reduced due to unusual or adverse economic conditions in the natural
resource industries and, therefore, the Global Resources Fund may adopt a
defensive investment policy under which its assets may be temporarily invested,
without limitation other than the Global Resources Fund's investment
restriction, in short-term money market instruments such as United States
Treasury securities, if, in the opinion of the Advisor, market conditions
warrant. Such market conditions might include developments in the markets for
the natural resources produced by the issuers in which the Global Resources Fund
invests, political and economic developments in the foreign countries in which
the Global Resources Fund has purchased securities, or other developments.

The investment philosophy of the Global Resources Fund is that in times of
severe economic and monetary instability, people have historically tended to buy
natural resource metals and minerals as a "store of value" to the extent that
they lose confidence in the purchasing power of the currencies of their
countries. As a consequence, in times of economic and monetary instability it is
expected that the long-term earnings and market prices of companies that mine
and process metals and minerals, especially gold and silver, may perform better
than certain other types of investments.

WORLD GOLD FUND

The concentration of the World Gold Fund's investments in the common stock
of companies engaged in the exploration, mining, processing, fabrication and
distribution of gold is premised on the Advisor's belief that, over the long
term, the value of gold, other metals and minerals and other natural resources
will increase, and that the value of securities of companies involved in gold
and other natural resources operations will also increase. There may be
temporary periods, however, when investments in such securities should be
reduced due to unusual or adverse economic conditions in the natural resource
industries and, therefore, the World Gold Fund may adopt a defensive investment
policy under which its assets may be temporarily invested, without limitation
other than the World Gold Fund's investment restrictions, in short-term money
market instruments (other than repurchase agreements with maturities of more
than seven days) such as United States Treasury securities if, in the opinion of
the Advisor, market conditions warrant. Such market conditions might include
developments in the markets for the natural resources produced by the issuers in
which the World Gold Fund invests, political and economic developments in the
foreign countries in which the World Gold Fund has purchased securities, or
other developments as described under "Special Risk Considerations Affecting the
Gold Shares Fund, the Global Resources Fund and the World Gold Fund."

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Statement of Additional Information
Page 6

The investment philosophy of the World Gold Fund is that in times of severe
economic and monetary instability, people have historically tended to buy gold
and other metals and minerals as a "store of value" to the extent that they lose
confidence in the purchasing power of the currencies of their countries. As a
consequence, in times of economic and monetary instability, it is expected that
the long-term earnings and market prices of companies that mine and process
metals and minerals, especially gold and silver, may perform better than certain
other types of investments.

TREASURY SECURITIES CASH FUND AND GOVERNMENT SECURITIES SAVINGS FUND

The Treasury Securities Cash Fund and Government Securities Savings Fund
have adopted a fundamental policy requiring use of best efforts to maintain a
constant net asset value of $1.00 per share. Shareholders should understand
that, while the Trust will use its best efforts to attain this objective, there
can be no guarantee that it will do so. The Treasury Securities Cash Fund and
Government Securities Savings Fund value their respective portfolio securities
on the basis of the amortized cost method. See "How Shares are Valued" in the
prospectus. This requires that those Funds maintain a dollar-weighted average
portfolio maturity of 90 days or less, purchase only instruments having
remaining maturities of 397 days or less, and invest only in securities
determined by the Board of Trustees of the Trust to be of high quality with
minimal credit risks. .

INCOME FUND

In order to increase current income, the Income Fund may write (sell)
covered call options on common stock in its portfolio.

The covered call option activities of the Income Fund may affect its
turnover rate and the amount of brokerage commissions paid by the Income Fund.
The exercise of call options written by the Income Fund may cause the Income
Fund to sell portfolio securities, thus increasing the Income Fund's turnover
rate.

The Income Fund will pay a brokerage commission each time it writes a
covered call option. Such commissions may be higher than those that would apply
to direct purchases and sales of portfolio securities. The call activities of
the Income Fund may be restricted if options relating to the types of securities
in which the Income Fund will invest are not listed on domestic exchanges or
quoted on NASDAQ.

When the Income Fund writes a call option, it will be required to
collateralize the option transaction with the underlying securities, which
assets will not be available for use by the Income Fund.

The Income Fund may also purchase call options. The Fund will purchase call
options only in closing transactions; that is, to close out a call option which
it has written.

The Income Fund's annual rate of portfolio turnover may vary widely from
year to year depending on market conditions and prospects and may be higher than
that of other mutual funds with preservation of capital, and consistent with
that objective, production of current income as an investment objective. For the
fiscal years ended June 30, 1994, 1995 and 1996, the Income Fund's rate of
portfolio turnover equaled, 6.91%, 7.02% and 50.89% , respectively. High
portfolio turnover in any given year indicates a substantial amount of
short-term trading, which will result in payment by the Income Fund from capital
of above-average amounts of brokerage commissions and could result in the
payment by shareholders of above-average amounts of taxes on realized investment
gain. Any short-term gain realized on securities will be taxed to shareholders
as ordinary income.

TAX FREE FUND AND NEAR-TERM TAX FREE FUND

As stated in the prospectus, the Tax Free Fund and the Near-Term Tax Free
Fund seek to provide a high level of current income that is exempt from Federal
income taxation and to preserve capital. To achieve that objective, the Fund's
portfolio will consist of short-term, intermediate and long-term debt
obligations issued by or on behalf of states, territories and possessions of the
United States and the District of Columbia and their political sub-divisions,
agencies or instrumentalities, or multi-state agencies or authorities. These
securities are generally known as "municipal bonds."

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Statement of Additional Information
Page 7

The Tax Free Fund and Near-Term Tax Free Fund will invest only in
securities which are rated one of the four highest ratings by Moody's Investors
Service (Aaa, Aa, A, or Baa) or by Standard & Poor's Corporation (AAA, AA, A, or
BBB). (A description of Moody's and Standard & Poor's rating systems is
presented under "Information About Securities Ratings" in this Statement of
Additional Information.) No investments in the fourth category of bonds (Baa and
BBB) will be made if it causes the aggregate of such investments to exceed 10%
of total net assets of the Fund. Investments in this fourth category may have
speculative characteristics and may involve higher risks. Even though these
investments are generally regarded as having an adequate capacity to pay
interest and repay principal, they may be more susceptible to adverse changes in
the economy.

The Tax Free and Near-Term Tax Free Fund's annual rate of portfolio
turnover may vary widely from year to year depending on market conditions and
prospects and may be higher than that of other mutual funds with an investment
objective of providing a high level of current income that is exempt from
Federal income taxation. For the fiscal years ended June 30, 1994, 1995, and
1996, the Tax Free Fund's rate of portfolio turnover equaled 50.87%, 21.52% and
69.23%, respectively. For the fiscal years ended June 30, 1994, 1995 and 1996,
the Near-Term Tax Free Fund's rate of portfolio turnover equaled, 69.13%, 52.63%
and 83.39%, respectively. High portfolio turnover in any given year indicates a
substantial amount of short-term trading, which will result in payment by the
Tax Free Fund and Near-Term Tax Free Fund from capital of above-average amounts
of brokerage commissions and could result in the payment by shareholders of
above-average amounts of taxes on realized investment gain. Any short-term gain
realized on securities will be taxed to shareholders as ordinary income.

Subsequent to a purchase by the Tax Free Fund and Near-Term Tax Free Fund,
an issue of municipal bonds may cease to be rated or its rating may be reduced
below the minimum required for purchase by the Tax Free Fund and Near- Term Tax
Free Fund. Neither event will require sale of such municipal bonds by the Tax
Free Fund and Near-Term Tax Free Fund, but the Advisor will consider such event
in its determination of whether the Tax Free Fund and Near-Term Tax Free Fund
should continue to hold the municipal bonds. To the extent that the rating given
by Moody's or Standard & Poor's for municipal bonds may change as a result of
changes in such organizations or their rating systems, the Tax Free Fund and
Near-Term Tax Free Fund will attempt to use comparable ratings as standards for
its investments in accordance with the investment policies contained in the
prospectus and in this Statement of Additional Information.

United Services Funds' Management buys and sells securities for the Funds
to accomplish investment objectives. The Funds' investment policies may lead to
frequent changes in investments, particularly in periods of rapidly fluctuating
interest rates. The Funds' investments may also be traded to take advantage of
perceived short-term disparities in market values or yields among securities of
comparable quality and maturity.

GENERAL INFORMATION ON MUNICIPAL BONDS. Municipal bonds are generally
understood to include debt obligations issued to obtain funds for various public
purposes, including the construction of a wide range of public facilities such
as airports, bridges, highways, housing, hospitals, mass transportation,
schools, streets, and water and sewer works. Other public purposes for which
municipal bonds may be issued include the refunding of outstanding obligations,
obtaining funds for general operating expenses and lending such funds to other
public institutions and facilities. In addition, certain types of private
activity bonds are issued by or on behalf of public authorities to obtain funds
to provide privately operated hazardous waste-treatment facilities; certain
redevelopment projects; airports, docks, and wharves (other than lodging,
retail, and office facilities); mass commuting facilities; multifamily
residential rental property; sewage and solid waste disposal property;
facilities for the furnishing of water; and local furnishing of electric energy
or gas or district heating and cooling facilities. Such obligations are
considered to be municipal bonds provided that the interest paid thereon
qualifies as exempt from Federal income tax, in the opinion of bond counsel, to
the issuer. In addition, if the proceeds from private activity bonds are used
for the construction, equipment, repair or improvement of privately operated
industrial or commercial facilities, the interest paid on such bonds may be
exempt from Federal income tax, although current Federal tax laws place
substantial limitations on the size of such issues.

In order to be classified as a "diversified" investment company under
the 1940 Act, a Fund may not, with respect to 75% of its total assets, invest
more than 5% of its total assets in the securities of any one issuer (except
U.S. government obligations) or own more than 10% of the outstanding voting
securities of any one issuer. For the purpose of diversification under the 1940
Act, the identification of the issuer of municipal bonds depends on the terms
and conditions of the security. When the assets and revenues of an agency,
authority, instrumentality or other political subdivision are separate from
those

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Statement of Additional Information
Page 8

of the government creating the issuing entity and the security is backed only by
the assets and revenues of such entity, such entity would be deemed to be the
sole issuer. Similarly, in the case of a private activity bond, if that bond is
backed only by the assets and revenues of the non-governmental user, then such
non-governmental user would be deemed to be the sole issuer. If, however, in
either case the creating government or some other entity guarantees a security,
such a guarantee may be considered a separate security and is to be treated as
an issue of such government or other entity.

The yields on municipal bonds are dependent on a variety of factors,
including general economic and monetary conditions, money market factors,
conditions of the municipal bond market, size of a particular offering, maturity
of the obligation, and rating of the issue. The imposition of a Fund's
management fees, as well as other operating expenses, will have the effect of
reducing the yield to investors.

Municipal bonds are also subject to the provisions of bankruptcy,
insolvency and other laws affecting the rights and remedies of creditors, such
as the Federal Bankruptcy Code, and laws, if any, which may be enacted by
Congress or state legislatures extending the time for payment of principal or
interest, or both, or imposing other constraints upon enforcement of such
obligations or upon municipalities by levying taxes. There is also the
possibility that, as a result of litigation or other conditions, the power or
ability of any one or more issuers to pay, when due, principal of and interest
on its, or their, municipal bonds may be materially affected. The Tax Reform Act
of 1986 enlarged the scope of the alternative minimum tax. As a result, interest
on private activity bonds issued after August 7, 1986 will be a preference item
for alternative minimum tax purposes.

From time to time, proposals to restrict or eliminate the Federal income
tax exemption for interest on municipal bonds have been introduced before
Congress. Similar proposals may be introduced in the future. If such a proposal
were enacted, the availability of municipal bonds for investment by the Funds
would be adversely affected. In such event, the Funds would re-evaluate their
investment objective and policies.

MUNICIPAL NOTES. Municipal notes are generally used to provide for
short-term capital needs and generally have maturities of one year or less.
Municipal notes include:

1. Tax Anticipation Notes. Tax anticipation notes are issued to finance
working capital needs of state and local governments. Generally, they are issued
in anticipation of various seasonal tax revenues, such as ad valorem property,
income sales, use and business taxes, and are payable from these specific future
taxes. Tax anticipation notes are usually general obligations of the issuer.
General obligations are secured by the issuer's pledge of its full faith, credit
and taxing power for the payment of principal and interest.

2. Revenue Anticipation Notes. Revenue anticipation notes are issued by
state and local governments or governmental bodies with the expectation that
receipt of future revenues, such as Federal revenue sharing or state aid
payments, will be used to repay the notes. Typically, they also constitute
general obligations of the issuer.

3. Bond Anticipation Notes. Bond anticipation notes are issued to provide
interim financing for state and local governments until long-term financing can
be arranged. In most cases, the long-term bonds then provide the money for the
repayment of the notes.

4. Tax-Exempt Commercial Paper. Tax-exempt commercial paper is a short-term
obligation with a stated maturity of 365 days or less. It is issued and backed
by agencies of state and local governments to finance seasonal working capital
needs or as short-term financing in anticipation of longer-term financing.

VARIABLE RATE DEMAND OBLIGATIONS. Variable rate obligations have a yield
which is adjusted periodically based upon changes in the level of prevailing
interest rates. Such adjustments are generally made on a daily, weekly or
monthly basis. Variable rate obligations lessen the capital fluctuations usually
inherent in fixed income investments.

Unlike securities with fixed rate coupons, variable rate instrument coupons
are not fixed for the full term of the instrument. Rather, they are adjusted
periodically based upon changes in prevailing interest rates. The more
frequently such instruments are adjusted, the less such instruments are affected
by interest rate changes. The value of a variable rate instrument, however, may
fluctuate in response to market factors and changes in the creditworthiness of
the issuer. By

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Statement of Additional Information
Page 9

investing in variable rate obligations the Funds seek to take advantage of the
normal yield curve pattern that usually results in higher yields on longer-term
investments. This policy also means that should interest rates decline, a Fund's
yield will decline and that Fund and its shareholders will forego the
opportunity for capital appreciation of that Fund's investments and of their
shares to the extent a portfolio is invested in variable rate obligations.
Should interest rates increase, a Fund's yield will increase and that Fund and
its shareholders will be subject to lessened risks of capital depreciation of
its portfolio investments and of their shares to the extent a portfolio is
invested in variable rate obligations. There is no limitation on the percentage
of the Funds' assets which may be invested in variable rate obligations. For
purposes of determining a Fund's weighted average portfolio maturity, the term
of a variable rate obligation is defined as the longer of the length of time
until the next rate adjustment or the time of demand.

Floating rate demand notes have an interest rate fixed to a known lending
rate (such as the prime rate) and are automatically adjusted when the known rate
changes. Variable rate demand notes have an interest rate which is adjusted at
specified intervals to a known rate. Demand notes provide that the holder may
demand payment of the note at its par value plus accrued interest by giving
notice to the issuer. To ensure that ability of the issuer to make payment upon
such demand, the note may be supported by an unconditional bank letter of
credit.

The Trustees have approved investments in floating and variable rate demand
notes upon the following conditions: the Funds have an unconditional right of
demand, upon notice to exceed thirty days, against the issuer to receive
payment; the Advisor determines the financial condition of the issuer and
continues to monitor it in order to be satisfied that the issuer will be able to
make payment upon such demand, either from its own resources or through an
unqualified commitment from a third party; and the rate of interest payable is
calculated to ensure that the market value of such notes will approximate par
value on the adjustment dates.

OBLIGATIONS WITH TERM PUTS ATTACHED. The Funds may purchase municipal
securities together with the right that it may resell the securities to the
seller at an agreed-upon price or yield within a specified period prior to the
maturity date of the securities. Although it is not a put option in the usual
sense, such a right to resell is commonly known as a "term put." The Funds may
purchase obligations with puts attached from banks and broker-dealers.

The price which the Funds expect to pay for municipal securities with puts
generally is higher than the price which otherwise would be paid for the
municipal securities alone. The Funds will use puts for liquidity purposes in
order to permit it to remain more fully invested in municipal securities than
would otherwise be the case by providing a ready market for certain municipal
securities in its portfolio at an acceptable price. The put generally is for a
shorter term than the maturity of the municipal security and does not restrict
in any way the Funds' ability to dispose of (or retain) the municipal security.

In order to ensure that the interest on municipal securities subject to
puts is tax-exempt to the Fund, it will limit its use of puts in accordance with
applicable interpretations and rulings of the Internal Revenue Service.

Since it is difficult to evaluate the likelihood of exercise of the
potential benefit of a put, it is expected that puts will be determined to have
a "value" of zero, regardless of whether any direct or indirect consideration
was paid. Accordingly, puts as separate securities are expected not to affect
the calculation of the weighted average portfolio maturity. Where a Fund has
paid for a put, the cost will be reflected as unrealized depreciation in the
underlying security for the period during which the commitment is held, and
therefore would reduce any potential gain on the sale of the underlying security
by the cost of the put. There is a risk that the seller of the put may not be
able to repurchase the security upon exercise of the put by that Fund. To
minimize such risks, the Funds will only purchase obligations with puts attached
from sellers whom the Advisor believes to be creditworthy.

WHEN-ISSUED SECURITIES AND FIRM COMMITMENTS. In order to secure what the
Advisor considers to be an advantageous price or yield, a Fund may purchase
securities on a "when-issued" or "firm commitment" basis or may purchase or sell
securities for delayed delivery, that is payment for and delivery of the
securities (the "settlement date") normally takes place 15 to 45 days after the
date the offer is accepted. A Fund will enter into such purchase transactions
for the purpose of acquiring portfolio securities and not for the purpose of
leverage. Delivery of the securities, in such cases, occurs beyond the normal
settlement periods, but no payment or delivery is made by that Fund prior to the
reciprocal delivery or payment by the other party to the transaction. The Funds
rely on the other party to consummate the transaction, and may be disadvantaged
if the other party fails to do so.

- --------------------------------------------------------------------------------
Statement of Additional Information
Page 10

These municipal securities are normally subject to changes in value based
upon changes, real or anticipated, in the level of interest rates and, to a
lesser extent, the public's perception of the creditworthiness of the issuers.
In general, municipal securities tend to appreciate when interest rates decline
and depreciate when interest rates rise. Purchasing municipal securities on a
when-issued basis or delayed delivery basis, therefore, can involve the risk
that the yields available in the market, when the delivery takes place, may
actually be higher than those obtained in the transaction itself.

At all times the Funds will restrict cash (which may be invested in
repurchase obligations) or liquid securities equal to the amount of a Fund's
when-issued or delayed delivery commitments. The restricted cash or liquid
securities will either be identified as being restricted in the Fund's
accounting records or physically segregated in a separate account at Bankers
Trust Company, the Funds' custodian. For the purpose of determining the adequacy
of the securities in the account, the deposited securities will be valued at
market or fair value. If the market or fair value of such securities declines,
additional cash or securities will be restricted on a daily basis so that the
value of the account will equal the amount of such commitments by that Fund. On
the settlement date, that Fund will meet its obligations from then-available
cash flow, the sale of securities held in the separate account, the sale of
other securities, or, although it would not normally expect to do so, from the
sale of the when-issued or delayed delivery securities themselves (which may
have a greater or lesser value than a Fund's payment obligations).

REAL ESTATE FUND

The Real Estate Fund is designed to provide investors the advantages of
real estate investment with the convenience and liquidity provided by a
professionally managed fund.

The Fund's portfolio will consist primarily of securities of companies in
the real estate industry or securities of companies related to the real estate
industry. Because the Fund's portfolio will be concentrated in one industry,
this would not be a suitable investment for a person seeking a more diversified
portfolio.

The Fund's investments will include the common and preferred stock of
companies, including real estate investment trusts ("REITs"), listed on national
securities exchanges or on NASDAQ which have at least 50% of the value of their
assets in, or which derive at least 50% of their revenue from, the ownership,
construction, management or sale of residential, commercial or industrial real
estate.

INTERMEDIATE TREASURY FUND

The Intermediate Treasury Fund's investment objective is to seek a high
current income and preservation of capital by investing in United States
Treasury securities. The Fund will invest 100% of its portfolio in United States
Treasury securities and will invest at least 65% of its portfolio in United
States Treasury securities that have a remaining maturity from one to ten years.
The weighted average maturity of the portfolio will range between three and ten
years.

United Services Funds' Management buys and sells securities for the
Intermediate Treasury Fund to accomplish investment objectives. The Fund's
investment policies may lead to frequent changes in investments, particularly in
periods of rapidly fluctuating interest rates. The Fund's investments may also
be traded to take advantage of perceived short-term disparities in market values
or yields among securities of comparable quality and maturity.

SPECIAL RISK CONSIDERATIONS

The following are among the most significant risks associated with an
investment in the Funds.

GOLD SHARES FUND, GLOBAL RESOURCES FUND, WORLD GOLD FUND,. INCOME FUND, AND REAL
ESTATE FUND

INVESTMENT IN FOREIGN SECURITIES. Investment in securities of foreign
issuers may involve special considerations and additional risks not present in
domestic investments. These include fluctuating exchange rates, the fact that
foreign securities, and the markets therefore, may not be as liquid as their
domestic issuers, the risk of adverse changes in foreign investment or exchange
control regulations, expropriation or confiscatory taxation, political or
financial instability, or other

- --------------------------------------------------------------------------------
Statement of Additional Information
Page 11

developments which can affect investments. As a result, the selection of
investments in foreign issuers may be more difficult and subject to greater
risks than investment in domestic issuers. The Gold Shares Fund, the Global
Resources Fund, the World Gold Fund, the Income Fund and the Real Estate Fund
will invest in the securities of foreign issuers that are listed on a domestic
exchange, quoted on NASDAQ, or traded in the domestic over-the-counter market.
In addition, when available, the Funds will invest in American Depository
Receipts ("ADRs") or other securities which can be sold for United States
dollars and for which market quotations are readily available in New York, so
that some of these risks may be minimized. (ADRs are certificates issued by
United States banks representing the right to receive securities of a foreign
issuer deposited in that bank or a correspondent bank.) The Gold Shares Fund,
the Global Resources Fund, the World Gold Fund, and the Real Estate Fund may
also invest in securities of foreign issuers that are listed on foreign
securities exchanges or, except for the Real Estate Fund, traded in the foreign
over-the-counter market.

GOLD SHARES FUND, GLOBAL RESOURCES FUND, WORLD GOLD FUND, AND REAL ESTATE FUND

CONCENTRATION. Because the investment alternatives of the Gold Shares Fund
are restricted by its policy of normally maintaining 65% of its total assets in
securities of companies involved in gold operations, the Global Resources Fund's
and the World Gold Fund's policy of concentrating its investments in companies
involved in natural resources (including gold and silver), the Real Estate
Fund's policy of concentrating at least 65% of the Fund's total assets in
companies in the real estate industry, investors should understand that
investment in these four Funds may be subject to greater risk and market
fluctuation than an investment in a portfolio of securities representing a
broader range of investment alternatives.

GOLD SHARES FUND, GLOBAL RESOURCES FUND AND WORLD GOLD FUND

VOLATILITY OF GOLD COMPANY STOCKS. The net asset value of Gold Shares Fund,
Global Resources Fund and the World Gold Fund will be affected by the volatility
of securities of companies involved in gold operations. The volatility of
securities of companies involved in gold operations is reflected by the
performance of the Gold Shares Fund's net asset value for the last ten years.

<TABLE>
<CAPTION>
CALENDAR
YEAR 1996(1) 1995 1994 1993 1992 1991 1990 1989 1988 1987
---- ----- ---- ----- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
High $2.60 $2.65 $3.26 $2.91 $3.01 $3.84 $6.44 $5.49 $5.48 $7.98
Low $1.84 $1.91 $2.12 $1.25 $1.31 $2.75 $3.08 $3.29 $3.00 $4.41
- -----------------------
(1) Through June 30, 1996
</TABLE>

It is not possible to predict, with assurance, the timing or extent of
future changes in the market price of gold or the extent to which changes in the
market price of gold will continue to affect the value of shares of companies
involved in gold operations.

Approximately 30% of the world's output of gold is produced in the Republic
of South Africa. A substantial portion of the Gold Shares Fund's net assets are
invested in securities of South African issuers engaged in mining of,
exploration for, processing of, or dealing in gold because such securities
generally offer a higher rate of return than securities of domestic issuers
involved in gold operations.

The production and marketing of gold may be affected by the actions of the
International Monetary Fund and certain governments, or by changes in existing
governments. In the current order of magnitude of production of gold bullion,
the four largest producers of gold are the Republic of South Africa, the United
States, Australia and Russia. Economic and political conditions prevailing in
these countries may have direct effects on the production and marketing of
newly-produced gold and sales of central bank gold holdings. In South Africa,
the activities of companies engaged in gold mining are subject to the policies
adopted by the Ministry of Mines. The Reserve Bank of South Africa, as the sole
authorized sales agent for South African gold, has an influence on the price and
timing of sales of South African gold. The Gold Shares Fund has significant
investments in South African issuers. The unsettled political and social
conditions in South Africa may have

- --------------------------------------------------------------------------------
Statement of Additional Information
Page 12

disruptive effects on the market prices of the investments of the Gold Shares
Fund and may impair its ability to hold investments in South African issuers.

GOLD SHARES FUND AND WORLD GOLD FUND

INVESTMENT IN GOLD AND GOLD BULLION. Because gold and gold bullion do not
generate investment income, the return to a Fund from such investments will be
derived solely from the gains and losses realized by the Fund upon the sale of
the gold and gold bullion. The Funds may also incur storage and other costs
relating to their investments in gold and gold bullion. Under certain
circumstances, these costs may exceed the custodial and brokerage costs
associated with investments in portfolio securities.

The Gold Shares Fund and the World Gold Fund have qualified in the past,
and expect to qualify in the future, as regulated investment companies under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). By
qualifying under Subchapter M of the Code, neither Fund is required to pay
Federal income tax on net investment income or capital gains that are
distributed to shareholders. To qualify as a regulated investment company under
Subchapter M of the Code, at least ninety percent (90%) of a Fund's gross income
for any taxable year must be derived from dividends, interest, gains from the
disposition of securities, and gains from certain other specified transactions
(the "Gross Income Test"). Gains from the disposition of gold and gold bullion
will not qualify for purposes of satisfying the Gross Income Test. Additionally,
to qualify under Subchapter M of the Code, at the close of each quarter of each
Fund's taxable year, at least fifty percent (50%) of the value of the Fund's
total assets must be represented by cash, Government securities and certain
other specified assets (the "Asset Value Test"). Investments in gold and gold
bullion will not qualify for purposes of satisfying the Asset Value Test. To
maintain each Fund's qualification as a regulated investment company under the
Code, each Fund will establish procedures to monitor its investments in gold and
gold bullion for purposes of satisfying the Gross Income Test and the Asset
Value Test.

BORROWING. The Gold Shares Fund and World Gold Fund have to deal with
unpredictable cashflows as shareholders purchase and redeem shares. Under
adverse conditions, the Funds might have to sell portfolio securities to raise
cash to pay for redemptions at a time when investment considerations would not
favor such sales. In addition, frequent purchases and sales of portfolio
securities tend to decrease the Funds' performance by increasing transaction
expenses.

The Gold Shares Fund and World Gold Fund may deal with unpredictable
cashflows by borrowing money. Through such borrowings the Gold Shares Fund and
World Gold Fund may avoid selling portfolio securities to raise cash to pay for
redemptions at a time when investment considerations would not favor such sales.
In addition, the Funds' performance may be improved due to a decrease in the
number of portfolio transactions. After borrowing money, if subsequent
shareholder purchases do not provide sufficient cash to repay the borrowed
monies, the Fund will liquidate portfolio securities in an orderly manner to
repay the borrowed monies.

To the extent that a Fund borrows money prior to selling securities, the
Fund would be leveraged such that the Fund's net assets may appreciate or
depreciate in value more than an unleveraged portfolio of similar securities.
Since substantially all of a Fund's assets will fluctuate in value and whereas
the interest obligations on borrowings may be fixed, the net asset value per
share of the Fund will increase more when the Fund's portfolio assets increase
in value and decrease more when the Fund's portfolio assets decrease in value
than would otherwise be the case. Moreover, interest costs on borrowings may
fluctuate with changing market rates of interest and may partially offset or
exceed the returns which the Funds earn on portfolio securities. Under adverse
conditions, the Funds might be forced to sell portfolio securities to meet
interest or principal payments at a time when market conditions would not be
conducive to favorable selling prices for the securities.

Neither the GOLD SHARES FUND nor the WORLD GOLD FUND will purchase any
security while borrowings represent more than 5% of their total assets
outstanding.

GLOBAL RESOURCES FUND AND WORLD GOLD FUND

INVESTMENT IN SMALL ISSUERS. Many companies involved in the exploration for
and mining, processing, fabrication and distribution of gold, silver and other
natural resources are small and unseasoned, and investments in their securities
by

- --------------------------------------------------------------------------------
Statement of Additional Information
Page 13

a Fund involves certain risks not present with investments in larger companies.
For example, such securities may not have readily available market quotations,
or may not otherwise be readily marketable, making it difficult for a Fund to
dispose of such securities when it is deemed advisable to do so. However, each
of the Global Resources Fund and the World Gold Fund has adopted investment
restrictions limiting its investment in securities which have legal or
contractual limitations, are not readily marketable, or do not have readily
available market quotations to 10% of its net assets. The Global Resources Fund
and the World Gold Fund are also limited with respect to investments in
unseasoned issuers, i.e., issuers with a record of less than three years'
continuous operation (including predecessors), to 5% of their respective total
net assets.

The Funds may invest in companies for which it is difficult to obtain
reliable information and financial data. There may be little or no information
available regarding these companies relative to geological data, mining or
engineering information, extent of proved and probable reserves, appraisals, and
other relevant data. As a consequence, investments will often be made based upon
the reputation and experience of the management of a company rather than upon
information concerning its fundamental investment characteristics.

Certain of the issuers in which a Fund may invest may face difficulties in
obtaining the capital necessary to continue in operation and may go into
bankruptcy, which may result in a complete loss of a Fund's investment.

GOLD SHARES FUND, GLOBAL RESOURCES FUND AND WORLD GOLD FUND

INVESTMENTS IN GOLD AND SILVER SECURITIES. While investment in securities
of issuers involved in gold and silver mining and in natural resources
operations generally involves risks not present with most investment companies,
investment in such securities may offer a greater return than shares of
industrial issuers. Since the market action of such securities has tended to
move against, or independently of, the market trend of industrial stock, the
addition of stock of companies involved in gold, silver and other natural
resources operations to an investor's portfolio may increase the return and
reduce overall fluctuations in the value of the portfolio. An investment in the
Gold Shares Fund, the Global Resources Fund or the World Gold Fund should be
considered part of an overall investment program, which may include investments
in the other Funds managed by the Advisor, rather than as a complete investment
program.

GOLD SHARES FUND, GLOBAL RESOURCES FUND, . WORLD GOLD FUND, INCOME FUND, ANDREAL
ESTATE FUND

GOLD SHARES FUND, GLOBAL RESOURCES FUND AND WORLD GOLD FUND

PURCHASING PUT OPTIONS. World Gold Fund, Global Resources Fund and Gold
Shares Fund may purchase put options that are listed on domestic or foreign
securities exchanges or quoted on NASDAQ. A put option gives the holder the
right to sell a security to the seller of the put option at a fixed price within
a specified time period. The initial purchaser of an option pays the seller a
premium for undertaking the obligation to purchase, which premium is retained by
the seller whether or not the option is exercised.

Each of these Funds may purchase puts on securities it owns ("protective
puts") or on securities it does not own ("non-protective puts"). Buying a
protective put permits each of these Funds to protect itself against a decline
in the value of the underlying securities, during the put period, below the
exercise price by selling the securities (or other securities which it may
purchase) on the exercise of the put. Buying a non-protective put permits the
World Gold Fund, Global Resources Fund and Gold Shares Fund if the market price
of the underlying securities is below the put price during the put period,
either to resell the put or to buy the underlying securities and sell them at
the exercise price. If the market price of the underlying securities is not
below the exercise price and the put is not exercised or resold (whether or not
at a profit), the put will become worthless at its expiration date.

- --------------------------------------------------------------------------------
Statement of Additional Information
Page 14

A put option purchased by the World Gold Fund, Global Resources Fund or
Gold Shares Fund, other than in a closing transaction, exposes the Fund to loss
of the amount paid for the option if the market price of the underlying security
is above the exercise price of the put option at the option's expiration date.
For the purchase of an option to become profitable, the price change of the
underlying stock must be sufficient to cover the premium paid (including
commissions). There can be no assurance that such a price change will result in
a profit for the option purchaser; profit will depend on the market price of the
underlying stock when the option was purchased, the remaining life of the option
and other factors.

A put option position may be closed out only on an exchange (or NASDAQ)
that provides a secondary market for options on the same series, and there is no
assurance that a liquid secondary market will exist for any particular option.

The option activities of the World Gold Fund, Global Resources Fund and
Gold Shares Fund may affect their turnover rate and the amount of brokerage
commission paid by the Fund. The exercise of options may cause these Funds to
sell portfolio securities, thus increasing the Funds' turnover rates. Holding a
protective put may cause the Funds to sell the underlying securities for reasons
that may not exist in the absence of the put. Holding a non-protective put may
cause the Funds to purchase the underlying securities to permit the Funds to
exercise the put.

The Funds will pay a brokerage commission each time they buy an option or
buy or sell a security in connection with the exercise of an option. Such
commission may be higher than the commission that would apply to direct
purchases or sales of portfolio securities.

The trading of put options will not constitute a dominant investment
practice of the above-listed Funds. Accordingly, it is not anticipated that any
decrease in potential capital appreciation that may result from this activity
will be inconsistent to any material extent with the overall realization of any
Fund's primary investment objective.

Not more than 2% of the total net assets of World Gold Fund, Global
Resources Fund or Gold Shares Fund may be invested in premiums on such put
options and not more than 25% of each of such Fund's total net assets may be
subject to options.

GOLD SHARES FUND, GLOBAL RESOURCES FUND, WORLD GOLD FUND, REAL ESTATE FUND AND
INCOME FUND

OPTIONS ON STOCK INDEXES. Options on stock indexes are based on indexes of
stock prices that change in value according to the market values of the
underlying stock. Some stock index options are based on a broad market index
such as the New York Stock Exchange composite index of Standard & Poor's
Corporation. Other index options are based on a market segment or on stocks in a
single industry. Stock index options are traded primarily on securities
exchanges. Options on stock indexes differ from options on securities in that
the exercise of an option on a stock index does not involve delivery of the
actual underlying security. Index options are settled in cash only. The
purchaser of an option receives a cash settlement amount and the writer of an
option is required, in return for the premium received, to make delivery of a
certain amount if the option is exercised. A position in a stock index option
may be offset by either the purchaser or writer by entering into a closing
transaction, or the purchaser may terminate the option by exercising it or
allowing it to expire. A Fund will write (sell) call options, write put options,
purchase put options, and purchase call options on stock indexes when
appropriate to hedge investments against a decline in value, or to reduce the
risk of missing a broad market advance or an advance in an industry or market
segment.

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Statement of Additional Information
Page 15

that is sufficient to cover the cash settlement amount, it would be required to
sell securities owned in order to satisfy the exercise of the option.

The Funds will adhere to the following non-fundamental limitations with
respect to investments in options on stock indexes: (1) the Funds will purchase
or write only those options on stock indexes that are traded on United States
securities exchanges or quoted on NASDAQ; and (2) the Funds will not invest more
than 5% of their total net assets in options on stock indexes.

PORTFOLIO TRANSACTIONS

The Advisory Agreement between the Trust and the Advisor requires that the
Advisor, in executing portfolio transactions and selecting brokers or dealers,
seek the best overall terms available. In assessing the terms of a transaction,
consideration may be given to various factors, including the breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer (for a specified transaction and on
a continuing basis), the reasonableness of the commission, if any, and the
brokerage and research services provided to the Trust and/or other accounts over
which the Advisor or an affiliate of the Advisor exercises investment
discretion. Under the Advisory Agreement, the Advisor is permitted, in certain
circumstances, to pay a higher commission than might otherwise be obtained in
order to acquire brokerage and research services. The Advisor must determine in
good faith, however, that such commission is reasonable in relation to the value
of the brokerage and research services provided -- viewed in terms of that
particular transaction or in terms of all the accounts over which investment
discretion is exercised. In such case, the Board of Trustees will review the
commissions paid by each Fund of the Trust to determine if the commissions paid
over representative periods of time were reasonable in relation to the benefits
obtained. The advisory fee of the Advisor would not be reduced by reason of its
receipt of such brokerage and research services. To the extent that research
services of value are provided by broker/dealers through or with whom the Trust
places portfolio transactions the Advisor may be relieved of expenses which it
might otherwise bear.

The Trust may, in some instances, purchase securities that are not listed
on a national securities exchange or quoted on NASDAQ, but rather are traded in
the over-the-counter market. When the transactions are executed in the
over-the-counter market, it is intended generally to seek first to deal with the
primary market makers. However, the services of brokers will be utilized if it
is anticipated that the best overall terms can thereby be obtained. Purchases of
newly issued securities for the Tax Free Fund, Near-Term Tax Free Fund and the
Intermediate Treasury Fund usually are placed with those dealers from which it
appears that the best price or execution will be obtained. Those dealers may be
acting as either agents or principals.

The brokerage fees paid by the following Funds for the three fiscal periods
ended June 30, 1996, were as follows:

1994 1995 1995
---------- ---------- ----------

Gold Shares Fund $ 271,782 $ 456-685 $ 261,378
Global Resources Fund 69,952 66,061 130,955
World Gold Fund 349,091 408,918 383,831
Income Fund 5,580 5,600 30,965
Real Estate Fund 158,335 60,630 75,940

In seeking its primary investment objective of capital appreciation, each
of the Gold Shares Fund, Global Resources Fund and World Gold Fund expects that
it generally will hold investments for at least six months. However, if the
Advisor concludes that economic, market or industry conditions warrant major
adjustments in any Fund's investment positions or if unusual market conditions
or developments of the type discussed under the heading "Special Risk
Considerations" dictate the taking of a temporary defensive position in
short-term money market instruments, changes may be made without regard to the
length of time an investment has been held, or whether a sale results in profit
or loss, or a purchase results in the reacquisition of an investment which may
have only recently been sold by the Fund.

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Statement of Additional Information
Page 16

MANAGEMENT OF THE FUNDS

William A. Fagan, Jr. Chairman of Chairman of the Board of
P.O. Box 17903 the Board of Trustees since January 1, 1989.
San Antonio, TX Trustees Business consultant since 1976.

NAME AND ADDRESS TRUST POSITION PRINCIPAL OCCUPATION
- --------------------------------------------------------------------------------
Frank E. Holmes* Trustee, Chairman of the Board of
President and Directors, and Chief Executive
Chief Officer of the Advisor since
Executive October 27, 1989. President
Officer from October 1989 to September
1995. Director of Security
Trust & Financial Company
("ST&FC"), a wholly-owned
subsidiary of Advisor, since
November 1991. President, Chief
Executive Officer and Trustee
of Accolade Funds, a
Massachusetts business trust
consisting of no-load mutual
funds, since April 1993.
Director of U.S. Advisors
(Guernsey) Limited, a
wholly-owned subsidiary of the
Advisor, and of the Guernsey
Funds managed by that Company
since August 1993. Director of
Marleau, Lemire Inc. from
January 1995 to December 1995.
Director of Franc-Or Resources
Corp since November 1994.
Director of United Services
Canada, Inc. (formerly United
Services Advisors Wealth
Management Corp.) since
February 1995 and Chief
Executive Officer from February
to August 1995. Trustee of
Pauze/Swanson United Services
Funds from November 1993 to
February 1996. Independent
business consultant and
financial adviser from July
1978 to October 1989. From July
1978 to October 1989, held
various positions with Merit
Investment Corporation, a
Canadian investment dealer,
including the latest position
as Executive Vice
President-Corporate Finance.
Formerly a member of the
Toronto Stock Exchange Listing
Committee, Registered Portfolio
Manager with the Toronto Stock
Exchange, and former President
and Chairman of the Toronto
Society of Investment Dealers
Association. Formerly a
Director of Merit Investment
Corporation.
----------
* This Trustee may be deemed an
"interested person" of the
Trust as defined in the
Investment Company Act of 1940.

- --------------------------------------------------------------------------------
Statement of Additional Information
Page 18

NAME AND ADDRESS TRUST POSITION PRINCIPAL OCCUPATION
- --------------------------------------------------------------------------------
Victor Flores Executive Vice Executive Vice President, Chief
President, Investment Officer of the Funds
Chief since February 1994. Portfolio
Investment Manager U.S. Gold Shares Fund
Officer since November 1992 and U.S.
World Gold Fund since January
1990. Portfolio Manager, U.S.
Global Resources Fund, from
January 1990 to November 1992.
Vice President, Chief
Investment Officer and Director
of U.S. Global Investors, Inc.
(formerly United Services
Advisors, Inc.) since February
1994. Formerly Vice President,
Portfolio Manager of U.S.
Global Investors, Inc.(July
1993-February 1994). Served as
Resource Analyst for United
Services Funds and U.S. Global
Investors, Inc. from January
1988 to December 1989.

PRINCIPAL HOLDERS OF SECURITIES

As of August 26, 1996, the officers and Trustees of the Funds as a group
owned less than 1% of the outstanding shares of each Fund. The Trust is aware of
the following persons who owned of record, or beneficially, more than 5% of the
outstanding shares of any Fund at August 26, 1996:

<TABLE>

<S> <C> <C> <C> <C>
U.S. GLOBAL RESOURCES FUND Charles Schwab & Co., Inc. 8.47% Record(1)
San Francisco, CA 94104

U.S. REAL ESTATE FUND Charles Schwab & Co., Inc. 18.35% Record(1)
San Francisco, CA 94104
National Financial Services Corp. New 8.51% Record(2)
York, NY 10008-3908
Charles Schwab & Co., Inc. 6.55% Record(1)
San Francisco, CA 94104
Donaldson Lufkin Jenrette Securities Corp. 5.83% Record(3)
Jersey City, NJ 07303-2052

U.S. INCOME FUND Charles Schwab & Co., Inc. 17.92% Record(1)
San Fransciso, CA 94104

U.S. WORLD GOLD FUND Charles Schwab & Co., Inc. 21.07% Record(1)
San Fransciso, CA 94104-
National Financial Services Corp. 6.34% Record(2)
New York, NY 10008-3908

UNITED SERVICES INTERMEDIATE David R. Hinkle IRA Rollover 5.17% Record
TREASURY FUND Winston Salem, NC 27101-3622

UNITED SERVICES NEAR-TERM TAX Louisa Kellam 5.42% Record
FREE FUND Sun City West, AZ 85375-5417

North Pursel North Investments
U.S. TAX FREE FUND Palm Beach, FL 33480-2132 6.20% Record(4)
<FN>

(1)Charles Schwab & Co., Inc., a broker-dealer, has advised that no individual
client owns more than 5% of the Fund.

(2)iNational Financial Corp., a broker-dealer, has advised that no individual
client owns more than 5% of the Fund.

(3)Donaldson Lufkin Jenrette Securities Corp., a broker-dealer, has advised that
no individual client owns more than 5% of the Fund.

(4)North Pursel North Investments, a broker-dealer, has advised that no
individual client owns more than 5% of the Fund.

</FN>
</TABLE>

INVESTMENT ADVISORY SERVICES

The investment adviser to the Funds is U.S. Global Investors, Inc.
(formerly United Services Advisors, Inc.) (the "Advisor"), a Texas corporation,
pursuant to an Advisory Agreement dated as of October 27, 1989. Frank E. Holmes,
Chief Executive Officer and a Director of the Advisor, as well as a Trustee,
President and Chief Executive Officer of the Trust, beneficially owns more than
25% of the outstanding voting stock of the Advisor and may be deemed to be a
controlling person of the Advisor.

- --------------------------------------------------------------------------------
Statement of Additional Information
Page 20

In addition to the services described in each Fund's prospectus, the
Advisor will provide the Trust with office space, facilities and simple business
equipment, and will provide the services of executive and clerical personnel for
administering the affairs of the Trust. It will compensate all personnel,
Officers and Trustees of the Trust if such persons are employees of the Advisor
or its affiliates, except that the Trust will reimburse the Advisor for a
portion of the compensation of the Advisor's employees who perform certain legal
services for the Trust, including state securities law regulatory compliance
work, based upon the time spent on such matters for the Trust. The Advisor pays
the expense of printing and mailing prospectuses and sales materials used for
promotional purposes.

For the services and facilities provided to each of the Funds by the
Advisor, each Fund may pay to the Advisor a monthly fee at the rate set forth
below based upon the monthly average daily net assets of such Fund for such
calendar month. Some of these fees have been voluntarily reduced or waived until
further notice. See the prospectus section - "The Investment Advisor."

<TABLE>
<CAPTION>
ADVISORY FEE SCHEDULE
- -------------------------------------------------------------------------------------------------------------------
MONTHLY
NAME OF FUND MONTHLY NET ASSETS RATE
- -------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C>
GOLD SHARES FUND UP TO AND INCLUDING $250 MILLION 1/12 OF .75%
OVER $250 MILLION 1/12 OF .50%

GLOBAL RESOURCES FUND UP TO AND INCLUDING $250 MILLION 1/12 OF 1%
OVER $250 MILLION 1/12 OF .50%

WORLD GOLD FUND UP TO AND INCLUDING $250 MILLION 1/12 OF 1%
OVER $250 MILLION 1/12 OF .50%

U.S. TREASURY SECURITIES CASH FUND UP TO AND INCLUDING $250 MILLION 1/12 OF .50%
OVER $250 MILLION 1/12 OF .375%

TAX FREE FUND UP TO AND INCLUDING $250 MILLION 1/12 OF .75%
OVER $250 MILLION 1/12 OF .50%

INCOME FUND UP TO AND INCLUDING $250 MILLION 1/12 OF .75%
OVER $250 MILLION 1/12 OF .50%

U.S. GOVERNMENT SECURITIES SAVINGS FUND UP TO AND INCLUDING $250 MILLION 1/12 OF .50%
OVER $250 MILLION 1/12 OF .375%

REAL ESTATE FUND UP TO AND INCLUDING $250 MILLION 1/12 OF .75%
OVER $250 MILLION 1/12 OF .50%

UNITED SERVICES INTERMEDIATE TREASURY FUND 1/12 OF .50%

UNITED SERVICES NEAR-TERM TAX FREE FUND 1/12 OF .50%
</TABLE>

- --------------------------------------------------------------------------------
Statement of Additional Information
Page 21

The Advisor may, out of profits derived from its management fee, pay
certain financial institutions (which may include banks, securities dealers and
other industry professionals) a "servicing fee" for performing certain
administrative servicing functions for fund shareholders to the extent these
institutions are allowed to do so by applicable statute, rule or regulation.
These fees will be paid periodically and will generally be based on a percentage
of the value of the institutions' client fund shares. The glass-steagall act
prohibits banks from engaging in the business of underwriting, selling or
distributing securities. However, in the advisor's opinion, such laws should not
preclude a bank from performing shareholder administrative and servicing
functions as contemplated herein.

The securities laws of certain states in which shares of the trust may,
from time to time, be qualified for sale require that the advisor reimburse the
trust for any excess of a fund's expenses over prescribed percentages of the
fund's average net assets. Thus, the advisor's compensation under the advisory
agreement is subject to reduction in any fiscal year to the extent that total
expenses of the fund for such year (including the advisor's compensation but
exclusive of taxes, brokerage commission, extraordinary expenses, and other
permissible expenses) exceed the most restrictive applicable expense limitation
prescribed by any state in which the trust's shares are qualified for sale. The
advisor may obtain waivers of these state expense limitations from time to time.
Such limitation is currently 2.5% Of the first $30 million of average net
assets, 2% of the next $70 million of average net assets and 1.5% Of the
remaining average net assets.

The board of trustees of the trust (including a majority of the
"disinterested trustees") recently approved continuation of the october 27, 1989
advisory agreement through october 1996. The advisory agreement provides that it
will continue initially for two years, and from year to year thereafter, with
respect to each fund, as long as it is approved at least annually both (i) by a
vote of a majority of the outstanding voting securities of such fund (as defined
in the investment company act of 1940 ) or by the board of trustees of the
trust, and (ii) by a vote of a majority of the trustees who are not parties to
the advisory agreement or "interested persons" of any party thereto, cast in
person at a meeting called for the purpose of voting on such approval. The
advisory agreement may be terminated on 60 days' written notice by either party
and will terminate automatically if it is assigned.

The trust pays the advisor a separate management fee for each portfolio
in the trust. Such fee is based on varying percentages of average net assets.
For the three fiscal periods ended june 30, 1994, june 30, 1995 and june 30,
1996, the trust incurred advisory fees (net of expenses paid by the advisor or
voluntary fee waivers) of $5,021,807,$5,233,507, and $5,216,589, respectively,
for all funds. For the three fiscal periods ended june 30, 1994, june 30, 1995
and june 30, 1996, the funds paid the advisor the following advisory fees (net
of expenses paid by the advisor or voluntary fee waivers):

1994 1995 1996
------------------------------------------

GOLD SHARES FUND $2,011,687 $1,969,645 $1,727,462
GLOBAL RESOURCES FUND 240,719 218,438 219,018
WORLD GOLD FUND 1,753,641 1,900,764 2,238,255
TREASURY SECURITIES CASH FUND 760,423 894,643 835,252
INCOME FUND 99,688 80,223 73,521
TAX FREE FUND -0- -0- -0-
GOVERNMENT SECURITIES SAVINGS FUND -0- -0- -0-
REAL ESTATE FUND 140,661 85,225 64,381
INTERMEDIATE TREASURY FUND -0- -0- -0-
NEAR-TERM TAX FREE FUND -0- -0- -0-

- --------------------------------------------------------------------------------
Statement of Additional Information
Page 21

TRANSFER AGENCY AND OTHER SERVICES

In addition to the services performed for the Funds and the Trust under the
Advisory Agreement, the Advisor, through its subsidiary USSI, provides transfer
agent and dividend disbursement agent services pursuant to the Transfer Agency
Agreement as described in the Funds' prospectuses under "Management of the Funds
- -- The Investment Advisor." In addition, lockbox and statement printing services
are provided by USSI. The Board of Trustees recently approved the Transfer
Agency and related agreements through October 1997. For the three fiscal years
ended June 30, 1994, 1995 and 1996, the Trust paid USSI total transfer agency,
lockbox and printing fees of , $2,313,933, $2,557,846 and $2,707,293
respectively, for all funds.

USSI also maintains the books and records of the Trust and of each Fund of
the Trust and calculates their daily net asset value as described in the Funds'
prospectuses under "Management of the Funds -- The Investment Advisor." Total
fees for such services for the fiscal years ending June 30, 1994, 1995 and 1996
were $354,278, $502,994, and $499,465 respectively, for all funds.

All fees paid to the Advisor during the fiscal year ended June 30, 1996,
(including management, transfer agency, lockbox, printing and accounting fees
but net of reimbursements) totaled $8,423,347.

A & B Mailers, Inc., a wholly-owned corporation of the Advisor, provides
the Trust with certain mail handling services. The charges for such services
have been negotiated by the Audit Committee and A & B Mailers, Inc. Each service
is priced separately.

CERTAIN PURCHASES OF SHARES OF THE FUNDS

Shares of all the Funds are continuously offered by the Trust at their net
asset value next determined after an order is accepted. The methods available
for purchasing shares of the Funds are described in the Prospectus. In addition,
shares of each Fund, except theTreasury Securities Cash Fund, the Tax Free Fund,
the Government Securities Savings Fund, may be purchased using stock, so long as
the securities delivered to the Trust meet the investment objectives and
concentration policies of the appropriate Fund, and are otherwise acceptable to
the Advisor, which reserves the right to reject all or any part of the
securities offered in exchange for shares of such Funds. On any such "in kind"
purchase, the following conditions will apply:

(1) the securities offered by the investor in exchange for shares of the
Fund must not be in any way restricted as to resale or otherwise be
illiquid;

(2) securities of the same issuer must already exist in the Fund's
portfolio;

(3) the securities must have a value which is readily ascertainable (and
not established only by evaluation procedures) as evidenced by a
listing on the AMEX and the NYSE, or NASDAQ;

(4) any securities so acquired by any Fund shall not comprise over 5% of
that Fund's net assets at the time of such exchange;

(5) no over-the-counter securities will be accepted unless the principal
over-the-counter market is in the United States; and

(6) the securities are acquired for investment and not for resale.

The Trust believes that this ability to purchase shares of each Fund,
except the Treasury Securities Cash Fund, the Tax Free Fund, and the Government
Securities Savings Fund using securities provides a means by which holders of
certain securities may obtain diversification and continuous professional
management of their investments without the expense of selling those securities
in the public market.

- --------------------------------------------------------------------------------
Statement of Additional Information
Page 22

An investor who wishes to make an "in kind" purchase should furnish (either
in writing or by telephone) to the Trust a list with a full and exact
description of all of the securities which he or she proposes to deliver. The
Trust will advise him or her as to those securities which it is prepared to
accept and will provide the investor with the necessary forms to be completed
and signed by the investor. The investor should then send the securities, in
proper form for transfer, with the necessary forms to the Trust and certify that
there are no legal or contractual restrictions on the free transfer and sale of
the securities. The securities will be valued as of the close of business on the
day of receipt by the Trust in the same manner as portfolio securities of the
Gold Shares, Global Resources, World Gold, Income, and Real Estate Funds are
valued. See the section entitled "How Shares Are Valued" in the prospectus. The
number of shares of the appropriate Fund, having a net asset value as of the
close of business on the day of receipt equal to the value of the securities
delivered by the investor, will be issued to the investor, less applicable stock
transfer taxes, if any.

ADDITIONAL INFORMATION ON REDEMPTIONS

WIRE REDEMPTIONS - TREASURY SECURITIES CASH FUND AND GOVERNMENT SECURITIES
SAVINGS FUND ONLY. When shares of the. Treasury Securities Cash Fund are
redeemed by wire, proceeds will normally be wired on the next business day after
receipt of the telephone instruction. To place a request for a wire redemption,
the shareholder may instruct USSI by telephone (if this option was elected on
the application accompanying the prospectus), or by mailing instructions to
United Services Funds, P.O. Box 781234, San Antonio, Texas 78278-1234. A bank
processing fee for each bank wire will be charged to the shareholder's account.
The shareholder may change the account which has been designated to receive
amounts withdrawn under this procedure at any time by writing to USSI with
signature(s) guaranteed as described in the prospectus. Further documentation
will be required to change the designated account when shares are held by a
corporation or other organization, fiduciary or institutional investor.

CHECK REDEMPTIONS - TREASURY SECURITIES CASH FUND AND GOVERNMENT SECURITIES
SAVINGS FUND ONLY. Upon receipt of a completed application indicating election
of the check writing feature, shareholders will be provided with a free supply
of temporary checks. A shareholder may order additional checks for a nominal
charge.

The checkwriting withdrawal procedure enables a shareholder to receive
dividends declared on the shares to be redeemed until such time as the check is
processed. For this reason, checks should never be used to close an account,
since the shareholder cannot know what the exact balance in the account will be
on the date that the check clears. If there are not sufficient shares to cover a
check, the check will be returned to the payee and marked "insufficient funds."
Checks written against shares which have been in the account less than 7 days
and were purchased by check will be returned as uncollected funds. A shareholder
may avoid this 7-day requirement by purchasing by bank wire or cashiers check.

The Trust reserves the right to terminate generally, or alter generally,
the checkwriting service or to impose a service charge upon 30 days' prior
notice to shareholders.

REDEMPTION IN KIND. The Trust reserves the right to redeem shares of the
Gold Shares Fund in cash or in kind. However, the Trust has elected to be
governed by Rule 18f-1 under the Investment Company Act of 1940, pursuant to
which the Trust is obligated to redeem shares of the Gold Shares Fund solely in
cash up to the lesser of $250,000 or one percent of the net asset value of the
Trust during any 90-day period for any one shareholder. Any shareholder of the
Gold Shares Fund receiving a redemption in kind would then have to pay brokerage
fees in order to convert his Fund investment into cash. All redemptions in kind
will be made in marketable securities of the Fund.

- --------------------------------------------------------------------------------
Statement of Additional Information
Page 23

by the SEC, which makes it not reasonably practicable for the Trust to dispose
of securities owned by it or fairly to determine the value of its assets, or (3)
as the SEC may otherwise permit.

CALCULATION OF PERFORMANCE DATA

Treasury Securities Cash Fund and Government Securities Savings Fund
shareholders and prospective investors in these Funds will be interested in
learning, from time to time, the current yield of the Funds, based on dividends
declared daily from net investment income. To obtain a current yield quotation,
call the Advisor toll free at 1-800-873-8637 (local residents call 308-1222).
The yield of that Fund is calculated by determining the net change in the value
of a hypothetical pre-existing account in the Fund having a balance of one share
at the beginning of a historical seven-calendar-day period, dividing the net
change by the value of the account at the beginning of the period to obtain the
base period return, and multiplying the base period return by 365/7. The net
change in the value of an account in the Fund reflects the value of additional
shares purchased with dividends from the original share and any such additional
shares, and all fees charged to all shareholder accounts in proportion to the
length of the base period and the Fund's average account size, but does not
include realized gains and losses, or unrealized appreciation and depreciation.
The Funds may also calculate their effective annualized yield (in effect, a
compound yield) by dividing the base period return (calculated as above) by
seven, adding one, raising the sum to the 365th power and subtracting one.

The Treasury Securities Cash Fund's and the. Government Securities Savings
Fund's net income, from the time of the immediately preceding dividend
declaration, consists of interest accrued or discount earned during such period
(including both original issue and market discount) on the Fund's securities,
less amortization of premium and the estimated expenses of the Fund applicable
to that dividend period. The yield quoted at any time represents the amount
being earned on a current basis and is a function of the types of instruments in
the Fund's portfolio, their quality and length of maturity, their relative
values, and the Fund's operating expenses. The length of maturity for the
portfolio is the average dollar-weighted maturity of the portfolio. This means
that the portfolio has an average maturity of a stated number of days for all of
its issues.

The yield fluctuates daily as the income earned on the investments of the
Treasury Securities Cash Fund and the Government Securities Savings Fund
fluctuates. Accordingly, there is no assurance that the yield quoted on any
given occasion will remain in effect for any period of time, nor is there any
guarantee that the net asset value or any stated rate of return will remain
constant. A shareholder's investment in the. Treasury Securities Cash Fund and
the . Government Savings Fund is not insured, although the underlying portfolio
securities are, of course, backed by the United States Government or, in the
case of the Government Securities Savings Fund, by a government agency.
Investors comparing results of the Treasury Securities Cash Fund and .
Government Securities Savings Fund with investment results and yields from other
sources, such as banks or savings and loan associations, should understand this
distinction.

The seven-day yield and effective yield for the. Treasury Securities Cash
Fund and the . Government Securities Savings Fund at June 30, 1996 were 4.19%
and 4.28%, and 5.04% and 5.17%, respectively, with an average weighted maturity
of investments on that date of 51 and 75 days, respectively.

TOTAL RETURN

The Gold Shares Fund, Global Resources Fund, World Gold Fund, Income Fund,
Tax Free Fund, the Real Estate Fund, the Near-Term Tax Free Fund and the
Intermediate Treasury Fund may each advertise performance in terms of average
annual total return for 1-, 5- and 10-year periods, or for such lesser periods
as any of such Funds have been in existence. Average annual total return is
computed by finding the average annual compounded rates of return over the
periods that would equate the initial amount invested to the ending redeemable
value, according to the following formula:

- --------------------------------------------------------------------------------
Statement of Additional Information
Page 24

n
P(1 + T) = ERV

The calculation assumes all charges are deducted from the initial $1,000
payment and assumes all dividends and distributions by each Fund are reinvested
at the price stated in the prospectus on the reinvestment dates during the
period, and includes all recurring fees that are charged to all shareholder
accounts.

The average annual compounded rate of return for each Fund for the
following years ended as of June 30, 1996 is as follows:

1 YEAR 5 YEARS 10 YEARS
----------------------------------------------

Gold Shares Fund (11.73)% (9.95)% (1.70)%
Global Resources Fund 22.80% 6.82% 7.72%
World Gold Fund 34.35% 16.21% 10.08%
Income Fund 16.60% 10.75% 9.08%
Tax Free Fund 5.25% 6.84% 7.09%
Real Estate Fund (since 17.34% 7.30% 4.67%
7/2/87)
Near-Term Tax Free Fund 3.68% 6.35% 5.97%
(since 12/1/90)
Intermediate Treasury Fund
(since 5/8/92) 2.48% N/A 6.45%

YIELD

The Gold Shares Fund, Global Resources Fund, World Gold Fund, Income Fund,
Tax Free Fund, Real Estate Fund, Near-Term Tax Free Fund and the Intermediate
Treasury Fund each may advertise performance in terms of a 30-day yield
quotation. The 30-day yield quotation is computed by dividing the net investment
income per share earned during the period by the maximum offering price per
share on the last day of the period, according to the following formula:

A - B
----- 6
YIELD = 2 [( + 1) - 1]
CD

Where: A = dividends and interest earned during the period

B = expenses accrued for the period (net of reimbursement)

C = the average daily number of shares outstanding during
the period that were entitled to receive dividends

D = the maximum offering price per share on the last day of
the period

- --------------------------------------------------------------------------------
Statement of Additional Information
Page 25

The 30-day yield for the 30 days ended June 30, 1996 for each Fund was as
follows:

Income Fund 2.40%
Tax Free Fund 5.33%
Real Estate Fund 4.02%
Near-Term Tax Free Fund 4.45%
Intermediate Treasury Fund 6.07%

TAX EQUIVALENT YIELD

The Tax Free Fund's tax equivalent yield for the 30 days ended June 30,
1996 was 8.82% based on a Federal income tax rate of 39.6%.

The Near-Term Tax Free Fund's tax equivalent yield for the 30 days ended
June 30, 1996 was 7.37% based on a Federal income tax rate of 39.6%.

The tax equivalent yield is computed by dividing that portion of the yield
of the Tax Free Fund (computed as described under "Yield" above) which is
tax-exempt, by one minus the Federal income tax rate of 28% (or other relevant
rate) and adding the result to that portion, if any, of the yield of the Fund
that is not tax-exempt. The compliment, for example, of a tax rate of 39.6% is
60.4%, that is [1.00 - .396 = .604].

NONSTANDARDIZED TOTAL RETURN

Each Fund may provide the above described standard total return results for
a period which ends as of not earlier than the most recent calendar quarter end
and which begins either twelve months before or at the time of commencement of
each Fund's operations. In addition, each Fund may provide nonstandardized total
return results for differing periods, such as for the most recent six months.
Such nonstandardized total return is computed as otherwise described under
"Total Return" except that no annualization is made.

DISTRIBUTION RATES

In its sales literature, each Fund, except for the money market funds, may
also quote its distribution rate along with the above described standard total
return and yield information. The distribution rate is calculated by annualizing
the latest distribution and dividing the result by the offering price per share
as of the end of the period to which the distribution relates. A distribution
can include gross investment income from debt obligations purchased at a premium
and in effect include a portion of the premium paid. A distribution can also
include gross short-term capital gains without recognition of any unrealized
capital losses. Further, a distribution can include income from the sale of
options by each Fund even though such option income is not considered investment
income under generally accepted accounting principals.

Because a distribution can include such premiums, capital gains and option
income, the amount of the distribution may be susceptible to control by the
Advisor through transactions designed to increase the amount of such items.
Also, because the distribution rate is calculated in part by dividing the latest
distribution by net asset value, the distribution rate will increase as the net
asset value declines. A distribution rate can be greater than the yield rate
calculated as described above.

EFFECT OF FEE WAIVER AND EXPENSE REIMBURSEMENT

- --------------------------------------------------------------------------------
Statement of Additional Information
Page 26

TAX STATUS

TAXATION OF THE FUNDS -- IN GENERAL

As stated in its Prospectus, each Fund intends to qualify as a "regulated
investment company" under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). Accordingly, each Fund will not be liable for Federal
income taxes on its taxable net investment income and capital gain net income
that are distributed to shareholders, provided that a Fund distributes at least
90% of its net investment income and net short-term capital gain for the taxable
year.

To qualify as a regulated investment company, each Fund must, among other
things, (a) derive in each taxable year at least 90% of its gross income from
dividends, interest, payments with respect to securities loans, gains from the
sale or other disposition of stock, securities or foreign currencies, or other
income derived with respect to its business of investing in such stock,
securities or currencies (the "90% test"); (b) derive in each taxable year less
than 30% of its gross income from the sale or other disposition of stock,
securities or certain options, futures or foreign currencies held less than
three months (the "30% test"), and (c) satisfy certain diversification
requirements at the close of each quarter of the Fund's taxable year.
Furthermore, in order to be entitled to pay tax-exempt interest income dividends
to shareholders, the Tax Free Fund and Near-Term Tax Free Fund must satisfy the
requirement that, at the close of each quarter of its taxable year, at least 50%
of the value of its total assets consists of obligations the interest of which
is exempt from Federal income tax. The Tax Free and Near-Term Tax Free Funds
intend to satisfy this requirement.

The Code imposes a non-deductible 4% excise tax on a regulated investment
company that fails to distribute during each calendar year an amount equal to
the sum of (1) at least 98% of its ordinary income for the calendar year, (2) at
least 98% of its capital gain net income for the twelve-month period ending on
October 31 of the calendar year and (3) any portion not taxable to the Fund of
the respective balance from the preceding calendar year. Because the excise tax
is based upon undistributed taxable income, it will not apply to tax exempt
income received by the Tax Free and Near-Term Tax Free Funds. The Funds intend
to make such distributions as are necessary to avoid imposition of this excise
tax.

TAXATION OF THE FUNDS' INVESTMENTS

A Fund's ability to make certain investments may be limited by provisions
of the Code that require inclusion of certain unrealized gains or losses in the
Fund's income for purposes of the 90% test, the 30% test and the distribution
requirements of the Code, and by provisions of the Code that characterize
certain income or loss as ordinary income or loss rather than capital gain or
loss. Such recognition, characterization and timing rules generally apply to
investments in certain forward currency contracts, foreign currencies and debt
securities denominated in foreign currencies.

For Federal income tax purposes, debt securities purchased by a Fund may be
treated as having original issue discount. Original issue discount can generally
be defined as the excess of the stated redemption price at maturity of a debt
obligation over the issue price. Original issue discount is treated as interest
for Federal income tax purposes as earned by a Fund, whether or not any income
is actually received, and therefore, is subject to the distribution requirements
of the Code. However, original issue discount with respect to tax-exempt
obligations generally will be excluded from a Fund's taxable income, although
such discount will be included in gross income for purposes of the 90% test and
the 30% test described above. Original issue discount with respect to tax-exempt
securities is accrued and added to the adjusted tax basis of such securities for
purposes of determining gain or loss upon sale or at maturity. Generally, the
amount of original issue discount is determined on the basis of a constant yield
to maturity which takes into account the compounding of accrued interest. Under
section 1286 of the Code, an investment in a stripped bond or stripped coupon
will result in original issue discount.

Debt securities may be purchased by a Fund at a discount which exceeds the
original issue price plus previously accrued original issue discount remaining
on the securities, if any, at the time a Fund purchases the securities. This
additional discount represents market discount for income tax purposes. To the
extent that a Fund purchases municipal bonds at a market discount, the
accounting accretion of such discount may generate taxable income for the Fund
and its shareholders. In the case of any debt security issued after July 18,
1984, having a fixed maturity date of more than one year from the date of issue
and having market discount, the gain realized on disposition will be treated as
interest income for purposes of the 90% test to the extent it does not exceed
the accrued market discount on the security (unless the Fund elects to include
such

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Page 27

accrued market discount in income in the tax year to which it is attributable).
Generally, market discount is accrued on a daily basis.

A Fund whose portfolio is subject to the market discount rules may be
required to capitalize, rather than deduct currently, part or all of any direct
interest expense incurred to purchase or carry any debt security having market
discount, unless the Fund makes the election to include market discount
currently. Because a Fund must take into account all original issue discount for
purposes of satisfying various requirements for qualifying as a regulated
investment company under Subchapter M of the Code, it will be more difficult for
a Fund to make the distributions required under Subchapter M of the Code and to
avoid the 4% excise tax described above. To the extent that a Fund holds zero
coupon or deferred interest bonds in its portfolio, or bonds paying interest in
the form of additional debt obligations, the Fund would recognize income
currently even though the Fund received no cash payment of interest, and would
need to raise cash to satisfy the obligations to distribute such income to
shareholders from sales of portfolio securities.

The Funds may purchase debt securities at a premium, i.e., at a purchase
price in excess of face amount. With respect to tax-exempt securities, the
premium must be amortized to the maturity date but no deduction is allowed for
the premium amortization. Instead, the amortized bond premium will reduce the
Fund's adjusted tax basis in the securities. For taxable securities, the premium
may be amortized if the Fund so elects. The amortized premium on taxable
securities is allowed as a deduction, and, generally for securities issued after
September 27, 1985, must be amortized under an economic accrual method.

TAXATION OF THE SHAREHOLDER

Taxable distributions generally are included in a shareholder's gross
income for the taxable year in which they are received. However, dividends
declared in October, November or December and made payable to shareholders of
record in such a month will be deemed to have been received on December 31, if a
Fund pays the dividends during the following January. Since none of the net
investment income of the Tax Free Fund, the Treasury Securities Cash Fund, the
Government Securities Savings Fund, the Intermediate Treasury Fund or the
Near-Term Tax Free Fund is expected to arise from dividends on domestic common
or preferred stock, none of these Funds' distributions will qualify for the 70%
corporate dividends-received deduction.

Distributions by a Fund, other than the Treasury Securities Cash Fund and
the . Government Securities Savings Fund, will result in a reduction in the fair
market value of the Fund's shares. Should a distribution reduce the fair market
value below a shareholder's cost basis, such distribution nevertheless would be
taxable to the shareholder as ordinary income or long-term capital gain, even
though, from an investment standpoint, it may constitute a partial return of
capital. In particular, investors should be careful to consider the tax
implications of buying shares of such Funds just prior to a distribution. The
price of such shares purchased at that time includes the amount of any
forthcoming distribution. Those investors purchasing the Fund's shares just
prior to a distribution may receive a return of investment upon distribution
which will nevertheless be taxable to them.

To the extent that the Tax Free Fund's and the Near-Term Tax Free Fund's
dividends distributed to shareholders are derived from interest income exempt
from Federal income tax and are designated as "exempt-interest dividends" by the
Fund, they will be excludable from a shareholder's gross income for Federal
income tax purposes. Shareholders who are recipients of Social Security benefits
should be aware that exempt-interest dividends received from the Fund are
includible in their "modified adjusted gross income" for purposes of determining
the amount of such Social Security benefits, if any, that are required to be
included in their gross income.

All distributions of investment income during the year will have the same
percentage designated as tax exempt. This method is called the "average annual
method." Since the Tax Free Fund and the Near-Term Tax Free Fund invest
primarily in tax-exempt securities, the percentage is expected to be
substantially the same as the amount actually earned during any particular
distribution period.

A shareholder of a Fund should be aware that a redemption of shares
(including any exchange into another United Services Fund) is a taxable event
and, accordingly, a capital gain or loss may be recognized. If a shareholder of
the Tax Free Fund or the Near-Term Tax Free Fund receives an exempt-interest
dividend with respect to any share and such share has

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Page 28

been held for six months or less, any loss on the redemption or exchange will be
disallowed to the extent of such exempt-interest dividend. Similarly, if a
shareholder of a Fund receives a distribution taxable as long-term capital gain
with respect to shares of the Fund and redeems or exchanges shares before he has
held them for more than six months, any loss on the redemption or exchange (not
otherwise disallowed as attributable to an exempt-interest dividend) will be
treated as long-term capital loss to the extent of the long-term capital gain
recognized.

The Tax Free Fund and the Near-Term Tax Free Fund may invest in private
activity bonds. Interest on private activity bonds issued after August 7, 1986,
is subject to the Federal alternative minimum tax ("AMT"), although the interest
continues to be excludable from gross income for other purposes. AMT is a
supplemental tax designed to ensure that taxpayers pay at least a minimum amount
of tax on their income, even if they make substantial use of certain tax
deductions and exclusions (referred to as "tax preference items"). Interest from
private activity bonds is one of the tax preference items that is added into
income from other sources for the purposes of determining whether a taxpayer is
subject to the AMT and the amount of any tax to be paid. Prospective investors
should consult their own tax advisors with respect to the possible application
of the AMT to their tax situation.

Opinions relating to the validity of tax-exempt securities and the
exemption of interest thereon from Federal income tax are rendered by recognized
bond counsel to the issuers. Neither the Advisor's nor the Fund's counsel makes
any review of proceedings relating to the issuance of tax-exempt securities or
the basis of such opinions.

CUSTODIAN

Bankers Trust Company acts as Custodian for all Funds of the Trust
described in this Statement of Additional Information. With respect to the Gold
Shares Fund, Global Resources Fund, and World Gold Fund , Bankers Trust Company
may hold securities of the funds outside the United States pursuant to
sub-custody arrangements separately approved by the Trust. Services with respect
to the retirement accounts will be provided by Security Trust and Financial
Company of San Antonio, Texas, a wholly-owned subsidiary of the Advisor.

INDEPENDENT ACCOUNTANTS AND LEGAL COUNSEL

Price Waterhouse LLP, One Riverwalk Place, Suite 900, San Antonio, Texas
78205 serves as the independent accountants for the Trust.

Goodwin, Procter & LLP, Exchange Place, Boston, Massachusetts 02109, are
legal counsel to the Trust.

INFORMATION ABOUT SECURITIES RATINGS

Debt Security Ratings, Including Municipal Bonds

MOODY'S INVESTORS SERVICE, INC. Aaa--the "best quality." Aa--"high quality
by all standards," but margins of protection or other elements make long-term
risks appear somewhat larger than Aaa rated municipal bonds. A--"upper medium
grade obligation." Security for principal and interest are considered adequate,
but elements may be present which suggest a susceptibility to impairment
sometime in the future. Baa--"medium grade obligations." Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and have
speculative characteristics as well.

STANDARD & POOR'S CORPORATION. AAA--"obligation of the highest quality."
AA--issues with investment characteristics "only slightly less marked than those
of the prime quality issues." A--"the third strongest capacity for payment of
debt service." Principal and interest payments on the bonds in this category are
considered safe. It differs from the two higher ratings, because with respect to
general obligation bonds, there is some weakness which, under certain adverse
circumstances, might impair the ability of the issuer to meet debt obligations
at some future date. With respect to

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Statement of Additional Information
Page 30

revenue bonds, debt service coverage is good but not exceptional, and stability
of the pledged revenues could show some variations because of increased
competition or economic influences on revenues. BBB--"regarded as having
adequate capacity to pay interest and repay principal." Whereas it normally
exhibits adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest and
repay principal.

FINANCIAL STATEMENTS

The financial statements for year ended June 30, 1996, are hereby
incorporated by reference from the Annual Report to Shareholders of that date
which has been delivered with this Statement of Additional Information [unless
previously provided, in which event the Trust will promptly provide another
copy, free of charge, upon request to: U.S. Global Investors, Inc., P.O. Box
29467, San Antonio, Texas 78229-0467, 1-800-873-8637 or (210) 308-1234].

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