UNITED SERVICES FUNDS, 485APOS, 1996-09-03

UNITED SERVICES FUNDS
485APOS, 1996-09-03

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REGISTRATION NO. 2-35439
REGISTRATION NO. 811-1800
=====================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No.
Post-Effective Amendment No. 79
(Check appropriate box or boxes)

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940

Amendment No. 79
UNITED SERVICES FUNDS
(Exact Name of Registrant as Specified in Charter)

7900 Callaghan Road
SAN ANTONIO, TEXAS 78229
(Address of Principal Executive Office)

Registrant's Telephone Number, including Area Code (210) 308-1234

Frank E. Holmes, President
United Services Funds
7900 Callaghan Road
SAN ANTONIO, TEXAS 78229
(Name and Address of Agent for Service)

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

Exhibit Index for exhibits filed herewith is at page ____ of ____.

It is proposed that this filing will become effective (check appropriate box)

/ / immediately upon filing pursuant to paragraph (b)

/ / on (date) pursuant to paragraph (b)

/ / 60 days after filing pursuant to paragraph (a)(i)

/X/ on November 1, 1996 pursuant to paragraph (a)(i)

/ / 75 days after filing pursuant to paragraph (a)(ii)

/ / on (date) pursuant to paragraph (a)(ii) of rule 485.

If appropriate, check the following box:

/ / this post-effective amendment designates a new effective
date for a previously filed post-effective amendment.

The Registrant hereby declares that, pursuant to Rule 24f-2 promulgated under
the Investment Company Act of 1940, an indefinite number of shares of beneficial
interest, no par value, in U.S. Gold Shares Fund, U.S. All American Equity Fund,
U.S. Treasury Securities Cash Fund, U.S. Global Resources Fund, U.S. World Gold
Fund, U.S. Income Fund, U.S. Government Securities Savings Fund, U.S. Tax Free
Fund, U.S. Real Estate Fund, United Services Near-Term Tax Free Fund, United
Services Intermediate Treasury Fund and China Region Opportunity Fund have
previously been registered. The Rule 24f-2 Notice for the most recent fiscal
year of United Services Funds was filed on or about August 26, 1996.

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

UNITED SERVICES FUNDS
FORM N-1A
CROSS REFERENCE SHEET
FORM N-1A
PART A CAPTION OR
ITEM NO. LOCATION IN PROSPECTUS
- --------- -----------------------------------------------

1 ........................ Cover Page

2 ........................ Not Applicable

3 ........................ Financial Highlights

4 ........................ Cover Page; The Trust;
Investment Objectives and
Considerations; Special Risks

5 ........................ Management of the Fund

6 ........................ Summary of Fees and Expenses; Cover Page;
The Trust; Dividends and Taxes

7 ........................ How to Purchase Shares; How Shares Are Valued

8 ........................ How to Redeem Shares

9 ........................ Not Applicable

FORM N-1A
PART B CAPTION OR
ITEM NO. LOCATION IN STATEMENT OF ADDITIONAL INFORMATION
- --------- -----------------------------------------------

10 ........................ Cover Page

11 ........................ Table of Contents

12 ........................ General Information

13 ........................ Investment Objectives and Policies

14 ........................ Management of the Trust

15 ........................ Principal Holders of Securities

16 ........................ Management of the Funds

17 ........................ Investment Objectives and
Policies
18 ........................ General Information

19 ........................ Certain Purchases of Shares of the Trust;
Additional Information on Purchases and
Redemptions

20 ........................ Tax Status

21 ........................ Not Applicable

22 ........................ Not Covered in Statement of Additional
Information (Covered under Item 7 in Part A)

23 ........................ Audited Financial Statements Report of
Independent Accountants (Covered in
Parts A and B)

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

PART A - PROSPECTUSES

Included herein are the Prospectuses for
United Services Funds
U.S. Gold Shares Fund, U.S. Global Resources Fund, and U.S. World Gold Fund
U.S. All American Equity Fund
U.S. Income Fund, U.S. Real Estate Fund
China Region Opportunity Fund
United Services Intermediate Treasury Fund
U.S. Tax Free Fund, United Services Near-Term Tax Free Fund
U.S. Treasury Securities Cash Fund, U.S. Government Securities Savings Fund

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

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
SPECIAL RISKS ON PAGE 11.) 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.

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 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..................... 8
U.S. Gold Shares Fund.............. 8
U.S. Global Resources Fund......... 8
U.S. World Gold Fund............... 9
COMMON INVESTMENT POLICIES........... 10
SPECIAL RISKS........................ 11
HOW TO PURCHASE SHARES............... 14
HOW TO EXCHANGE SHARES............... 17
HOW TO REDEEM SHARES................. 18
HOW SHARES ARE VALUED................ 22
DIVIDENDS AND TAXES.................. 22
THE TRUST............................ 24
MANAGEMENT OF THE FUNDS.............. 25
PERFORMANCE INFORMATION.............. 27

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

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 implies. The
examples should not be considered a representation of past or future expenses.
Actual expenses may be greater or less than those shown.
- ------------------------------------------------------------------------------

(1) Annual Fund Operating Expenses are based on each Fund's historical expenses.
Management fees are paid to U.S. Global Investors, Inc. (the "Advisor") for
maintaining its investments and business affairs. Each Fund incurs other
expenses for maintaining shareholder records, furnishing shareholder statements
and reports and for other services. Transfer agency and accounting services fees
are paid to United Shareholder Services, Inc. ("USSI" or the "Transfer Agent"),
a subsidiary of the Advisor, and are not charged directly to individual
shareholder accounts. The Transfer Agent charges the Fund $23.00 per shareholder
account per year. The account closing fee will be paid by the shareholder
directly to the Transfer Agent which will, in turn, reduce its charges to the
Fund by a like amount. Please refer to the section entitled "Management of the
Funds" on Page 25 for further information.

FINANCIAL HIGHLIGHTS
U.S. GOLD SHARES 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 ....... $ 2.14 2.48 2.49 2.21 3.57 3.82 3.77 3.74
-------- ------- ------- ------- ------- ------- ------- -------
Net investment income(a) ................. .05 .06 .07 .04 .07 .10 .16 .20
Net realized and unrealized gain
(loss) on investments(b) ................ (.30) (.33) (.02) .29 (1.35) (.25) .08 .04
-------- ------- ------- ------- ------- ------- ------- -------
Total from investment operations ........... (.25) (.27) .05 .33 (1.28) (.15) .24 .24
-------- ------- ------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ..... (.05) (.06) (.06) (.04) (.08) (.10) (.19) (.21)
Distributions in excess of net
investment income(c) .................... -- (.01) -- (.01) -- -- -- --
Distributions from net realized gains .... -- -- -- -- -- -- -- --
-------- ------- ------- ------- ------- ------- ------- -------
Total dividends and distributions .......... (.05) (.07) (.06) (.05) (.08) (.10) (.19) (.21)
-------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period ............. $ 1.84 2.14 2.48 2.49 2.21 3.57 3.82 3.77
======== ======= ======= ======= ======= ======= ======= =======

Total Investment Return(d).................. (11.73)% (11.21) 1.85 16.70 (36.45) (3.77) 5.51 7.03

Ratios/Supplemental Data:
Net assets, end of period (in thousands) ... $153,839 211,171 263,827 299,808 187,937 343,148 295,108 239,111
Ratio of expenses to average net assets..... 1.54%(e) 1.42 1.46 1.88 1.54 1.54 1.46 1.54
Ratio of net income to average net assets... 1.81%(e) 2.47 2.61 2.58 2.52 2.71 3.80 5.46
Portfolio turnover rate .................... 24.24% 32.75 29.40 19.93 24.69 48.94 13.13 7.49
Average commission rate paid (f) $ 0.0523 NA NA NA NA NA NA NA

YEAR ENDED JUNE 30,
-------------------
1988 1987
-------- --------
<S> <C> <C>
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

</TABLE>
(CONTINUED)

FINANCIAL HIGHLIGHTS
U.S. GLOBAL RESOURCES 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 1988 1987
------- -------- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <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 11.00 5.29
------- -------- ------ ------ ------ ------ ------ ------ ------ ------
Net investment income(a)................ (.01) (.03) (.02) .01 .00 .03 .12 .13 .14 (.19)
Net realized and unrealized gain
(loss) on investments(b)............... 1.31 .36 (.18) .35 .25 (.12) .02 (.33) (2.77) 5.90)
------- -------- ------ ------ ------ ------ ------ ------ ------ ------
Total from investment operations.......... 1.30 .33 (.20) .36 .25 (.09) .14 (.20) (2.63) 5.71)
======= ======== ====== ====== ====== ====== ====== ====== ====== ======
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) (.70) --
Distributions in excess of net
realized gain(c)....................... -- (.31) -- -- -- -- -- -- -- --
------- -------- ------ ------ ------ ------ ------ ------ ------ ------
Total dividends and distributions......... (.08) (.31) (.16) (.04) (.23) (.46) (.90) (.40) (.70) --
======= ======== ====== ====== ====== ====== ====== ====== ====== ======
Net asset value, end of period............ $ 6.98 $ 5.76 $ 5.74 6.10 5.78 5.76 6.31 7.07 7.67 11.00
------- -------- ------ ------ ------ ------ ------ ------ ------ ------
Total Investment Return(d)................ 22.80% 5.94 (3.73) 6.46 4.31 (1.26) (.47) (2.36) (24.01) 107.55
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 37,064 44,930
Ratio of expenses to average net
assets .................................. 2.57%(e) 2.49 2.43 2.46 2.33 2.43 2.10 2.04 (.49) 2.90

Ratio of net income to average net
assets .................................. (0.13)%(e) (0.60) (.34) .17 .61 .58 1.37 1.78 1.78 (1.64)

Portfolio turnover rate................... 116.77% 50.24 57.74 119.69 55.07 81.80 70.22 21.31 26.78 7.98

Average commission rate paid (f) ......... $0.0306 NA NA NA NA NA NA NA NA NA
</TABLE>
(CONTINUED)

FINANCIAL HIGHLIGHTS

U.S. WORLD GOLD FUND

1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
-------- ------- ------ ------ ------ ------ ------ ------ ------ -------
<S> <C> <C> <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 20.47 9.61
-------- ------- ------- ------- ------ ------ ------ ------ ------- -------
Net investment income(a) ............... (.08) (.12) (.09) (.12) (.13) (.10) (.04) .02 .00 .00
Net realized and unrealized gain (loss)
on investments(b) ..................... 5.39 .33 1.13 5.20 (.40) (.63) (.66) (2.48) (4.14) 11.06
-------- ------- ------- ------- ------ ------ ------ ------ ------- -------
Total from investment operations ......... 5.31 .21 1.04 5.08 (.53) (.73) (.70) (2.46) (4.14) 11.06
-------- ------- ------- ------- ------ ------ ------ ------ ------- -------
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) (.20) --
-------- ------- ------- ------- ------ ------ ------ ------ ------- -------
Total dividends and distributions ........ -- (.03) -- -- -- -- (.10) -- (2.30) (.20)
-------- ------- ------- ------- ------ ------ ------ ------ ------- -------
Net asset value, end of period ...........$ 21.12 15.81 15.63 14.59 9.51 10.04 10.77 11.57 14.03 20.47
======== ======= ======= ======= ====== ====== ====== ====== ======= =======

Total Investment Return(d) ............... 33.59% 1.36% 7.13 53.58 (5.37) (7.03) (7.02) (16.42) (21.29) 116.80

Ratios/Supplemental Data:
Net assets, end of period (in
thousands) .............................$248,781 181,473 202,819 109,805 57,942 65,423 72,626 85,119 104,273 126,839
Ratio of expenses to average net assets .. 1.51%(e) 1.55 1.53 2.00 2.20 2.22 1.95 2.00 1.47 1.47
Ratio of net income to average net assets (.40)%(e) (.66) 0.66 (1.15) (1.18) (.95) (.24) .13 .04 (.05)
Portfolio turnover rate .................. 25.97% 28.02% 19.65 26.05 47.28 44.46 25.52 0.02 39.20 43.66
Average commission rate paid (f) $0.0202 NA NA NA NA NA NA NA NA NA
</TABLE>

(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

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.

REPURCHASE AGREEMENTS

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 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.

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(R)

The ABC Investment Plan(R) (Automatically Building Capital Investment Plan)
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(R) 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.

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 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. 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.

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 checks are 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 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

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, the
Funds assess a $50 administrative fee if the taxpayer identification number is
not provided by year end.

CERTIFICATES

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(R). 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).
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

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. (Before writing, read "Additional
Information About Exchanges.")

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.

(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 described at page 16.

(5) Exchanges out of United Services Funds" equity funds of shares held
less than 14 days are subject to a trader's fee described at page 20.

(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.

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, 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 the
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 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 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 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(R),
UGMA/UTMA accounts, and retirement plan accounts administered by the Advisor or
its agents or its 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 Plans(R), UGMA/UTMA
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

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, 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 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

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 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.

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

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 reinvest
men 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 dividend and 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.

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.

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.

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.

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 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 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.

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.

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, 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.

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

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.

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 .......................... 3
Financial Highlights .................................. 5
Investment Objectives and
Considerations ...................................... 7
Special Considerations ................................ 8
How to Purchase Shares ................................ 11
How to Exchange Shares ................................ 14
How to Redeem Shares .................................. 15
How Shares are Valued ................................. 20
Dividends and Taxes ................................... 20
The Trust ............................................. 22
Management of the Fund ................................ 23
Performance Information ............................... 25

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.

ALL AMERICAN
EQUITY FUND
------------
SHAREHOLDER TRANSACTION EXPENSES

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)

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" at page 19 for more information on this
fee.

Except for active ABC Investment Plan(R), UGMA/UTMA 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" on page 18.

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 are paid to U.S. Global Investors, Inc. (the "Advisor") for
managing its investments and business affairs. The Fund incurs other expenses
for maintaining shareholder records, furnishing shareholder statements and
reports, and for other services. Transfer agency and accounting services fees
are paid to United Shareholder Services, Inc. ("USSI" or the "Transfer Agent"),
a subsidiary of the Advisor, and are not charged directly to individual
shareholder accounts. The Transfer Agent charges the Fund $23.00 per shareholder
account per year. The account closing fee, account maintenance fee and small
account charge will be paid by the shareholder directly to the Transfer Agent
which will, in turn, reduce its charges to the Fund by like amount. Please refer
to the section entitled "Management of the Fund" on page 23 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 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:

YEAR ENDED JUNE 30,
------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
--------- --------- --------- --------- --------- --------- ----------
<S> <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
--------- --------- --------- --------- --------- ---------- ----------
Net investment income(a).......................... .41 .44 .44 .36 .17 .14 .49
Net realized and unrealized gain (loss) on
investments(b)................................... 4.44 2.68 (.75) 1.91 1.62 .97 (.55)
--------- --------- --------- --------- --------- ---------- ----------
Total from investment operations.................... 4.85 3.12 (.31) 2.27 1.79 1.11 (.06)
--------- --------- --------- --------- --------- ---------- ----------
Less dividends and distributions:
Dividends from net investment income.............. (.38) (.39) (.44) (.37) (.12) (.10) (.50)
Distributions in excess of net investment
income(c)........................................ -- -- (.02) (.09) -- -- --
Distributions from net realized gains............. -- -- (.31) -- -- -- --
Distributions in excess of net realized gain(i)... -- (2.17) -- -- -- -- --
--------- --------- --------- --------- --------- ---------- ----------
Total dividends and distributions................... (.38) (2.56) (.77) (.46) (.12) (.10) (.50)
--------- --------- --------- --------- --------- ---------- ----------
Net asset value, end of period...................... $ 24.55 $ 20.08 $ 19.52 $ 20.60 $ 18.79 $ 17.12 $ 16.11
========= ========= ========= ========= ========= ========== ==========
Total Investment Return(d).......................... 24.31% 17.98% (1.67) 12.15 10.51 6.84 (0.40)

Ratios/Supplemental Data:
Net assets, end of period (in thousands)............ $ 15,220 $ 11,931 10,227 12,331 11,825 10,306 9,763
Ratio of expenses to average net assets............. 0.68%(e) 0.70 0.61 1.03 2.03% 2.80 2.10

Ratio of net income to average net assets........... 1.84%(e) 2.33 2.11 1.86 .78% .83 2.63

Portfolio turnover rate............................. 16.01% 96.92% 116.61 11.55 34.83% 209.26 258.30

Average commission rate paid (f) ................... $ 0.1000 NA NA NA NA NA NA

1989 1988 1987
--------- --------- --------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period................ 16.44 20.24 18.38
--------- --------- --------
Net investment income(a).......................... .43 .40 .32
Net realized and unrealized gain (loss) on
investments(b)................................... .28 (3.46) 1.92
--------- --------- --------
Total from investment operations.................... .71 3.06 2.24
--------- --------- --------
Less dividends and distributions:
Dividends from net investment income.............. (.48) (.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................... (.48) (.74) (.38)
--------- --------- --------
Net asset value, end of period...................... 16.67 16.44 20.24
========= ========= ========
Total Investment Return(d).......................... 4.45 (15.45) 12.59

Ratios/Supplemental Data:
Net assets, end of period (in thousands)............ $ 11,992 16,817 36,368

Ratio of expenses to average net assets............. 1.97% 1.43 1.35

Ratio of net income to average net assets........... 2.62% 1.68 1.68

Portfolio turnover rate............................. 113.24% 179.67 58.26

Average commission rate paid (f) .................. NA NA NA

(FOOTNOTES ON FOLLOWING PAGE)
</TABLE>

(CONTINUED FROM PREVIOUS PAGE)

expense ratio subject to the most restrictive state limitation 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" at page 9.

SPECIAL CONSIDERATIONS

PORTFOLIO TURNOVER

The Fund's total portfolio turnover rate is shown in the "Financial
Highlights Table" on page 5. 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.

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.

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(R)
(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.

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(R)

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.

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 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.

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

FUNDS IN THE UNITED SERVICES FAMILY

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

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 thousand 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 described at page 17.

(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

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

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, 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

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.

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 United Services Funds" 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.

As a special service for small investors, active ABC Investment Plan(R),
UGMA/UTMA accounts, 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(R), UGMA/UTMA 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).

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.

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.

DIVIDENDS AND 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, 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
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 generally pays dividends quarterly and distributes capital gains,
if any, annually.

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, 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.

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.

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 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.

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 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

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.

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 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.

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

[THIS PAGE INTENTIONALLY LEFT BLANK]

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. 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.

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................. 5
Investment Objectives and
Considerations
U.S. Income Fund................ 8
U.S. Real Estate Fund........... 8
Special Considerations............... 10
How to Purchase Shares............... 13
How to Exchange Shares............... 16
How to Redeem Shares................. 17
How Shares are Valued................ 21
Dividends and Taxes.................. 22
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%

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

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 are paid to U.S. Global Investors, Inc. (the "Advisor") for
managing its investments and business affairs. Each Fund incurs other expenses
for maintaining shareholder records, furnishing shareholder statements and
reports, and for other services. Transfer agency and accounting services fees
are paid to United Shareholder Services, Inc. ("USSI" or the "Transfer Agent"),
a wholly-owned subsidiary of the Advisor, and are not charged directly to
individual shareholder accounts. The Transfer Agent charges the Fund $23.00 per
shareholder account per year. The account closing fee and small account charge
are paid by the shareholder directly to the Transfer Agent which will, in turn,
reduce its charges to the Fund by an equal amount. Please refer to the section
entitled "Management of the Funds" on Page 24 for further information.

3
[This page intentionally left blank]

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

----------------------
1988 1987
--------- ---------
<S> <C> <C>

Per Share Operating Performance: 10.50 11.20
Net asset value, beginning of period.... --------- ---------
.63 .63
Net investment income(c)..............
Net realized and unrealized gain (.38) (.27)
(loss) on investments(d)............. --------- ---------
.25 .36
Total from investment operations........ -------- ---------

Less dividends and distributions:
Dividends from net investment (.76) (.50)
income..............................
Distributions in excess of net -- --
investment income(e)................
Distributions from net realized (.35) (.32)
gains...............................
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: 4,450 3,572
Net assets, end of period (in
thousands)............................. 1.73 1.60
Ratio of expenses to average net
assets.................................
Ratio of net income to average net 6.19 6.14
assets.................................

Portfolio turnover rate................. 126.56 173.91
Average Commission Rate Paid(h) ........ NA NA

</TABLE>
(CONTINUED)
5

FINANCIAL HIGHLIGHTS
U.S. REAL ESTATE 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:

YEAR ENDED JUNE 30,
----------------------------------------------------------------------- PERIOD
1996 1995 1994 1993 1992 1991 1990 1989 ENDED(a)
--------- ------- ------ ------ ------- ------- ------- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period............ $ 9.80 9.86 10.96 10.17 8.83 8.36 10.20 9.29 10.00
--------- ------- ------ ------ ------- ------- ------- ----- ------
Net investment income(c)...................... .42 .23 .22 .17 .29 .24 .30 .38 .45
Net realized and unrealized gain (loss) on
investments(d)............................... 1.27 (.13) (1.05) .79 1.38 .47 (1.57) .94 (.78)
--------- ------- ------ ------ ------- ------- ------- ----- ------
Total from investment operations................ 1.69 .10 (.83) .96 1.67 .71 (1.27) 1.32 (.33)
--------- ------- ------ ------ ------- ------- ------- ----- ------
Less dividends and distributions:
Dividends from net investment income.......... (.39) (.16) (.22) (.17) (.33) (.24) (.30) (.41) (.38)
Distributions in excess of net investment
income(e)................................... -- -- (.02) -- -- -- -- -- --
Distributions from net realized gains......... -- -- -- -- -- -- (.27) -- --
Tax return of capital distributions(e)........ (.13) -- (.03) -- -- -- -- -- --
--------- ------- ------ ------ ------- ------- ------- ----- ------
Total dividends and distributions............... (.52) (.16) (.27) (.17) (.33) (.24) (.57) (.41) (.38)
--------- ------- ------ ------ ------- ------- ------- ----- ------
Net asset value, end of period.................. $ 10.97 9.80 9.86 10.96 10.17 8.83 8.36 10.20 9.29
========= ======= ====== ====== ======= ======= ======= ===== ======

Total Investment Return(f)...................... 17.34% 1.09 (7.70) 9.45 18.70 9.23 (12.60) 14.46 (2.99)

Ratios/supplemental data:

Net assets, end of period (in thousands)........ $ 8,220 9,169 14,597 19,780 21,514 6,678 6,016 5,658 3,237
Ratio of expenses to average net assets......... 2.26%(g) 1.92 1.59 1.40 1.63 2.63 2.51 2.14 --(b)
Ratio of net income to average net assets....... 3.63%(g) 2.22 1.96 1.55 3.17 2.66 3.50 4.70 6.76(b)
Portfolio turnover rate......................... 107.59% 48.10 145.33 186.99 102.56 132.53 62.55 87.67 51.01(b)
Average commission rate paid (h) $ 0.0925 NA NA NA NA NA NA NA NA

</TABLE>

(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" on pages 5 and 6 of this prospectus. 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" on page 22.

LENDING OF PORTFOLIO SECURITIES

lend securities with an aggregate market value of more than one-third of the
Fund's total net assets.

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.

LIMITATIONS. Each Fund will purchase and sell only options that are listed
on a securities exchange or quoted on NASDAQ. 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 the Fund's total assets.

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; (4) lend portfolio securities
with an aggregate market value of not more than one-third of such Fund's total
net assets; and (5) with respect to the Real Estate Fund, invest up to 5% of the
total assets in securities of companies (including predecessors) that have been
in continuous operation for less than three years (except such limitation shall
not apply to securities of real estate investment trusts).

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
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

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(R)

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.

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

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

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. (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 thousand 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.

(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," page 15.)

(5) Exchanges out of United Services Funds" equity funds of shares held
less than 14 days are subject to a trader's fee described at page 19.

(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

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

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 paid to someone other than the registered owner
of 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, 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

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.

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 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

upon the number of shareholder accounts. The account closing fee does not apply
to exchanges between the United Services Funds' 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.

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(R),
UGMA/UTMA, 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.

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 at 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

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.

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.

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 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.

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.

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 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.

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
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

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.

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

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" at page 12.) 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..................... 5
Risk Factors and Special
Considerations..................... 12
Additional Investment Practices...... 14
Futures Contracts and Options........ 15
How to Purchase Shares............... 17
How to Exchange Shares............... 20
How to Redeem Shares................. 21
How Shares are Valued................ 26
Dividends and Taxes.................. 27
The Trust............................ 30
Management of the Fund............... 31
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%(2)
12b-1 Fees...................... None
Other Expenses.................. 1.18%(2)
Transfer Agency Fees............ 0.58%
Accounting Services Fees........ 0.15%
Total Fund Operating Expenses

(net of waivers and
reimbursements).............. 2.25%(2)

Except for active ABC Investment Plan(R), Uniform Gift to Minors Act
("UGMA"), Uniform Transfer to Minors Act ("UTMA") 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 $5. See "Small Accounts" on page 24.

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

(1) Management Fees are paid to U.S. Global Investors, Inc. (the "Advisor") for
managing its investments and business affairs. The Fund incurs other expenses
for maintaining shareholder records, furnishing shareholder statements and
reports and for other services. Transfer agency and accounting services fees are
paid to United Shareholder Services, Inc. ("USSI" or the "Transfer Agent"), a
subsidiary of the Advisor, and are not charged directly to individual
shareholder accounts. The Transfer Agent charges the Fund $23.00 per shareholder
account per year. The account closing fee and small account charge will be paid
by the shareholder directly to the Transfer Agent which will, in turn, reduce
its charges to the Fund by a like amount. Please refer to the section entitled
"Management of the Fund" on page 31 for further information. Please refer to the
section entitled "Performance Information" on page 34 which discusses the impact
of these charges on standard total return and yield.

(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 are 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)
--------- -------- ---------
<S> <C> <C> <C>
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.

</TABLE>
(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.

(c) Includes the effect of capital share transactions throughout the year.
(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 53.64%.

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 fewer than four years 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, 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

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(R)

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.

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 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.

CERTIFICATES

HOW TO EXCHANGE SHARES

FUNDS IN THE UNITED SERVICES FAMILY

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
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

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" on page 19.)

(5) Exchanges out of United Services Funds' equity funds of shares held less
than 180 days are subject to the redemption fee described on page 24.

(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" on
page 23.)

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

Telephone redemptions are available for Chairman's Circle accounts.

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, 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 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.

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 the 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 100 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

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 United Service 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(R),
UGMA/UTMA 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

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

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.

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, 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.

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.

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.

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

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.

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, 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.

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 Advisor's guarantee.

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 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

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

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................. 12
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(R) UGMA/UTMA 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 small
account charge of $5 for that month. See "Small Accounts" on page 15.

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

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 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 are paid to U.S. Global Investors, Inc. (the "Advisor") for
managing its investments and business affairs. The Fund incurs other expenses
for maintaining shareholder records, furnishing shareholder statements and
reports, and for other services. Transfer agency and accounting services fees
are paid to United Shareholder Services, Inc. ("USSI" or the "Transfer Agent"),
a subsidiary of the Advisor, and are not charged directly to individual
shareholder accounts. The Transfer Agent charges the Fund $23.00 per shareholder
account per year. The account closing fee and small account charge will be paid
by the shareholder directly to the Transfer Agent which will, in turn, reduce
its charges to the Fund by a like amount. Please refer to the section entitled
"Management of the Fund" on page 19 for further information.

(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.............. -- -- -- (.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%(g) 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.
(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 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

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(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 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(R)

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
(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 checks are 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.

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

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 thousand 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

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

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" 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 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

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, 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 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

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 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 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

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(R),
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.

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

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.

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

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 FUND 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. 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.

TABLE OF CONTENTS

PAGE
----
Summary of Fees and Expenses......... 2
Financial Highlights................. 5
Investment Objectives and
Considerations
Tax Free Fund................... 8
Near-Term Tax Free Fund......... 8
Common Practices................ 8
Municipal Securities................. 9
Special Considerations............... 11
How to Purchase Shares............... 12
How to Exchange Shares............... 15
How to Redeem Shares................. 16
How Shares Are Valued................ 20
Dividends and Taxes.................. 20
The Trust............................ 22
Management of the Funds.............. 22
Performance Information.............. 25

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.

TAX NEAR-TERM
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%(3)
12b-1 Fees...................... None None
Other Expenses, including
Transfer Agency and

Accounting Services Fees..... 0.40%(2) 0.40%(3)
Total Fund Operating Expenses

(net of waivers and

reimbursements).............. 0.40%(2) 0.40%(3)

Except for active ABC Investment Plan,(R) UGMA/UTMA 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 small account charge of $5 for that month. See "Small Accounts" at
page 18.

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:

TAX FREE NEAR-TERM TAX
FUND FREE FUND
-------- -------------

1 year............................... $ 14 $ 14
3 years.............................. $ 45 $ 51
5 years.............................. $ 78 $ 91
10 years............................. $172 $ 202

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 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 are paid to U.S. Global Investors, Inc. (the
"Advisor") for managing its investments and business affairs. Each Fund
incurs other expenses for maintaining shareholder records, furnishing
shareholder statements and reports, and for other services. Transfer agency
and accounting services fees are paid to United Shareholder Services, Inc.
("USSI" or the "Transfer Agent"), a subsidiary of the Advisor, and are not
charged directly to individual shareholder accounts. The Transfer Agent
charges the Funds $23.00 per shareholder account per year. The account
closing fee and small account charge will be paid by the shareholder
directly to the Transfer Agent which will, in turn, reduce its charges to
the Funds by a like amount. Please refer to the section entitled
"Management of the Funds" on page 22 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 1988 1987
------- ------- ------- ------- ------ ----- ----- ------ ------ -----
<S> <C> <C> <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 10.98 11.15
------- ----- ----- ----- ----- ----- ----- ----- ----- -----
Net investment income(c)................... .59 .64 .67 .66 .62 .58 .62 .69 .85 .63
Net realized and unrealized gain (loss)
on investments(d)......................... .01 .18 (.56) .47 .59 .20 (.15) .51 .02 (.02)
------- ----- ----- ----- ----- ----- ----- ----- ----- -----
Total from investment operations............. .60 .82 .11 1.13 1.21 .78 .47 1.20 .87 .61
------- ----- ----- ----- ----- ----- ----- ----- ----- -----
Less dividends and distributions:
Dividends from net investment income....... -- -- -- -- -- -- -- -- (1.10) (.66)
_ tax exempt............................. (.55) (.62) (.59) (.63) (.62) (.58) (.57) (.64) -- --
_ taxable................................ (.02) (.02) (.09) -- -- -- (0.6) (0.4) -- --
Distributions in excess of net investment
income(e)................................ -- (.03) (.06) -- -- -- -- -- -- --
Distributions from net realized gain....... -- -- (.06) (.03) (.21) -- -- -- -- (.12)
Distributions in excess of realized
gains(e)................................. -- -- (.07) -- -- -- -- -- -- --
------- ----- ----- ----- ----- ----- ----- ----- ----- -----
Total dividends and distributions............ (.57) (.67) (.87) (.66) (.83) (.58) (.63) (.68) (1.10) (.78)
------- ----- ----- ----- ----- ----- ----- ----- ----- -----
Net asset value, end of period............... $ 11.58 11.55 11.40 12.16 11.69 11.31 11.11 11.27 10.75 10.98
======= ====== ======= ====== ===== ===== ===== ====== ===== =====

Total Investment Return(f)................... 5.25% 7.51 0.75 9.97 11.02 7.19 4.31 11.48 8.69 5.21

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 7,749 7,470
Ratio of expenses to average net assets...... .36%(g) .22 -- .32 1.27 1.93 1.61 1.23 -- (.05)
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 7.60 6.99
Portfolio turnover rate...................... 69.23% 21.52 50.87 93.96 70.23 54.49 82.34 110.45 121.21 37.23

</TABLE>
5

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 (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
gain.......................... -- -- -- (.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 POLICIES

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
UGMA/UTMA accounts. The minimum subsequent investment is $50. The minimum
initial investment for persons enrolled in 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
1-800-873-8637. 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(R)

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 checks are 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.

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
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, 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

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.

(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," page 14.)

(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

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
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

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, 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.

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 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 of United Services 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(R),
UGMA/UTMA 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
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

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 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

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

more than 25% of the voting stock of the Advisor and is its controlling
person. The Advisor was organized in 1968.

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.

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.

These fees will be paid periodically and will generally be based on a percentage
of the value of the institutions' client Fund shares.

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
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, 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 Funds 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.

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
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.

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
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 .................................. 12
How Shares are Valued ................................. 18
Dividends and Taxes ................................... 18
The Trust ............................................. 19
Management of the Funds ............................... 20
Performance Information ............................... 23

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(R), UGMA/UTMA 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" on page 16.

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 CASH SECURITIES SAVINGS
FUND 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 are paid to U.S. Global Investors, Inc. (the
"Advisor") for managing the Fund's investments and business affairs. The Fund
incurs other expenses maintaining shareholder records, furnishing shareholder
statements and reports, and for other services. Transfer agency and accounting
service fees are paid to United Shareholder Services, Inc. ("USSI" or "Transfer
Agent"), a wholly-owned subsidiary of the Advisor, and are not charged directly
to individual shareholder accounts. The Transfer Agent charges the Fund $23.00
per shareholder account per year. The account closing fee and small account
charge will be paid by the shareholder directly to the Transfer Agent which
will, in turn, reduce its charges to the Fund by a like amount. Please refer to
the section entitled "Management of the Funds" at page 20 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

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:

YEAR ENDED JUNE 30,
---------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
--------- --------- --------- --------- --------- --------- ---------
<S> <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 1.00 1.00
--------- --------- --------- --------- --------- --------- ---------
Net investment income(b).................. .04 .04 .02 .02 .04 .06 .08
Net realized and unrealized gain (loss) on
investments(c)........................... -- -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
Total from investment operations............ .04 .04 .02 .02 .04 .06 .08
--------- --------- --------- --------- --------- --------- ---------
Less dividends and distributions:
Dividends from net investment income...... (.04) (.04) (.02) (.02) (.04) (.06) (.08)
Distributions from net realized gains..... -- -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
Total dividends and distributions........... (.04) (.04) (.02) (.02) (.04) (.06) (.08)
--------- --------- --------- --------- --------- --------- ---------
Net asset value, end of period.............. $ 1.00 1.00 1.00 1.00 1.00 1.00 1.00
========= ========= ========= ========= ========= ========= =========

Total Investment Return(e).................. 4.54% 4.43 2.38 2.46 4.33 6.69 7.91

Ratios/Supplemental Data:
Net assets, end of period (in thousands).... $ 188,844 190,373 164,708 142,888 150,192 155,849 162,988
Ratio of expenses to average net assets..... 1.03% .97 .93 .99 .88 .73 .70
Ratio of net income to average net assets... 4.42% 4.32 2.38 2.41 4.30 6.96 7.67
Portfolio turnover rate..................... -- -- -- -- -- -- --

1989 1988 1987
--------- --------- ---------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period........ 1.00 1.00 1.00
--------- --------- ---------
Net investment income(b).................. .08 .06 .05
Net realized and unrealized gain (loss) on
investments(c)........................... -- -- --
--------- --------- ---------
Total from investment operations............ .08 .06 .05
--------- --------- ---------
Less dividends and distributions:
Dividends from net investment income...... (.08) (.06) (.05)
Distributions from net realized gains..... -- -- --
--------- --------- ---------
Total dividends and distributions........... (.08) (.06) (.05)
--------- --------- ---------
Net asset value, end of period.............. 1.00 1.00 1.00
========= ========= =========
Total Investment Return(e).................. 7.94 6.07 4.74

Ratios/Supplemental Data:
Net assets, end of period (in thousands).... 170,960 158,883 104,356
Ratio of expenses to average net assets..... .70 .68 1.12
Ratio of net income to average net assets... 7.67 5.85 4.89
Portfolio turnover rate..................... -- -- --
</TABLE>

(CONTINUED)

FINANCIAL HIGHLIGHTS
U.S. GOVERNMENT SECURITIES SAVINGS 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(a) 1989(a)
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <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................... -- -- -- -- -- -- -- --

1988(a) 1987(a)
--------- ---------
<S> <C> <C>
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)
</TABLE>

(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

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

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(R)

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., Easter 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.

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.

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

HOW TO EXCHANGE SHARES

FUNDS IN THE UNITED SERVICES FAMILY

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," page 11.)

(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

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

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, 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(R) 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

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 United Services
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 an active ABC Investment Plan(R),
UGMA/UTMA and retirement plan account, 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).

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

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

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

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 manage ment 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.

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 Fundis
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.

[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. 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

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

PART B -- STATEMENTS OF ADDITIONAL INFORMATION
Included herein is Part C for
United Services Funds

Post-Effective Amendment No. 79

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

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")

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......................................... 3
Investment Restrictions................................................. 4
GOLD SHARES FUND.................................................... 6
GLOBAL RESOURCES FUND............................................... 7
WORLD GOLD FUND..................................................... 7
U.S. TREASURY SECURITIES CASH FUND AND
U.S. GOVERNMENT SECURITIES SAVINGS FUND.......................... 8
INCOME FUND.......................................................... 8
TAX FREE FUND AND NEAR-TERM TAX FREE FUND ........................... 8
REAL ESTATE FUND.....................................................12
INTERMEDIATE TREASURY FUND...........................................12
SPECIAL RISK CONSIDERATIONS................................................ 12
PORTFOLIO TRANSACTIONS..................................................... 16
MANAGEMENT OF THE FUNDS.................................................... 17
PRINCIPAL HOLDERS OF SECURITIES............................................ 21
INVESTMENT ADVISORY SERVICES............................................... 21
ADVISORY FEE SCHEDULE...................................................... 22
TRANSFER AGENCY AND OTHER SERVICES......................................... 23
CERTAIN PURCHASES OF SHARES OF THE FUNDS................................... 24
ADDITIONAL INFORMATION ON REDEMPTIONS...................................... 25
Wire Redemptions -- U.S. Treasury Securities Cash Fund and
U.S. Government Securities Savings Fund Only........................ 25
Check Redemptions -- U.S. Treasury Securities Cash Fund and
U.S. Government Securities Savings Fund Only........................ 25
Redemption in Kind...................................................... 25
Suspension of Redemption Privileges..................................... 25
CALCULATION OF PERFORMANCE DATA............................................ 25
TAX STATUS................................................................. 28
Taxation of the Funds -- In General..................................... 28
Taxation of the Funds' Investments...................................... 29
Taxation of the Shareholder............................................. 29
CUSTODIAN.................................................................. 30
INDEPENDENT ACCOUNTANTS AND LEGAL COUNSEL.................................. 31
INFORMATION ABOUT SECURITIES RATINGS....................................... 31
FINANCIAL STATEMENTS....................................................... 31

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").

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 (the "1940 Act").

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 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 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, 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.)

The following investment restrictions may be changed by the Board of
Trustees without a shareholder vote, except that any change in the restriction
of the GOLD SHARES FUND described in (12) does require a shareholder vote.

A Fund may not:

(12) Invest in warrants to purchase common stock, except as provided
in restriction (#23) below and, except that the GOLD SHARES FUND
may invest up to 2% of the value of its net assets in marketable
warrants to purchase
common stock.

(13) Invest in companies for the purpose of exercising control or
management.

(14) Invest in securities of companies (including predecessors) that
have been in continuous operation for less than 3 years, except
that the GOLD SHARES FUND, the GLOBAL RESOURCES FUND, the WORLD
GOLD FUND and the REAL ESTATE FUND may each invest up to 5% of
their total net assets in such securities, and except that with
respect to the REAL ESTATE FUND, this limitation shall not apply
to securities of real estate investment trusts, and except that
this restriction shall not apply to the TAX FREE FUND and the
NEAR-TERM TAX FREE FUND.

(15) Hypothecate, pledge, or mortgage any of its assets, except to
secure loans as a temporary measure for extraordinary purposes
and except as may be required to collateralize letters of credit
to secure state surety
bonds.

(17) In the case of the TREASURY SECURITIES CASH FUND, the GOVERNMENT
SECURITIES SAVINGS FUND, TAX FREE FUND, INTERMEDIATE TREASURY
FUND and the NEAR-TERM TAX FREE FUND only, invest in any foreign
securities. However, all Funds may invest in foreign securities
listed and traded on domestic securities exchanges to

the extent consistent with their investment objectives (although
the Funds stated herein have no present intent to do so).

(18) Invest more than 10% of its total net assets in securities that
do not have readily available market quotations or are otherwise
not readily marketable. In the case of the GLOBAL RESOURCES
FUND, included in illiquid securities are foreign securities not
listed on a domestic or foreign exchange.

(19) (Intentionally omitted)

(20) In the case of the INCOME FUND invest less than 80% of its total
net assets in income-producing securities.

(21) In the case of all but the GOLD SHARES FUND, the GLOBAL
RESOURCES FUND and the WORLD GOLD FUND, invest in oil, gas or
other mineral exploration or development programs, but this
shall not prevent a Fund from purchasing securities of companies
in the oil, gas or mineral business if such purchase is
otherwise consistent with each Fund's investment objectives and
policies. The Funds are prohibited from any investment in oil,
gas, and other mineral leases.

(22) In the case of the GLOBAL RESOURCES FUND, the WORLD GOLD FUND,
the TREASURY SECURITIES CASH FUND, and the INTERMEDIATE TREASURY
FUND, invest more than 10% of its total net assets in repurchase
agreements of more than seven days maturity. These repurchase
agreements must be collateralized by United States Government or
United States Government Agency securities whose market values
equal 102% of the principal amount of the repurchase
obligations.

(23) In the case of the WORLD GOLD FUND and the INCOME FUND, invest
more than 5% of their respective total net assets in warrants.
The GLOBAL RESOURCES FUND may invest up to 5% of its total net
assets in warrants (which are valued at the lower of cost or
market); however, the GLOBAL RESOURCES FUND'S investments in
warrants not listed on the New York or American Stock Exchange
may not exceed 2% of its total net assets.

(24) In the case of the REAL ESTATE FUND, purchase or sell real
property (including limited partnership interests, but excluding
readily marketable interests in real estate investment trusts or
readily marketable securities
of companies which invest in real estate).

(25) In the case of the INTERMEDIATE TREASURY FUND and the NEAR-TERM
TAX FREE FUND, purchase securities of any other investment
company, except as part of a plan of merger, consolidation or
reorganization.

(26) 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.

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 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."

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."

The 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 on page of 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 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 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, 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. Neither event will require sale of
such municipal bonds by the Tax Free Fund, but the Advisor will consider such
event in its determination of whether the 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 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 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 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.

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

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 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.

CALENDAR

YEAR 19961 1995 1994 1993 1992 1991 1990 1988 1988 1987
- ---- ----- ---- ----- ---- ---- ---- ---- ---- ---- ----
High $2.60 $2.65 $3.05 $2.49 $3.84 $4.75 $6.44 $4.02 $7.98 $7.91
Low $1.72 $2.02 $1.85 $1.25 $2.17 $2.94 $3.55 $3.00 $3.74 $4.41

1 Through June 30, 1996

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 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.

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 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,
AND REAL ESTATE

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. Furthermore, extreme fluctuations in the prices of such
natural resources may limit the marketability of the securities in which the
Gold Shares Fund, the Global Resources Fund and the World Gold Fund may invest.

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

15
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.

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.

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 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 1996
---- ---- ----
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.

MANAGEMENT OF THE FUNDS

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 TRUST
ADDRESS POSITION PRINCIPAL OCCUPATION

JOHN P. ALLEN Trustee President, Deposit Development
5600 San Pedro Associates Inc., a bank marketing firm.
San Antonio, TX President, Paragon Press. Partner, Rio
Cibolo Ranch, Inc.

WILLIAM A. FAGAN, JR. Chairman of Chairman of the Board of Trustees since
P.O. Box 17903 the Board of January 1, 1989. Business consultant
San Antonio, TX Trustees since 1976.

E. DOUGLAS HODO Trustee Chief Executive Officer of Houston
7706 Fondren Baptist University. Formerly Dean and
Houston, TX Professor of Economics and Finance,
College of Business, University of Texas
at San Antonio.

CHARLES Z. MANN Trustee Business consultant since January 1,
Turning Point 1993. Chairman, Bermuda Monetary
13 Knapton Estates Rd. Authority 1986 to 1992. Executive Vice
Smiths, Bermuda President of International Median
HS01 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 and
6010 Sierra Petroleum Engineering, University of
Arbor Court Texas at Austin. Former Associate
Austin, TX 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 Directors, and
President Chief Executive Officer of the Advisor
and Chief since October 27, 1989. President from
Executive October 1989 to September 1995. Director
Officer 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 September
President, 1995 and Chief Financial Officer since
Chief August 1996. Executive Vice President
Operating and Chief Financial Officer of the
Officer, Advisor from October 27, 1989 to
Chief September 1995. Chief Operating Officer
Financial since November 1, 1993. President, Chief
Officer 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 Executive Vice President, Chief
Vice Investment Officer of the Funds since
President, February 1994. Portfolio Manager U.S.
Chief Gold Shares Fund since November 1992 and
Investment U.S. World Gold Fund since January 1990.
Officer 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 Vice President and Secretary of the
President, Trust from September 1995. Vice
Secretary 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, Secretary and Associate
Counsel of ST&FC since September 1992 to
present; Vice President-Operations of
ST&FC from May 1993 to December 1994.

THOMAS D. TAYS Vice Vice President - Special Counsel,
President, Securities Specialist, Director of
Securities Compliance, Assistant Secretary of the
Specialist, Advisor from September 1995 to present;
Director of Associate Counsel, Assistant Secretary
Compliance 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.

TERESA G. Chief Vice President, Mutual Fund Accounting
WALTERS Accounting of the Advisor from February 1995 to
Officer August 1996. Vice President, Chief
Financial Officer of USF from September
1995 to August 1996 and Chief Accounting
Officer since September 1995. Served as
Vice President, Chief Accounting
Officer, Treasurer, and Controller of
USF from March 3, 1995 to September
1995. Vice President, Mutual Fund
Accounting of USSI since March 13, 1995.
Vice President and Treasurer of
Pauze/Swanson United Services Funds from
March 8, 1995, Chief Financial Officer
from September 1995, Chief Accounting
Officer from March 1995 to February
1996. Vice President, Chief Financial
Officer, Chief Accounting Officer,
Treasurer of Accolade Funds since
September 1995. Employee of the Advisor
from October 1986 to present.

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:

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 8.51% Record(2)
Corp. New York, NY 10008-3908

Charles Schwab & Co., Inc. 6.55% Record(1)
San Francisco, CA 94104
Donaldson Lufkin Jenrette 5.83% Record(3)
Securities Corp.
Jersey City, NJ 07303-2052
U.S. INCOME FUND Charles Schwab & Co., Inc. 17.92% Record(1)
San Francisco, CA 94104
U.S. WORLD GOLD FUND Charles Schwab & Co., Inc. 21.07% Record(1)
San Fransciso, CA 94104-
National Financial Services 6.34% Record(2)
Corp. New York, NY 10008-3908

UNITED SERVICES NationsBank of Texas 12.96% Record(3)
INTERMEDIATE TREASURY
FUND

David R. Hinkle IRA Rollover 5.17% Record
Winston Salem, NC 27101-3622
UNITED SERVICES NEAR-TERM Louisa Kellam 5.42% Record
TAX FREE FUND Sun City West, AZ 85375-5417
U.S. TAX FREE FUND North Pursel North Investments 6.20% Record(4)
Palm Beach, FL 33480-2132

(1) Charles Schwab & Co., Inc., a broker-dealer, has advised that no individual
client owns more than 5% of the Fund.
(2) National 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.

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 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.

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 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."

ADVISORY FEE SCHEDULE

MONTHLY MONTHLY
NAME OF FUND NET ASSETS RATE
------------ ---------- ----

GOLD SHARES FUND Up to and including $250 million 1/12 of .75%
Over $250 million 1/12 of .50%

GLOBAL Up to and including $250 million 1/12 of 1%
RESOURCES FUND 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 Up to and including $250 million 1/12 of .50%
SECURITIES Over $250 million 1/12 of .375%
CASH FUND

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 Up to and including $250 million 1/12 of .50%
SECURITIES Over $250 million 1/12 of .375%
SAVINGS FUND

REAL ESTATE FUND Up to and including $250 million 1/12 of .75%
Over $250 million 1/12 of .50%

UNITED SERVICES 1/12 of .50%
INTERMEDIATE
TREASURY FUND

UNITED SERVICES NEAR- 1/12 of .50%
TERM TAX FREE FUND

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-

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 the Treasury 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.

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.

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

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.

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

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 4.01%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:

P(1 + T)n = ERV

Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000
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 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%

TOTAL PERIOD
1 YEAR 5 YEARS IN EXISTENCE
-------- ------- ------------
Real Estate Fund (since 7/2/87) 17.34% 7.30% 4.67%
Near-Term Tax Free Fund (since 12/1/90) 3.68% 6.35% 5.97%
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
-----
YIELD = 2[( + 1)6 - 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 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

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 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 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 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 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
33

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].

=====================================================================
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....................................................... 7
MANAGEMENT OF THE FUND....................................................... 8
PRINCIPAL HOLDERS OF SECURITIES.............................................. 11
INVESTMENT ADVISORY SERVICES................................................. 11
TRANSFER AGENCY AND OTHER SERVICES........................................... 12
CERTAIN PURCHASES OF SHARES OF THE FUND...................................... 12
ADDITIONAL INFORMATION ON REDEMPTIONS.........................................13
Suspension of Redemption Privileges................................. 13
CALCULATION OF PERFORMANCE DATA.............................................. 13
TAX STATUS................................................................... 15
Taxation of the Fund -- In General.................................. 15
Taxation of the Fund's Investments.................................. 15
Taxation of the Shareholder......................................... 15
CUSTODIAN.................................................................... 16
INDEPENDENT ACCOUNTANTS AND LEGAL COUNSEL.................................... 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 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").

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 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 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 investment restrictions may be changed by the Board of
Trustees without a shareholder vote.

The Fund may not:

(12) Invest in warrants to purchase common stock.
(13) Invest in companies for the purpose of exercising control or
management.
(14) Invest in securities of companies (including predecessors)
that have been in continuous operation for less than 3 years.
(15) Hypothecate, pledge, or mortgage any of its assets, except to
secure loans as a temporary measure for extraordinary purposes
and except as may be required to collateralize letters of
credit to secure state surety bonds.

(16) Participate on a joint or joint and several basis in any
trading account (except for a joint securities trading account
with other Funds managed by the Advisor for repurchase
agreements permitted by the Securities and Exchange Commission
pursuant to an exemptive order).
(17) Intentionally omitted.
(18) Invest more than 10% of its total net assets in securities
that do not have readily available market quotations or are
otherwise not readily marketable.
(19) Intentionally omitted.
(20) Intentionally omitted.
(21) Invest in oil, gas or other mineral exploration or development
programs, but this shall not prevent the Fund from purchasing
securities of companies in the oil, gas or mineral business if
such purchase is otherwise consistent with the Fund's
investment objectives and policies. The Fund is prohibited
from any investment in oil, gas, and other mineral leases.
(22) Intentionally omitted.
(23) Intentionally omitted.
(24) Purchase or sell real property (including limited partnership
interests, but excluding readily marketable interests in real
estate investment trusts or readily marketable securities of
companies which invest in real estate).

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 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 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

TRUST
NAME AND ADDRESS POSITION PRINCIPAL OCCUPATION
- ---------------- -------- --------------------

John P. Allen Trustee President, Deposit Development Associates
5600 San Pedro Inc., a bank marketing firm. President,
San Antonio, TX Paragon Press. Partner, Rio Cibolo Ranch,
Inc.

William A. Fagan, Jr. Chairman of Chairman of the Board of Trustees since
P.O. Box 17903 the Board of January 1, 1989. Business consultant
San Antonio, TX Trustees since 1976.

E. Douglas Hodo Trustee Chief Executive Officer of Houston
7706 Fondren Baptist University. Formerly Dean and
Houston, TX Professor of Economics and Finance,
College of Business, University of Texas
at San Antonio.

Charles Z. Mann Trustee Business consultant since January 1,
Turning Point 1993. Chairman, Bermuda Monetary
13 Knapton Estates Rd. Authority from 1986 to 1992. Executive
Smiths, Bermuda Vice President of International Median
HS01 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 and
6010 Sierra Arbor Petroleum Engineering, University of
Court Texas at Austin. Former Associate
Austin, TX 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.

TRUST
NAME AND ADDRESS POSITION PRINCIPAL OCCUPATION
- ---------------- -------- --------------------
Frank E. Holmes* Trustee, Chairman of the Board of Directors, and
President Chief Executive Officer of the Advisor
and Chief since October 27, 1989. President from
Executive October 1989 to September 1995. Director
Officer 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.

Bobby D. Duncan Executive President of the Advisor since September
Vice President, 1995 and Chief Financial Officer since
Chief Operating August 1996. Executive Vice President
Officer Chief and Chief Financial Officer of the
Financial Advisor from October 27, 1989 to
Officer 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.

* This Trustee may be deemed an "interested person" of the Trust as defined in
the Investment Company Act of 1940.

TRUST
NAME AND ADDRESS POSITION PRINCIPAL OCCUPATION
- ---------------- -------- --------------------
Victor Flores Executive Vice Executive Vice President, Chief
President, Investment Officer of the Funds since
Chief February 1994. Portfolio Manager U.S.
Investment Gold Shares Fund since November 1992 and
Officer 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 the
Secretary 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 Counsel,
Securities Securities Specialist, Director of
Specialist, Compliance, Assistant Secretary of the
Director Advisor from September 1995 to present;
of Compliance 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.

Teresa G. Chief Vice President, Mutual Fund Accounting
Walters Accounting of the Advisor from February 1995 August
Officer 1996. Vice President, Chief Financial
Officer of USF from September 1995 to
August 1996 and Chief Accounting Officer
since September 1995. Served as Vice
President, Chief Accounting Officer,
Treasurer, and Controller of USF from
March 3, 1995 to September 1995. Vice
President, Mutual Fund Accounting of
USSI since March 13, 1995. Vice
President and Treasurer of Pauze/Swanson
United Services Funds from March 8,
1995, and Chief Financial Officer from
September 1995 to February 1996., Chief
Accounting Officer from March 1995 to
September 1995. Vice President, Chief
Financial Officer, Chief Accounting
Officer, Treasurer of Accolade Funds
since September 1995. Employee of the
Advisor from October 1986 to present.

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.

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 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 the following advisory fees (net of
expenses paid by the Advisor or voluntary fee waivers): $0, $0 and $0,
respectively.

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.

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;

13
(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.

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:

P(1 + T)n = ERV

Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 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
-----
YIELD = 2 [( + 1)6 - 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 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.

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

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

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].

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

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....................................................5
PORTFOLIO TRANSACTIONS.........................................................9
MANAGEMENT OF THE FUND........................................................10
PRINCIPAL HOLDERS OF SECURITIES...............................................13
INVESTMENT ADVISORY SERVICES..................................................13
TRANSFER AGENCY AND OTHER SERVICES............................................14
ADDITIONAL INFORMATION ON REDEMPTIONS.........................................15
CALCULATION OF PERFORMANCE DATA...............................................15
TAX STATUS....................................................................15
Taxation of the Fund -- In General...................................15
Taxation of the Fund's Investments...................................16
Taxation of the Shareholder..........................................16
Other Tax Considerations.............................................16
CUSTODIAN.....................................................................17
INDEPENDENT ACCOUNTANTS ......................................................17
FINANCIAL STATEMENTS..........................................................17

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.

(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.

The following investment restrictions may be changed by the Board of Trustees
without a shareholder vote.

The Fund may not:

(12) Intentionally omitted.

(13) Invest in companies for the purpose of exercising control or
management.

(14) Intentionally omitted.

(17) Intentionally omitted.

(18) Intentionally omitted.

(19) Intentionally omitted.

(20) Intentionally omitted.

(21) Invest in oil, gas or other mineral exploration or development
programs, but this shall not prevent the Fund from purchasing
securities of companies in the oil, gas or mineral business if
such purchase is otherwise consistent with the Fund's
investment objectives and policies. The Fund is prohibited
from any investment in oil, gas, and other mineral leases.

(22) Intentionally omitted.

(23) The Fund may not invest more than 5% of its total net assets
in warrants.

(24) Intentionally omitted.

(25) Intentionally omitted.

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.

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

TRUST
NAME AND ADDRESS POSITION PRINCIPAL OCCUPATION
- ---------------- -------- --------------------

John P. Allen Trustee President, Deposit Development
5600 San Pedro Associates Inc., a bank marketing firm.
San Antonio, TX President, Paragon Press. Partner, Rio
Cibolo Ranch, Inc.

William A. Fagan, Jr. Chairman of Chairman of the Board of Trustees since
P.O. Box 17903 the Board January 1, 1989. Business consultant
San Antonio, TX of Trustees since 1976.

W.C.J. van Rensburg Trustee Professor of Geological Science and
6010 Sierra Arbor Court Petroleum Engineering, University of
Austin, TX 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 Directors, and
President Chief Executive Officer of the Advisor
and Chief since October 27, 1989. President from
Executive October 1989 to September 1995. Director
Officer 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.

Bobby D. Duncan Executive President of the Advisor since September
Vice 1995. Executive Vice President and Chief
President, Financial Officer of the Advisor from
Chief October 27, 1989 to September 1995.
Operating Chief Operating Officer since November
Officer, 1, 1993.and Chief Financial Officer
Chief since August 1996 President, Chief
Financial Executive Officer, Chief Operating
Officer 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.

* This Trustee may be deemed an "interested person" of the Trust as defined in
the Investment Company Act of 1940.

TRUST
NAME AND ADDRESS POSITION PRINCIPAL OCCUPATION
- ---------------- -------- --------------------

Victor Flores Executive Executive Vice President, Chief
Vice Investment Officer of the Funds since
President, February 1994. Portfolio Manager U.S.
Chief Gold Shares Fund since November 1992 and
Investment U.S. World Gold Fund since January 1990.
Officer 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 Vice President and Secretary of the
President, Trust from September 1995. Vice
Secretary 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, Secretary and Associate
Counsel of ST&FC since September 1992 to
present; Vice President-Operations of
ST&FC from May 1993 to December 1994.

Thomas D. Tays Vice Vice President - Special Counsel,
President, Securities Specialist, Director of
Securities Compliance, Assistant Secretary of the
Specialist, Advisor from September 1995 to present;
Director of Associate Counsel, Assistant Secretary
Compliance 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.

Teresa G. Chief Vice President, Mutual Fund Accounting
Walters Accounting of the Advisor from February 1995 to
Officer August 1996. Vice President, Chief
Financial Officer of USF from September
1995 to August 1996. Chief Accounting
Officer since September 1995. Served as
Vice President, Chief Accounting
Officer, Treasurer, and Controller of
USF from March 3, 1995 to September
1995. Vice President, Mutual Fund
Accounting of USSI since March 13, 1995.
Vice President and Treasurer of
Pauze/Swanson United Services Funds from
March 8, 1995 to February 1996. Chief
Financial Officer since September 1995,
Chief Accounting Officer from March 1995
to September 1995. Vice President, Chief
Financial Officer, Chief Accounting
Officer, Treasurer of Accolade Funds
since September 1995. Employee of the
Company from October 1986 to present.

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."

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 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

P(1 + T)n = ERV

Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical
$1,000 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

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.

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

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.

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].

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

PART C -- OTHER INFORMATION
Included herein is Part C for
United Services Funds

Post-Effective Amendment No. 79

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

PART C. OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements included in PART B (Statement of Additional
Information) of this Registration Statement:

(1) The Financial Statements for the year ended June 30, 1996 of United
Services Funds, as examined by Price Waterhouse LLP, are incorporated
by reference from the Annual Report to Shareholders of United
Services Funds (U.S. Gold Shares Fund, U.S. Global Resources Fund,
U.S. World Gold Fund, U.S. Treasury Securities Cash Fund, U.S. All
American Equity Fund, U.S. Income Fund, U.S. Tax Free Fund, U.S.
Government Securities Savings Fund, U.S. Real Estate Fund, United
Services Near-Term Tax Free Fund, United Services Intermediate
Treasury Fund, United Services Special-Term Government Fund and China
Region Opportunity Fund) of that date.

(b) EXHIBITS

EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- --------- ---------------------------------------------------------------------
(1) (a) First Amended and Restated Master Trust Agreement, dated May 19,
1995, incorporated by reference from Post- Effective Amendment No. 78
to Registration Statement

( 2) By-laws, incorporated by reference from Post-Effective Amendment No.
44 to Registration Statement.

( 3) Not Applicable

( 4) Specimen certificates incorporated by reference from Post-Effective
Amendment No. 42 to Registration Statement of Registrant's
predecessor United Services Gold Shares, Inc. and from Post-Effective
Amendments No. 4 and No. 7 to Registration Statement of United
Services Group of Funds, Inc. Specimen certificates for United
Services Funds/Gold Shares Fund, U.S. Treasury Securities Fund,
Income Fund, Tax Free Fund, and U.S. Real Estate Fund incorporated by
reference from Post- Effective Amendment No. 55. Specimen
certificates U.S. Government Securities Savings Fund (formerly U.S.
GNMA Fund), U.S. All American Equity Fund (formerly U.S. Good and Bad
Times Fund), U.S. Global Resources Fund (formerly Prospector Fund),
U.S. World Gold Fund (formerly U.S. New Prospector Fund), and U.S.
Treasury Securities Cash Fund (formerly U.S. Treasury Securities
Fund) incorporated by reference from Post-Effective Amendment No. 62.
Specimen certificate for United Services Intermediate Treasury Fund
(formerly U.S. Treasury Bond Fund) incorporated by reference from
Post-Effective Amendment No. 65; and specimen certificate for U.S.
Intermediate Treasury Fund (formerly U.S. Treasury Bond Fund)
incorporated by reference to Post-Effective Amendment No. 66.
Specimen certificate for United Services Near-Term Tax Free Fund
(formerly U.S. California Double Tax Free Fund)incorporated by
reference to Post-Effective Amendment No. 70 and specimen certificate
for China Region Opportunity Fund incorporated by reference to
Post-Effective Amendment No. 76.

(5) (a) Advisory Agreement with United Services Advisors, Inc., dated October
1989 incorporated by reference from Post-Effective Amendment No. 62.

( 6) Not Applicable

( 7) Not Applicable

( 8) (a) Custodian Agreement Bankers Trust Company, incorporated by reference
from Post-Effective Amendment No. 61.

(b) Global Custodian Agreement between United Services Funds and Bankers
Trust Company incorporated by reference from United Services Funds
Report on FORM SE, Exhibit 77 Q 3(b) for six month period ended June
30, 1992.

( 9) (a) Transfer Agency Agreement, as amended, with United
Shareholder Services, Inc. dated as of November 1, 1988 filed herein.

(b) Bookkeeping and Accounting Agreement, dated February 1, 1992, between
United Shareholder Services, Inc. and United Services Funds
incorporated by reference from United Services Funds Report on Form
N-SAR for six months ended December 31, 1991.

(c) Lockbox Agreement between United Services Funds and United
Shareholder Services, Inc. incorporated by reference from
Post-Effective Amendment No. 71.

(d) Printing Agreement between United Services Funds and United
Shareholder Services, Inc. incorporated by reference from
Post-Effective Amendment No. 71.

(10) (a) Opinion of Goodwin, Procter & Hoar incorporated by reference from
Post- Effective-Amendment No. 59.

(b) Opinion of Goodwin, Procter & Hoar with respect to the United
Services Intermediate Treasury Fund incorporated by reference from
Post-Effective Amendment No. 65.

(c) Opinion of Goodwin, Procter & Hoar with respect to United Services
Special- Term Government Fund (formerly United Service Adjustable
Government Fund) incorporated by reference from Post-Effective
amendment No. 69.

(d) Opinion of Goodwin Procter & Hoar incorporated by reference from
Post- Effective amendment No. 74.

(e)* Consent of Goodwin, Procter & Hoar LLP filed herein

(11)* Consent of Independent Accountants, Price Waterhouse LLP filed

(12) Not Applicable

(13) Not Applicable

(14) (a) Individual Retirement Accounts, Disclosure Statement & Custodian
Agreement incorporated by reference to Post-Effective Amendment #67.

(b) Prototype Defined Contribution and Trust/Custodial Account Sponsored
by Securities Trust and Financial Company (Basic Plan Document #01)
incorporated by reference from Post-Effective Amendment #67.

(c) Prototype Cash or Deferred Profit-Sharing Plan and Trust/Custodial
Account Sponsored by Securities Trust and Financial Company (Basic
Plan Document #04) incorporated by reference from Post-Effective
Amendment #67.

(15) Not Applicable

(16) Schedule for computation of each performance quotation provided in
the Registration Statement in response to Item 22, incorporated by
reference from Post-Effective Amendment No. 57.

(17) Powers of Attorney, incorporated by reference from Post-Effective
Amendment No. 78.

* Filed Herein

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

Information pertaining to persons controlled by or under common control
with Registrant is incorporated by reference to the Statement of
Additional Information contained in Part B of this Registration
Statement at the section entitled "Principal Holders of Securities."

ITEM 26. NUMBER OF HOLDERS OF SECURITIES

The number of record holders, as of August 26, 1996 of each class of
securities of the Registrant.

NUMBER OF
TITLE OF CLASS RECORD HOLDERS
------------------------------------------ --------------

U.S. Gold Shares Fund 40,403
U.S. Global Resources Fund 6,363
U.S. All American Equity Fund 2,787
U.S. Treasury Securities Cash Fund 12,259
U.S. Tax Free Fund 1,092
U.S. Income Fund 1,330
U.S. World Gold Fund 21,802
U.S. Government Securities Savings Fund 22,382
U.S. Real Estate Fund 1,255
United Services Near-Term Tax Free Fund 318
United Services Intermediate Treasury Fund 344
China Region Opportunity Fund 4,413

ITEM 27. INDEMNIFICATION

Under Article VI of the Registrant's Master Trust Agreement, each of
its Trustees and officers or person serving in such capacity with
another entity at the request of the Registrant (a "Covered Person")
shall be indemnified (from the assets of the Sub-Trust or Sub-Trusts in
question) against all liabilities, including, but not limited to,
amounts paid in satisfaction of judgments, in compromises or as fines
or penalties, and expenses, including reasonable legal and accounting
fees, incurred by the Covered Person in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or
criminal before any court or administrative or legislative body, in
which such Covered Person may be or may have been involved as a party
or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having
been such a Trustee or officer, director or trustee, except with
respect to any matter as to which it has been determined that such
Covered Person (i) did not act in good faith in the reasonable belief
that such Covered Person's action was in or not opposed to the best
interests of the Trust or (ii) had acted with wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in
the conduct of such Covered Person's office (either and both of the
conduct described in (i) and (ii) being referred to hereafter as
"Disabling Conduct"). A determination that the Covered Person is not
entitled to indemnification may be made by (i) a final decision on the
merits by a court or other body before whom the proceeding was brought
that the person to be indemnified was not liable by reason of Disabling
Conduct, (ii) dismissal of a court action or an administrative
proceeding against a Covered Person for insufficiency of evidence of
Disabling Conduct, or (iii) a reasonable determination, based upon a
review of the facts, that the indemnitee was not liable by reason of
Disabling Conduct by (a) a vote of the majority of a quorum of Trustees
who are neither "interested persons" of the Trust as defined in Section
1(a)(19) of the 1940 Act nor parties to the proceeding, or (b) as
independent legal counsel in a written opinion.

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR

Information pertaining to business and other connections of
Registrant's investment adviser is incorporated by reference to the
Prospectus and Statement of Additional Information contained in Parts A
and B of this Registration Statement at the sections entitled
"Management of the Funds" in the Prospectus and "Investment Advisory
Services" in the Statement of Additional Information.

ITEM 29. PRINCIPAL UNDERWRITERS

The Registrant is currently comprised of thirteen no-load funds which
act as distributor of their own shares.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

All accounts and records maintained by the Registrant are kept at the
Registrant's office located at 7900 Callaghan Road, San Antonio, Texas.
All accounts and records maintained by Bankers Trust Company as
custodian are maintained in New York.

ITEM 31. Not Applicable

ITEM 32. Not Applicable

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

EXHIBIT INDEX

EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ------------------------------------------------------------------

( 9) (h) Transfer Agency Agreement, as amended, with United
Shareholder Services, Inc. dated as of November 1, 1988

(10) (d) Consent of Goodwin, Procter & Hoar LLP

(11) Consent of Independent Accountants, Price Waterhouse LLP

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

SIGNATURE PAGE

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and that it has duly caused this
Amendment to the Registration Statement on Form N-1A to be signed on its behalf
by the undersigned, thereunto duly authorized in the city of San Antonio, State
of Texas, on the 3rd day of September, 1996.

UNITED SERVICES FUNDS

By: /S/ FRANK E. HOLMES
-----------------------------------------
Frank E. Holmes, Chief Executive Officer
President

Date: September 3, 1996

Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:

SIGNATURE TITLE DATE
- ------------------------- ------------------------- ----------------

*/S/ JOHN P. ALLEN Trustee September 3, 1996
- -------------------------
John P. Allen

*/S/ BOBBY D. DUNCAN Executive Vice President, September 3, 1996
- ------------------------- Chief Operating Officer
Bobby D. Duncan

*/S/ WILLIAM A. FAGAN, JR. Trustee September 3, 1996
- -------------------------
William A. Fagan, Jr.

*/S/ EDWARD D. HODO Trustee September 3, 1996
- -------------------------
Edward D. Hodo

/S/ FRANK E. HOLMES Trustee, President, September 3, 1996
- ------------------------- Chief Executive Officer
Frank E. Holmes

*/S/ CHARLES Z. MANN Trustee September 3, 1996
- -------------------------
Charles Z. Mann

*/S/ TERESA G. ROWAN Vice President, Chief September 3, 1996
- ------------------------- Accounting Officer
Teresa G. Rowan

*/S/ W.C.J. VAN RENSBURG Trustee September 3, 1996
- -------------------------
W.C.J. van Rensburg

*BY: /S/ SUSAN B. MC GEE
-----------------------------------------
Susan B. McGee, Vice President, Secretary
Power of Attorney

GOODWIN, PROCTER & HOAR LLP
Counsellors at Law
Exchange Place
Boston, Massachusetts 02109-2881

Telephone (617) 570-1000
Telecopier (617) 523-1231

August 30, 1996

United Services Funds
7900 Callaghan Road
San Antonio, Texas 78229

Ladies and Gentlemen:

We hereby consent to the incorporation by reference in Post-Effective
Amendment No. 79 (the "Amendment") to Registration Statement 2-35439 on Form
N-1A (the "Registration Statement") of United Services Funds (the "Trust") of
our opinion with respect to the legality of the shares of the Trust representing
interests in (i) the U.S. Gold Shares Fund, U.S. Global Resources Fund, U.S.
World Gold Fund, U.S. All American Equity Fund, U.S. Income Fund, U.S. Tax Free
Fund, U.S. Treasury Securities Cash Fund (formerly, U.S. Treasury Cash Fund),
U.S. Government Securities Savings Fund, U.S. Real Estate Fund and United
Services Near-Term Tax Free Fund (formerly, U.S. California Double Tax Free
Fund), which opinion was filed with Post-Effective Amendment No. 59 to the
Registration Statement, (ii) the United Services Intermediate Treasury Fund
(formerly, U.S. Treasury Bond Fund), which opinion was filed with Post-Effective
Amendment No. 65 to the Registration Statement, and (iii) the China Region
Opportunity Fund (formerly U.S. China Opportunity Fund), which opinion was filed
with Post-Effective Amendment No. 74 to the Registration Statement. We also
hereby consent to the reference to this firm in each Prospectus (other than the
Prospectus for the China Region Opportunity Fund) under the heading "Legal
Counsel" and in each Statement of Additional Information under the heading
"Independent Accountants and Legal Counsel" which is included in Part A and Part
B of the Amendment.

Very truly yours,

/s/ Goodwin, Procter & Hoar LLP

GOODWIN, PROCTER & HOAR LLP

/hex
310309.cl

700 N. St. Mary's, Suite 900 Telephone 210 226 7700
San Antonio, TX 78205 Facsimile 210 226 7412

................................................................................

PRICE WATERHOUSE LLP [Price Waterhouse Logo]

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 79 to the Registration Statement on Form N-1A (the "Registration
Statement") of our report dated August 19, 1996, relating to the financial
statements and selected per share data and ratios appearing in the June 30, 1996
Annual Report of the U.S. Gold Shares, U.S. Global Resources, U.S. World Gold,
China Region Opportunity Funds, U.S. Treasury Securities Cash, U.S. Government
Securities Savings, U.S. Tax Free, United Services Near-Term Tax Free, U.S. All
American Equity, U.S. Income, U.S. Real Estate and United Services Intermediate
Treasury, separate funds of United Services Funds, which are also incorporated
by reference into the Registration Statement. We also consent to the references
to us under the headings "Financial Highlights" and "Independent Accountants" in
the Prospectuses for the above Funds and under the heading "Independent
Accountants and Legal Counsel" in the Statements of Additional Information for
the U.S. Gold Shares, U.S. Global Resources, U.S. World Gold, U.S. Treasury
Securities Cash, U.S. Government Securities Savings, U.S. Tax Free, United
Services Near-Term Tax Free, U.S. All American Equity, U.S. Income, U.S. Real
Estate, and United Services Intermediate Treasury Funds and the heading
"Independent Accountants" in the Statement of Additional Information for the
China Region Opportunity Fund.

/s/ Price Waterhouse LLP

PRICE WATERHOUSE LLP
San Antonio, Texas
August 30, 1996

TRANSFER AGENCY AGREEMENT

THIS AGREEMENT is made as of the 1st day of November 1988, by and
between United Services Funds, an unincorporated business trust organized under
the laws of the Commonwealth of Massachusetts, having its principal office and
place of business at 7900 Callaghan Road, San Antonio, Texas 78229 (hereinafter
referred to as the "Trust"), and United Shareholder Services, Inc., a Texas
corporation authorized to do business at Suite 5300, 11330 IH 10 West, San
Antonio, Texas 78249 (hereinafter referred to as the "Transfer Agent").

WITNESSETH:

That for and in consideration of the mutual promises hereinafter set
forth, the Trust on behalf of each Sub-Trust and the Transfer Agent agree as
follows:

1. DEFINITIONS. Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:

(a) "Authorized Person" shall be deemed to include the President, any Vice
President, the Secretary, Treasurer, the persons listed in Appendix A
hereto, or any other person, whether or not any such person is an
Officer or employee of the Trust, duly authorized to give Oral
Instructions and Written Instructions on behalf of the Trust as
indicated in a certification pursuant to Section 6(d) or 6(e) hereof
as may be received by the Transfer Agent from time to time;

(b) "Certificate" shall mean any notice, instruction or other instrument
in writing, authorized or required by this Agreement to be given to
the Transfer Agent, which is actually received by the Transfer Agent
and signed on behalf of the Trust by any two Officers thereof;

(d) "Custodian" refers to the custodian of all of the securities and other
moneys owned by the Trust;

(e) "Declaration of Trust" shall mean the Master Trust Agreement and
Declaration of Trust of United Services Funds dated July 31 1984 as
the same is amended from time to time;

(f) "Officer" shall mean the President, Vice President, Secretary and
Treasurer;

(g) "Oral Instructions" shall mean instructions orally communicated and
actually received by the Transfer Agent from an Authorized Person or
from a person reasonably believed by the Transfer Agent to be an
Authorized Person;

(h) "Prospectus" shall mean the most current effective prospectus relating
to the particular Sub-Trust's Shares under the Securities Act of 1933,
as amended;

(i) "Shares" refers to the transferable units of interest into which the
beneficial interest in the Trust or any Sub-Trust of the Trust (as the
context may require) shall be divided from time to time;

(j) "Shareholder" means a record owner of Shares;

(k) "Sub-Trust" shall mean each series of Shares established and
designated under or in accordance with the provisions of Article IV of
the Declaration of Trust, including the U.S. Gold Shares Fund ("Gold
Shares Fund"), U.S. Good and Bad Times Fund ("Good and Bad Times
Fund), U.S. Growth Fund ("Growth Fund"), U.S. Income Fund ("Income
Fund"), U.S. LoCap Fund ("LoCap Fund"), Prospector Fund, U.S. Tax Free
Fund ("Tax Free Fund"), U.S. Treasury Securities Fund, U.S. New
Prospector Fund ("New Prospector Fund"), U.S. GNMA Fund and U.S. Real
Estate Fund and such other separate and distinct sub-trusts as may
from time to time be created by the Trust;

(l) "Trust" refers to the Massachusetts business trust established under
the Declaration of Trust;

(m) "Trustees" or "Board of Trustees" refers to the duly elected Trustees
of the Trust;

(n) "Written Instruction" shall mean a written communication actually
received by the Transfer Agent from an Authorized Person or from a
person reasonably believed by the Transfer Agent to be an Authorized
Person by telex or any other such system whereby the receiver of such
communication is able to verify through codes or otherwise with a
reasonable degree of certainty the authenticity of the sender of such
communication; and

(o) The "1940 Act" refers to the Investment Company Act of 1940 and
regulations thereunder.

2. REPRESENTATION OF TRANSFER AGENT. The Transfer Agent does hereby represent
and warrant to the Trust that it is duly registered as a transfer agent as
provided in Section 17A(c) of the Securities Exchange Act of 1934, as
amended.

3. APPOINTMENT OF THE TRANSFER AGENT. The Trust hereby appoints and
constitutes the Transfer Agent as transfer agent for all of the Shares of
each Sub-Trust of the Trust in existence as of the date hereof, and as
shareholder servicing agent for the Trust and the Transfer Agent accepts
such appointments and agrees to perform the duties herein set forth. If the
Board of Trustees, pursuant to Article IV of the Declaration of the Trust,
hereafter designates and establishes a new Sub-Trust, the Transfer Agent
agrees that it will act as transfer agent and shareholders servicing agent
for such new Sub-Trust on the terms set forth herein. The Trust shall cause
a written notice to be sent to the Transfer Agent to the effect that it has
established a new Sub-Trust and that it appoints the Transfer Agent as
transfer agent and shareholder servicing agent for the new Sub-Trust.
Compensation of the Transfer Agent shall be established pursuant to Section
4 hereof. The Trust shall be obligated to provide such Documents and
Further Documents as are specified in Sections 5 and 6 hereof as the
Transfer Agent may reasonably request.

4. COMPENSATION.

(a) Each Sub-Trust will initially compensate the Transfer Agent for its
services rendered under this Agreement in accordance with the fees set
forth in the Fee Schedule annexed hereto and incorporated herein for
the existing Sub-Trusts. The Fee Schedule shall specify out-of-pocket
disbursements of the Transfer Agent for which the Transfer Agent shall
be entitled to bill separately. No sub-Trust shall be liable for any
expenses, debts or obligations arising under this Agreement of any
other Sub-Trust.

(b) The parties hereto will agree upon the compensation for acting as
Transfer Agent for any Sub-Trust hereafter designated and established
at the time that the Transfer Agent commences serving as such for said
Sub-Trust, and such agreement shall be reflected in a Fee Schedule for
that Sub-Trust, dated and signed by an authorized officer of each
party hereto, to be attached to this Agreement.

(c) Any compensation agreed to hereunder may be adjusted from time to time
by attaching a revised Fee Schedule, approved by the Board of Trustees
of the Trust and dated and signed by an Officer of each party hereto,
to this Agreement.

(d) The Transfer Agent will bill the Trust for each Sub-Trust as soon as
practicable after the end of each calendar month, and said billings
will be detailed in accordance with the Fee Schedule for each
Sub-Trust. The Trust will promptly pay to the Transfer Agent the
amount of such bill.

5. DOCUMENTS. In connection with the appointment of the Transfer Agent, the
Trust shall, on or before the date this Agreement goes into effect, file
with the Transfer Agent the following documents:

(a) A copy of the Declaration of Trust as then in effect;

(b) A copy of the By-laws of the Trust, as then in effect;

(d) If applicable, a specimen of the certificate for Shares of each
Sub-Trust of the Trust in the form approved by the Trustees, with a
certificate of the Secretary of the Trust as to such approval;

(e) All account application forms and other documents relating to
Shareholder accounts or relating to any plan, program or service
offered by the Trust;

(f) If applicable, a list of Shareholders of the existing Sub-Trusts with
the name, address and tax identification number of each Shareholder,
and the number of Shares of the existing Sub-Trusts held by each,
certificate numbers and denominations (if any certificates have been
issued), lists of any accounts against which stops have been placed,
together with the reasons for said stops, and the number of Shares
redeemed by the Sub-Trusts; and

(g) A copy of the opinion of counsel for the Trust with respect to the
validity of the Shares and the status of such shares under the
Securities Act of 1933.

6. FURTHER DOCUMENTATION. The Trust will also furnish from time to time the
following documents:

(a) Each resolution of the Trustees authorizing the original issue of
Shares or establishing a new Sub-Trust;

(b) Each Registration Statement filed with the Commission, and all
amendments and orders with respect thereto, in effect with respect to
the sale of Shares of the Trust;

(d) Copies of each vote of the Trustees designating Authorized Persons to
give instructions to the Transfer Agent;

(e) Certificates as to any change in an Officer or Trustee of the Trust;

(f) Specimens of all new certificates for Shares, accompanied by the
Trustees' resolutions approving such forms; and

(g) Such other certificates, documents or opinions as may mutually be
deemed necessary or appropriate for the Transfer Agent in the proper
performance of its duties.

7. REPRESENTATION OF THE TRUST. The Trust represents to the Transfer Agent
that, as of the date hereof, all outstanding Shares are validly issued,
fully paid and non-assessable by the Trust. The Trust may hereafter issue
an unlimited number of Shares of each Sub-Trust presently existing or
hereafter created. When Shares are hereafter issued in accordance with the
terms of the Prospectus, such Shares shall be validly issued, fully paid
and non-assessable by the Trust.

8. DUTIES OF THE TRANSFER AGENT.

(a) The Transfer Agent shall be responsible for administering and/or
performing transfer agent functions, for acting as service agent in
connection with dividend and distribution functions and for performing
shareholder account administrative agent functions in connection with
the issuance, transfer and redemption or repurchase (including
coordination with the Custodian) of the Trust's Shares. The details of
the operating standards and procedures to be followed shall be
determined from time to time by agreement between the Transfer Agent
and the Trust.

(b) The Transfer Agent shall create and maintain all necessary records
including those specified in Section 17 hereof, in accordance with all
applicable laws, rules and regulations, including but not limited to
records required by Section 31(a) of the 1940 Act, and those records
pertaining to the various functions performed by it hereunder. All
records shall be available for inspection and use by the Trust. Where
applicable, such records shall be maintained by the Transfer Agent for
the periods and in the places required by Rule 31a-2 under the 1940
Act. All such records shall be the property of the Trust and the
Transfer Agent shall deliver such records to the Trust or its designee
upon request.

(c) The Transfer Agent shall make available during regular business hours
all records and other data created and maintained pursuant to this
Agreement for reasonable audit and inspection by the Trust, or any
person retained by the Trust. Upon reasonable notice by the Trust, the
Transfer Agent shall make available during regular business hours its
facilities and premises employed in connection with its performance of
this Agreement for reasonable visitation by the Trust, or any person
retained by the Trust.

(d) At the expense of the Trust, the Transfer Agent shall maintain an
adequate supply of blank share certificates for each Sub-Trust
providing for the issuance of certificates to meet the Transfer
Agent's requirements therefor. Such share certificates shall be
properly signed by facsimile. The Trust agrees that, notwithstanding;
the death, resignation, or removal of any officer of the Trust whose
signature appears on such certificates, the Transfer Agent may
continue to countersign certificates which bear such signatures until
other directed by the Trust. Share certificates may be issued and
accounted for entirely by the Transfer Agent and do not require any
third party registrar or other endorsing party.

(e) The Transfer Agent shall issue replacement share certificates in lieu
of certificates which have been lost, stolen or destroyed, without any
further action by the Board of Trustees or any Officer of the Trust,
upon receipt by the Transfer Agent of properly executed affidavits and
lost certificate bonds, in form satisfactory to the Transfer Agent,
with the Trust and the Transfer Agent as obligees under replacement
certificates without requiring the affidavits and lost certificate
bonds described above and the Transfer Agent agrees to indemnify the
Trust against any and all losses or claims which may arise by reason
of the issuance of such new certificates in the place of the one
allegedly lost, stolen or destroyed.

(f) The Transfer Agent shall also maintain a record of each certificate
issued, the number of Shares represented thereby and the holder of
record. With respect to shares held in open account, i.e. no
certificate being issued with respect thereto, the Transfer Agent
shall maintain comparable records of the record holders thereof,
including their addresses and tax identification numbers. The Transfer
Agent shall further maintain a stop transfer record on lost and/or
replaced certificates.

(g) The Transfer Agent will address and mail all account communication by
the Trust to its Shareholders, including reports to Shareholders and
dividend and distribution notices.

(h) The Transfer Agent will investigate all Shareholder inquiries relating
to Shareholder accounts and will answer all correspondence from
Shareholders, securities brokers and other relating to its duties
hereunder and such other correspondence as may from time to time be
mutually agreed upon between the Transfer Agent and the Trust.

(i) The Transfer Agent shall furnish the Trust state by state registration
reports, such period and special reports as the Trust may reasonably
request, and such other information, including Shareholder lists and
statistical information concerning accounts as my be agreed upon from
time to time between the Trust and the Transfer Agent.

(j) In connection with special meetings of Shareholders, the Transfer
Agent will prepare Shareholder lists, process and tabulate returned
proxy cards, report on proxies voted prior to meetings, act as teller
at meetings and certify Shares voted at meetings.

9. SALE OF TRUST SHARES.

(a) Whenever the Trust shall sell or cause to be sold any Shares of a
Sub-Trust, the Trust shall deliver or cause to be delivered to the
Transfer Agent a Certificate duly specifying: (i) the name of the
Sub-Trust whose Shares were sold; (ii) the number of Shares sold,
trade date, and price; (iii) the amount of money to be delivered to
the Custodian for the sale of such Shares and specifically allocated
to such Sub-Trust; and (iv) in the case of a new account, a new
account application or sufficient information to establish an account.

(b) The Transfer Agent will, upon receipt by it of a check or other
payment identified by it as an investment in Shares of one of the
Sub-Trusts and drawn or endorsed to the Transfer Agent as agent for,
or identified as being for the account of, one of the Sub-Trusts,
promptly deposit such check or other payment to the appropriate
account, postings necessary to reflect the investment. The Transfer
Agent will notify the Trust, or its designee, and the Custodian of all
purchases and related account adjustments.

(c) Under procedures as established by mutual agreement between the Trust
and the Transfer Agent, the Transfer Agent shall issue to the
purchaser or his authorized agent such Shares as he is entitled to
receive, based on the appropriate net asset value of the Sub-Trust's
Shares, determined in accordance with applicable Federal law or
regulation. In issuing Shares to a purchaser or his authorized agent,
the Transfer Agent shall be entitled to rely upon the latest
directions, if any, previously received by the Transfer Agent from the
purchaser or his authorized agent concerning the delivery of such
Shares.

(d) The Transfer Agent shall not be required to issue any Shares of the
Trust where it has received a Written Instruction from the Trust or
written notification from any appropriate Federal or state authority
that the sale of the Shares of the Sub-Trust in question has been
suspended or discontinued, and the Transfer Agent shall be entitled to
rely upon such written Instructions or written notification.

(e) Upon the issuance of any Shares of any Sub-Trust in accordance with
the foregoing provision of this Section, the Transfer Agent shall not
be responsible for the payment of any original issue or other taxes
required to be paid by the Trust in connection with such issuance.

(f) The Transfer Agent may establish such additional rules and regulations
governing the transfer or registration of Shares as it may deem
advisable and consistent with such rules and regulations generally
adopted by transfer agents.

10. RETURNED CHECKS. In the event that any check or other order for the
transfer of money is returned unpaid for any reason, the Transfer Agent
will take such steps as the Transfer Agent may, in its discretion, deem
appropriate to protect the Trust from financial loss or as the Trust or its
designee may instruct. Provided that the standard procedures, as agreed
upon from time to time, between the Trust and the Transfer Agent, regarding
purchases and redemptions of shares, are adhered to by the Transfer Agent,
the Transfer Agent shall not be liable for any loss suffered by the
Sub-Trust as a result of returned or unpaid purchase or redemption
transactions. Legal or other expenses incurred to collect amounts owed to a
Sub-Trust as a consequence of returned or unpaid purchase or redemption
transaction shall be an expense of that Sub-Trust. A Sub-Trust may, at its
option, purchase insurance to reduce its potential losses from collection
activities.

11. REDEMPTIONS. Shares of any Sub-Trust may be redeemed in accordance with the
procedures set forth in the Prospectus of the Trust and the Transfer Agent
will duly process all redemption requests.

12. TRANSFER AND EXCHANGES. The Transfer Agent is authorized to review and
process transfers of Shares of each Sub- Trust, exchanges between
Sub-Trusts on the records of the Sub-Trusts maintained by the Transfer
Agent, and exchanges between the Trust and other funds as may be permitted
by the prospectus of the Trust. If Shares to be transferred are represented
by outstanding certificates, the Transfer Agent will, upon surrender to it
of the certificates in proper form for transfer, and upon cancellation
thereof, countersign and issue new certificates for a like number of Shares
and deliver the same. If the Shares to be transferred are not represented
by outstanding certificates, the Transfer Agent will, upon an order
therefor by or on behalf of the registered holder thereof in proper form,
credit the same to the transferee on its books. If Shares are to be
exchanged for Shares of another fund, the Transfer Agent will process such
exchange in the same manner as a redemption of sale of Shares, except that
it may in its discretion waive requirements for information and
documentation.

13. RIGHT TO SEE ASSURANCES. The Transfer Agent reserves the right to refuse to
transfer or redeem Shares until it is satisfied that the requested transfer
or redemption is legally authorized, and it shall incur no liability for
the refusal, in good faith, to make transfers or redemptions which the
Transfer Agent, in its judgment, deems improper or unauthorized, or until
it is satisfied that there is no basis for any claim adverse to such
transfer or redemption. The Transfer Agent may, in effecting transfers,
rely upon the provisions of the Uniform Act for the Simplification of
Fiduciary Security Transfers or the Uniform Commercial Code, as the same
may be amended from time to time, which in the opinion of legal counsel for
the Trust or of its own legal counsel protect it in not requiring certain
documents in connection with the transfer or redemption of Shares of any
Sub-Trust, and the Trust shall indemnify the Transfer Agent for any act
done or omitted by it in reliance upon such laws of opinions of counsel of
the Trust or its own counsel.

14. DISTRIBUTIONS.

(a) The Trust will promptly notify the Transfer Agent of the declaration
of any dividend or distribution. The Trust shall furnish to the
Transfer Agent a resolution of the Board of Trustees of the Trust
certified by the Secretary; (i) authorizing the declaration of
dividends on a specified period basis and authorizing the Transfer
Agent to rely on Oral Instructions or a Certificate specifying the
date of the declaration of such dividend or distribution, the date of
payment thereof, the record date as of which Shareholders entitled to
payment shall be determined and the amount payable per share to
Shareholders of record as of that date and the total amount payable to
the Transfer Agent of the Trust on the payment date; or (ii) setting
forth the date of the declaration of any dividend or distribution by a
Sub-Trust, the date of payment thereof, the record date as of which
Shareholders entitled to payment shall be determined, and the amount
payable per share to the Shareholders of record as of that date and
the total amount payable to the Transfer Agent on the payment date.

(b) The Transfer Agent, on behalf of the Trust, shall instruct the
Custodian to place in a dividend disbursing account funds equal to the
cash amount of any dividend or distribution to be paid out. The
Transfer Agent will calculate, prepare and mail checks to, or (where
appropriate) credit such dividend or distribution to the account of,
Sub-Trust Shareholders, and maintain and safeguard all underlying
records.

(d) The Transfer Agent will maintain all records necessary to reflect the
crediting of dividends which are reinvested in Shares of the Trust,
including without limitation daily dividends.

(e) The Transfer Agent shall not be liable for any improper payments made
in accordance with a resolution of the Board of Trustees of the Trust.

(f) If the Transfer Agent shall not receive from the Custodian sufficient
cash to make payment to all shareholders of the Trust as of the record
date, the Transfer Agent shall, upon notifying the Trust, withhold
payment to all Shareholders of record as of the record date until such
sufficient cash is provided to the Transfer Agent.

15. OTHER DUTIES. In addition to the duties expressly provided for herein, the
Transfer Agent shall perform such other duties and functions and shall be
paid such amounts therefor as may from time to time be agreed in writing.

16. TAXES. It is understood that the Transfer Agent shall file such appropriate
information returns concerning the payment of dividends and capital gain
distributions with the proper Federal, State and local authorities as are
required by law to be filed by the Trust and shall withhold such sums as
are required to be withheld by applicable law.

17. BOOKS AND RECORDS.

(a) The Transfer Agent shall maintain records showing for each
Shareholder's account the following: (i) names, addresses and tax
identification numbers; (ii) number of Shares held; (iii) historical
information regarding the account of each Shareholder, including
dividends paid and date and price of all transactions on a
Shareholder's account; (iv) any stop or restraining order placed
against a Shareholder's account; (v) information with respect to
withholdings; (vi) any capital gain or dividend reinvestment order,
plan application, dividend address and correspondence relating to the
current maintenance of a Shareholder's account; (vii) certificate
numbers and denominations for any Shareholders holding certificates;
(viii) any information required in order for the Transfer Agent to
perform the calculations contemplated or required by this Agreement;
and (ix) such other information and data as may be required by
applicable law.

(b) Any records required to be maintained by Rule 31a-1 under the 1940 Act
will be preserved for the periods prescribed in Rule 31a-2 under the
1940 Act. Such records may be inspected by the Trust at reasonable
times. The Transfer Agent may, at its option at any time, and shall
forthwith upon the Trust's demand, turn over to the Trust and cease to
retain in the Transfer Agent's files, records and documents created
and maintained by the Transfer Agent in performance of its services or
for its protection. At the end of the six-year retention period, such
records and documents will either be turned over to the Trust, or
destroyed in accordance with the Trust's authorization.

18. RELIANCE BY TRANSFER AGENT; INSTRUCTIONS.

(a) The Transfer Agent shall be protected in acting upon any paper or
document believed by it to be genuine and to have been signed by an
Authorized Person and shall not be held to have any notice of any
change of authority of any person until receipt of written
certification thereof from the Trust. It shall also be protected in
processing Share certificates which it reasonably believes to bear the
proper manual or facsimile signatures.

(b) At any time the Transfer Agent may apply to any Authorized Person of
the Trust for Written Instructions, and, at the expense of the Trust,
may seek advice from legal counsel for the Trust or its own legal
counsel, with respect to any matter arising in connection with this
Agreement, and it shall not be liable for any action taken or not
taken or suffered by it in good faith in accordance with such Written
Instructions or with the opinion of such counsel. In addition, the
Transfer Agent, its officers, agents or employees, shall accept
instructions or requests given to them by any person representing or
acting on behalf of the Trust only if said representative is known by
the Transfer Agent, its officers, agents or employees, to be an
Authorized Person. The Transfer Agent shall have no duty or obligation
to inquire into, nor shall the Transfer Agent be responsible for, the
legality of any act done by it upon the request or direction of
Authorized Persons of the Trust.

(c) Notwithstanding any of the foregoing provisions of this Agreement, the
Transfer Agent shall be under no duty or obligation to inquire into,
and shall not be liable for: (i) the legality of the issue or sale of
any Shares of the Trust, or the sufficiency of the amount to be
received therefor; (ii) the legality of the redemption of any Shares
of the Trust, or the propriety of the amount to be paid therefor;
(iii) the legality of the declaration of any dividend by the Trust, or
the legality of the issue of any Shares of the Trust in payment of any
stock dividend; or (iv) the legality of any recapitalization of
readjustment of the Shares of the Trust.

19. STANDARD OF CARE AND INDEMNIFICATION.

(a) The Transfer Agent may, in connection with this Agreement, employ
agents or attorneys in fact, and shall not be liable for any loss
arising out of or in connection with its actions under this Agreement
so long as it acts in good faith and with due diligence, and is not
negligent or guilty of any willfully misconduct.

(b) The Trust hereby agrees to indemnify and hold harmless the Transfer
Agent from and against any and all claims, demands, expenses and
liabilities (whether with or without basis in fact of law) of any and
every nature which the Transfer Agent may sustain or incur or which
may be asserted against the Transfer Agent by any person by reason of,
or as a result of: (i) any action taken or omitted to be taken by the
Transfer Agent in good faith in reliance upon any Certificate,
instrument, order or stock certificate believed by it to be genuine
and to be signed, countersigned or executed by any duly authorized
person, upon the Oral Instructions or Written Instructions of an
Authorized Person of the Trust or upon the opinion of legal counsel
for the Trust or its own counsel; or (ii) any good action taken or
permitted to be taken by the Transfer Agent in connection with its
appointment in good faith in reliance upon any law, act, regulation or
interpretation of the same even though the same may thereafter have
been altered, changed, amended or repealed. However, indemnification
hereunder shall not apply to actions or omissions of the Transfer
Agent or its directors, officers, employees or agents in cases of its
own negligence, willful misconduct, bad faith, or reckless disregard
of its or their own duties hereunder.

20. AFFILIATION BETWEEN TRUST AND TRANSFER AGENT. It is understood that the
Trustees, officers, employees, agents and Shareholders of the Trust are or
may be interested in the Transfer Agent as directors, officers, employees,
agents, stockholders, or otherwise, and that the directors, officers,
employees, agents or stockholders of the Transfer Agent may be interest in
the Trust as Trustees, officers, employees, agents, Shareholders, or
otherwise. The fact that the officers, Trustees, employees, agents or
Shareholders of the Trust are or may be affiliated persons (as defined in
the 1940 Act) of the Transfer Agent shall not affect the validity of this
Agreement.

21. TERM.

(a) This Agreement shall become effective on the date hereof (the
"Effective Date") and shall continue in effect until January 31, 1989
and thereafter with respect to each Sub-Trust, so long as such
continuance with respect to any such Sub-Trust is specifically
approved on or prior to January 31, 1989 and at least annually
thereafter by either a majority of the Trustees or the vote of a
majority of the outstanding voting securities (as defined in the 1940
Act) of such Sub-Trust.

Any approval of this Agreement by the holders of a majority of the
outstanding shares (as defined in the 1940 Act) of any Sub-Trust shall
be effective to continue this Agreement with respect to any such Sub-
Trust notwithstanding: (i) that this Agreement has not been approved
by the holders of a majority of the outstanding shares of any other
Sub-Trust affected thereby, and (ii) that this Agreement has not been
approved by the vote of a majority of the outstanding shares of the
Trust, unless such approval shall be required by any other applicable
law or otherwise.

(b) This Agreement may be terminated at any time without payment of any
penalty by vote of the Trustees of the Trust or by the Transfer Agent
on sixty (60) days' written notice to the other party. In the event
such notice is given by the Trust, it shall be accompanied by a
resolution of the Board of Trustees, certified by the Secretary,
electing to terminate this Agreement and designating a successor
transfer agent.

22. AMENDMENT. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties with the formality
of this Agreement, and (i) authorized or approved by a resolution of the
Board of Trustees, including a majority of the Trustees of the Trust who
are not interested persons of the Trust as defined in the 1940 Act, or (ii)
authorized and approved by such other procedures as may be permitted or
required by the 1940 Act.

23. SUBCONTRACTING. The Trust agrees that the Transfer Agent may, in its
discretion, subcontract for certain of the services to be provided
hereunder.

24. SECURITY. The Transfer Agent represents and warrants that, to the best of
its knowledge, the various procedures and systems which the Transfer Agent
has implemented with regard to safeguarding from loss or damage
attributable to fire, theft or any other cause (including provision for
twenty-four hours a day restricted access) the Trust's blank checks,
records and other data and the Transfer Agent's records, data, equipment,
facilities and other property used in the performance of its obligations
hereunder are adequate and that it will make such changes therein from time
to time as in its judgment are required for the secure performance of its
obligations hereunder. The parties shall review such systems and procedures
on a periodic basis.

25. MISCELLANEOUS.

(a) Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Trust or the Transfer Agent, shall
be sufficiently given if addressed to that party and mailed or
delivered to it at its office set forth below or at such other place
as it may from time to time designate in writing.

To the Trust: To The Transfer Agent:

United Services Funds United Shareholder Services, Inc.
Woodway Park, Suite 5300 Woodway Park, Suite 5300
11330 IH 10 West 11330 IH 10 West
San Antonio, Texas 78249 San Antonio, Texas 78249

Attention: President Attention: President

(b) This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Trust or
the Transfer Agent without the written consent of the other.

(d) This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original; but such counterparts shall,
together, constitute only one instrument.

26. LIMITATION OF LIABILITY. The term "United Services Funds" means and refers
to the Trustees from time to time serving under the Master Trust Agreement
of the Trust dated July 31, 1984, as the same may subsequently thereto have
been, or subsequently hereto be, amended. It is expressly agreed that
obligations of the Trust hereunder shall not be binding upon any Trustee,
Shareholder, nominees, officers, agents or employees of the Trust,
personally, but bind only the assets and property of the Trust, as provided
in the Master Trust Agreement. The execution and delivery of this Agreement
have been authorized by the Trustees and signed by an authorized officer of
the Trust, acting as such, and neither such authorization nor such
execution and delivery shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but
shall bind only the assets and property of the Trust as provided in the
Master Trust Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunder duly authorized and their
respective seals to be hereunto affixed, as of the day and year first above
written.

UNITED SERVICES FUNDS
Attest:
By: /S/ Ofelia M. Mayo By: /S/ Clark Aylsworth
- ----------------------------- -------------------------------
Clark Aylsworth
President

Attest: UNITED SHAREHOLDER SERVICES, INC.

By:/S/ Ofelia M. Mayo By:
- -----------------------------

/S/David L. Ray
--------------------------------
David L. Ray
President

APPENDIX A

I, Bobby D. Duncan, Executive Vice President, Chief Operating Officer,
Chief Financial Officer and Treasurer, and I, Ofelia M. May, Secretary of UNITED
SERVICES FUNDS, a Massachusetts business trust (the "Trust"), do hereby certify
that:

The following individuals have been duly authorized by the Board of
Trustees of the Trust in conformity with the Trust's Declaration of Trust and
By-Laws to give Oral Instructions and Written Instructions on behalf of the
Trust, and the signatures set forth opposite their respective names are their
true and correct signatures:

NAME POSITION (USSI) SIGNATURE

Bobby D. Duncan Chief Executive Officer /S/ BOBBY D. DUNCAN

Elizabeth A. Applin Vice President, Shareholder /S/ ELIZABETH A. APPLIN
Services, Assistant
Corporate Secretary

Ofelia M. Mayo Vice President, Corporate /S/ OFELIA M. MAYO
Secretary

David L. Ray President, Chief Operating /S/ DAVID L. RAY
Officer, Chief Financial
Officer

Kelli D. Shomaker Vice President, Treasurer /S/ KELLI D. SHOMAKER
Controller

/S/ BOBBY D. DUNCAN
Bobby D. Duncan
Executive Vice President,
Chief Operating Officer
Chief Financial Officer,
Treasurer of the Trust

/S/ OFELIA M. MAYO
Ofelia M. Mayo
Vice President, Secretary
of the Trust

FEE SCHEDULE

As compensation for all services rendered and to be rendered by the
Transfer Agent hereunder, each Sub-Trust (including U.S. Gold Shares Fund, U.S.
Good and Bad Times Fund, U.S. growth Fund, U.S. Income Fund, U.S. LoCap Fund,
Prospector Fund, U.S. Tax Free Fund, U.S. Treasury Securities Fund, U.S. New
Prospector Fund, U.S. GNMA Fund and U.S. Real Estate Fund) shall pay to the
Transfer Agent an annual fee per investor account. For all Funds, including
equity bond and "money market" funds, the annual fee is $14 per account. At the
discretion of the Board of Trustees of the Trust, the annual fees may be
increased in future years.

The Transfer Agent shall be entitled to bill the Trust separately for
all out-of-pocket disbursements incurred at the direction of the Trust,
including, without limitation:

(a) costs of postage, envelopes, statements, confirmations, forms, labels
and any other materials required to be sent to shareholders;

(b) costs of stationery and postage for communications with individual
shareholders regarding investment accounts;

(d) costs of storage of records to be maintained under applicable law;

(e) telephone and line charges, including "800 service", used by
shareholders to contact the Transfer Agent, telephone equipment and
maintenance contracts;

(f) processing forms and printing thereof;

(g) other usual and customary miscellaneous items;

(h) voice response unit;

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

UNITED SHAREHOLDER SERVICES, INC.

AMENDMENT No. 5 TO FEE SCHEDULE OF TRANSFER AGENCY
AGREEMENT
DATED FEBRUARY 6, 1996

Pursuant to Section 4(c) of the Transfer Agency Agreement, dated
November 1, 1988, by and among United Services Funds (the "Trust") and United
Shareholder Services, Inc. (the "Transfer Agent"), the parties thereto hereby
adjust compensation paid to the Transfer Agency under the Agreement:

As compensation for all services rendered and to be rendered by the
Transfer Agent hereunder, each Sub-trust shall pay to the Transfer Agent an
annual fee per investor account for all Funds, including equity, bond and "money
market" funds, an annual fee of $23 per account. In connection with
obtaining/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 Sub-Trust 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 Sub-Trust held in accounts, at the institutions, which payment shall not
exceed $1.92 times the average daily number of accounts holding Trust shares at
the institution.

The transfer Agent shall be entitled to bill the Trust separately for
all out-of-pocket disbursements incurred at the direction of the Trust,
including, without limitation:

(a) costs of postage, envelopes, statements, confirmations, forms, labels and
any other materials required to be sent to shareholders;

(b) costs of stationery and postage for communications with individual
shareholders regarding the investment accounts;

(d) costs of storage of records to be maintained under applicable laws;

(e) telephone and line charges, including "800 service" used by shareholders to
contact the Transfer Agent, telephone equipment and maintenance contracts;

(f) processing forms and printing thereof;

(g) other usual and customary miscellaneous items.

The Trust assesses Account Closing Fees, Small Account Charges and Account
Maintenance Fees to shareholders of certain sub- trusts in accordance with the
Trust's prospectuses. Said fees or charges shall be paid directly to the
Transfer Agent which will, in turn, apply such amounts first to its annual fee
and then, in the event aggregate fees and charges exceed its annual fee, to
out-of-pocket disbursements incurred at the direction of the Trust. The
remainder, if any, shall remain with the Transfer Agent as additional
compensation.

Effective as of March 1, 1996 by United Services Funds Board of Trustees vote at
a meeting held February 6, 1996.

UNITED SERVICES FUNDS UNITED SHAREHOLDER SERVICES, INC.

By: /S/FRANK HOLMES By: /S/ BOBBY D. DUNCAN
- -------------------------- -------------------------------
Frank E. Holmes, President Bobby D. Duncan, President

- -------------------------- -------------------------------
Attest: /S/SUSAN B. MCGEE Attest: /S/SUSAN B. MCGEE