DEAN FAMILY OF FUNDS, 485A24F, 1997-10-03

DEAN FAMILY OF FUNDS
485A24F, 1997-10-03

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Registration Nos. 811-7987
333-18653
U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-1A
--
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
--

Pre-Effective Amendment No.

Post-Effective Amendment No. 4

and/or
--
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
--

Amendment No. 7

(Check appropriate box or boxes)

DEAN FAMILY OF FUNDS

(Exact Name of Registrant as Specified in Charter)

2480 Kettering Tower
Dayton, Ohio 45423
(Address of Principal Executive Offices)

Registrant's Telephone Number, including Area Code: (937) 222-9531

Frank H. Scott
C.H. Dean & Associates, Inc.
2480 Kettering Tower
Dayton, Ohio 45423
(Name and Address of Agent for Service)

Copies to:

Tina D. Hosking
Countrywide Fund Services, Inc.
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202

It is proposed that this filing will become effective:
--
/ / immediately upon filing pursuant to Rule 485(b)
/ / on (date) pursuant to Rule 485(b)
/ / 75 days after filing pursuant to Rule 485(a)
/x/ on (December 1) pursuant to Rule 485(a)

The Registrant has registered an indefinite number of shares under the
Securities Act of 1933, as amended, pursuant to Rule 24f-2 under the Investment
Company Act of 1940, as amended.

<PAGE>

DEAN FAMILY OF FUNDS

CROSS REFERENCE SHEET
PURSUANT TO RULE 481(A)
UNDER THE SECURITIES ACT OF 1933

PART A

ITEM NO. REGISTRATION STATEMENT CAPTION CAPTION IN PROSPECTUS

1. Cover Page Cover Page

2. Synopsis Expense Information

3. Condensed Financial Information Performance Information

4. General Description of Registrant Investment Objectives,
Investment Policies and
Risk Considerations;
Operation of the Funds

5. Management of the Fund Operation of the Funds

6. Capital Stock and Other Securities Cover Page; Operation of
the Funds; Dividends and
Distributions; Taxes

7. Purchase of Securities Being Offered How to Purchase Shares;
Shareholder Services;
Exchange Privilege;
Distribution Plans;
Calculation of Share Price
and Public Offering Price;
Application

8. Redemption or Repurchase How to Redeem Shares;
Shareholder Services;
Exchange Privilege

9. Pending Legal Proceedings Inapplicable

PART B
CAPTION IN STATEMENT
OF ADDITIONAL
ITEM NO. REGISTRATION STATEMENT CAPTION INFORMATION

10. Cover Page Cover Page

11. Table of Contents Table of Contents

(i)

<PAGE>

12. General Information and History The Trust

13. Investment Objectives and Policies Definitions, Policies and
Risk Considerations;
Quality Ratings of
Corporate Bonds and
Preferred Stocks;
Investment Limitations;
Securities Transactions;
Portfolio Turnover

14. Management of the Fund Trustees and Officers

15. Control Persons and Principal Holders Principal Security Holders
of Securities

16. Investment Advisory and Other Services The Investment Adviser;
The Sub-Adviser;
Distribution Plans;
Custodian; Auditors;
Countrywide Fund Services,
Inc.

17. Brokerage Allocation and Other Securities Transactions
Practices

18. Capital Stock and Other Securities The Trust

19. Purchase, Redemption and Pricing of Calculation of Share
Securities Being Offered Price and Public Offering
Price; Other Purchase
Information; Redemption in
Kind

20. Tax Status Taxes

21. Underwriters The Underwriter

22. Calculation of Performance Data Historical Performance
Information

23. Financial Statements Statement of Assets and
Liabilities As of March
17, 1997; Financial
Statements As of August
31, 1997

PART C

The information required to be included in Part C is set forth
under the appropriate Item, so numbered, in Part C to this Registration
Statement.

(ii)

<PAGE>

PROSPECTUS
December 1, 1997

DEAN FAMILY OF FUNDS
2480 KETTERING TOWER
DAYTON, OHIO 45423

The Dean Family of Funds currently offers four separate series of shares to
investors: the Large Cap Value Fund, the Small Cap Value Fund, the Balanced Fund
and the International Value Fund (individually a "Fund" and collectively the
"Funds").

The LARGE CAP VALUE FUND seeks to provide growth of capital over the
long-term by investing primarily in the common stocks of large companies.

The SMALL CAP VALUE FUND seeks to provide capital appreciation by investing
primarily in the common stocks of small companies.

The BALANCED FUND seeks to preserve capital while producing a high total
return by allocating its assets among equity securities, fixed-income securities
and money market instruments.

The INTERNATIONAL VALUE FUND seeks to provide long-term capital growth by
investing primarily in the common stocks of foreign companies.

Each Fund offers two classes of shares: Class A shares (sold subject to a
maximum 5.25% front-end sales load and a 12b-1 fee of up to .25% of average
daily net assets) and Class C shares (sold subject to a 1% contingent deferred
sales load for a one-year period and a 12b-1 fee of up to 1% of average daily
net assets).

C.H. Dean & Associates, Inc., dba Dean Investment Associates, 2480 Kettering
Tower, Dayton, Ohio 45423 ("Dean Investment Associates"), serves as investment
adviser to the Funds. Dean Investment Associates is an independent investment
counsel firm which has been advising individual, institutional and corporate
clients since 1973. The firm manages approximately $4.0 billion for clients
worldwide. Currently, Dean Investment Associates has 100 employees which
includes 7 Chartered Financial Analysts (CFA), 10 Certified Public Accounts
(CPA) and 3 PhDs. Dean Investment Associates is Dayton, Ohio's largest
independent investment manager.

This Prospectus sets forth concisely the information about the Funds that
potential investors should know before investing. Please retain this Prospectus
for future reference. A Statement of Additional Information dated December 1,
1997 has been filed with the Securities and Exchange Commission and is hereby
incorporated by reference in its entirety. A copy of the Statement of Additional
Information can be obtained at no charge by calling one of the numbers listed
below.

<PAGE>

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

For Information or Assistance in Opening An Account, Please Call:

Nationwide (Toll-Free) . . . . . . . . . . . . . . . 888-899-8343
Cincinnati . . . . . . . . . . . . . . . . . . . . . 513-629-2285
- -----------------------------------------------------------------

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

<PAGE>

FINANCIAL HIGHLIGHTS

The following information, which is unaudited, is an integral part of the Funds'
financial statements and should be read in conjunction with the financial
statements. The financial statements as of August 31, 1997 appear in the
Statement of Additional Information of the Funds, which can be obtained at no
charge by calling Countrywide Fund Services, Inc. (Nationwide call toll-free
888-899-8343) or by writing to the Funds at the address on the front of this
Prospectus.

<PAGE>
<TABLE>
DEAN FAMILY OF FUNDS
FINANCIAL HIGHLIGHTS
Per Share Data for a Share Outstanding Throughout Each period

<CAPTION>
DEAN LARGE CAP VALUE FUND DEAN SMALL CAP VALUE FUND

Class A Class C Class A Class C
Period Period Period Period
Ended Ended Ended Ended
August 31, 1997 (A) August 31, 1997 (A) August 31, 1997 (A) August 31, 1997(A)
(Unaudited) (Unaudited) (Unaudited) (Unaudited)

Net asset value at beginning of period $ 10.00 $ 10.76 $ 10.00 $ 10.95
---------- -------- ------------ -------------
Income from investment operations:
Net investment income 0.02 0.00 0.02 --
Net realized and unrealized gains
(losses) on investments 0.69 (0.07) 1.25 0.31
---------- -------- ------------ -------------
Total from investment operations 0.71 (0.07) 1.27 0.31
---------- -------- ------------ -------------

Less distributions:
Dividends from net investment income (0.01) -- -- --
Distributions from net realized gains -- -- -- --
---------- -------- ------------ -------------
Total distributions (0.01) -- -- --
---------- -------- ------------ -------------

Net asset value at end of period $ 10.70 $ 10.69 $ 11.27 $ 11.26
========== ======== ============ =============

Total return (B) 7.11% (0.65)% 12.70% 2.83%
========== ======== ============ =============

Net assets at end of period $ 6,704,634 $ 5,869 $ 14,800,643 $ 137,339
========== ======== ============ =============

Ratio of expenses to average net assets:
Before waiver of fees by Adviser 2.82% 3.51% 2.12% 2.86%
========== ======== ============ =============
After waiver of fees by Adviser 1.82% 2.51% 1.80% 2.54%
========== ======== ============ =============

Ratio of net investment income (loss) to
average net assets (C) 0.63% (1.47)% 0.83% (0.16)%

Portfolio turnover rate (C) 20% 20% 51% 51%

Average commission rate per share $ 0.0600 $ 0.0600 $ 0.0600 $ 0.0600
<PAGE>
<CAPTION>
DEAN BALANCED FUND
Class A Class C
Period Period
Ended Ended
August 31, 1997 (A) August 31, 1997 (A)
(Unaudited) (Unaudited)
<S> <C> <C>
Net asset value at beginning of period $ 10.00 $ 10.71
---------- --------

Income from investment operations:
Net investment income 0.05 --
Net realized and unrealized gains
(losses) on investments 0.63 (0.06)
---------- --------
Total from investment operations 0.68 (0.06)
---------- --------

Less distributions:
Dividends from net investment income (0.03) --
Distributions from net realized gains -- --
---------- --------
Total distributions (0.03) --

---------- --------
Net asset value at end of period $ 10.65 $ 10.65
========== ========

Total return (B) 6.86% (0.56)%
========== ========

Net assets at end of period $ 6,783,871 $192,093
========== ========

Ratio of expenses to average net assets:
Before waiver of fees by Adviser 2.80% 3.54%
After waiver of fees by Adviser 1.80% 2.54%

Ratio of net investment income (loss) to
average net assets (C) 2.06% 0.68%

Portfolio turnover rate (C) 44% 44%

Average commission rate per share $ 0.0600 $ 0.0600
<FN>
(A) Represents the period from the initial public offering of shares (May 28,
1997 for Class A shares of each Fund) through August 31, 1997.
The initial public purchase of shares was August 1, 1997 for Class C shares
of the Small Cap Value Fund and the Balanced Fund, and August 19, 1997 for
Class C shares of the Large Cap Value Fund.

(B) The total returns shown do not include the effect of applicable
sales loads.

- 6 -

<PAGE>

EXPENSE INFORMATION
CLASS A CLASS C
SHAREHOLDER TRANSACTION EXPENSES SHARES SHARES

<S> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price). . . . . . 5.25% None
Maximum Contingent Deferred Sales Load
(as a percentage of original purchase price) . None* 1.00%
Sales Load Imposed on Reinvested Dividends . . None None
Exchange Fee . . . . . . . . . . . . . . . . . None None
Redemption Fee . . . . . . . . . . . . . . . . None** None**
<FN>

* Purchases at net asset value of amounts totaling $1 million or more may
be subject to a contingent deferred sales load of up to 1.00% if a
redemption occurred within 12 months of purchase and a commission was
paid by the Underwriter to a participating unaffiliated dealer. See
"How to Redeem Shares".
** A wire transfer fee is charged in the case of redemptions made by wire.
Such fee is subject to change and is currently $8. See "How to Redeem
Shares".
</FN>
</TABLE>
<TABLE>
<CAPTION>

ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
TOTAL FUND
OPERATING
MANAGEMENT FEES OTHER EXPENSES
(AFTER WAIVERS)(A) 12B-1 FEES(B) EXPENSES (AFTER WAIVERS)(C)
LARGE CAP
VALUE FUND
<S> <C> <C> <C> <C>
Class A Shares .75% .25% .85% 1.85%
Class C Shares .75% 1.00% .85% 2.60%

SMALL CAP
VALUE FUND
Class A Shares .75% .25% .85% 1.85%
Class C Shares .75% 1.00% .85% 2.60%

BALANCED FUND
Class A Shares .75% .25% .85% 1.85%
Class C Shares .75% 1.00% .85% 2.60%

INTERNATIONAL
VALUE FUND
Class A Shares .65% .25% .95% 1.85%
Class C Shares .65% 1.00% .95% 2.60%

(A) Absent waivers, management fees would be 1.00% for the Large Cap Value
Fund, the Small Cap Value Fund and the Balanced Fund and 1.25% for the
International Value Fund.
(B) Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charges permitted by the National Association
of Securities Dealers.
(C) Absent waivers of management fees, total Fund operating expenses would
be 2.10% for Class A shares and 2.85% for Class C shares of the Large
Cap Value Fund, the Small Cap Value Fund and the Balanced Fund and
2.45% for Class A shares and 3.20% for Class C shares of the
International Value Fund.
</TABLE>

- 7 -

<PAGE>

The purpose of these tables is to assist the investor in understanding the
various costs and expenses that an investor in the Funds will bear directly or
indirectly. The percentages expressing "Other Expenses" are based on estimated
amounts for the current fiscal year. THE EXAMPLE BELOW SHOULD NOT BE CONSIDERED
A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE SHOWN.

EXAMPLE

You would pay the following
expenses on a $1,000
investment, assuming (1) CLASS A CLASS C
5% annual return and (2) SHARES SHARES
redemption at the end of ------- ------
each time period: 1 Year $ 70 $26
3 Years 108 81

- 8 -

<PAGE>

INVESTMENT OBJECTIVES, INVESTMENT POLICIES AND RISK CONSIDERATIONS

The Dean Family of Funds (the "Trust") is comprised of four Funds, each
with its own portfolio and investment objective. None of the Funds is intended
to be a complete investment program, and there is no assurance that the
investment objective of any Fund can be achieved. Each Fund's investment
objective may be changed by the Board of Trustees without shareholder approval,
but only after notification has been given to shareholders and after this
Prospectus has been revised accordingly. If there is a change in a Fund's
investment objective, shareholders should consider whether such Fund remains an
appropriate investment in light of their then current financial position and
needs. Unless otherwise indicated, all investment practices and limitations of
the Funds are nonfundamental policies which may be changed by the Board of
Trustees without shareholder approval.

Known primarily for its balanced approach to managing money, Dean
Investment Associates strives to generate superior risk-adjusted returns over
full market cycles. Dean Investment Associates also has 25 years experience in
managing equities via the "value" approach. The "value" approach is a
disciplined, prudent approach to equity management that attempts to provide
superior capital appreciation on a risk-adjusted basis by investing in equities
which are out-of-favor, neglected or misunderstood. The goal is to choose those
equities that appear to have the greatest margin of safety.

LARGE CAP VALUE FUND

The Large Cap Value Fund seeks to provide growth of capital over the
long-term by investing primarily in the common stocks of large companies. A
"large company" is one which has a market capitalization of greater than $750
million at the time of investment. Under normal circumstances, at least 65% of
the Fund's total assets will be invested in common stocks of large companies or
securities convertible into common stocks of large companies (such as
convertible bonds, convertible preferred stocks and warrants). The Fund may
invest in preferred stocks and bonds provided they are rated at the time of
purchase in the four highest grades assigned by Moody's Investors Service, Inc.
(Aaa, Aa, A or Baa) or Standard & Poor's Ratings Group (AAA, AA, A or BBB) or,
if unrated, are determined by Dean Investment Associates to be of comparable
quality. Preferred stocks and bonds rated Baa or BBB have speculative
characteristics and changes in economic conditions or other circumstances are
more likely to lead to a weakened capacity to pay principal and interest or to
pay the preferred stock obligations than is the

- 9 -

<PAGE>

case with higher grade securities. Subsequent to its purchase by the Fund, a
security may cease to be rated or its rating may be reduced below Baa or BBB.
Dean Investment Associates will consider such an event to be relevant in its
determination of whether the Fund should continue to hold such security. See the
Statement of Additional Information for a description of ratings.

The stock selection approach of the Fund can best be described in the
vernacular of the investment business as a "value" orientation. That is, great
emphasis is placed on purchasing stocks that have lower than market multiples of
price to earnings, book value, cash flow and revenues and/or high dividend
yield. As indicated above, companies in whose securities the Fund may invest
will predominantly have large capitalizations in terms of total market value.
Usually, but not always, the stocks of such companies are traded on major stock
exchanges. Such stocks are usually very liquid, but there may be periods when a
particular stock or stocks in general become substantially less liquid. Such
periods are usually, but not always, brief and care will be taken by Dean
Investment Associates to minimize the overall liquidity risk of the Fund's
portfolio.

Investments in equity securities are subject to inherent market risks and
fluctuations in value due to earnings, economic conditions, quality ratings and
other factors beyond the control of Dean Investment Associates. As a result, the
return and net asset value of the Fund will fluctuate.

The Fund may invest in foreign companies through the purchase of sponsored
American Depository Receipts (certificates of ownership issued by an American
bank or trust company as a convenience to investors in lieu of the underlying
shares which it holds in custody) or other securities of foreign issuers that
are publicly traded in the United States. When selecting foreign investments,
Dean Investment Associates will seek to invest in securities that have
investment characteristics and qualities comparable to the kinds of domestic
securities in which the Fund invests. Investment in securities of foreign
issuers involves somewhat different investment risks from those affecting
securities of domestic issuers. In addition to credit and market risk,
investments in foreign securities involve sovereign risk, which includes local
political and economic developments, potential nationalization, withholding
taxes on dividend or interest payments and currency blockage. Foreign companies
may have less public or less reliable information available about them and may
be subject to less governmental regulation than U.S. companies. Securities of
foreign companies may be less liquid or more volatile than securities of U.S.
companies.

- 10 -

<PAGE>

The Trust has approved the use of certain options and futures strategies
for the Fund, including the purchase and sale of options on equity securities,
stock indices and futures contracts and the purchase and sale of stock index
futures contracts. For a discussion of these transactions, see "Additional
Investment Information."

When Dean Investment Associates believes substantial price risks exist for
common stocks and securities convertible into common stocks because of
uncertainties in the investment outlook or when in the judgment of Dean
Investment Associates it is otherwise warranted in selling to manage the Fund's
portfolio, the Fund may temporarily hold for defensive purposes all or a portion
of its assets in short-term obligations such as bank debt instruments
(certificates of deposit, bankers' acceptances and time deposits), commercial
paper, U.S. Government obligations having a maturity of less than one year,
shares of money market investment companies or repurchase agreements
collateralized by U.S. Government obligations. The Fund is also permitted to
lend its securities and to borrow money and pledge its assets in connection
therewith. See "Additional Investment Information" for a discussion of these
transactions. The Fund will not invest more than 10% of its total assets in
shares of money market investment companies. Investments by the Fund in shares
of money market investment companies may result in duplication of advisory,
administrative and distribution fees.

SMALL CAP VALUE FUND

The Small Cap Value Fund seeks to provide capital appreciation by investing
primarily in the common stocks of small companies. A "small company" is one
which has a market capitalization of $750 million or less at the time of
investment. Under normal circumstances, the Fund will invest at least 65% of its
total assets in the common stocks of small companies or securities convertible
into common stocks of small companies (such as convertible bonds, convertible
preferred stocks and warrants). However, the Fund may invest a portion of its
assets in common stocks of larger companies. The Fund may invest in preferred
stocks & bonds provided they are rated at the time of purchase in the four
highest grades assigned by Moody's Investors Service, Inc. (Aaa, Aa, A or Baa)
or Standard & Poor's Ratings Group (AAA, AA, A or BBB) or, if unrated, are
determined by Dean Investment Associates to be of comparable quality. Preferred
stocks and bonds rated Baa or BBB have speculative characteristics and changes
in economic conditions or other circumstances are more likely to lead to a
weakened capacity to pay principal and interest or to pay the preferred stock
obligations than is the case with higher grade securities. Subsequent to its
purchase by the Fund, a security may cease to

- 11 -

<PAGE>

be rated or its rating may be reduced below Baa or BBB. Dean Investment
Associates will consider such an event to be relevant in its determination of
whether the Fund should continue to hold such security. See the Statement of
Additional Information for a description of ratings.

Investments in equity securities are subject to inherent market risks and
fluctuations in value due to earnings, economic conditions and other factors
beyond the control of Dean Investment Associates. As a result, the return and
net asset value of the Fund will fluctuate.

The stock selection approach of the Fund can best be described in the
vernacular of the investment business as a "value" orientation. That is, great
emphasis is placed on purchasing stocks that have lower than market multiples of
price to earnings, book value, cash flow and revenues and/or high dividend
yield. The Fund may invest a significant portion of its assets in small,
unseasoned companies. While smaller companies generally have potential for rapid
growth, they often involve higher risks because they lack the management
experience, financial resources, product diversification and competitive
strengths of larger corporations. In addition, in many instances, the securities
of smaller companies are traded only over-the-counter or on a regional
securities exchange and the frequency and volume of their trading is
substantially less than is typical of larger companies. Therefore, the
securities of smaller companies may be subject to wider price fluctuations. When
making large sales, the Fund may have to sell portfolio holdings at discounts
from quoted prices or may have to make a series of small sales over an extended
period of time.

- 12 -

<PAGE>

BALANCED FUND

The Balanced Fund seeks to preserve capital while producing a high total
return by allocating its assets among equity securities, fixed-income securities
and money market obligations. Under normal circumstances, the asset mix of the
Fund will normally range between 40-75 percent in common stocks and securities
convertible into common stocks, 25-60 percent in preferred stocks and bonds, and
0-25 percent in money market instruments. Moderate shifts between asset classes
are made in an attempt to maximize returns or reduce risk.

Because the Fund intends to allocate its assets among equity securities,
fixed-income securities and money market instruments, it may not be able to
achieve, at times, a total return as high as that of a portfolio with complete
freedom to invest its assets entirely in any one type of security. Likewise,
since a portion of the Fund's portfolio will normally consist of fixed-income
securities and/or money market instruments, the Fund may not achieve the degree
of capital appreciation that a portfolio investing solely in equity securities
might achieve. It should be noted that, although the Fund intends to invest in
fixed-income securities to reduce the price volatility of the Fund's shares,
intermediate and long-term fixed-income securities do fluctuate in value more
than money market instruments.

- 13 -

<PAGE>

The Fund attempts to achieve growth of capital through its investments in
equity securities. The equity securities that the Fund may purchase consist of
common stocks or securities having characteristics of common stocks (such as
convertible preferred stocks, convertible debt securities or warrants) of
domestic issuers. The equity selection approach of the Fund can best be
described in the vernacular of the investment business as a "value" orientation.
That is, great emphasis is placed on purchasing stocks that have lower than
market multiples of price to earnings, book value, cash flow and revenues and/or
high dividend yield.

The Fund attempts to earn current income and at the same time achieve
moderate growth of capital and/or reduce fluctuation in the net asset value of
its shares by investing a portion of its assets in fixed-income securities. The
fixed-income securities that the Fund may purchase include U.S. Government
obligations and corporate debt securities (such as bonds and debentures)
maturing in more than one year from the date of purchase and preferred stocks of
domestic issuers rated at the time of purchase in the four highest grades
assigned by Moody's Investors Service, Inc. (Aaa, Aa, A or Baa) or Standard &
Poor's Ratings Group (AAA, AA, A or BBB) or, if unrated, which are determined by
Dean Investment Associates to be of comparable quality. Preferred stocks and
fixed-income securities rated Baa or BBB have speculative characteristics and
changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity to pay principal and interest or to pay the preferred stock
obligations than is the case with higher grade securities. Subsequent to its
purchase by the Fund, a security may cease to be rated or its rating may be
reduced below Baa or BBB. Dean Investment Associates will consider such an event
to be relevant in its determination of whether the Fund should continue to hold
such security. See the Statement of Additional Information for a description of
ratings.

Investments in fixed-income and equity securities are subject to inherent
market risks and fluctuations in value due to changes in earnings, economic
conditions, quality ratings and other factors beyond the control of Dean
Investment Associates. Fixed-income securities are also subject to price
fluctuations based upon changes in the level of interest rates, which will
generally result in all those securities changing in price in the same way,
i.e., all those securities experiencing appreciation when interest rates decline
and depreciation when interest rates rise. As a result, the return and net asset
value of the Fund will fluctuate.

- 14 -

<PAGE>

The Fund also attempts to earn current income and reduce fluctuation in the
net asset value of its shares by investing a portion of its assets in money
market instruments. The money market instruments that the Fund may purchase
consist of short-term (i.e., maturing in one year or less from the date of
purchase) dollar-denominated debt obligations which (i) are U.S. Government
obligations, (ii) are issued by domestic banks, or (iii) are issued by domestic
corporations, if such corporate debt obligations have been rated at least
Prime-2 by Moody's Investors Service, Inc. ("Moody's") or A-2 by Standard &
Poor's Ratings Group ("S&P"), or have an outstanding issue of debt securities
rated at least A by Moody's or S&P, or are of comparable quality in the opinion
of Dean Investment Associates. Money market instruments also include repurchase
agreements collateralized by U.S. Government obligations and shares of money
market investment companies. The Fund will not invest more than 10% of its total
assets in shares of money market investment companies. Investments by the Fund
in shares of money market investment companies may result in duplication of
advisory, administrative and distribution fees. When Dean Investment Associates
believes substantial price risks exist for equity securities and/or fixed-income
securities because of uncertainties in the investment outlook or when in the
judgment of Dean Investment Associates it is otherwise warranted in selling to
manage the Fund's portfolio, the Fund may temporarily hold greater than 25% of
its assets in money market instruments for defensive purposes.

Investors should be aware that the investment results of the Fund depend
upon the ability of Dean Investment Associates to correctly anticipate the
relative performance and risk of equity securities, fixed-income securities and
money market instruments. Historical evidence indicates that correctly timing
portfolio allocations among these asset classes has been an extremely difficult
investment strategy to implement successfully. There can be no assurance that
Dean Investment Associates will correctly anticipate relative asset class
performance in the future on a consistent basis. Investment results would
suffer, for example, if only a small portion of the Fund's assets were invested
in stocks during a significant stock market advance or if a major portion were
invested in stocks during a major decline.

- 15 -

<PAGE>

comparable to the kinds of domestic securities in which the Fund invests.
Investment in securities of foreign issuers involves somewhat different
investment risks from those affecting securities of domestic issuers. In
addition to credit and market risks, investments in foreign securities involve
sovereign risk, which includes local political and economic developments,
potential nationalization, withholding taxes on dividend or interest payments
and currency blockage. Foreign companies may have less public or less reliable
information available about them and may be subject to less governmental
regulation than U.S. companies. Securities of foreign companies may be less
liquid or more volatile than securities of U.S. companies.

The Trust has approved the use of certain options and futures strategies
for the Fund, including the purchase and sale of options on equity securities,
stock indices and futures contracts and the purchase and sale of stock index
futures contracts. The Fund is also permitted to lend its securities and to
borrow money and pledge its assets in connection therewith. For a discussion of
these transactions, see "Additional Investment Information."

INTERNATIONAL VALUE FUND

The International Value Fund seeks to provide long-term capital growth by
investing primarily in the common stocks of foreign companies. Generally, the
stocks purchased by the Fund are issued by companies located in the United
Kingdom, Continental Europe and the Pacific Basin, including Japan, Singapore,
Malaysia, Hong Kong and Australia. Under normal market conditions, investments
will be made in a minimum of three countries other than the United States.

Dean Investment Associates has retained Newton Capital Management Ltd.
("Newton Capital") to manage the investments of the International Value Fund.
Individual stock selection decisions are based upon Newton's assessment of value
based on fundamental research. Fundamental research includes a review of
capitalization and valuation measures. Stocks are chosen that Newton Capital
believes sell at a discount to the company's true economic value. The stock
selection process includes a review of enterprise value to sales; price/earnings
relative to the local market; dividend coverage; dividend yield relative to the
local market; and price to free cash flow. Preference is given to companies with
strong balance sheets and histories of consistent profitability. This strategic
framework guides the managers towards the sectors and company characteristics
that they believe will lead to future out-performance of the Europe, Australia
and Far East Index compiled by Morgan Stanley Capital International.

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<PAGE>

Over the longer term, stocks are selected which will be able to deliver
superior earnings and dividend growth. This will often reflect the company's
market position and pricing power. Newton Capital looks for either a dominant
position in a competitive market or a well protected niche. The goal is to be
able to invest in these companies at valuation levels which do not reflect their
future prospects so a wider view is used when analyzing a company's potential.
Response to different phases of the market and economic cycle will be made, for
instance, through varying the Fund's exposure to more cyclical companies ahead
of an expected economic recovery. Other, more specific criteria will also
generate some stock selection decisions.

Under normal circumstances, at least 65% of the Fund's total assets will be
invested in the common stocks of foreign companies and securities convertible
into the common stocks of foreign companies (such as convertible bonds,
convertible preferred stocks and warrants). The Fund may invest in preferred
stocks and bonds provided they are rated at the time of purchase in the four
highest grades assigned by Moody's (Aaa, Aa, A or Baa) or S&P (AAA, AA, A or
BBB) or, if unrated, are determined by Dean Investment Associates to be of
comparable quality. Preferred stocks and bonds rated Baa or BBB have speculative
characteristics and changes in economic conditions or other circumstances are
more likely to lead to a weakened capacity to pay principal and interest or to
pay the preferred stock obligations than is the case with higher grade
securities. Subsequent to its purchase by the Fund, a security may cease to be
rated or its rating may be reduced below Baa or BBB. Dean Investment Associates
will consider such an event to be relevant in its determination of whether the
Fund should continue to hold such security. See the Statement of Additional
Information for a description of ratings.

Investments in equity securities are subject to inherent market risks and
fluctuations in value due to earnings, economic conditions, quality ratings and
other factors beyond the control of Newton Capital. As a result, the return and
net asset value of the Fund will fluctuate.

Investment in securities of foreign issuers involves somewhat different
investment risks from those affecting securities of domestic issuers. In
addition to credit and market risk, investments in foreign securities involve
sovereign risk, which includes fluctuations in foreign exchange rates, future
political and economic developments, and the possible imposition of exchange
controls or other foreign governmental laws or restrictions. In addition, with
respect to certain countries, there is the possibility of expropriation of
assets, confiscatory taxation, political or social instability or diplomatic
developments which could adversely affect investments in those countries.

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<PAGE>

There may be less publicly available information about a foreign company
than about a U.S. company, and accounting, auditing and financial reporting
standards and requirements may not be comparable. Securities of many foreign
companies are less liquid and their prices more volatile than securities of
comparable U.S. companies. Transaction costs of investing in foreign securities
markets are generally higher than in the U.S. and there is generally less
governmental supervision and regulation of exchanges, brokers and issuers than
there is in the U.S. The Fund might have greater difficulty taking appropriate
legal action in foreign courts. Depository receipts that are not sponsored by
the issuer may be less liquid. Dividend and interest income from foreign
securities will generally be subject to withholding taxes by the country in
which the issuer is located and may not be recoverable by the Fund or the
investor.

The Fund's investments that are denominated in a currency other than the
U.S. dollar are subject to the risk that the value of a particular currency will
change in relation to one or more other currencies including the U.S. dollar.
Among the factors that may affect currency values are trade balances, the level
of short-term interest rates, differences in relative values of similar assets
in different currencies, long-term opportunities for investment and capital
appreciation and political developments. The Fund may try to hedge these risks
by investing in foreign currencies, currency futures contracts and options
thereon, forward currency exchange contracts, or any combination thereof, but
there can be no assurance that such strategies will be effective.

The risks of foreign investing are of greater concern in the case of
investments in emerging markets, which may exhibit greater price volatility and
have less liquidity. Furthermore, the economies of emerging market countries
generally are heavily dependent upon international trade and, accordingly, have
been and may continue to be adversely affected by trade barriers, managed
adjustments in relative currency values, and other protectionist measures
applied internally or imposed by the countries with which they trade. These
emerging market economies also have been and may continue to be adversely
affected by economic conditions in the countries with which they trade. The Fund
presently intends to limit its investments in emerging market countries to no
more than 10% of its net assets.

The Trust has approved the use of certain options and futures strategies
for the Fund, including the purchase and sale of options on equity securities,
stock indices and futures contracts and the purchase and sale of stock index
futures contracts and forward currency exchange contracts. For a discussion of
these transactions, see "Additional Investment Information."

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<PAGE>

When Newton Capital believes substantial price risks exist for common
stocks and securities convertible into common stocks because of uncertainties in
the investment outlook or when in the judgment of Newton Capital it is otherwise
warranted in selling to manage the Fund's portfolio, the Fund may temporarily
hold for defensive purposes all or a portion of its assets in short-term
obligations such as bank debt instruments (certificates of deposit, bankers'
acceptances and time deposits), commercial paper, U.S. Government obligations
having a maturity of less than one year, shares of money market investment
companies or repurchase agreements collateralized by U.S. Government
obligations. The Fund is also permitted to lend its securities and to borrow
money and pledge its assets in connection therewith. See "Additional Investment
Information" for a discussion of these transactions. The Fund will not invest
more than 10% of its total assets in shares of money market investment
companies. Investments by the Fund in shares of money market investment
companies may result in duplication of advisory, administrative and distribution
fees.

ADDITIONAL INVESTMENT INFORMATION

OPTIONS AND FUTURES. Each Fund may write covered call and covered put
options on equity securities that the particular Fund is eligible to purchase.
Call options written by a Fund give the holder the right to buy the underlying
securities from the Fund at a stated exercise price; put options give the holder
the right to sell the underlying security to the Fund. These options are covered
by the Fund because, in the case of call options, it will own the underlying
securities as long as the option is outstanding or because, in the case of put
options, it will maintain a segregated account of cash, U.S. Government
obligations or other high-quality debt securities which can be liquidated
promptly to satisfy any obligation of the Fund to purchase the underlying
securities. The Funds may also write straddles (combinations of puts and calls
on the same underlying security). A Fund will receive a premium from writing a
put or call option, which increases the Fund's return in the event the option
expires unexercised or is closed out at a profit. The amount of the premium will
reflect, among other things, the relationship of the market price of the
underlying security to the exercise price of the option and the remaining term
of the option. By writing a call option, the Fund limits its opportunity to
profit from any increase in the market value of the underlying security above
the exercise price of the option. By writing a put option, the Fund assumes the
risk that it may be required to purchase the underlying security for an exercise
price higher than its then current market value, resulting in a potential
capital loss unless the security subsequently appreciates in value.

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<PAGE>

The purchaser of an option risks a total loss of the premium paid for the
option if the price of the underlying security does not increase or decrease
sufficiently to justify exercise. The seller of an option, on the other hand,
will recognize the premium as income if the option expires unrecognized but
forgoes any capital appreciation in excess of the exercise price in the case of
a call option and may be required to pay a price in excess of current market
value in the case of a put option. Options purchased and sold other than on an
exchange in private transactions also impose on the Funds the credit risk that
the counterparty will fail to honor its obligations. If the price of the
security sold short increases between the time of the short sale and the time a
Fund replaces the borrowed security, the Fund will incur a loss; conversely, if
the price declines, a Fund will realize a capital gain. Although a Fund's gain
is limited to the price at which it sold the security short, its potential loss
is theoretically unlimited.

Each Fund may purchase put options to hedge against a decline in the value
of its portfolio. By using put options in this manner, a Fund will reduce any
profit it might otherwise have realized in the underlying security by the amount
of the premium paid for the put option and by transaction costs. A Fund may
purchase call options on securities or on relevant stock indices to hedge
against an increase in the value of securities that the Fund wants to buy
sometime in the future. The premium paid for the call option and any transaction
costs will increase the cost of securities acquired, upon exercise of the
option, and, unless the price of the underlying security rises sufficiently, the
option may expire worthless.

The Funds may purchase either exchange-traded or over-the-counter options
on securities. A Fund's ability to terminate options positions established in
the over-the-counter market may be more limited than in the case of
exchange-traded options and may also involve the risk that securities dealers
participating in such transactions would fail to meet their obligations to the
Fund.

The Funds may purchase and sell futures contracts to hedge against changes
in prices. The Funds will not engage in futures transactions for speculative
purposes. A Fund may also write call options and purchase put options on futures
contracts as a hedge to attempt to protect securities in its portfolio against
decreases in value. When a Fund writes a call option on a futures contract, it
is undertaking the obligation of selling a futures contract at a fixed price at
any time during a specified period if the option is exercised. Conversely, as
purchaser of a put option on a futures contract, a Fund is entitled (but not
obligated) to sell a futures contract at the fixed price during the life of the
option.

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<PAGE>

A Fund may not purchase or sell futures contracts or related options if
immediately thereafter the sum of the amount of margin deposits on a Fund's
existing futures positions and premiums paid for related options would exceed 5%
of the market value of a Fund's total assets. When a Fund purchases futures
contracts, an amount of cash and cash equivalents, equal to the underlying
commodity value of the futures contracts (less any related margin deposits),
will be deposited in a segregated account with the Fund's custodian (or the
broker, if legally permitted) to collateralize the position and thereby insure
that the use of such futures contract is unleveraged. When a Fund sells futures
contracts, it will either own or have the right to receive the underlying future
or security, or will make deposits to collateralize the position as discussed
above. When a Fund uses futures and options on futures as hedging devices, there
is a risk that the prices of the securities subject to the futures contracts may
not correlate perfectly with the prices of the securities in a Fund's portfolio.
This may cause the futures contract and any related options to react differently
than the portfolio securities to market changes. In addition, the investment
adviser could be incorrect in its expectations about the direction or extent of
market factors such as stock price movements. In these events, the Fund may lose
money on the futures contract or option. It is not certain that a secondary
market for positions in futures contracts or for options will exist at all
times. Although the investment adviser will consider liquidity before entering
into these transactions, there is no assurance that a liquid secondary market on
an exchange or otherwise will exist for any particular futures contract or
option at any particular time. A Fund's ability to establish and close out
futures and options positions depends on this secondary market.

FORWARD CURRENCY EXCHANGE CONTRACTS. The International Value Fund may enter
into forward currency exchange contracts. When Newton Capital believes that the
currency of a particular foreign country may suffer a substantial decline
against the U.S. dollar, it may attempt to hedge some portion or all of this
anticipated risk by entering into a forward contract to sell an amount of
foreign currency approximating the value of some or all of the International
Value Fund's portfolio obligations denominated in such foreign currency. It may
also enter into such contracts to protect against loss between trade and
settlement dates resulting from changes in foreign currency exchange rates. Such
contracts will also have the effect of limiting any gains to the International
Value Fund between trade and settlement dates resulting from changes in such
rates.

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<PAGE>

U.S. GOVERNMENT OBLIGATIONS. "U.S. Government obligations" include
securities which are issued or guaranteed by the United States Treasury, by
various agencies of the United States Government, and by various
instrumentalities which have been established or sponsored by the United States
Government. U.S. Treasury obligations are backed by the "full faith and credit"
of the United States Government. U.S. Treasury obligations include Treasury
bills, Treasury notes, and Treasury bonds. U.S. Treasury obligations also
include the separate principal and interest components of U.S. Treasury
obligations which are traded under the Separate Trading of Registered Interest
and Principal of Securities ("STRIPS") program. Agencies or instrumentalities
established by the United States Government include the Federal Home Loan Banks,
the Federal Land Bank, the Government National Mortgage Association, the Federal
National Mortgage Association, the Federal Home Loan Mortgage Corporation, the
Student Loan Marketing Association, the Small Business Administration, the Bank
for Cooperatives, the Federal Intermediate Credit Bank, the Federal Financing
Bank, the Federal Farm Credit Banks, the Federal Agricultural Mortgage
Corporation, the Resolution Funding Corporation, the Financing Corporation of
America and the Tennessee Valley Authority. Some of these securities are
supported by the full faith and credit of the United States Government while
others are supported only by the credit of the agency or instrumentality, which
may include the right of the issuer to borrow from the United States Treasury.
In the case of securities not backed by the full faith and credit of the United
States, the investor must look principally to the agency issuing or guaranteeing
the obligation for ultimate repayment, and may not be able to assert a claim
against the United States in the event the agency or instrumentality does not
meet its commitments. Shares of the Funds are not guaranteed or backed by the
United States Government.

REPURCHASE AGREEMENTS. Each Fund may enter into repurchase agreements.
Repurchase agreements are transactions by which a Fund purchases a security and
simultaneously commits to resell that security to the seller at an agreed upon
time and price, thereby determining the yield during the term of the agreement.
In the event of a bankruptcy or other default of the seller of a repurchase
agreement, a Fund could experience both delays in liquidating the underlying
security and losses. To minimize these possibilities, each Fund intends to enter
into repurchase agreements only with its Custodian, banks having assets in
excess of $10 billion and the largest and, in the judgment of the investment
adviser, most creditworthy primary U.S. Government securities dealers. Each Fund
will enter into repurchase agreements which are collateralized by U.S.
Government obligations. Collateral for repurchase agreements is held in
safekeeping in the customer-only account of the Funds' Custodian

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<PAGE>

at the Federal Reserve Bank. At the time a Fund enters into a repurchase
agreement, the value of the collateral, including accrued interest, will equal
or exceed the value of the repurchase agreement and, in the case of a repurchase
agreement exceeding one day, the seller agrees to maintain sufficient collateral
so the value of the underlying collateral, including accrued interest, will at
all times equal or exceed the value of the repurchase agreement. A Fund will not
enter into a repurchase agreement not terminable within seven days if, as a
result thereof, more than 15% of the value of the net assets of the Fund would
be invested in such securities and other illiquid securities.

COMMERCIAL PAPER. Commercial paper consists of short-term (usually from one
to two hundred seventy days) unsecured promissory notes issued by corporations
in order to finance their current operations. The Funds will only invest in
commercial paper within the two top ratings of either Moody's (Prime-1 or
Prime-2) or S&P (A-1 or A-2), or which, in the opinion of the investment adviser
is of equivalent investment quality. Certain notes may have floating or variable
rates. Variable and floating rate notes with a demand notice period exceeding
seven days will be subject to each Fund's restriction on illiquid investments
unless, in the judgment of the investment adviser, such note is liquid.

WHEN-ISSUED SECURITIES. Obligations issued on a when-issued or
to-be-announced basis are settled by delivery and payment after the date of the
transaction, usually within 15 to 45 days. In a to-be-announced transaction, a
Fund has committed to purchasing or selling securities for which all specific
information is not yet known at the time of the trade, particularly the face
amount in transactions involving mortgage-related securities. The Funds will
only make commitments to purchase obligations on a when-issued or
to-be-announced basis with the intention of actually acquiring the obligations,
but a Fund may sell these securities before the settlement date if it is deemed
advisable as a matter of investment strategy or in order to meet its
obligations, although it would not normally expect to do so. The Funds will
purchase securities on a when- issued basis or TBA basis only if delivery and
payment for the securities takes place within 120 days after the date of the
transaction.

Purchases of securities on a when-issued or to-be-announced basis are
subject to market fluctuations and their current value is determined in the same
manner as other portfolio securities. When effecting such purchases for a Fund,
a segregated account of cash or liquid securities of the Fund in an amount
sufficient to make payment for the portfolio securities to be purchased will be
maintained with the Fund's Custodian at the trade date and valued daily at
market for the purpose of determining the adequacy of

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<PAGE>

the securities in the account. If the market value of segregated securities
declines, additional cash or securities will be segregated on a daily basis so
that the market value of the Fund's segregated assets will equal the amount of
the Fund's commitments to purchase when-issued obligations and securities on a
to-be-announced basis. A Fund's purchase of securities on a when-issued or
to-be-announced basis may increase its overall investment exposure and involves
a risk of loss if the value of the securities declines prior to the settlement
date or if the broker-dealer selling the securities fails to deliver after the
value of the securities has risen.

BORROWING AND PLEDGING. Each Fund may borrow money from banks, provided
that, immediately after any such borrowings, there is asset coverage of 300% for
all borrowings of the Fund. A Fund will not make any borrowing which would cause
its outstanding borrowings to exceed one-third of the value of its total assets.
Each Fund may pledge assets in connection with borrowings but will not pledge
more than one-third of its total assets. Borrowing magnifies the potential for
gain or loss on the portfolio securities of the Funds and, therefore, if
employed, increases the possibility of fluctuation in a Fund's net asset value.
This is the speculative factor known as leverage. Each Fund's policies on
borrowing and pledging are fundamental policies which may not be changed without
the affirmative vote of a majority of its outstanding shares. It is the Funds'
present intention, which may be changed by the Board of Trustees without
shareholder approval, to borrow only for emergency or extraordinary purposes and
not for leverage.

LENDING PORTFOLIO SECURITIES. Each Fund may, from time to time, lend
securities on a short-term basis (i.e., for up to seven days) to banks, brokers
and dealers and receive as collateral cash, U.S. Government obligations or
irrevocable bank letters of credit (or any combination thereof), which
collateral will be required to be maintained at all times in an amount equal to
at least 100% of the current value of the loaned securities plus accrued
interest. Although each of the Funds does have the ability to make loans of all
of its portfolio securities, it is the present intention of the Trust, which may
be changed without shareholder approval, that such loans will not be made with
respect to a Fund if as a result the aggregate of all outstanding loans exceeds
one-third of the value of the Fund's total assets. Securities lending will
afford a Fund the opportunity to earn additional income because the Fund will
continue to be entitled to the interest payable on the loaned securities and
also will either receive as income all or a portion of the interest on the
investment of any cash loan collateral or, in the case of collateral other than
cash, a fee negotiated with the borrower. Such loans will be terminable at any
time. Loans of securities involve risks of delay in receiving additional
collateral or in recovering the securities lent or even loss of rights in the

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<PAGE>

collateral in the event of the insolvency of the borrower of the securities. A
Fund will have the right to regain record ownership of loaned securities in
order to exercise beneficial rights. A Fund may pay reasonable fees in
connection with arranging such loans.

PORTFOLIO TURNOVER. The Funds do not intend to use short-term trading as a
primary means of achieving their investment objectives. However, each Fund's
rate of portfolio turnover will depend upon market and other conditions, and it
will not be a limiting factor when portfolio changes are deemed necessary or
appropriate by the investment adviser. Although the annual portfolio turnover
rate of each of the Funds cannot be accurately predicted, it is not expected to
exceed 100% with respect to any of the Funds, but may be either higher or lower.
A 100% turnover rate would occur, for example, if all the securities of a Fund
were replaced once in a one-year period. High turnover involves correspondingly
greater commission expenses and transaction costs and increases the possibility
that a Fund would not qualify as a regulated investment company under Subchapter
M of the Internal Revenue Code. A Fund will not qualify as a regulated
investment company if it derives 30% or more of its gross income from gains
(without offset for losses) from the sale or other disposition of securities
held for less than three months. High turnover may result in a Fund recognizing
greater amounts of income and capital gains, which would increase the amount of
income and capital gains which the Fund must distribute to shareholders in order
to maintain its status as a regulated investment company and to avoid the
imposition of federal income or excise taxes (see "Taxes").

HOW TO PURCHASE SHARES

The initial investment in a Fund ordinarily must be at least $1,000 ($250
for tax-deferred retirement plans). The Funds may, in Dean Investment
Associates' sole discretion, accept certain accounts with less than the stated
minimum initial investment. Investors may open an account and make an initial
investment through securities dealers having a sales agreement with the Trust's
principal underwriter, 2480 Securities LLC (the "Underwriter"). Investors may
also make an initial investment directly by sending a check and a completed
account application to Countrywide Fund Services, Inc. (the "Transfer Agent"),
P.O. Box 5354, Cincinnati, Ohio 45201-5354. Checks should be made payable to the
"Large Cap Value Fund", the "Small Cap Value Fund", the "Balanced Fund" or the
"International Value Fund", whichever is applicable. An account application is
included in this Prospectus. Additional shares may be purchased through the Open
Account Program described below.

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<PAGE>

The Trust mails investors a confirmation of all purchases or redemptions of
Fund shares. Certificates representing shares are not issued. The Trust and the
Underwriter reserve the right to limit the amount of investments and to refuse
to sell to any person.

Investors should be aware that the Funds' account application contains
provisions in favor of the Trust, the Underwriter, the Transfer Agent and
certain of their affiliates, excluding such entities from certain liabilities
(including, among others, losses resulting from unauthorized shareholder
transactions) relating to the various services (for example, telephone
exchanges) made available to investors.

Should an order to purchase shares be canceled because the check does not
clear, the investor will be responsible for any resulting losses or fees
incurred by the Trust or the Transfer Agent in the transaction.

OPEN ACCOUNT PROGRAM. Please direct inquiries concerning the services
described in this section to the Transfer Agent at the address or numbers listed
below.

After an initial investment, all investors are considered participants in
the Open Account Program. The Open Account Program helps investors make
purchases of shares of the Funds over a period of years and permits the
automatic reinvestment of dividends and distributions of the Funds in additional
shares without a sales load.

Under the Open Account Program, the investor may purchase and add shares to
his or her account at any time either through a securities dealer or by sending
a check to Countrywide Fund Services, Inc., P.O. Box 5354, Cincinnati, Ohio
45201-5354. The check should be made payable to the applicable Fund.

Under the Open Account Program, investors may also purchase shares of the
Funds by bank wire. Please telephone the Transfer Agent (Nationwide call
toll-free 888-899-8343; in Cincinnati call 629-2285) for instructions. The bank
may impose a charge for sending a wire. There is presently no fee for receipt of
wired funds, but the Transfer Agent reserves the right to charge shareholders
for this service upon thirty days' prior notice to shareholders.

Each additional purchase request must contain the name of the account and
the account number to permit proper crediting to the account. While there is no
minimum amount required for subsequent investments, the Trust reserves the right
to impose such a requirement. All purchases under the Open Account Program

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<PAGE>

are made at the public offering price next determined after receipt of a
purchase order by the Trust. If a broker-dealer received concessions for selling
shares of the Funds to a current shareholder, such broker-dealer will receive
the concessions described above with respect to additional investments by the
shareholder.

SALES LOAD ALTERNATIVES

Each Fund offers two classes of shares which may be purchased at the
election of the purchaser. The two classes of shares each represent interests in
the same portfolio of investments of a Fund, have the same rights and are
identical in all material respects except that (i) Class C shares bear the
expenses of higher distribution fees; (ii) certain other class specific expenses
will be borne solely by the class to which such expenses are attributable,
including transfer agent fees attributable to a specific class of shares,
printing and postage expenses related to preparing and distributing materials to
current shareholders of a specific class, registration fees incurred by a
specific class of shares, the expenses of administrative personnel and services
required to support the shareholders of a specific class, litigation or other
legal expenses relating to a specific class of shares, Trustees' fees or
expenses incurred as a result of issues relating to a specific class of shares
and accounting fees and expenses relating to a specific class of shares; and
(iii) each class has exclusive voting rights with respect to matters relating to
its own distribution arrangements. The net income attributable to Class C shares
and the dividends payable on Class C shares will be reduced by the amount of the
incremental expenses associated with the distribution fee (see "Distribution
Plans").

The Funds' alternative sales arrangements permit investors to choose the
method of purchasing shares that is most beneficial given the amount of the
purchase, the length of time the investor expects to hold his or her shares and
other relevant circumstances. Investors should determine whether under their
particular circumstances it is more advantageous to incur a front-end sales load
and be subject to lower ongoing charges, as discussed below, or to have all of
the initial purchase price invested in the Funds with the investment thereafter
being subject to higher ongoing charges. A salesperson or any other person
entitled to receive any portion of a distribution fee may receive different
compensation for selling Class A or Class C shares.

As an illustration, investors who qualify for significantly reduced sales
loads, as described below, might elect the Class A sales load alternative
because similar sales load reductions are not available for purchases under the
Class C sales load

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<PAGE>

alternative. Moreover, shares acquired under the Class A sales load alternative
would be subject to lower ongoing distribution fees as described below.
Investors not qualifying for reduced initial sales loads who expect to maintain
their investment for an extended period of time might also elect the Class A
sales load alternative because over time the accumulated continuing distribution
fees on Class C shares may exceed the difference in initial sales loads between
Class A and Class C shares. Again, however, such investors must weigh this
consideration against the fact that less of their funds will be invested
initially under the Class A sales load alternative. Furthermore, the higher
ongoing distribution fees will be offset to the extent any return is realized on
the additional funds initially invested under the Class C sales load
alternative.

Some investors might determine that it would be more advantageous to
utilize the Class C sales load alternative to have more of their funds invested
initially, despite being subject to higher ongoing distribution fees and, for a
one-year period, being subject to a contingent deferred sales load. For example,
based on estimated fees and expenses, an investor subject to the maximum 5.25%
initial sales load on Class A shares who elects to reinvest dividends in
additional shares would have to hold the investment in Class A shares
approximately 6 years before the accumulated ongoing distribution fees on the
alternative Class C shares would exceed the initial sales load plus the
accumulated ongoing distribution fees on Class A shares. In this example and
assuming the investment was maintained for more than 6 years, the investor might
consider purchasing Class A shares. This example does not take into account the
time value of money which reduces the impact of the higher ongoing Class C
distribution fees, fluctuations in net asset value or the effect of different
performance assumptions.

In addition to the compensation otherwise paid to securities dealers, the
Underwriter may from time to time pay from its own resources additional cash
bonuses or other incentives to selected dealers in connection with the sale of
shares of the Funds. On some occasions, such bonuses or incentives may be
conditioned upon the sale of a specified minimum dollar amount of the shares of
the Funds during a specific period of time. Such bonuses or incentives may
include financial assistance to dealers in connection with conferences, sales or
training programs for their employees, seminars for the public, advertising,
sales campaigns and other dealer-sponsored programs or events.

CLASS A SHARES

Class A shares are sold on a continuous basis at the public offering price
next determined after receipt of a purchase order by the Trust. Purchase orders
received by dealers prior to 4:00

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p.m., Eastern time, on any business day and transmitted to the Transfer Agent by
5:00 p.m., Eastern time, that day are confirmed at the public offering price
determined as of the close of the regular session of trading on the New York
Stock Exchange on that day. It is the responsibility of dealers to transmit
properly completed orders so that they will be received by the Transfer Agent by
5:00 p.m., Eastern time. Dealers may charge a fee for effecting purchase orders.
Direct purchase orders received by the Transfer Agent by 4:00 p.m., Eastern
time, are confirmed at that day's public offering price. Direct investments
received by the Transfer Agent after 4:00 p.m., Eastern time, and orders
received from dealers after 5:00 p.m., Eastern time, are confirmed at the public
offering price next determined on the following business day.

The public offering price of Class A shares is the next determined net
asset value per share plus a sales load as shown in the following table.

DEALER
REALLOWANCE
SALES LOAD AS % OF: AS % OF
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT PRICE INVESTED PRICE
- -------------------- -------- -------- ------
Less than $25,000 5.25% 5.54% 4.75%
$25,000 but less than $50,000 4.75 4.99 4.25
$50,000 but less than $100,000 4.00 4.17 3.50
$100,000 but less than $250,000 3.25 3.36 2.75
$250,000 but less than $500,000 2.50 2.56 2.25
$500,000 but less than $1,000,000 2.25 2.30 2.00
$1,000,000 or more None* None* None

* There is no front-end sales load on purchases of $1 million or more but a
contingent deferred sales load of up to 1.00% may apply with respect to
Class A shares if a commission was paid by the Underwriter to a
participating unaffiliated dealer and the shares are redeemed within twelve
months from the date of purchase.

Under certain circumstances, the Underwriter may increase or decrease
the reallowance to dealers. Dealers engaged in the sale of shares of the Funds
may be deemed to be underwriters under the Securities Act of 1933. The
Underwriter retains the entire sales load on all direct initial investments in
the Funds and on all investments in accounts with no designated dealer of
record.

For initial purchases of Class A shares of the Funds of $1,000,000 or
more and subsequent purchases further increasing the size of the account, a
dealer's commission of 1.00% of such purchases from $1 million to $3 million,
.75% of such purchases

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<PAGE>

from $3 million to $5 million and .50% of such purchases in excess of $5 million
of the purchase amount may be paid by the Underwriter to participating
unaffiliated dealers through whom such purchases are effected. In determining a
dealer's eligibility for such commission, purchases of Class A shares of the
Funds may be aggregated. Dealers should contact the Underwriter concerning the
applicability and calculation of the dealer's commission in the case of combined
purchases. An exchange from other funds will not qualify for payment of the
dealer's commission, unless such exchange is from a fund with assets as to which
a dealer's commission or similar payment has not been previously paid.
Redemptions of Class A shares may result in the imposition of a contingent
deferred sales load if the dealer's commission described in this paragraph was
paid in connection with the purchase of such shares. See "Contingent Deferred
Sales Load for Certain Purchases of Class A Shares" below.

REDUCED SALES LOAD. A "purchaser" (defined below) may use the Right of
Accumulation to combine the cost or current net asset value (whichever is
higher) of his existing Class A shares of any Fund in the Dean Family of Funds
with the amount of his current purchases in order to take advantage of the
reduced sales loads set forth in the table above. Purchases made of shares of
any Fund in the Dean Family of Funds pursuant to a Letter of Intent may also be
eligible for the reduced sales loads. The minimum initial investment under a
Letter of Intent is $10,000. Shareholders should contact the Transfer Agent for
information about the Right of Accumulation and Letter of Intent.

PURCHASES AT NET ASSET VALUE. Banks, bank trust departments and savings
and loan associations, and employees of such institutions, in their fiduciary
capacity or for their own accounts, may purchase Class A shares of the Funds at
net asset value. To the extent permitted by regulatory authorities, a bank trust
department may charge fees to clients for whose account it purchases shares at
net asset value. Federal and state credit unions may also purchase Class A
shares at net asset value.

In addition, Class A shares of the Funds may be purchased at net asset
value by broker-dealers who have a sales agreement with the Underwriter and
their registered personnel and employees, including members of the immediate
families of such registered personnel and employees. Clients of investment
advisers and financial planners may also purchase Class A shares of the Funds at
net asset value if their investment adviser or financial planner has made
arrangements to permit them to do so with the Trust and the Underwriter. The
investment adviser or financial planner must notify the Transfer Agent that an
investment qualifies as a purchase at net asset value.

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<PAGE>

Class A shares may also be purchased at net asset value by
organizations which qualify under section 501(c)(3) of the Internal Revenue Code
as exempt from Federal income taxes, their employees, alumni and benefactors,
and family members of such individuals.

Trustees, directors, officers and employees of the Trust, Dean
Investment Associates, the Underwriter or the Transfer Agent, including members
of the immediate families of such individuals and employee benefit plans
established by such entities, may also purchase Class A shares of the Funds at
net asset value.

CONTINGENT DEFERRED SALES LOAD FOR CERTAIN PURCHASES OF CLASS A SHARES.
A contingent deferred sales load is imposed upon certain redemptions of Class A
shares (or shares into which such Class A shares were exchanged) purchased at
net asset value in amounts totaling $1 million or more, if the dealer's
commission described above was paid by the Underwriter and the shares are
redeemed within twelve months from the date of purchase. The contingent deferred
sales load will be paid to the Underwriter and will be equal to the commission
percentage paid at the time of purchase (either 1.00%, .75% or .50% depending on
the amount of purchase) as applied to the lesser of (1) the net asset value at
the time of purchase of the Class A shares being redeemed or (2) the net asset
value of such Class A shares at the time of redemption. In determining whether
the contingent deferred sales load is payable, it is assumed that shares not
subject to the contingent deferred sales load are the first redeemed followed by
other shares held for the longest period of time. The contingent deferred sales
load will not be imposed upon shares representing reinvested dividends or
capital gains distributions, or upon amounts representing share appreciation. If
a purchase of Class A shares is subject to the contingent deferred sales load,
the investor will be so notified on the confirmation for such purchase.

Redemptions of such Class A shares of the Funds held for at least 12
months will not be subject to the contingent deferred sales load and an exchange
of such Class A shares into another fund is not treated as a redemption and will
not trigger the imposition of the contingent deferred sales load at the time of
such exchange. A fund will "tack" the period for which such Class A shares being
exchanged were held onto the holding period of the acquired shares for purposes
of determining if a contingent deferred sales load is applicable in the event
that the acquired shares are redeemed following the exchange; however, the
period of time that the redemption proceeds of such Class A shares are held in a
money market fund will not count toward the holding period for determining
whether a contingent deferred sales load is applicable. See "Exchange
Privilege".

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<PAGE>

The contingent deferred sales load is currently waived for any partial
or complete redemption following death or disability (as defined in the Internal
Revenue Code) of a shareholder (including one who owns the shares with his or
her spouse as a joint tenant with rights of survivorship) from an account in
which the deceased or disabled is named. The Underwriter may require
documentation prior to waiver of the charge, including death certificates,
physicians' certificates, etc.

ADDITIONAL INFORMATION. For purposes of determining the applicable
sales load and for purposes of the Letter of Intent and Right of Accumulation
privileges, a purchaser includes an individual, his or her spouse and their
children under the age of 21 purchasing shares for his, her or their own
account; or a trustee or other fiduciary purchasing shares for a single
fiduciary account although more than one beneficiary is involved; or employees
of a common employer, provided that economies of scale are realized through
remittances from a single source and quarterly confirmation of such purchases;
or an organized group, provided that the purchases are made through a central
administration or a single dealer, or by other means which result in economy of
sales effort or expense. Contact the Transfer Agent for additional information
concerning purchases at net asset value or at reduced sales loads.

CLASS C SHARES

Class C shares are sold on a continuous basis at the net asset value
next determined after receipt of a purchase order by the Trust. Purchase orders
received by dealers prior to 4:00 p.m., Eastern time, on any business day and
transmitted to the Transfer Agent by 5:00 p.m., Eastern time, that day are
confirmed at the net asset value determined as of the close of the regular
session of trading on the New York Stock Exchange on that day. It is the
responsibility of dealers to transmit properly completed orders so that they
will be received by the Transfer Agent by 5:00 p.m., Eastern time. Dealers may
charge a fee for effecting purchase orders. Direct purchase orders received by
the Transfer Agent by 4:00 p.m., Eastern time, are confirmed at that day's net
asset value. Direct investments received by the Transfer Agent after 4:00 p.m.,
Eastern time, and orders received from dealers after 5:00 p.m., Eastern time,
are confirmed at the net asset value next determined on the following business
day. A contingent deferred sales load is imposed on Class C shares if an
investor redeems an amount which causes the current value of the investor's
account to fall below the total dollar amount of purchase payments subject to
the deferred sales load, except that no such charge is imposed upon shares
representing reinvested dividends or capital gains distributions, or upon
amounts representing share appreciation.

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<PAGE>

Whether a contingent deferred sales load is imposed will depend on the
amount of time since the investor made a purchase payment from which an amount
is being redeemed. Purchases are subject to the contingent deferred sales load
according to the following schedule:

Year Since Purchase Contingent Deferred
Payment Was Made Sales Load
------------------- -------------------
First Year 1%
Thereafter None

In determining whether a contingent deferred sales load is payable, it
is assumed that the purchase payment from which the redemption is made is the
earliest purchase payment (from which a redemption or exchange has not already
been effected). If the earliest purchase from which a redemption has not yet
been effected was made within one year before the redemption, then a deferred
sales load at the rate of 1% will be imposed.

The following example will illustrate the operation of the contingent
deferred sales load. Assume that an individual opens an account and purchases
1,000 shares at $10 per share and that six months later the net asset value per
share is $12 and, during such time, the investor has acquired 50 additional
shares through reinvestment of distributions. If at such time the investor
should redeem 450 shares (proceeds of $5,400), 50 shares will not be subject to
the load because of dividend reinvestment. With respect to the remaining 400
shares, the load is applied only to the original cost of $10 per share and not
to the increase in net asset value of $2 per share. Therefore, $4,000 of the
$5,400 redemption proceeds will be charged the load. At the rate of 1%, the
contingent deferred sales load would be $40. In determining whether an amount is
available for redemption without incurring a deferred sales load, the purchase
payments made for all Class C shares in the shareholder's account are
aggregated, and the current value of all such shares is aggregated.

All sales loads imposed on redemptions are paid to the Underwriter. The
Underwriter intends to pay a commission of 1% of the purchase amount to
participating brokers at the time the investor purchases Class C shares.

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<PAGE>

SHAREHOLDER SERVICES

Contact the Transfer Agent (Nationwide call toll-free 888- 899-8343; in
Cincinnati call 629-2285) for additional information about the shareholder
services described below.

AUTOMATIC WITHDRAWAL PLAN

If the shares in an account have a value of at least $5,000, the
shareholder may elect to receive, or may designate another person to receive,
monthly or quarterly payments in a specified amount of not less than $50 each.
There is no charge for this service. Purchases of additional Class A shares
while the plan is in effect are generally undesirable because a sales load is
incurred whenever purchases are made.

TAX-DEFERRED RETIREMENT PLANS

Shares of the Funds are available for purchase in connection with the
following tax-deferred retirement plans:

-- Keogh Plans for self-employed individuals

-- Individual retirement account (IRA) plans for
individuals and their non-employed spouses

-- Qualified pension and profit-sharing plans for
employees, including those profit-sharing plans with a
401(k) provision

-- 403(b)(7) custodial accounts for employees of public school
systems, hospitals, colleges and other non-profit
organizations meeting certain requirements of the Internal
Revenue Code

DIRECT DEPOSIT PLANS

Shares of the Funds may be purchased through direct deposit plans
offered by certain employers and government agencies. These plans enable a
shareholder to have all or a portion of his or her payroll or social security
checks transferred automatically to purchase shares of the Funds.

AUTOMATIC INVESTMENT PLAN

Shareholders may make automatic monthly investments in a Fund from
their bank, savings and loan or other depository institution account. The
minimum initial and subsequent investments must be $50 under the plan. The
Transfer Agent pays the costs associated with these transfers, but reserves the

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<PAGE>

right, upon thirty days' written notice, to make reasonable charges for this
service. A shareholder's depository institution may impose its own charge for
debiting an account which would reduce the return from an investment in the
Funds.

REINVESTMENT PRIVILEGE

If a shareholder has redeemed shares of a Fund, he or she may reinvest
all or part of the proceeds without any additional sales load. This reinvestment
must occur within ninety days of the redemption and the privilege may only be
exercised once per year.

HOW TO REDEEM SHARES

Shareholders may redeem shares of a Fund on each day that the Trust is
open for business by sending a written request to the Transfer Agent. The
request must state the number of shares or the dollar amount to be redeemed and
the account number. The request must be signed exactly as the shareholder's name
appears on the Trust's account records. If the shares to be redeemed have a
value of $25,000 or more, the shareholder's signature must be guaranteed by any
eligible guarantor institution, including banks, brokers and dealers, municipal
securities brokers and dealers, government securities brokers and dealers,
credit unions, national securities exchanges, registered securities
associations, clearing agencies and savings associations.

Shareholders may also redeem shares by placing a wire redemption
request through a securities broker or dealer. Unaffiliated broker-dealers may
impose a fee on the shareholder for this service. Shareholders will receive the
net asset value per share next determined after receipt by the Transfer Agent of
the wire redemption request. It is the responsibility of broker-dealers to
properly transmit wire redemption orders.

If the instructions request a redemption by wire, the shareholder will
be charged an $8 processing fee by the Funds' custodian. The Trust reserves the
right, upon thirty days' written notice, to change the processing fee. All
charges will be deducted from the shareholder's account by redemption of shares
in the account. The shareholder's bank or brokerage firm may also impose a
charge for processing the wire. In the event that wire transfer of funds is
impossible or impractical, the redemption proceeds will be sent by mail to the
designated account.

Redemption requests may direct that the proceeds be deposited directly
in the shareholder's account with a commercial bank or other depository
institution via an Automated Clearing House (ACH) transaction. There is
currently no charge for ACH transactions. Contact the Transfer Agent for more
information about ACH transactions.

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<PAGE>

A contingent deferred sales load may apply to a redemption of Class C
shares or to a redemption of certain Class A shares purchased at net asset
value. See "How to Purchase Shares".

Shares are redeemed at their net asset value per share next determined
after receipt by the Transfer Agent of a proper redemption request in the form
described above, less any applicable contingent deferred sales load. Payment is
normally made within three business days after tender in such form, provided
that payment in redemption of shares purchased by check will be effected only
after the check has been collected, which may take up to fifteen days from the
purchase date. To eliminate this delay, shareholders may purchase shares of the
Funds by certified check or wire.

The Trust and the Transfer Agent will consider all written and verbal
instructions as authentic and will not be responsible for the processing of
exchange instructions received by telephone which are reasonably believed to be
genuine or the delivery or transmittal of the redemption proceeds by wire. The
affected shareholders will bear the risk of any such loss. The privilege of
exchanging shares by telephone is automatically available to all shareholders.
The Trust or the Transfer Agent, or both, will employ reasonable procedures to
determine that telephone instructions are genuine. If the Trust and/or the
Transfer Agent do not employ such procedures, they may be liable for losses due
to unauthorized or fraudulent instructions. These procedures may include, among
others, requiring forms of personal identification prior to acting upon
telephone instructions, providing written confirmation of the transactions
and/or tape recording telephone instructions.

At the discretion of the Trust or the Transfer Agent, corporate
investors and other associations may be required to furnish an appropriate
certification authorizing redemptions to ensure proper authorization. The Trust
reserves the right to require shareholders to close an account if at any time
the value of the shares in the account is less than $1,000 (based on actual
amounts invested including any sales load paid, unaffected by market
fluctuations), or $250 in the case of tax-deferred retirement plans, or such
other minimum amount as the Trust may determine from time to time. After
notification of the Trust's intention to close an account, the shareholder will
be given thirty days to increase the value of the account to the minimum amount.

The Trust reserves the right to suspend the right of redemption or to
postpone the date of payment for more than three business days under unusual
circumstances as determined by the Securities and Exchange Commission.

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<PAGE>

EXCHANGE PRIVILEGE

Shares of the Funds may be exchanged for each other or for the
following series of Countrywide Investment Trust:

Short Term Government Income Fund -- a money market fund which invests
in short-term U.S. Government obligations backed by the "full faith and
credit" of the United States and seeks high current income, consistent
with protection of capital.

Intermediate Term Government Income Fund -- invests in intermediate
term U.S. Government obligations and seeks high current income,
consistent with protection of capital. Capital appreciation is a
secondary objective.

Class A shares of a Fund which are not subject to a contingent deferred
sales load may be exchanged for Class A shares of any other Fund, for shares of
the Short Term Government Income Fund and for shares of the Intermediate Term
Government Income Fund (provided such shares are not subject to a contingent
deferred sales load).

Class C shares of a Fund, as well as Class A shares of a Fund subject
to a contingent deferred sales load, may be exchanged, on the basis of relative
net asset value per share, for shares of any other Fund subject to a contingent
deferred sales load, for shares of the Short Term Government Income Fund and for
any shares of the Intermediate Term Government Income Fund subject to a
contingent deferred sales load. A fund will "tack" the period for which the
shares being exchanged were held onto the holding period of the acquired shares
for purposes of determining if a contingent deferred sales load is applicable in
the event that the acquired shares are redeemed following the exchange. The
period of time that shares are held in the Short Term Government Income Fund
will not count toward the holding period for determining whether a contingent
deferred sales load is applicable. Shareholders may request an exchange by
sending a written request to the Transfer Agent. The request must be signed
exactly as your name appears on the Trust's account records. Exchanges may also
be requested by telephone. If you are unable to execute your transaction by
telephone (for example during times of unusual market activity) consider
requesting your exchange by mail or by visiting the Trust's offices at 2480
Kettering Tower, Dayton, Ohio 45423. An exchange will be effected at the next
determined net asset value after receipt of a request by the Transfer Agent.

Exchanges may only be made for shares of funds then offered for sale in
your state of residence and are subject to the applicable minimum initial
investment requirements. The exchange privilege may be modified or terminated by
the Board of Trustees upon 60 days' prior notice to shareholders. An exchange
results

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<PAGE>

in a sale of fund shares, which may cause you to recognize a capital gain or
loss. Before making an exchange, contact the Transfer Agent to obtain more
information about exchanges among the Funds.

DIVIDENDS AND DISTRIBUTIONS

The Large Cap Value Fund, the Balanced Fund and the International Value
Fund each expects to distribute substantially all of its net investment income,
if any, on a quarterly basis. The Small Cap Value Fund expects to distribute
substantially all of its net investment income, if any, on an annual basis. Each
Fund expects to distribute any net realized long-term capital gains at least
once each year. Management will determine the timing and frequency of the
distributions of any net realized short-term capital gains.

Distributions are paid according to one of the following options:

Share Option - income distributions and capital gains
distributions reinvested in additional
shares.

Income Option - income distributions and short-term capital
gains distributions paid in cash; long-term
capital gains distributions reinvested in
additional shares.

Cash Option - income distributions and capital
gains distributions paid in cash.

The choice of option should be indicated on the application. If no option is
specified, distributions will automatically be reinvested in additional shares.
All distributions will be based on the net asset value in effect on the payable
date.

If the Income Option or the Cash Option is selected and the U.S. Postal
Service cannot deliver the checks or if the checks remain uncashed for six
months, dividends may be reinvested in the account at the then-current net asset
value and the account will be converted to the Share Option. No interest will
accrue on amounts represented by uncashed distribution checks.

An investor who has received in cash any dividend or capital gains
distribution from any Fund may return the distribution within thirty days of the
distribution date to the Transfer Agent for reinvestment at the net asset value
next determined after its return. The investor or his dealer must notify the
Transfer Agent that a distribution is being reinvested pursuant to this
provision.

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<PAGE>

TAXES

Each Fund intends to qualify for the special tax treatment afforded a
"regulated investment company" under Subchapter M of the Internal Revenue Code
so that it does not pay federal taxes on income and capital gains distributed to
shareholders. Each Fund intends to distribute substantially all of its net
investment income and any net realized capital gains to its shareholders.
Distributions of net investment income and from net realized short-term capital
gains, if any, are taxable as ordinary income. Dividends distributed by the
Funds from net investment income may be eligible, in whole or in part, for the
dividends received deduction available to corporations. Distributions resulting
from the sale of foreign currencies and foreign obligations, to the extent of
foreign exchange gains, are taxed as ordinary income or loss. If these
transactions result in reducing the Fund's net income, a portion of the income
may be classified as a return of capital (which will lower a shareholder's tax
basis). If the Fund pays nonrefundable taxes to foreign governments during the
year, the taxes will reduce the Fund's net investment income but still may be
included in a shareholder's taxable income. However, a shareholder may be able
to claim an offsetting tax credit or itemized deduction on his return for his
portion of foreign taxes paid by the Fund. Distributions of net realized
long-term capital gains are taxable as long-term capital gains regardless of how
long a shareholder has held Fund shares. Redemptions and exchanges of shares of
the Funds are taxable events on which a shareholder may realize a gain or loss.

Under applicable tax law, the Fund may be required to limit its gains
from hedging in foreign currency forwards, futures and options. Although it is
anticipated the Fund will comply with such limits, the Fund's use of these
hedging techniques involves greater risk of unfavorable tax consequences than
funds not engaging in such techniques. Hedging may also result in the
application of the mark-to-market and straddle provisions of the Internal
Revenue Code. These provisions could result in an increase (or decrease) in the
amount of taxable dividends paid by the Fund as well as affect whether dividends
paid by the Fund are classified as capital gains or ordinary income.

The Funds will mail to each of their shareholders a statement
indicating the amount and federal income tax status of all distributions made
during the year. In addition to federal taxes, shareholders of the Funds may be
subject to state and local taxes on distributions. Shareholders should consult
their tax advisors about the tax effect of distributions and withdrawals from
the Funds and the use of the Automatic Withdrawal Plan and the Exchange
Privilege. The tax consequences described in this section apply whether
distributions are taken in cash or reinvested in additional shares.

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<PAGE>

OPERATION OF THE FUNDS

The Funds are diversified series of the Dean Family of Funds, an
open-end management investment company organized as an Ohio business trust on
December 18, 1996. The Board of Trustees supervises the business activities of
the Trust. Like other mutual funds, the Trust retains various organizations to
perform specialized services for the Funds.

The Trust retains Dean Investment Associates, 2480 Kettering Tower,
Dayton, Ohio, to manage the Funds' investments. Dean Investment Associates is an
independent investment counsel firm which has been advising individual,
institutional and corporate clients since 1973. Dean Investment Associates
currently provides investment advisory services to three registered investment
companies which serve as underlying vehicles for variable annuity insurance
products. The firm manages approximately $4.0 billion for clients worldwide.
Currently, Dean Investment Associates has 100 employees which includes 7
Chartered Financial Analysts (CFA), 10 Certified Public Accounts (CPA) and 3
PhDs. Dean Investment Associates is Dayton, Ohio's largest independent
investment manager. The controlling shareholder of Dean Investment Associates is
Chauncey H. Dean.

The Large Cap Value Fund, the Small Cap Value Fund and the Balanced
Fund each pays Dean Investment Associates a fee for its services equal to the
annual rate of 1.00% of the average value of its daily net assets. The
International Value Fund pays Dean Investment Associates a fee for its services
equal to the annual rate of 1.25% of the average value of its daily net assets.
As the owner of greater than 25% of its shares, Chauncey H. Dean may be deemed
to control each of the Funds.

Dirk H. Van Dijk and Arvind K. Sachdeva are primarily responsible for
managing the portfolio of the Large Cap Value Fund. Mr. Van Dijk is currently
Senior Equity Analyst and has been employed by Dean Investment Associates since
1994. He previously was an Equity Analyst with Bartlett & Co., an investment
adviser. Mr. Sachdeva is currently Director of Research and has been employed by
Dean Investment Associates in various capacities since 1993. He previously was a
portfolio manager for Carillon Advisers, an investment management firm.

Dirk H. Van Dijk and Amit Dugar are the persons primarily responsible
for managing the portfolio of the Small Cap Value Fund. Mr. Dugar has been
employed by Dean Investment Associates as an Equity Analyst since 1994. He
formerly was a Quantitative Analyst with Renaissance Investment Management, an
investment adviser.

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<PAGE>

Arvind K. Sachdeva, James C. Hunter, David S. Oda and James G. Tillar
are primarily responsible for managing the portfolio of the Balanced Fund. Mr.
Hunter has been employed as an Equity Analyst by Dean Investment Associates
since 1993. He previously was a Security Analyst for Star Bank, N.A. Mr. Oda,
Senior Fixed Income Analyst, has been employed by Dean Investment Associates
since 1990. Mr. Tillar, Assistant Vice President, has been employed by Dean
Investment Associates since 1987.

Newton Capital Management Ltd., 71 Queen Victoria Street, London,
England EC4V 4DR ("Newton Capital"), has been retained by Dean Investment
Associates to manage the investments of the International Value Fund. Newton
Capital is a United Kingdom investment advisory firm registered with the
Securities and Exchange Commission. Newton Capital is affiliated with Newton
Investment Management Ltd., an English investment advisory firm which has been
managing assets for institutional investors, mutual funds and individuals since
1977. Dean Investment Associates (not the Fund) pays Newton Capital a fee for
its services equal to the rate of .50% of the average value of the Fund's daily
net assets.

Paul Butler is International Equities Director for Newton Capital
Management and is primarily responsible for managing the portfolio of the
International Value Fund. Paul graduated from Cambridge University in 1986 with
a degree in Natural Sciences and joined Newton in 1987. Paul worked as an
International Equities analyst for five years before becoming a Portfolio
Manager in 1992. In 1993, Paul was appointed as a director of Newton and
promoted to his current position as Director of International Equities.

The Funds are responsible for the payment of all operating expenses,
including fees and expenses in connection with membership in investment company
organizations, brokerage fees and commissions, legal, auditing and accounting
expenses, expenses of registering shares under federal and state securities
laws, expenses related to the distribution of the Funds' shares (see
"Distribution Plans"), insurance expenses, taxes or governmental fees, fees and
expenses of the custodian, transfer agent and accounting and pricing agent of
the Funds, fees and expenses of members of the Board of Trustees who are not
interested persons of the Trust, the cost of preparing and distributing
prospectuses, statements, reports and other documents to shareholders, expenses
of shareholders' meetings and proxy solicitations, and such extraordinary or
non-recurring expenses as may arise, including litigation to which the Funds may
be a party and indemnification of the Trust's officers and Trustees with respect
thereto.

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<PAGE>

2480 Securities LLC, 2480 Kettering Tower, Dayton, Ohio (the
"Underwriter"), an affiliate of Dean Investment Associates, serves as principal
underwriter for the Funds and, as such, is the exclusive agent for the
distribution of shares of the Funds.

The Trust retains Countrywide Fund Services, Inc., P.O. Box 5354,
Cincinnati, Ohio 45201-5354 (the "Transfer Agent"), to serve as the Funds'
transfer agent, dividend paying agent and shareholder servicing agent. The
Transfer Agent is a wholly-owned indirect subsidiary of Countrywide Credit
Industries, Inc., a New York Stock Exchange listed company principally engaged
in residential mortgage lending.

The Transfer Agent also provides accounting and pricing services to the
Funds. The Transfer Agent receives a monthly fee from each Fund for calculating
daily net asset value per share and maintaining such books and records as are
necessary to enable it to perform its duties.

In addition, the Transfer Agent has been retained to provide
administrative services to the Funds. In this capacity, the Transfer Agent
supplies executive, administrative and regulatory services, supervises the
preparation of tax returns, and coordinates the preparation of reports to
shareholders and reports to and filings with the Securities and Exchange
Commission and state securities authorities. Each Fund pays the Transfer Agent a
fee for these administrative services at the annual rate of .10% of the average
value of its daily net assets up to $100,000,000, .075% of such assets from
$100,000,000 to $200,000,000 and .05% of such assets in excess of $200,000,000;
provided, however, that the minimum fee is $1,000 per month with respect to each
Fund.

Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to its objective of seeking best
execution of portfolio transactions, Dean Investment Associates, and with
respect to the International Value Fund, Newton Capital, may give consideration
to sales of shares of the Funds as a factor in the selection of brokers and
dealers to execute portfolio transactions of the Funds. Subject to the
requirements of the Investment Company Act of 1940 (the "1940 Act") and
procedures adopted by the Board of Trustees, the Funds may execute portfolio
transactions through any broker or dealer and pay brokerage commissions to a
broker (i) which is an affiliated person of the Trust, or (ii) which is an
affiliated person of such person, or (iii) an affiliated person of which is an
affiliated person of the Trust, Dean Investment Associates, Newton Capital or
the Underwriter.

Shares of each Fund have equal voting rights and liquidation rights,
and are voted in the aggregate and not by Fund except in matters where a
separate vote is required by the 1940 Act or when the matter affects only the
interests of a particular Fund. Each

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<PAGE>

class of shares of a Fund shall vote separately on matters relating to its plan
of distribution pursuant to Rule 12b-1 (see "Distribution Plans"). When matters
are submitted to shareholders for a vote, each shareholder is entitled to one
vote for each full share owned and fractional votes for fractional shares owned.
The Trust does not normally hold annual meetings of shareholders. The Trustees
shall promptly call and give notice of a meeting of shareholders for the purpose
of voting upon the removal of any Trustee when requested to do so in writing by
shareholders holding 10% or more of the Trust's outstanding shares. The Trust
will comply with the provisions of Section 16(c) of the 1940 Act in order to
facilitate communications among shareholders.

DISTRIBUTION PLANS

CLASS A SHARES. Pursuant to Rule 12b-1 under the 1940 Act, the Funds
have adopted a plan of distribution (the "Class A Plan") under which the Funds'
Class A shares may directly incur or reimburse the Underwriter for certain
distribution-related expenses, including payments to securities dealers and
others who are engaged in the sale of shares of the Funds and who may be
advising investors regarding the purchase, sale or retention of Fund shares;
expenses of maintaining personnel who engage in or support distribution of
shares or who render shareholder support services not otherwise provided by the
Transfer Agent; expenses of formulating and implementing marketing and
promotional activities, including direct mail promotions and mass media
advertising; expenses of preparing, printing and distributing sales literature
and prospectuses and statements of additional information and reports for
recipients other than existing shareholders of the Funds; expenses of obtaining
such information, analyses and reports with respect to marketing and promotional
activities as the Trust may, from time to time, deem advisable; and any other
expenses related to the distribution of the Funds' Class A shares.

Pursuant to the Class A Plan, the Funds may make payments to dealers
and other persons, including the Underwriter and its affiliates, who may be
advising investors regarding the purchase, sale or retention of Class A shares.
The annual limitation for payment of expenses pursuant to the Class A Plan is
.25% of each Fund's average daily net assets allocable to Class A shares.
Unreimbursed expenditures will not be carried over from year to year. In the
event the Class A Plan is terminated by a Fund in accordance with its terms, the
Fund will not be required to make any payments for expenses incurred by the
Underwriter after the date the Class A Plan terminates.

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<PAGE>

CLASS C SHARES. Pursuant to Rule 12b-1 under the 1940 Act, the Funds
have adopted a plan of distribution (the "Class C Plan") which provides for two
categories of payments. First, the Class C Plan provides for the payment to the
Underwriter of an account maintenance fee, in an amount equal to an annual rate
of .25% of a Fund's average daily net assets allocable to Class C shares, which
may be paid to other dealers based on the average value of Fund shares owned by
clients of such dealers. In addition, the Class C shares may directly incur or
reimburse the Underwriter in an amount not to exceed .75% per annum of a Fund's
average daily net assets allocable to Class C shares for certain
distribution-related expenses incurred in the distribution and promotion of the
Fund's Class C shares, including payments to securities dealers and others who
are engaged in the sale of shares of the Funds and who may be advising investors
regarding the purchase, sale or retention of such shares; expenses of
maintaining personnel who engage in or support distribution of shares or who
render shareholder support services not otherwise provided by the Transfer
Agent; expenses of formulating and implementing marketing and promotional
activities, including direct mail promotions and mass media advertising;
expenses of preparing, printing and distributing sales literature and
prospectuses and statements of additional information and reports for recipients
other than existing shareholders of the Funds; expenses of obtaining such
information, analyses and reports with respect to marketing and promotional
activities as the Trust may, from time to time, deem advisable; and any other
expenses related to the distribution of the Funds' Class C shares.

Pursuant to the Class C Plan, the Funds may make payments to dealers
and other persons, including the Underwriter and its affiliates, who may be
advising investors regarding the purchase, sale or retention of Class C shares.
Unreimbursed expenditures will not be carried over from year to year. In the
event the Class C Plan is terminated by a Fund in accordance with its terms, the
Fund will not be required to make any payments for expenses incurred by the
Underwriter after the date the Class C Plan terminates. The Underwriter may make
payments to dealers and other persons in an amount up to .75% per annum of the
average value of Class C shares owned by their clients, in addition to the .25%
account maintenance fee described above.

GENERAL. Pursuant to the Plans, the Funds may also make payments to
banks or other financial institutions that provide shareholder services and
administer shareholder accounts. The Glass-Steagall Act prohibits banks from
engaging in the business of underwriting, selling or distributing securities.
Although the scope of this prohibition under the Glass-Steagall Act has not been
clearly defined by the courts or appropriate regulatory agencies, management of
the Trust believes that the Glass-

- 44 -

<PAGE>

Steagall Act should not preclude a bank from providing such services. However,
state securities laws on this issue may differ from the interpretations of
federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part of such services, management of the
Trust believes that there would be no material impact on the Funds or their
shareholders. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. The Funds may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Funds, no preference will be shown for such
securities.

The National Association of Securities Dealers, in its Rules of Fair
Practice, places certain limitations on asset-based sales charges of mutual
funds. These Rules require fund-level accounting in which all sales charges -
front-end load, 12b-1 fees or contingent deferred load - terminate when a
percentage of gross sales is reached.

CALCULATION OF SHARE PRICE AND PUBLIC OFFERING PRICE

On each day that the Trust is open for business, the share price (net
asset value) of Class C shares and the public offering price (net asset value
plus applicable sales load) of Class A shares is determined as of the close of
the regular session of trading on the New York Stock Exchange, currently 4:00
p.m., Eastern time. The Trust is open for business on each day the New York
Stock Exchange is open for business and on any other day when there is
sufficient trading in a Fund's investments that its net asset value might be
materially affected. Securities held by the Fund may be primarily listed on
foreign exchanges or traded in foreign markets which are open on days (such as
Saturdays and U.S. holidays) when the New York Stock Exchange is not open for
business. As a result, the net asset value per share of the Fund may be
significantly affected by trading on days when the Trust is not open for
business. The net asset value per share of each Fund is calculated by dividing
the sum of the value of the securities held by the Fund plus cash or other
assets minus all liabilities (including estimated accrued expenses) by the total
number of shares outstanding of the Fund, rounded to the nearest cent.

U.S. Government obligations are valued at their most recent bid prices
as obtained from one or more of the major market makers for such securities.
Other portfolio securities are valued as follows: (i) securities which are
traded on stock exchanges or are quoted by NASDAQ are valued at the last
reported sale price as of the close of the regular session of trading on

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<PAGE>

the New York Stock Exchange on the day the securities are being valued, or, if
not traded on a particular day, at the closing bid price, (ii) securities traded
in the over-the-counter market, and which are not quoted by NASDAQ, are valued
at the last sale price (or, if the last sale price is not readily available, at
the last bid price as quoted by brokers that make markets in the securities) as
of the close of the regular session of trading on the New York Stock Exchange on
the day the securities are being valued, (iii) securities which are traded both
in the over-the-counter market and on a stock exchange are valued according to
the broadest and most representative market, and (iv) securities (and other
assets) for which market quotations are not readily available are valued at
their fair value as determined in good faith in accordance with consistently
applied procedures established by and under the general supervision of the Board
of Trustees. The net asset value per share of each Fund will fluctuate with the
value of the securities it holds.

PERFORMANCE INFORMATION

From time to time, each Fund may advertise its "average annual total
return." Each Fund may also advertise "yield." Both yield and average annual
total return figures are based on historical earnings and are not intended to
indicate future performance.

The "average annual total return" of a Fund refers to the average
annual compounded rates of return over the most recent 1, 5 and 10 year periods
or, where the Fund has not been in operation for such period, over the life of
the Fund (which periods will be stated in the advertisement) that would equate
an initial amount invested at the beginning of a stated period to the ending
redeemable value of the investment. The calculation of "average annual total
return" assumes the reinvestment of all dividends and distributions and the
deduction of the current maximum sales load from the initial investment. A Fund
may also advertise total return (a "nonstandardized quotation") which is
calculated differently from "average annual total return." A nonstandardized
quotation of total return may be a cumulative return which measures the
percentage change in the value of an account between the beginning and end of a
period, assuming no activity in the account other than reinvestment of dividends
and capital gains distributions. A nonstandardized quotation of total return may
also indicate average annual compounded rates of return over periods other than
those specified for "average annual total return." These nonstandardized returns
do not include the effect of the applicable sales load which, if included, would
reduce total return. A nonstandardized quotation of total return will always be
accompanied by a Fund's "average annual total return" as described above.

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<PAGE>

The "yield" of a Fund is computed by dividing the net investment income
per share earned during a thirty-day (or one month) period stated in the
advertisement by the maximum public offering price per share on the last day of
the period (using the average number of shares entitled to receive dividends).
The yield formula assumes that net investment income is earned and reinvested at
a constant rate and annualized at the end of a six-month period.

From time to time, the Funds may advertise their performance rankings
as published by recognized independent mutual fund statistical services such as
Lipper Analytical Services, Inc. ("Lipper"), or by publications of general
interest such as FORBES, MONEY, THE WALL STREET JOURNAL, BUSINESS WEEK,
BARRON'S, FORTUNE or MORNINGSTAR MUTUAL FUND VALUES. The Funds may also compare
their performance to that of other selected mutual funds, averages of the other
mutual funds within their categories as determined by Lipper, or recognized
indicators such as the Dow Jones Industrial Average and the Standard & Poor's
500 Stock Index. In connection with a ranking, the Funds may provide additional
information, such as the particular category of funds to which the ranking
relates, the number of funds in the category, the criteria upon which the
ranking is based, and the effect of fee waivers and/or expense reimbursements,
if any. The Funds may also present their performance and other investment
characteristics, such as volatility or a temporary defensive posture, in light
of Dean Investment Associates' or Newton Capital's view of current or past
market conditions or historical trends.

Prior Performance of the Adviser's Balanced Strategy. Since 1973, the
Adviser has managed separate private accounts. Since 1985, the Adviser has
managed private accounts with investment objectives, policies and strategies
substantially similar to those employed by the Adviser in managing the Balanced
Fund. The Adviser believes that it has produced outstanding, risk-adjusted
investment results over time for these private accounts. The investment
performance illustrated below represents, for one, three, five and ten year
periods ended June 30, 1997, the performance of all of the Adviser's private
accounts which were managed by the Adviser with investment objectives, policies
and strategies substantially similar to those employed by the Adviser in
managing the Balanced Fund (the "Private Accounts"). As a point of comparison,
the charts below also reflect the historical performance of the average balanced
mutual fund as reported by Morningstar Mutual Fund Values.

While the Adviser employs for the Balanced Fund investment objectives
and strategies that are substantially similar to those that were employed
by the Adviser in managing the Private Accounts, the Adviser, in managing the
Balanced Fund, may be subject to certain restrictions on its investment
activities to which, as investment adviser to the Private Accounts, it was not
previously subject. Examples include limits on the percentage of assets invested
in securities of issuers in a single industry and requirements on distributing
income to shareholders. Operating expenses are incurred by the Balanced Fund
which were not incurred by the Private Accounts.

The following performance data represents the prior performance of the
Private Accounts and not the prior performance of the Balanced Fund and
should not be relied upon by investors as an indication of future performance of
the Balanced Fund. The performance of the Private Accounts has been computed in
accordance with the standards formulated by the Association for Investment
Management and Research ("AIM") since January 1, 1993. Prior to that date, the
performance of the Private Accounts was computed according to a methodology
substantially similar to the standards formulated by AIM. All performance data
presented is net of expenses.

Balanced Performance for 1, 3, 5 and 10 Year Periods Ended June 30, 1997

BAR GRAPH:
DEAN INVESTMENT BALANCED AVERAGE MUTUAL FUND
ASSOCIATES AS REPORTED BY MORNINGSTAR MUTUAL FUND VALUES
1 YEAR 20.73% 18.97%
3 YEARS 16.79 16.71
5 YEARS 11.78 12.62
10 YEARS 11.54 10.97

The performance of the average balanced mutual fund as presented
represents an average of the total returns of 348 balanced mutual funds
tracked by Morningstar Mutual Fund Values. Mutual funds are subject to certain
restrictions on their investment activities to which the Private Accounts were
not subject. Examples include limits on the percentage of assets invested in
securities of issuers in a single industry and requirements on distributing
income to shareholders. Operating expenses are incurred by the mutual funds
which were not incurred by the Private Accounts.

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<PAGE>

DEAN FAMILY OF FUNDS
2480 Kettering Tower
Dayton, Ohio 45423

BOARD OF TRUSTEES
Victor S. Curtis
Chauncey H. Dean
Robert D. Dean
Frank J. Perez
Dr. David H. Ponitz
Frank H. Scott
Gilbert P. Williamson

INVESTMENT ADVISER
C.H. DEAN & ASSOCIATES, INC.
2480 Kettering Tower
Dayton, Ohio 45423

UNDERWRITER
2480 SECURITIES LLC
2480 Kettering Tower
Dayton, Ohio 45423

TRANSFER AGENT
COUNTRYWIDE FUND SERVICES, INC.
P.O. Box 5354
Cincinnati, Ohio 45201-5354

SHAREHOLDER SERVICE
Nationwide: (Toll-Free) 888-899-8343
Cincinnati: 513-629-2285

TABLE OF CONTENTS PAGE

Expense Information. . . . . . . . . . . . . . . . . . . . .
Investment Objectives, Investment Policies and Risk
Considerations . . . . . . . . . . . . . . . . . . . . . . .
How To Purchase Shares . . . . . . . . . . . . . . . . . . .
Shareholder Services . . . . . . . . . . . . . . . . . . . .
How To Redeem Shares . . . . . . . . . . . . . . . . . . . .
Exchange Privilege . . . . . . . . . . . . . . . . . . . . .
Dividends and Distributions. . . . . . . . . . . . . . . . .
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operation of the Funds . . . . . . . . . . . . . . . . . . .
Distribution Plans. . . . . . . . . . . . . . . . . . . . .
Calculation of Share Price and Public Offering Price . . . .
Performance Information. . . . . . . . . . . . . . . . . . .

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<PAGE>

No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Trust. This Prospectus does not constitute an offer by the Trust to sell
shares in any State to any person to whom it is unlawful for the Trust to make
such offer in such State.

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<PAGE>

[Logo] DEAN

family of funds_______

[Logo]
Prospectus
December 1, 1997

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<PAGE>

DEAN FAMILY OF FUNDS

STATEMENT OF ADDITIONAL INFORMATION

December 1, 1997

Large Cap Value Fund
Small Cap Value Fund
Balanced Fund
International Value Fund

This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Prospectus of the Dean Family of Funds dated
December 1, 1997. A copy of the Funds' Prospectus can be obtained by writing the
Trust at 312 Walnut Street, 21st Floor, Cincinnati, Ohio 45202, or by calling
the Trust nationwide toll-free 888-899-8343.

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<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

Dean Family of Funds
2480 Kettering Tower
Dayton, Ohio 45423

TABLE OF CONTENTS

THE TRUST..................................................... 3

DEFINITIONS, POLICIES AND RISK CONSIDERATIONS................. 4

QUALITY RATINGS OF CORPORATE BONDS AND PREFERRED STOCKS....... 13

INVESTMENT LIMITATIONS........................................ 15

TRUSTEES AND OFFICERS......................................... 17

THE INVESTMENT ADVISER........................................ 20

THE SUB-ADVISER............................................... 21

THE UNDERWRITER............................................... 21

DISTRIBUTION PLANS............................................ 22

SECURITIES TRANSACTIONS....................................... 23

PORTFOLIO TURNOVER............................................ 25

CALCULATION OF SHARE PRICE AND PUBLIC OFFERING PRICE.......... 25

OTHER PURCHASE INFORMATION.................................... 26

TAXES ..................................................... 27

REDEMPTION IN KIND............................................ 29

HISTORICAL PERFORMANCE INFORMATION............................ 30

CUSTODIAN..................................................... 32

AUDITORS ..................................................... 32

PRINCIPAL SECURITY HOLDERS.................................... 33

COUNTRYWIDE FUND SERVICES, INC................................ 33

STATEMENT OF ASSETS AND LIABILITIES AS OF MARCH 17, 1997...... 35

UNAUDITED FINANCIAL STATEMENTS AS OF AUGUST 31, 1997.......... 40

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<PAGE>

THE TRUST

The Dean Family of Funds (the "Trust") was organized as an Ohio
business trust on December 18, 1996. The Trust currently offers four series of
shares to investors: the Large Cap Value Fund, the Small Cap Value Fund, the
Balanced Fund and the International Value Fund (referred to individually as a
"Fund" and collectively as the "Funds"). Each Fund has its own investment
objective(s) and policies.

Each share of a Fund represents an equal proportionate interest in the
assets and liabilities belonging to that Fund with each other share of that Fund
and is entitled to such dividends and distributions out of the income belonging
to the Fund as are declared by the Trustees. The shares do not have cumulative
voting rights or any preemptive or conversion rights, and the Trustees have the
authority from time to time to divide or combine the shares of any Fund into a
greater or lesser number of shares of that Fund so long as the proportionate
beneficial interest in the assets belonging to that Fund and the rights of
shares of any other Fund are in no way affected. In case of any liquidation of a
Fund, the holders of shares of the Fund being liquidated will be entitled to
receive as a class a distribution out of the assets, net of the liabilities,
belonging to that Fund. Expenses attributable to any Fund are borne by that
Fund. Any general expenses of the Trust not readily identifiable as belonging to
a particular Fund are allocated by or under the direction of the Trustees in
such manner as the Trustees determine to be fair and equitable. Generally, the
Trustees allocate such expenses on the basis of relative net assets or number of
shareholders. No shareholder is liable to further calls or to assessment by the
Trust without his express consent.

Both Class A shares and Class C shares of a Fund represent an interest
in the same assets of such Fund, have the same rights and are identical in all
material respects except that (i) Class C shares bear the expenses of higher
distribution fees; (ii) certain other class specific expenses will be borne
solely by the class to which such expenses are attributable, including transfer
agent fees attributable to a specific class of shares, printing and postage
expenses related to preparing and distributing materials to current shareholders
of a specific class, registration fees incurred by a specific class of shares,
the expenses of administrative personnel and services required to support the
shareholders of a specific class, litigation or other legal expenses relating to
a class of shares, Trustees' fees or expenses incurred as a result of issues
relating to a specific class of shares and accounting fees and expenses relating
to a specific class of shares; and (iii) each class has exclusive voting rights
with respect to matters relating to its own distribution arrangements. The Board
of Trustees may classify and reclassify the shares of a Fund into additional
classes of shares at a future date.

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<PAGE>

DEFINITIONS, POLICIES AND RISK CONSIDERATIONS

A more detailed discussion of some of the terms used and investment
policies described in the Prospectus (see "Investment Objectives and Policies")
appears below:

MAJORITY. As used in the Prospectus and this Statement of Additional
Information, the term "majority" of the outstanding shares of the Trust (or of
any Fund) means the lesser of (1) 67% or more of the outstanding shares of the
Trust (or the applicable Fund) present at a meeting, if the holders of more than
50% of the outstanding shares of the Trust (or the applicable Fund) are present
or represented at such meeting or (2) more than 50% of the outstanding shares of
the Trust (or the applicable Fund).

COMMERCIAL PAPER. Commercial paper consists of short-term (usually from
one to two hundred seventy days) unsecured promissory notes issued by
corporations in order to finance their current operations. The Funds will only
invest in commercial paper rated A-1 or A-2 by Standard & Poor's Ratings Group
("S&P") or Prime-1 or Prime-2 by Moody's Investors Service, Inc. ("Moody's") or
which, in the opinion of the investment Advisor, is of equivalent investment
quality. Certain notes may have floating or variable rates. Variable and
floating rate notes with a demand notice period exceeding seven days will be
subject to each Fund's restrictions on illiquid investments (see "Investment
Limitations") unless, in the judgment of the investment adviser, subject to the
direction of the Board of Trustees, such note is liquid.

The rating of Prime-1 is the highest commercial paper rating assigned
by Moody's. Among the factors considered by Moody's in assigning ratings are the
following: Evaluation of the management of the issuer; economic evaluation of
the issuer's industry or industries and an appraisal of speculative-type risks
which may be inherent in certain areas; evaluation of the issuer's products in
relation to competition and customer acceptance; liquidity; amount and quality
of long-term debt; trend of earnings over a period of 10 years; financial
strength of the parent company and the relationships which exist with the
issuer; and recognition by the management of obligations which may be present or
may arise as a result of public interest questions and preparations to meet such
obligations. These factors are all considered in determining whether the
commercial paper is rated Prime-1 or Prime-2. Commercial paper rated A-1
(highest quality) by S&P has the following characteristics: liquidity ratios are
adequate to meet cash requirements; long-term senior debt is rated "A" or
better, although in some cases "BBB" credits may be allowed; the issuer has
access to at least two additional channels of borrowing; basic earnings and cash
flow have an upward trend with allowance made for unusual

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<PAGE>

circumstances; typically, the issuer's industry is well established and the
issuer has a strong position within the industry; and the reliability and
quality of management are unquestioned. The relative strength or weakness of the
above factors determines whether the issuer's commercial paper is rated A-1 or
A-2.

BANK DEBT INSTRUMENTS. Bank debt instruments in which the Funds may
invest consist of certificates of deposit, bankers' acceptances and time
deposits issued by national banks and state banks, trust companies and mutual
savings banks, or banks or institutions the accounts of which are insured by the
Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance
Corporation. Certificates of deposit are negotiable certificates evidencing the
indebtedness of a commercial bank to repay funds deposited with it for a
definite period of time (usually from fourteen days to one year) at a stated or
variable interest rate. Bankers' acceptances are credit instruments evidencing
the obligation of a bank to pay a draft which has been drawn on it by a
customer, which instruments reflect the obligation both of the bank and of the
drawer to pay the face amount of the instrument upon maturity. Time deposits are
non-negotiable deposits maintained in a banking institution for a specified
period of time at a stated interest rate. Investments in time deposits maturing
in more than seven days will be subject to each Fund's restrictions on illiquid
investments (see "Investment Limitations").

REPURCHASE AGREEMENTS. Repurchase agreements are transactions by which
a Fund purchases a security and simultaneously commits to resell that security
to the seller at an agreed upon time and price, thereby determining the yield
during the term of the agreement. In the event of a bankruptcy or other default
of the seller of a repurchase agreement, a Fund could experience both delays in
liquidating the underlying security and losses. To minimize these possibilities,
each Fund intends to enter into repurchase agreements only with its Custodian,
with banks having assets in excess of $10 billion and with broker-dealers who
are recognized as primary dealers in U.S. Government obligations by the Federal
Reserve Bank of New York. Collateral for repurchase agreements is held in
safekeeping in the customer-only account of the Funds' Custodian at the Federal
Reserve Bank. A Fund will not enter into a repurchase agreement not terminable
within seven days if, as a result thereof, more than 15% of the value of its net
assets would be invested in such securities and other illiquid securities.

Although the securities subject to a repurchase agreement might bear
maturities exceeding one year, settlement for the repurchase would never be more
than one year after a Fund's acquisition of the securities and normally would be
within a

- 5 -

<PAGE>

shorter period of time. The resale price will be in excess of the purchase
price, reflecting an agreed upon market rate effective for the period of time
the Fund's money will be invested in the securities, and will not be related to
the coupon rate of the purchased security. At the time a Fund enters into a
repurchase agreement, the value of the underlying security, including accrued
interest, will equal or exceed the value of the repurchase agreement, and in the
case of a repurchase agreement exceeding one day, the seller will agree that the
value of the underlying security, including accrued interest, will at all times
equal or exceed the value of the repurchase agreement. The collateral securing
the seller's obligation must be of a credit quality at least equal to the Fund's
investment criteria for portfolio securities and will be held by the Custodian
or in the Federal Reserve Book Entry System.

For purposes of the Investment Company Act of 1940, a repurchase
agreement is deemed to be a loan from a Fund to the seller subject to the
repurchase agreement and is therefore subject to that Fund's investment
restriction applicable to loans. It is not clear whether a court would consider
the securities purchased by a Fund subject to a repurchase agreement as being
owned by that Fund or as being collateral for a loan by the Fund to the seller.
In the event of the commencement of bankruptcy or insolvency proceedings with
respect to the seller of the securities before repurchase of the security under
a repurchase agreement, a Fund may encounter delay and incur costs before being
able to sell the security. Delays may involve loss of interest or decline in
price of the security. If a court characterized the transaction as a loan and a
Fund has not perfected a security interest in the security, that Fund may be
required to return the security to the seller's estate and be treated as an
unsecured creditor of the seller. As an unsecured creditor, a Fund would be at
the risk of losing some or all of the principal and income involved in the
transaction. As with any unsecured debt obligation purchased for a Fund, the
investment adviser seeks to minimize the risk of loss through repurchase
agreements by analyzing the creditworthiness of the obligor, in this case, the
seller. Apart from the risk of bankruptcy or insolvency proceedings, there is
also the risk that the seller may fail to repurchase the security, in which case
a Fund may incur a loss if the proceeds to that Fund of the sale of the security
to a third party are less than the repurchase price. However, if the market
value of the securities subject to the repurchase agreement becomes less than
the repurchase price (including interest), the Fund involved will direct the
seller of the security to deliver additional securities so that the market value
of all securities subject to the repurchase agreement will equal or exceed the
repurchase price. It is possible that a Fund will be unsuccessful in seeking to
enforce the seller's contractual obligation to deliver additional securities.

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<PAGE>

LOANS OF PORTFOLIO SECURITIES. Each Fund may lend its portfolio
securities subject to the restrictions stated in the Prospectus. Under
applicable regulatory requirements (which are subject to change), the loan
collateral must, on each business day, at least equal the value of the loaned
securities. To be acceptable as collateral, letters of credit must obligate a
bank to pay amounts demanded by a Fund if the demand meets the terms of the
letter. Such terms and the issuing bank must be satisfactory to the Fund. The
Funds receive amounts equal to the dividends or interest on loaned securities
and also receive one or more of (a) negotiated loan fees, (b) interest on
securities used as collateral, or (c) interest on short-term debt securities
purchased with such collateral; either type of interest may be shared with the
borrower. The Funds may also pay fees to placing brokers as well as custodian
and administrative fees in connection with loans. Fees may only be paid to a
placing broker provided that the Trustees determine that the fee paid to the
placing broker is reasonable and based solely upon services rendered, that the
Trustees separately consider the propriety of any fee shared by the placing
broker with the borrower, and that the fees are not used to compensate the
investment adviser or any affiliated person of the Trust or an affiliated person
of the investment adviser or other affiliated person. The terms of the Funds'
loans must meet applicable tests under the Internal Revenue Code and permit the
Funds to reacquire loaned securities on five days' notice or in time to vote on
any important matter.

WHEN-ISSUED SECURITIES AND SECURITIES PURCHASED ON A TO-BE-ANNOUNCED
BASIS. Each Fund will only make commitments to purchase securities on a
when-issued or to-be-announced ("TBA") basis with the intention of actually
acquiring the securities. In addition, each Fund may purchase securities on a
when-issued or TBA basis only if delivery and payment for the securities takes
place within 120 days after the date of the transaction. In connection with
these investments, each Fund will direct the Custodian to place cash or U.S.
Government obligations in a segregated account in an amount sufficient to make
payment for the securities to be purchased. When a segregated account is
maintained because a Fund purchases securities on a when-issued or TBA basis,
the assets deposited in the segregated account will be valued daily at market
for the purpose of determining the adequacy of the securities in the account. If
the market value of such securities declines, additional cash or securities will
be placed in the account on a daily basis so that the market value of the
account will equal the amount of a Fund's commitments to purchase securities on
a when-issued or TBA basis. To the extent funds are in a segregated account,
they will not be available for new investment or to meet redemptions. Securities
purchased on a when-issued or TBA basis and the securities held in a Fund's
portfolio are subject to changes in market value based upon changes in the level
of interest rates (which will

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<PAGE>

generally result in all of those securities changing in value in the same way,
i.e., all those securities experiencing appreciation when interest rates decline
and depreciation when interest rates rise). Therefore, if in order to achieve
higher returns, a Fund remains substantially fully invested at the same time
that it has purchased securities on a when-issued or TBA basis, there will be a
possibility that the market value of the Fund's assets will have greater
fluctuation. The purchase of securities on a when-issued or TBA basis may
involve a risk of loss if the broker-dealer selling the securities fails to
deliver after the value of the securities has risen.

When the time comes for a Fund to make payment for securities purchased
on a when-issued or TBA basis, the Fund will do so by using then available cash
flow, by sale of the securities held in the segregated account, by sale of other
securities or, although it would not normally expect to do so, by directing the
sale of the securities purchased on a when-issued or TBA basis themselves (which
may have a market value greater or less than the Fund's payment obligation).
Although a Fund will only make commitments to purchase securities on a
when-issued or TBA basis with the intention of actually acquiring the
securities, the Fund may sell these securities before the settlement date if it
is deemed advisable by the investment adviser as a matter of investment
strategy.

WARRANTS AND RIGHTS. Warrants are options to purchase equity securities
at a specified price and are valid for a specific time period. Rights are
similar to warrants, but normally have a short duration and are distributed by
the issuer to its shareholders. Each Fund may purchase warrants and rights,
provided that the Fund does not invest more than 5% of its net assets at the
time of purchase in warrants and rights other than those that have been acquired
in units or attached to other securities. Of such 5%, no more than 2% of a
Fund's assets at the time of purchase may be invested in warrants which are not
listed on either the New York Stock Exchange or the American Stock Exchange.

STRIPS. STRIPS are U.S. Treasury bills, notes and bonds that have been
issued without interest coupons or stripped of their unmatured interest coupons,
interest coupons that have been stripped from such U.S. Treasury securities, and
receipts or certificates representing interests in such stripped U.S. Treasury
securities and coupons. A STRIPS security pays no interest in cash to its holder
during its life although interest is accrued for federal income tax purposes.
Its value to an investor consists of the difference between its face value at
the time of maturity and the price for which it was acquired, which is generally
an amount significantly less than its face value. Investing in STRIPS may help
to preserve capital during periods of declining interest rates.

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<PAGE>

STRIPS do not entitle the holder to any periodic payments of interest
prior to maturity. Accordingly, such securities usually trade at a deep discount
from their face or par value and will be subject to greater fluctuations of
market value in response to changing interest rates than debt obligations of
comparable maturities which make periodic distributions of interest. On the
other hand, because there are no periodic interest payments to be reinvested
prior to maturity, STRIPS eliminate the reinvestment risk and lock in a rate of
return to maturity. Current federal tax law requires that a holder of a STRIPS
security accrue a portion of the discount at which the security was purchased as
income each year even though the Fund received no interest payment in cash on
the security during the year.

FOREIGN SECURITIES. Subject to the Fund's investment policies and
quality and maturity standards, a Fund may invest in the securities (payable in
U.S. dollars) of foreign issuers. Because the Funds may invest in foreign
securities, an investment in the Funds involves risks that are different in some
respects from an investment in a fund which invests only in securities of U.S.
domestic issuers. Foreign investments may be affected favorably or unfavorably
by changes in currency rates and exchange control regulations. There may be less
publicly available information about a foreign company than about a U.S.
company, and foreign companies may not be subject to accounting, auditing and
financial reporting standards and requirements comparable to those applicable to
U.S. companies. There may be less governmental supervision of securities
markets, brokers and issuers of securities. Securities of some foreign companies
are less liquid or more volatile than securities of U.S. companies, and foreign
brokerage commissions and custodian fees are generally higher than in the United
States. Settlement practices may include delays and may differ from those
customary in United States markets. Investments in foreign securities may also
be subject to other risks different from those affecting U.S. investments,
including local political or economic developments, expropriation or
nationalization of assets, restrictions on foreign investment and repatriation
of capital, imposition of withholding taxes on dividend or interest payments,
currency blockage (which would prevent cash from being brought back to the
United States), and difficulty in enforcing legal rights outside the United
States.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The value of the
International Value Fund's portfolio securities which are invested in non-U.S.
dollar denominated instruments as measured in U.S. dollars may be affected
favorably or unfavorably by changes in foreign currency exchange rates and
exchange control regulations, and the Fund may incur costs in connection with
conversions between various currencies. The Fund will conduct its foreign
currency exchange transactions either on a spot (i.e., cash) basis at the spot
rate prevailing in the foreign

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<PAGE>

currency exchange market, or through forward contracts to purchase or sell
foreign currencies. A forward foreign currency exchange contract involves an
obligation to purchase or sell a specific currency at a future date, which may
be any fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. These contracts are traded
directly between currency traders (usually large commercial banks) and their
customers. The Fund will not, however, hold foreign currency except in
connection with purchase and sale of foreign portfolio securities.

The International Value Fund will enter into forward foreign currency
exchange contracts as described hereafter. When the Fund enters into a contract
for the purchase or sale of a security denominated in a foreign currency, it may
desire to establish the cost or proceeds relative to another currency. The
forward contract may be denominated in U.S. dollars or may be a "cross-currency"
contract where the forward contract is denominated in a currency other than U.S.
dollars. However, this tends to limit potential gains which might result from a
positive change in such currency relationships.

The forecasting of a short-term currency market movement is extremely
difficult and the successful execution of a short-term hedging strategy is
highly uncertain. The International Value Fund may enter into such forward
contracts if, as a result, not more than 50% of the value of its total assets
would be committed to such contracts. Under normal circumstances, consideration
of the prospect for currency parities will be incorporated into the longer term
investment decisions made with regard to overall diversification strategies.
However, the Trustees believe that it is important to have the flexibility to
enter into forward contracts when the Sub-Adviser determines it to be in the
best interests of the Fund. The Custodian will segregate cash, U.S. Government
obligations or other liquid high-grade debt obligations in an amount not less
than the value of the Fund's total assets committed to foreign currency exchange
contracts entered into under this type of transaction. If the value of the
segregated securities declines, additional cash or securities will be added on a
daily basis, i.e., "marked to market," so that the segregated amount will not be
less than the amount of the Fund's commitments with respect to such contracts.

Generally, the International Value Fund will not enter into a forward
foreign currency exchange contract with a term of greater than 90 days. At the
maturity of the contract, the Fund may either sell the portfolio security and
make delivery of the foreign currency, or may retain the security and terminate
the obligation to deliver the foreign currency by purchasing an "offsetting"
forward contract with the same currency trader obligating the Fund to purchase,
on the same maturity date, the same amount of the foreign currency.

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<PAGE>

It is impossible to forecast with absolute precision the market value
of portfolio securities at the expiration of the contract. Accordingly, it may
be necessary for the Fund to purchase additional foreign currency on the spot
market (and bear the expense of such purchase) if the market value of the
security is less than the amount of foreign currency the Fund is obligated to
deliver and if a decision is made to sell the security and make delivery of the
foreign currency. Conversely, it may be necessary to sell on the spot market
some of the foreign currency received upon the sale of the portfolio security if
its market value exceeds the amount of foreign currency the Fund is obligated to
deliver.

If the International Value Fund retains the portfolio security and
engages in an offsetting transaction, the Fund will incur a gain or a loss (as
described below) to the extent that there has been movement in forward contract
prices. If the Fund engages in an offsetting transaction, it may subsequently
enter into a new forward contract to sell the foreign currency. Should forward
prices decline during the period between entering into a forward contract for
the sale of a foreign currency and the date the Fund enters into an offsetting
contract for the purchase of the foreign currency, the Fund will realize a gain
to the extent the price of the currency the Fund has agreed to sell exceeds the
price of the currency it has agreed to purchase. Should forward prices increase,
the Fund will suffer a loss to the extent the price of the currency the Fund has
agreed to purchase exceeds the price of the currency the Fund has agreed to
sell.

The International Value Fund's dealings in forward foreign currency
exchange contracts will be limited to the transactions described above. The Fund
is not required to enter into such transactions with regard to its foreign
currency-denominated securities and will not do so unless deemed appropriate by
the Sub-Adviser. It should also be realized that this method of protecting the
value of the Fund's portfolio securities against a decline in the value of a
currency does not eliminate fluctuations in the underlying prices of the
securities held by the Fund. It simply establishes a rate of exchange which one
can achieve at some future point in time. Additionally, although such contracts
tend to minimize the risk of loss due to a decline in the value of the hedged
currency, at the same time, they tend to limit any potential gain which might
result should the value of such currency increase.

WRITING COVERED CALL OPTIONS. Each Fund may write covered call options
on equity securities or futures contracts to earn premium income, to assure a
definite price for a security it has considered selling, or to close out options
previously purchased. A call option gives the holder (buyer) the right to
purchase a security or futures contract at a specified price (the exercise
price) at any time until a certain date (the expiration date). A call option is
"covered" if a Fund owns the underlying security subject to the call option at
all times during the option period.

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<PAGE>

A covered call writer is required to deposit in escrow the underlying security
in accordance with the rules of the exchanges on which the option is traded and
the appropriate clearing agency.

The writing of covered call options is a conservative investment
technique which Dean Investment Associates believes involves relatively little
risk. However, there is no assurance that a closing transaction can be effected
at a favorable price. During the option period, the covered call writer has, in
return for the premium received, given up the opportunity for capital
appreciation above the exercise price should the market price of the underlying
security increase, but has retained the risk of loss should the price of the
underlying security decline.

A Fund may write covered call options if, immediately thereafter, not
more than 30% of its net assets would be committed to such transactions. As long
as the Securities and Exchange Commission continues to take the position that
unlisted options are illiquid securities, a Fund will not commit more than 15%
of its net assets to unlisted covered call transactions and other illiquid
securities.

WRITING COVERED PUT OPTIONS. Each Fund may write covered put options on
equity securities and futures contracts to assure a definite price for a
security if it is considering acquiring the security at a lower price than the
current market price or to close out options previously purchased. A put option
gives the holder of the option the right to sell, and the writer has the
obligation to buy, the underlying security at the exercise price at any time
during the option period. The operation of put options in other respects is
substantially identical to that of call options. When a Fund writes a covered
put option, it maintains in a segregated account with its Custodian cash or
obligations in an amount not less than the exercise price at all times while the
put option is outstanding.

The risks involved in writing put options include the risk that a
closing transaction cannot be effected at a favorable price and the possibility
that the price of the underlying security may fall below the exercise price, in
which case a Fund may be required to purchase the underlying security at a
higher price than the market price of the security at the time the option is
exercised. A Fund may not write a put option if, immediately thereafter, more
than 25% of its net assets would be committed to such transactions.

OPTIONS TRANSACTIONS GENERALLY. Option transactions in which the Funds
may engage involve the specific risks described above as well as the following
risks: the writer of an option may be assigned an exercise at any time during
the option period;

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<PAGE>

disruptions in the markets for underlying instruments could result in losses for
options investors; imperfect or no correlation between the option and the
securities being hedged; the insolvency of a broker could present risks for the
broker's customers; and market imposed restrictions may prohibit the exercise of
certain options. In addition, the option activities of a Fund may affect its
portfolio turnover rate and the amount of brokerage commissions paid by a Fund.
The success of a Fund in using the option strategies described above depends,
among other things, on Dean Investment Associates' or the Sub-Adviser's ability
to predict the direction and volatility of price movements in the options,
futures contracts and securities markets and Dean Investment Associates' or the
Sub-Adviser's ability to select the proper time, type and duration of the
options.

QUALITY RATINGS OF CORPORATE BONDS AND PREFERRED STOCKS

The ratings of Moody's Investors Service, Inc. and Standard & Poor's
Ratings Group for corporate bonds in which the Funds may invest are as follows:

MOODY'S INVESTORS SERVICE, INC.

Aaa - Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.

Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.

A - Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate but elements
may be present which suggest a susceptibility to impairment sometime in the
future.

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<PAGE>

Baa - Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
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 in fact have speculative characteristics as well.

STANDARD & POOR'S RATINGS GROUP

AAA - Bonds rated AAA have the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay principal is
extremely strong.

AA - Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from the highest rated issues only in small degree.

A - Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.

BBB - Bonds rated BBB are regarded as having an adequate capacity to
pay interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for bonds in this category than for bonds in higher rated categories.

The ratings of Moody's Investors Service, Inc. and Standard & Poor's
Ratings Group for preferred stocks in which the Funds may invest are as follows:

MOODY'S INVESTORS SERVICE, INC.

aaa - An issue which is rated aaa is considered to be a top-quality
preferred stock. This rating indicates good asset protection and the least risk
of dividend impairment within the universe of preferred stocks.

aa - An issue which is rated aa is considered a high-grade preferred
stock. This rating indicates that there is reasonable assurance that earnings
and asset protection will remain relatively well maintained in the foreseeable
future.

a - An issue which is rated a is considered to be an upper- medium
grade preferred stock. While risks are judged to be somewhat greater than in the
"aaa" and "aa" classifications, earnings and asset protection are, nevertheless,
expected to be maintained at adequate levels.

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<PAGE>

baa - An issue which is rated baa is considered to be medium grade,
neither highly protected nor poorly secured. Earnings and asset protection
appear adequate at present but may be questionable over any great length of
time.

STANDARD & POOR'S RATINGS GROUP

AAA - This is the highest rating that may be assigned by Standard &
Poor's to a preferred stock issue and indicates an extremely strong capacity to
pay the preferred stock obligations.

AA - A preferred stock issue rated AA also qualifies as a high-quality
fixed income security. The capacity to pay preferred stock obligations is very
strong, although not as overwhelming as for issues rated AAA.

A - An issue rated A is backed by a sound capacity to pay the preferred
stock obligations, although it is somewhat more susceptible to the diverse
effects of changes in circumstances and economic conditions.

BBB - An issue rated BBB is regarded as backed by an adequate capacity
to pay the preferred stock obligations. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to make payments for a preferred
stock in this category than for issues in the A category.

INVESTMENT LIMITATIONS

The Trust has adopted certain fundamental investment limitations
designed to reduce the risk of an investment in each Fund. These limitations may
not be changed with respect to any Fund without the affirmative vote of a
majority of the outstanding shares of that Fund.

1. BORROWING MONEY. The Fund will not borrow money, except from a bank,
provided that immediately after such borrowing there is asset coverage of 300%
for all borrowings of the Fund. The Fund will not make any borrowing which would
cause its outstanding borrowings to exceed one-third of the value of its total
assets. This limitation is not applicable to when- issued purchases.

2. PLEDGING. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any security owned or held by the
Fund except as may be necessary in connection with borrowings described in
limitation (1) above. The Fund will not mortgage, pledge or hypothecate more
than one-third of its assets in connection with borrowings.

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<PAGE>

3. MARGIN PURCHASES. The Fund will not purchase any securities or
evidences of interest thereon on "margin" (except such short-term credits as are
necessary for the clearance of transactions or to the extent necessary to engage
in transactions described in the Prospectus and Statement of Additional
Information which involve margin purchases).

4. OPTIONS. The Fund will not purchase or sell puts, calls, options,
futures, straddles, commodities or commodities futures contracts except as
described in the Prospectus and Statement of Additional Information.

5. REAL ESTATE. The Fund will not purchase, hold or deal in real estate
or real estate mortgage loans, except that the Fund may purchase (a) securities
of companies (other than limited partnerships) which deal in real estate or (b)
securities which are secured by interests in real estate.

6. AMOUNT INVESTED IN ONE ISSUER. The Fund will not invest more than 5%
of its total assets in the securities of any issuer; provided, however, that
there is no limitation with respect to investments and obligations issued or
guaranteed by the United States Government or its agencies or instrumentalities
or repurchase agreements with respect thereto.

7. SHORT SALES. The Fund will not make short sales of securities, or
maintain a short position, other than short sales "against the box."

8. MINERAL LEASES. The Fund will not purchase oil, gas or other mineral
leases or exploration or development programs.

9. UNDERWRITING. The Fund will not act as underwriter of securities
issued by other persons, either directly or through a majority owned subsidiary.
This limitation is not applicable to the extent that, in connection with the
disposition of its portfolio securities (including restricted securities), the
Fund may be deemed an underwriter under certain federal securities laws.

10. ILLIQUID INVESTMENTS. The Fund will not purchase securities which
cannot be readily resold to the public because of legal or contractual
restrictions on resale or for which no readily available market exists or engage
in a repurchase agreement maturing in more than seven days if, as a result
thereof, more than 15% of the value of the Fund's net assets would be invested
in such securities.

11. CONCENTRATION. The Fund will not invest 25% or more of its total
assets in the securities of issuers in any particular industry; provided,
however, that there is no limitation with respect to investments in obligations
issued or guaranteed by the United States Government or its agencies or
instrumentalities or repurchase agreements with respect thereto.

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<PAGE>

12. INVESTING FOR CONTROL. The Fund will not invest in companies for
the purpose of exercising control.

13. OTHER INVESTMENT COMPANIES. The Fund will not invest more than 10%
of its total assets in securities of other investment companies. The Fund will
not invest more than 5% of its total assets in the securities of any single
investment company.

14. SENIOR SECURITIES. The Fund will not issue or sell any senior
security. This limitation is not applicable to short-term credit obtained by the
Fund for the clearance of purchases and sales or redemptions of securities, or
to arrangements with respect to transactions involving options, futures
contracts, short sales and other similar permitted investments and techniques.

15. LOANS. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, or (b) by engaging in repurchase agreements. For
purposes of this limitation, the term "loans" shall not include the purchase of
bonds, debentures, commercial paper or corporate notes, and similar marketable
evidences of indebtedness.

With respect to the percentages adopted by the Trust as maximum
limitations on each Fund's investment policies and restrictions, an excess above
the fixed percentage (except for the percentage limitations relative to the
borrowing of money and the holding of illiquid securities) will not be a
violation of the policy or restriction unless the excess results immediately and
directly from the acquisition of any security or the action taken.

The Trust does not intend to pledge, mortgage or hypothecate the assets
of any Fund. The statements of intention in this paragraph reflect
nonfundamental policies which may be changed by the Board of Trustees without
shareholder approval.

TRUSTEES AND OFFICERS

The following is a list of the Trustees and executive officers of the
Trust. Each Trustee who is an "interested person" of the Trust, as defined by
the Investment Company Act of 1940, is indicated by an asterisk.

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<PAGE>

Estimated Annual
Compensation
NAME AGE POSITION HELD FROM THE TRUST
- ---- --- ------------- --------------
*Frank H. Scott 52 President/Trustee $ 0
*Chauncey H. Dean 72 Trustee 0
*Robert D. Dean 63 Trustee 0
*Victor S. Curtis 35 Trustee 0
+Frank J. Perez 53 Trustee 6,000(1)
+David H. Ponitz 66 Trustee 6,000(1)
+Gilbert P. Williamson 59 Trustee 6,000(1)
Robert G. Dorsey 40 Vice President 0
Mark J. Seger 35 Treasurer 0
Tina D. Hosking 29 Secretary 0
John F. Splain 41 Asst. Secretary 0

* Mr. Scott, Mr. Chauncey Dean, Mr. Robert Dean and Mr.
Curtis, as affiliated persons of C.H. Dean & Associates,
Inc., the Trust's investment adviser, and 2480 Securities
LLC, the Trust's principal underwriter, are "interested
persons" of the Trust within the meaning of Section 2(a)(19)
of the Investment Company Act of 1940.

+ Member of Audit Committee.

(1) Messrs. Perez, Ponitz and Williamson have elected to defer their
compensation by participating in the Dean Family of Funds Directors
Deferred Compensation Plan (the "Plan"). The Plan is a non-qualified
deferred compensation plan in which the Trustees will accrue their
benefits on a tax-free basis until such time as they begin receiving
distributions. The tax obligations of the Plan will be paid by the
Adviser Messrs. Perez, Ponitz and Williamson will not be entitled to
receive a distribution from the Plan until they have attained the age
of 72.

The principal occupations of the Trustees and executive officers of the
Trust during the past five years are set forth below:

FRANK H. SCOTT, 2480 Kettering Tower, Dayton, Ohio 45423, is Senior
Vice President of C.H. Dean & Associates, Inc. (the investment adviser to the
Trust) and President of 2480 Securities LLC (the Trust's principal underwriter).

CHAUNCEY H. DEAN, 2480 Kettering Tower, Dayton, Ohio 45423, is Chairman
& Chief Executive Officer and the controlling shareholder of C.H. Dean &
Associates. He is also the controlling shareholder of 2480 Securities LLC.

ROBERT D. DEAN, 2480 Kettering Tower, Dayton, Ohio 45423, is President
and Chief Investment Officer of C.H. Dean & Associates. He previously was
Professor of Economics at the University of Memphis.

VICTOR S. CURTIS, 2480 Kettering Tower, Dayton, Ohio 45423, is
Portfolio Manager of C. H. Dean & Associates. He previously was Assistant Vice
President of Corporate Banking for PNC Bank.

FRANK J. PEREZ, 3535 Southern Blvd., Kettering, Ohio 45429 is President
and Chief Executive Officer of Kettering Medical Center.

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<PAGE>

DAVID H. PONITZ, 444 W. Third Street, Dayton, Ohio 45402, is President
of Sinclair Community College.

GILBERT P. WILLIAMSON, 2320 Kettering Tower, Dayton, Ohio 45423, is a
Director of S.C.O., Inc. (a software company), Retix, Inc. (a communications
company), Roberds, Inc. (a retail company) and Citizens Federal Bank. He
formerly was Chairman and Chief Executive Officer of NCR Corp.

ROBERT G. DORSEY, 312 Walnut Street, Cincinnati, Ohio 45202, is
President and Treasurer of Countrywide Fund Services, Inc. (a registered
transfer agent) and Treasurer of Countrywide Investments, Inc. (a registered
broker-dealer and investment adviser) and Countrywide Financial Services, Inc.
(a financial services company and parent of Countrywide Fund Services, Inc. and
Countrywide Investments, Inc.) He is also Vice President of Brundage, Story and
Rose Investment Trust, PRAGMA Investment Trust, Markman MultiFund Trust, The New
York State Opportunity Funds and Maplewood Investment Trust and Assistant Vice
President of Interactive Investments, Schwartz Investment Trust, The Tuscarora
Investment Trust, Williamsburg Investment Trust and The Gannett Welsh & Kotler
Funds (all of which are registered investment companies).

MARK J. SEGER, C.P.A., 312 Walnut Street, Cincinnati, Ohio 45202, is
Vice President of Countrywide Financial Services, Inc. and Vice President and
Chief Operating Officer of Countrywide Fund Services, Inc. He is also Treasurer
of Countrywide Investment Trust, Countrywide Tax-Free Trust, Countrywide
Strategic Trust, Brundage, Story and Rose Investment Trust, Markman MultiFund
Trust, PRAGMA Investment Trust, Williamsburg Investment Trust, The New York
State Opportunity Funds and Maplewood Investment Trust and Assistant Treasurer
of Interactive Investments, Schwartz Investment Trust, The Tuscarora Investment
Trust and The Gannett Welsh & Kotler Funds.

TINA D. HOSKING, 312 Walnut Street, Cincinnati, Ohio 45202, is
Assistant Vice President and Counsel of Countrywide Fund Services, Inc. She is
also Secretary of PRAGMA Investment Trust and The New York State Opportunity
Funds and Assistant Secretary of The Gannett Welsh & Kotler Funds.

JOHN F. SPLAIN, 312 Walnut Street, Cincinnati, Ohio 45202, is Secretary
and General Counsel of Countrywide Fund Services, Inc., Countrywide Investments,
Inc. and Countrywide Financial Services, Inc. He is also Secretary of
Countrywide Investment Trust, Countrywide Tax-Free Trust, Countrywide Strategic
Trust, Brundage, Story and Rose Investment Trust, Markman MultiFund Trust, The
Tuscarora Investment Trust, Williamsburg Investment Trust and Maplewood
Investment Trust and Assistant Secretary of Interactive Investments, Schwartz
Investment Trust, PRAGMA Investment Trust, The New York State Opportunity Funds
and The Gannett Welsh & Kotler Funds.

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<PAGE>

Each non-interested Trustee will receive an annual retainer of $2,000
and a $1,000 fee for each Board meeting attended and will be reimbursed for
travel and other expenses incurred in the performance of their duties.

THE INVESTMENT ADVISER

C.H. Dean & Associates, Inc. ("Dean Investment Associates") is the
Funds' investment manager. Chauncey H. Dean is the controlling shareholder of
Dean Investment Associates. Mr. Dean, by reason of such affiliation, may
directly or indirectly receive benefits from the advisory fees paid to Dean
Investment Associates. Mr. Dean is also the controlling shareholder of the
Trust's principal underwriter, 2480 Securities LLC.

Under the terms of the advisory agreements between the Trust and Dean
Investment Associates, Dean Investment Associates manages the Funds'
investments. The Large Cap Value Fund, the Small Cap Value Fund and the Balanced
Fund each pay Dean Investment Associates a fee computed and accrued daily and
paid monthly at an annual rate of 1.00% of its average daily net assets. The
International Value Fund pays Dean Investment Associates a fee computed and
accrued daily and paid monthly at an annual rate of 1.25% of its average daily
net assets.

The Funds are responsible for the payment of all expenses incurred in
connection with the organization, registration of shares and operations of the
Funds, including such extraordinary or non-recurring expenses as may arise, such
as litigation to which the Trust may be a party. The Funds may have an
obligation to indemnify the Trust's officers and Trustees with respect to such
litigation, except in instances of willful misfeasance, bad faith, gross
negligence or reckless disregard by such officers and Trustees in the
performance of their duties. The compensation and expenses of any officer,
Trustee or employee of the Trust who is an officer, director, employee or
stockholder of Dean Investment Associates are paid by Dean Investment
Associates.

By its terms, the advisory agreement on behalf of each Fund will remain
in force until April 1, 1999 and from year to year thereafter, subject to annual
approval by (a) the Board of Trustees or (b) a vote of the majority of a Fund's
outstanding voting securities; provided that in either event continuance is also
approved by a majority of the Trustees who are not interested persons of the
Trust, by a vote cast in person at a meeting called for the purpose of voting
such approval. Each of the Trust's advisory agreements may be terminated at any
time, on sixty days' written notice, without the payment of any penalty, by the
Board of Trustees, by a vote of the majority of a Fund's outstanding voting
securities, or by Dean Investment Associates. Each of the advisory agreements
automatically terminates in the event of its assignment, as defined by the
Investment Company Act of 1940 and the rules thereunder.

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Dean Investment Associates may use the name "Dean" or any derivation
thereof in connection with any registered investment company or other business
enterprise with which it is or may become associated.

THE SUB-ADVISER

Newton Capital Management Ltd. (the "Sub-Adviser") has been retained to
manage the investments of the International Value Fund. The Sub-Adviser is a
United Kingdom investment advisory firm registered with the Securities and
Exchange Commission. Newton is affiliated with Newton Investment Management
Ltd., an English investment advisory firm which has been managing assets for
institutional investors, mutual funds and individuals since 1977. The Adviser
(not the Fund) pays the Sub-Adviser a fee computed and accrued daily and paid
monthly at an annual rate of .50% of the average value of the Fund's daily net
assets.

By its terms, the Trust's Sub-Advisory Agreement will remain in force
until April 1, 1999 and from year to year thereafter, subject to annual approval
by (a) the Board of Trustees or (b) a vote of the majority of the International
Value Fund's outstanding voting securities; provided that in either event
continuance is also approved by a majority of the Trustees who are not
interested persons of the Trust, by a vote cast in person at a meeting called
for the purpose of voting on such approval. The Trust's Sub-Advisory Agreement
may be terminated at any time, on sixty days' written notice, without the
payment of any penalty, by the Board of Trustees, by a vote of the majority of
the International Value Fund's outstanding voting securities, or by the Adviser
or Sub-Adviser. The Sub-Advisory Agreement automatically terminates in the event
of its assignment, as defined by the Investment Company Act of 1940 and the
rules thereunder.

THE UNDERWRITER

2480 Securities LLC (the "Underwriter") is the principal underwriter of
the Funds and, as such, is the exclusive agent for distribution of shares of the
Funds. The Underwriter is obligated to sell the shares on a best efforts basis
only against purchase orders for the shares. Shares of each Fund are offered to
the public on a continuous basis.

The Underwriter currently allows concessions to dealers who sell shares
of the Funds. The Underwriter receives that portion of the sales load which is
not reallowed to the dealers who sell shares of the Funds. The Underwriter
retains the entire sales load on all direct initial investments in the Funds and
on all investments in accounts with no designated dealer of record. The
Underwriter bears promotional expenses in connection with the distribution of
the Funds' shares to the extent that such expenses are not assumed by the Funds
under their plans of distribution.

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The Funds may compensate dealers, including the Underwriter and its
affiliates, based on the average balance of all accounts in the Funds for which
the dealer is designated as the party responsible for the account. See
"Distribution Plans" below.

DISTRIBUTION PLANS

CLASS A SHARES -- As stated in the Prospectus, the Funds have adopted a
plan of distribution with respect to the Class A shares of the Funds (the "Class
A Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940 which
permits each Fund to pay for expenses incurred in the distribution and promotion
of that Fund's Class A shares, including but not limited to, the printing of
prospectuses, statements of additional information and reports used for sales
purposes, advertisements, expenses of preparation and printing of sales
literature, promotion, marketing and sales expenses, and other
distribution-related expenses, including any distribution fees paid to
securities dealers or other firms who have executed a distribution or service
agreement with the Underwriter. The Class A Plan expressly limits payment of the
distribution expenses listed above in any fiscal year to a maximum of .25% of
the average daily net assets of a Fund allocable to its Class A shares.
Unreimbursed expenses will not be carried over from year to year.

CLASS C SHARES -- The Funds have also adopted a plan of distribution
(the "Class C Plan") with respect to the Class C shares of the Funds. The Class
C Plan provides for two categories of payments. First, the Class C Plan provides
for the payment to the Underwriter of an account maintenance fee, in an amount
equal to an annual rate of .25% of the average daily net assets of a Fund
allocable to its Class C shares, which may be paid to other dealers based on the
average value of the Fund's Class C shares owned by clients of such dealers. In
addition, a Fund may pay up to an additional .75% per annum of that Fund's daily
net assets allocable to its Class C shares for expenses incurred in the
distribution and promotion of the shares, including but not limited to,
prospectus costs for prospective shareholders, costs of responding to
prospective shareholder inquiries, payments to brokers and dealers for selling
and assisting in the distribution of Class C shares, costs of advertising and
promotion and any other expenses related to the distribution of the Class C
shares. Unreimbursed expenditures will not be carried over from year to year.
The Funds may make payments to dealers and other persons in an amount up to .75%
per annum of the average value of Class C shares owned by their clients, in
addition to the .25% account maintenance fee described above.

The continuance of the Plans must be specifically approved at least
annually by a vote of the Trust's Board of Trustees and by a vote of the
Trustees who are not interested persons of the Trust and have no direct or
indirect financial interest in the Plans (the "Independent Trustees") at a
meeting called for the purpose of voting on such continuance. A Plan may be
terminated

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at any time by a vote of a majority of the Independent Trustees or by a vote of
the holders of a majority of the outstanding shares of a Fund or the applicable
class of a Fund. In the event a Plan is terminated in accordance with its terms,
the affected Fund (or class) will not be required to make any payments for
expenses incurred by the Underwriter after the termination date. The Plans may
not be amended to increase materially the amount to be spent for distribution
without shareholder approval. All material amendments to the Plans must be
approved by a vote of the Trust's Board of Trustees and by a vote of the
Independent Trustees.

In approving the Plans, the Trustees determined, in the exercise of
their business judgment and in light of their fiduciary duties as Trustees, that
there is a reasonable likelihood that the Plans will benefit the Funds and their
shareholders. The Board of Trustees believes that expenditure of the Funds'
assets for distribution expenses under the Plans should assist in the growth of
the Funds which will benefit the Funds and their shareholders through increased
economies of scale, greater investment flexibility, greater portfolio
diversification and less chance of disruption of planned investment strategies.
The Plans will be renewed only if the Trustees make a similar determination for
each subsequent year of the Plans. There can be no assurance that the benefits
anticipated from the expenditure of the Funds' assets for distribution will be
realized. While the Plans are in effect, all amounts spent by the Funds pursuant
to the Plans and the purposes for which such expenditures were made must be
reported quarterly to the Board of Trustees for its review. Distribution
expenses attributable to the sale of more than one class of shares of a Fund
will be allocated at least annually to each class of shares based upon the ratio
in which the sales of each class of shares bears to the sales of all the shares
of such Fund. In addition, the selection and nomination of those Trustees who
are not interested persons of the Trust are committed to the discretion of the
Independent Trustees during such period.

By reason of his ownership of shares of Dean Investment Associates,
Chauncey H. Dean may be deemed to have a financial interest in the operation of
the Plans.

SECURITIES TRANSACTIONS

Decisions to buy and sell securities for the Funds and the placing of
the Funds' securities transactions and negotiation of commission rates where
applicable are made by Dean Investment Associates and are subject to review by
the Board of Trustees of the Trust. In the purchase and sale of portfolio
securities, Dean Investment Associates seeks best execution for the Funds,

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<PAGE>

taking into account such factors as price (including the applicable brokerage
commission or dealer spread), the execution capability, financial responsibility
and responsiveness of the broker or dealer and the brokerage and research
services provided by the broker or dealer. Dean Investment Associates generally
seeks favorable prices and commission rates that are reasonable in relation to
the benefits received.

The Funds may attempt to deal directly with the dealers who make a
market in the securities involved unless better prices and execution are
available elsewhere. Such dealers usually act as principals for their own
account. On occasion, portfolio securities for the Funds may be purchased
directly from the issuer.

Dean Investment Associates is specifically authorized to select brokers
who also provide brokerage and research services to the Funds and/or other
accounts over which Dean Investment Associates exercises investment discretion
and to pay such brokers a commission in excess of the commission another broker
would charge if Dean Investment Associates determines in good faith that the
commission is reasonable in relation to the value of the brokerage and research
services provided. The determination may be viewed in terms of a particular
transaction or Dean Investment Associates' overall responsibilities with respect
to the Funds and to accounts over which it exercises investment discretion.

Research services include securities and economic analyses, reports on
issuers' financial conditions and future business prospects, newsletters and
opinions relating to interest trends, general advice on the relative merits of
possible investment securities for the Funds and statistical services and
information with respect to the availability of securities or purchasers or
sellers of securities. Although this information is useful to the Funds and Dean
Investment Associates, it is not possible to place a dollar value on it.
Research services furnished by brokers through whom the Funds effect securities
transactions may be used by Dean Investment Associates in servicing all of its
accounts and not all such services may be used by Dean Investment Associates in
connection with the Funds.

The Funds have no obligation to deal with any broker or dealer in the
execution of securities transactions. However, the Underwriter and other
affiliates of the Trust or Dean Investment Associates may effect securities
transactions which are executed on a national securities exchange or
transactions in the over-the-counter market conducted on an agency basis. No
Fund will effect any brokerage transactions in its portfolio securities with
Dean Investment Associates if such transactions would be unfair or unreasonable
to its shareholders. Over-the-counter

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<PAGE>

transactions will be placed either directly with principal market makers or with
broker-dealers. Although the Funds do not anticipate any ongoing arrangements
with other brokerage firms, brokerage business may be transacted from time to
time with other firms. Neither Dean Investment Associates nor affiliates of the
Trust or the Underwriter will receive reciprocal brokerage business as a result
of the brokerage business transacted by the Funds with other brokers.

CODE OF ETHICS. The Trust and Dean Investment Associates and the
Sub-Adviser have each adopted a Code of Ethics under Rule 17j-1 of the
Investment Company Act of 1940. The Code significantly restricts the personal
investing activities of all employees of the Trust, Dean Investment Associates
and the Sub- Adviser. No employee may purchase or sell any security which at the
time is being purchased or sold (as the case may be), or to the knowledge of the
employee, is being considered for purchase or sale by any Fund.

PORTFOLIO TURNOVER

A Fund's portfolio turnover rate is calculated by dividing the lesser
of purchases or sales of portfolio securities for the fiscal year by the monthly
average of the value of the portfolio securities owned by the Fund during the
fiscal year. High portfolio turnover involves correspondingly greater brokerage
commissions and other transaction costs, which will be borne directly by the
Funds. Dean Investment Associates anticipates that each Fund's portfolio
turnover rate normally will not exceed 100%. A 100% turnover rate would occur if
all of a Fund's portfolio securities were replaced once within a one year
period.

Generally, each Fund intends to invest for long-term purposes. However,
the rate of portfolio turnover will depend upon market and other conditions, and
it will not be a limiting factor when Dean Investment Associates or, when
appropriate, the Sub-Adviser, believes that portfolio changes are appropriate.

CALCULATION OF SHARE PRICE AND PUBLIC OFFERING PRICE

The share price (net asset value) and the public offering price (net
asset value plus applicable sales load) of the shares of each Fund are
determined as of the close of the regular session of trading on the New York
Stock Exchange (currently 4:00 p.m., Eastern time), on each day the Trust is
open for business. The Trust is open for business on every day except Saturdays,
Sundays and the following holidays: New Year's Day, Martin Luther King, Jr. Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. The Trust may also be open for business on
other days in which there is sufficient trading in a Fund's portfolio securities
that

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<PAGE>

its net asset value might be materially affected. For a description of the
methods used to determine the share price and the public offering price, see
"Calculation of Share Price and Public Offering Price" in the Prospectus.

The value of non-dollar denominated portfolio instruments held by the
International Value Fund will be determined by converting all assets and
liabilities initially expressed in foreign currency values into U.S. dollar
values at the mean between the bid and offered quotations of such currencies
against U.S. dollars as last quoted by any recognized dealer. If such quotations
are not available, the rate of exchange will be determined in accordance with
policies established in good faith by the Board of Trustees. Gains or losses
between trade and settlement dates resulting from changes in exchange rates
between the U.S. dollar and a foreign currency are borne by the International
Value Fund. To protect against such losses, the Fund may enter into forward
foreign currency exchange contracts, which will also have the effect of limiting
any such gains.

OTHER PURCHASE INFORMATION

The Prospectus describes generally how to purchase shares of the Funds.
Additional information with respect to certain types of purchases of shares of
the Class A shares of the Funds is set forth below.

RIGHT OF ACCUMULATION. A "purchaser" (as defined in the Prospectus) of
shares of a Fund has the right to combine the cost or current net asset value
(whichever is higher) of his existing Class A shares of any Fund in the Dean
Family of Funds with the amount of his current purchases in order to take
advantage of the reduced sales loads set forth in the tables in the Prospectus.
The purchaser or his dealer must notify Countrywide Fund Services, Inc.
("Countrywide") that an investment qualifies for a reduced sales load. The
reduced load will be granted upon confirmation of the purchaser's holdings by
Countrywide.

LETTER OF INTENT. The reduced sales loads set forth in the tables in
the Prospectus may also be available to any "purchaser" (as defined in the
Prospectus) of shares of a Fund who submits a Letter of Intent to Countrywide.
The Letter must state an intention to invest within a thirteen month period in
any Fund in the Dean Family of Funds a specified amount which, if made at one
time, would qualify for a reduced sales load. A Letter of Intent may be
submitted with a purchase at the beginning of the thirteen month period or
within ninety days of the first purchase under the Letter of Intent. Upon
acceptance of this Letter, the purchaser becomes eligible for the reduced sales
load applicable to the level of investment covered by such Letter of Intent as
if the entire amount were invested in a single transaction.

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<PAGE>

The Letter of Intent is not a binding obligation on the purchaser to
purchase, or the Trust to sell, the full amount indicated. During the term of a
Letter of Intent, shares representing 5% of the intended purchase will be held
in escrow. These shares will be released upon the completion of the intended
investment. If the Letter of Intent is not completed during the thirteen month
period, the applicable sales load will be adjusted by the redemption of
sufficient shares held in escrow, depending upon the amount actually purchased
during the period. The minimum initial investment under a Letter of Intent is
$10,000.

A ninety-day backdating period can be used to include earlier purchases
at the purchaser's cost (without a retroactive downward adjustment of the sales
charge). The thirteen month period would then begin on the date of the first
purchase during the ninety-day period. No retroactive adjustment will be made if
purchases exceed the amount indicated in the Letter of Intent. The purchaser or
his dealer must notify Countrywide that an investment is being made pursuant to
an executed Letter of Intent.

OTHER INFORMATION. The Trust either does not impose a front-end sales
load or imposes a reduced sales load in connection with purchases of shares of a
Fund made under the reinvestment privilege or the purchases described in the
"Reduced Sales Load," "Purchases at Net Asset Value" or "Exchange Privilege"
sections in the Prospectus because such purchases require minimal sales effort
by Dean Investment Associates. Purchases described in the "Purchases at Net
Asset Value" section may be made for investment only, and the shares may not be
resold except through redemption by or on behalf of the Trust.

TAXES

The Prospectus describes generally the tax treatment of distributions
by the Funds. This section of the Statement of Additional Information includes
additional information concerning federal taxes.

Each Fund intends to qualify for the special tax treatment afforded a
"regulated investment company" under Subchapter M of the Internal Revenue Code
so that it does not pay federal taxes on income and capital gains distributed to
shareholders. To so qualify a Fund must, among other things, (i) derive at least
90% of its gross income in each taxable year from dividends, interest, payments
with respect to securities loans, gains from the sale or other disposition of
stock, securities or foreign currency, or certain other income (including but
not limited to gains from options, futures and forward contracts) derived with
respect to its business of investing in stock, securities or currencies and (ii)
diversify its holdings so that at the end of each quarter of its taxable year
the following two conditions are

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<PAGE>

met: (a) at least 50% of the value of the Fund's total assets is represented by
cash, U.S. Government securities, securities of other regulated investment
companies and other securities (for this purpose such other securities will
qualify only if the Fund's investment is limited in respect to any issuer to an
amount not greater than 5% of the Fund's assets and 10% of the outstanding
voting securities of such issuer) and (b) not more than 25% of the value of the
Fund's assets is invested in securities of any one issuer (other than U.S.
Government securities or securities of other regulated investment companies).

A Fund's net realized capital gains from securities transactions will
be distributed only after reducing such gains by the amount of any available
capital loss carryforwards. Capital losses may be carried forward to offset any
capital gains for eight years, after which any undeducted capital loss remaining
is lost as a deduction.

A federal excise tax at the rate of 4% will be imposed on the excess,
if any, of a Fund's "required distribution" over actual distributions in any
calendar year. Generally, the "required distribution" is 98% of a Fund's
ordinary income for the calendar year plus 98% of its net capital gains
recognized during the one year period ending on October 31 of the calendar year
plus undistributed amounts from prior years. The Funds intend to make
distributions sufficient to avoid imposition of the excise tax.

The Trust is required to withhold and remit to the U.S. Treasury a
portion (31%) of dividend income on any account unless the shareholder provides
a taxpayer identification number and certifies that such number is correct and
that the shareholder is not subject to backup withholding.

Investments by the International Value Fund in certain options, futures
contracts and options on futures contracts are "section 1256 contracts." Any
gains or losses on section 1256 contracts are generally considered 60% long-term
and 40% short-term capital gains or losses ("60/40"). Section 1256 contracts
held by the International Value Fund at the end of each taxable year are treated
for federal income tax purposes as being sold on such date for their fair market
value. The resultant paper gains or losses are also treated as 60/40 gains or
losses. When the section 1256 contract is subsequently disposed of, the actual
gain or loss will be adjusted by the amount of any preceding year-end gain or
loss. The use of section 1256 contracts may force the International Value Fund
to distribute to shareholders paper gains that have not yet been realized in
order to avoid federal income tax liability.

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<PAGE>

Foreign currency gains or losses on non-U.S. dollar denominated bonds
and other similar debt instruments and on any non-U.S. dollar denominated
futures contracts, options and forward contracts that are not section 1256
contracts generally will be treated as ordinary income or loss.

Certain hedging transactions undertaken by the International Value Fund
may result in "straddles" for federal income tax purposes. The straddle rules
may affect the character of gains (or losses) realized by the International
Value Fund. In addition, losses realized by the International Value Fund on
positions that are part of a straddle may be deferred, rather than being taken
into account in calculating taxable income for the taxable year in which such
losses are realized. Because only a few regulations implementing the straddle
rules have been promulgated, the tax consequences of hedging transactions to the
International Value Fund are not entirely clear. The hedging transactions may
increase the amount of short-term capital gain realized by the International
Value Fund which is taxed as ordinary income when distributed to shareholders.
The International Value Fund may make one or more of the elections available
under the Internal Revenue Code of 1986, as amended, which are applicable to
straddles. If the International Value Fund makes any of the elections, the
amount, character and timing of the recognition of gains or losses from the
affected straddle positions will be determined under rules that vary according
to the elections made. The rules applicable under certain of the elections
operate to accelerate the recognition of gains or losses from the affected
straddle positions. Because application of the straddle rules may affect the
character of gains or losses, defer losses and/or accelerate the recognition of
gains or losses from the affected straddle positions, the amount which must be
distributed to shareholders, and which will be taxed to shareholders as ordinary
income or long-term capital gain in any year, may be increased or decreased
substantially as compared to a fund that did not engage in such hedging
transactions.

The diversification requirements applicable to the International Value
Fund's assets may limit the extent to which the International Value Fund will be
able to engage in transactions in options, futures contracts or options on
futures contracts.

REDEMPTION IN KIND

Under unusual circumstances, when the Board of Trustees deems it in the
best interests of a Fund's shareholders, the Fund may make payment for shares
repurchased or redeemed in whole or in part in securities of the Fund taken at
current value. If any such redemption in kind is to be made, each Fund intends
to make an election pursuant to Rule 18f-1 under the Investment Company

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Act of 1940. This election will require the Funds to redeem shares solely in
cash up to the lesser of $250,000 or 1% of the net asset value of each Fund
during any 90 day period for any one shareholder. Should payment be made in
securities, the redeeming shareholder will generally incur brokerage costs in
converting such securities to cash. Portfolio securities which are issued in an
in-kind redemption will be readily marketable.

HISTORICAL PERFORMANCE INFORMATION

From time to time, each Fund may advertise average annual total return.
Average annual total return quotations will be computed by finding the average
annual compounded rates of return over 1, 5 and 10 year 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 and 10 year periods
at the end of the 1, 5 or 10 year periods (or fractional
portion thereof)

The calculation of average annual total return assumes the reinvestment
of all dividends and distributions and the deduction of the current maximum
sales load from the initial $1,000 payment. If a Fund has been in existence less
than one, five or ten years, the time period since the date of the initial
public offering of shares will be substituted for the periods stated. Each Fund
may also advertise total return (a "non-standardized quotation") which is
calculated differently from average annual total return. A nonstandardized
quotation of total return may be a cumulative return which measures the
percentage change in the value of an account between the beginning and end of a
period, assuming no activity in the account other than reinvestment of dividends
and capital gains distributions. This computation does not include the effect of
the applicable sales load which, if included, would reduce total return. A
nonstandardized quotation may also indicate average annual compounded rates of
return without including the effect of the applicable sales load or over periods
other than those specified for average annual total return. A nonstandardized
quotation of total return will always be accompanied by the Fund's average
annual total return as described above.

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From time to time, each of the Funds may advertise its yield. A yield
quotation is based on a 30-day (or one month) period and 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:

Yield = 2[(a-b/cd +1)6 -1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
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

Solely for the purpose of computing yield, dividend income is
recognized by accruing 1/360 of the stated dividend rate of the security each
day that a Fund owns the security. Generally, interest earned (for the purpose
of "a" above) on debt obligations is computed by reference to the yield to
maturity of each obligation held based on the market value of the obligation
(including actual accrued interest) at the close of business on the last
business day prior to the start of the 30-day (or one month) period for which
yield is being calculated, or, with respect to obligations purchased during the
month, the purchase price (plus actual accrued interest). With respect to the
treatment of discount and premium on mortgage or other receivables-backed
obligations which are expected to be subject to monthly paydowns of principal
and interest, gain or loss attributable to actual monthly paydowns is accounted
for as an increase or decrease to interest income during the period and discount
or premium on the remaining security is not amortized.

To help investors better evaluate how an investment in a Fund might
satisfy their investment objective, advertisements regarding each Fund may
discuss various measures of Fund performance, including current performance
ratings and/or rankings appearing in financial magazines, newspapers and
publications which track mutual fund performance. Advertisements may also
compare performance (using the calculation methods set forth in the Prospectus)
to performance as reported by other investments, indices and averages. When
advertising current ratings or rankings, the Funds may use the following
publications or indices to discuss or compare Fund performance:

Lipper Mutual Fund Performance Analysis measures total return for the
mutual fund industry and ranks individual mutual fund performance over specified
time periods assuming reinvestment of all distributions, exclusive of sales
loads. In

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addition, the Funds may use comparative performance information appearing in
relevant indices, including the S&P 500 Index, the Dow Jones Industrial Average,
and the Russell 2000 Index. The S&P 500 Index is an unmanaged index of 500
stocks, the purpose of which is to portray the pattern of common stock price
movement. The Dow Jones Industrial Average is a measurement of general market
price movement for 30 widely held stocks listed on the New York Stock Exchange.
The Russell 2000 Index is an unmanaged index comprised of the 2,000 smallest
U.S. domiciled publicly-traded common stocks in the Russell 3000 Index (an
unmanaged index of the 3,000 largest U.S. domiciled publicly-traded common
stocks by market capitalization). The International Value Fund may compare its
performance to the Europe, Australia and Far East Index, which is generally
considered to be representative of the performance of unmanaged common stocks
that are publicly traded in the securities markets located outside the United
States.

In assessing such comparisons of performance an investor should keep in
mind that the composition of the investments in the reported indices and
averages is not identical to the Funds' portfolios, that the averages are
generally unmanaged and that the items included in the calculations of such
averages may not be identical to the formula used by the Funds to calculate
their performance. In addition, there can be no assurance that the Funds will
continue this performance as compared to such other averages.

CUSTODIAN

Bank One Trust Company, N.A., 100 East Broad Street, Columbus, Ohio,
has been retained to act as Custodian for the investments of the Large Cap Value
Fund, the Small Cap Value Fund and the Balanced Fund. Bank One acts as each
Fund's depository, safekeeps its portfolio securities, collects all income and
other payments with respect thereto, disburses funds as instructed and maintains
records in connection with its duties.

The Northern Trust Company, 50 South LaSalle Street, Chicago, Illinois,
has been retained to act as Custodian for the investments of the International
Value Fund. Northern Trust acts as the Fund's depository, safekeeps its
portfolio securities, collects all income and other payments with respect
thereto, disburses funds as instructed and maintains records in connection with
its duties.

AUDITORS

The firm of Ernst & Young LLP has been selected as independent auditors
for the Trust for the fiscal year ending March 31, 1998. Ernst & Young LLP, 1300
Chiquita Center, Cincinnati, Ohio, performs an annual audit of the Trust's
financial statements and advises the Trust as to certain accounting matters.

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PRINCIPAL SECURITY HOLDERS

As of September 19, 1997, Merrill Lynch Pierce Fenner & Smith - Mutual
Fund Operations, 4800 Deer Lake Drive East, 3rd Floor, Jacksonville, Florida,
owned of record 31.4% of the outstanding Class A shares of the Large Cap Value
Fund, 89.3% of the outstanding Class C shares of the Large Cap Value Fund, 30.0%
of the outstanding Class A shares of the Small Cap Value Fund, 90.9% of the
outstanding Class C shares of the Small Cap Value Fund, 27.2% of the outstanding
Class A shares of the Balanced Fund and 97.0% of the outstanding Class C shares
of the Balanced Fund. Merrill Lynch Pierce Fenner & Smith - Mutual Fund
Operations may be deemed to control the Class A and Class C shares of the Large
Cap Value Fund, the Small Cap Value Fund and the Balanced Fund by virtue of the
fact that they own of record more than 25% of such shares. As of September 19,
1997, Chauncey H. Dean and Zada G. Dean, 7777 Taylorsville Road, Huber Heights,
Ohio, owned of record 47.0% of the outstanding Class A shares of the Large Cap
Value Fund, 43.2% of the outstanding Class A shares of the Small Cap Value Fund
and 45.0% of the outstanding Class A shares of the Balanced Fund. Chauncey H.
Dean and Zada G. Dean may be deemed to control the Class A shares of the Large
Cap Value Fund, the Small Cap Value Fund and the Balanced Fund by virtue of the
fact that they own of record more than 25% of such shares. As of September 19,
1997, Zada G. Dean, 7777 Taylorsville Road, Huber Heights, Ohio, owned of record
15.9% of the outstanding Class A shares of the Large Cap Value Fund, 7.4% of the
outstanding Class A shares of the Small Cap Value Fund and 15.1% of the
outstanding Class A shares of the Balanced Fund. As of September 19, 1997,
McDonald & Co., C/FBO Ellen Emmel IRA, 2159 Deer Meadow Drive, Cincinnati, Ohio,
owned of record 10.7% of the outstanding Class C shares of the Large Cap Value
Fund. For purposes of voting on matters submitted to shareholders, any person
who owns more than 50% of the outstanding shares of a Fund generally would be
able to cast the deciding vote.

As of September 19, 1997, the Trustees and officers of the Trust as a
group owned of record and beneficially 47.0% of the outstanding Class A shares
of the Large Cap Value Fund, 43.2% of the outstanding Class A shares of the
Small Cap Value Fund and 45.0% of the outstanding Class A shares of the Balanced
Fund and less than 1% of the outstanding shares of each other Fund (or Class
thereof).

COUNTRYWIDE FUND SERVICES, INC.

The Trust's transfer agent, Countrywide Fund Services, Inc.
("Countrywide"), maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of the Funds' shares, acts as dividend and distribution disbursing
agent and

- 33 -

<PAGE>

performs other shareholder service functions. Countrywide receives for its
services as transfer agent a fee from the Fund payable monthly at an annual rate
of $20 per account from each of the Funds; provided, however, that the minimum
fee is $1,200 per month for each class of shares of a Fund. In addition, the
Funds pay out-of-pocket expenses, including but not limited to, postage,
envelopes, checks, drafts, forms, reports, record storage and communication
lines.

Countrywide also provides accounting and pricing services to the Funds.
For calculating daily net asset value per share and maintaining such books and
records as are necessary to enable Countrywide to perform its duties, each Fund
will pay Countrywide a fee in accordance with the following schedule:

AVERAGE MONTHLY NET ASSETS MONTHLY FEE
$ 0 - $ 50,000,000 $3,000
50,000,000 - 100,000,000 3,500
100,000,000 - 200,000,000 4,000
200,000,000 - 300,000,000 5,000
Over 300,000,000 6,000 + .001%
of average monthly
net assets.

In addition, each Fund pays all costs of external pricing services.

Countrywide also provides administrative services to the Funds. In this
capacity, Countrywide supplies non-investment related statistical and research
data, internal regulatory compliance services and executive and administrative
services. Countrywide supervises the preparation of tax returns, reports to
shareholders of the Funds, reports to and filings with the Securities and
Exchange Commission and state securities commissions, and materials for meetings
of the Board of Trustees. For the performance of these administrative services,
each Fund pays Countrywide a fee at the annual rate of .10% of the average value
of its daily net assets up to $100,000,000, .075% of such assets from
$100,000,000 to $200,000,000 and .05% of such assets in excess of $200,000,000;
provided, however, that the minimum fee is $1,000 per month for each Fund.

- 34 -

<PAGE>

LARGE CAP VALUE FUND

SMALL CAP VALUE FUND

BALANCED FUND

DEAN FAMILY OF FUNDS

STATEMENT OF ASSETS AND LIABILITIES

AS OF

MARCH 17, 1997

TOGETHER WITH

AUDITORS' REPORT

- 35 -

<PAGE>

REPORT OF INDEPENDENT AUDITORS

To the Board of Trustees and Shareholder
Dean Family of Funds:

We have audited the accompanying statement of assets and liabilities of Dean
Family of Funds (comprised of the Large Cap Value Fund, the Small Cap Value
Fund, and the Balanced Fund)(the Fund) as of March 17, 1997. This statement of
assets and liabilities is the responsibility of the Fund's management. Our
responsibility is to express an opinion on this statement of assets and
liabilities based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of assets and liabilities is free of
material misstatements. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of assets and
liabilities. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
statement of assets and liabilities presentation. We believe that our audit
provides a reasonable basis for our opinion.

In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of each of the
portfolios comprising Dean Family of Funds at March 17, 1997, in conformity with
generally accepted accounting principles.

/s/ Ernst & Young, LLP
Ernst & Young, LLP

Cincinnati, Ohio
March 18, 1997

- 36 -

<PAGE>

DEAN FAMILY OF FUNDS

STATEMENT OF ASSETS AND LIABILITIES

AS OF MARCH 17, 1997

LARGE CAP SMALL CAP
VALUE VALUE BALANCED
FUND FUND FUND

ASSETS:
<S> <C> <C> <C>
Cash $34,000 $33,000 $33,000
Organization costs (Note 2) 17,000 17,000 17,000
------- ------- -------

Total assets 51,000 50,000 50,000
------- ------- -------

LIABILITIES:
Accrued expenses (Note 2) 17,000 17,000 17,000
------- ------- -------

Total Liabilities 17,000 17,000 17,000
------- ------- -------

Net assets for shares of
beneficial interest
outstanding (Note 1) $34,000 $33,000 $33,000
======= ======= =======

Shares outstanding (Note 1) 3,400 3,300 3,300
======= ======= =======

Net asset value per share $10.00 $10.00 $10.00
======= ======= =======

</TABLE>

- 37 -

<PAGE>

DEAN FAMILY OF FUNDS

NOTES TO STATEMENT OF ASSETS AND LIABILITIES

AS OF MARCH 17, 1997

(1) The Dean Family of Funds (the Trust) is an open-end management
investment company established as an Ohio business trust under
a Declaration of Trust dated December 18, 1996. The Trust has
established three fund series to date, the Large Cap Value
Fund, the Small Cap Value Fund and the Balanced Fund (the
Funds). The Funds each offer two classes of shares: Class A
shares (sold subject to maximum front-end sales load of 5.25%
and a distribution fee of up to 0.25% of average daily net
assets of each Fund) and Class C shares (sold subject to
maximum contingent deferred sales load of 1% if redeemed
within a one-year period from purchase and a distribution fee
of up to 1% of average daily net assets). Each Class A and
Class C share of the Fund represents identical interests in
the Fund's investment portfolio and has the same rights,
except that (i) Class C shares bear the expenses of higher
distribution fees, which is expected to cause Class C shares
to have a higher expense ratio and to pay lower dividends than
Class A shares; (ii) certain other class specific expenses
will be borne solely by the class to which such expenses are
attributable; and (iii) each class has exclusive voting rights
with respect to matters relating to its own distribution
arrangements.

The Trust has had no operations except for the initial issuance of
Class A shares. On March 17, 1997, 3,400 shares, 3,300 shares and 3,300
shares of each fund, respectively, were issued for cash at $10.00 per
share.

(2) Expenses incurred in connection with the organization of the
Funds and the initial offering of shares are estimated to be
$51,000, which includes $45,000 paid to Countrywide Fund
Services, Inc., the Trust's administrator. These expenses
have been paid by Dean Investment Associates (the Adviser).
Upon commencement of the public offering of shares of the
Funds, the Funds will reimburse the Adviser for such expenses,
with that amount being capitalized and amortized on a
straight-line basis over five years. As of March 17, 1997,
all outstanding shares of the Funds were held by the Adviser,
who purchased these initial shares in order to provide the
Trust with its required capital. In the event the initial
shares of the Funds are redeemed by any holder thereof at any
time prior to the complete amortization of organizational
expenses, the redemption proceeds payable with respect to such
shares will be reduced by the pro rata share (based upon the

- 38 -

<PAGE>

portion of the shares redeemed in relation to the required
capitalization) of the unamortized deferred organizational expenses as
of the date of such redemption.

(3) Reference is made to the Prospectus and this Statement of Additional
Information for a description of the Management Agreement, the
Underwriting Agreement, the Distribution Expense Plan, the
Administration Agreement, tax aspects of the Funds and the calculation
of the net asset value of shares of each Fund.

- 39 -
<PAGE>

DEAN FAMILY OF FUNDS:

LARGE CAP VALUE FUND

SMALL CAP VALUE FUND

BALANCED FUND

INTERIM REPORT
August 31, 1997
(Unaudited)

<PAGE>
<TABLE>
DEAN FAMILY OF FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
For the Five Months Ended August 31, 1997 (Unaudited)
<CAPTION>
DEAN DEAN
LARGE CAP SMALL CAP DEAN
VALUE VALUE BALANCED
FUND FUND FUND
<S> <C> <C> <C>
FROM OPERATIONS:
Net investment income $ 7,693 $ 19,997 $ 26,014
Net realized gains from security transactions 18,360 136,897 50,339
Net change in unrealized appreciation/
depreciation on investments 222,500 1,024,805 215,738
------------- ------------ -----------
Net increase in net assets from operations 248,553 1,181,699 292,091
------------- ------------ -----------

FROM DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income, Class A (3,594) -- (9,211)
Dividends from net investment income, Class C -- -- --
------------- ------------ -----------
Decrease in net assets from distributions to shareholders (3,594) -- (9,211)
------------- ------------ -----------

FROM CAPITAL SHARE TRANSACTIONS (A):
CLASS A
Proceeds from shares sold 6,424,350 13,609,409 6,512,148
Net asset value of shares issued in
reinvestment of distributions to shareholders 3,308 -- 8,412
Payments for shares redeemed (2,022) (20,673) (52,988)
------------ ----------- -----------
Net increase in net assets from Class A share transactions 6,425,636 13,588,736 6,467,572
------------ ----------- -----------

CLASS C
Proceeds from shares sold 5,908 134,547 192,512
Net asset value of shares issued in
reinvestment of distributions to shareholders -- -- --
Payments for shares redeemed -- -- --
------------ ----------- -----------
Net increase in net assets from Class C share transactions 5,908 134,547 192,512
------------ ----------- -----------

Net increase from capital share transactions 6,431,544 13,723,283 6,660,084
------------ ----------- -----------

TOTAL INCREASE IN NET ASSETS 6,676,503 14,904,982 6,942,964

NET ASSETS:
Beginning of period 34,000 33,000 33,000
------------ ----------- -----------
End of period $ 6,710,503 $14,937,982 $ 6,975,964
============ =========== ===========

UNDISTRIBUTED NET INVESTMENT INCOME $ 4,099 $ 19,997 $ 16,803
============ =========== ===========

(A) Summary of capital share activity:
CLASS A
Shares sold 623,339 1,311,686 637,212
Shares issued in reinvestment of distributions to shareholders 325 -- 835
Shares redeemed (201) (1,813) (4,911)
------------ ----------- -----------
Net increase in shares outstanding 623,463 1,309,873 633,136
Shares outstanding, beginning of period 3,400 3,300 3,300
------------ ----------- -----------
Shares outstanding, end of period 626,863 1,313,173 636,436
============ =========== ===========

CLASS C
Shares sold 549 12,194 18,031
Shares issued in reinvestment of distributions to shareholder -- -- --
Shares redeemed -- -- --
------------ ----------- -----------
Net increase in shares outstanding 549 12,194 18,031
Shares outstanding, beginning of period -- -- --
------------ ----------- -----------
Shares outstanding, end of period 549 12,194 18,031
============ =========== ===========

See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN FAMILY OF FUNDS
FINANCIAL HIGHLIGHTS
Per Share Data for a Share Outstanding Throughout Each period

<CAPTION>
DEAN LARGE CAP VALUE FUND DEAN SMALL CAP VALUE FUND

Net asset value at end of period $ 10.70 $ 10.69 $ 11.27 $ 11.26
========== ======== ============ =============

Total return (B) 7.11% (0.65)% 12.70% 2.83%
========== ======== ============ =============

Net assets at end of period $ 6,704,634 $ 5,869 $ 14,800,643 $ 137,339
========== ======== ============ =============

Ratio of net investment income (loss) to
average net assets (C) 0.63% (1.47)% 0.83% (0.16)%

Portfolio turnover rate (C) 20% 20% 51% 51%

Less distributions:
Dividends from net investment income (0.03) --
Distributions from net realized gains -- --
---------- --------
Total distributions (0.03) --

---------- --------
Net asset value at end of period $ 10.65 $ 10.65
========== ========

Total return (B) 6.86% (0.56)%
========== ========

Net assets at end of period $ 6,783,871 $192,093
========== ========

Ratio of expenses to average net assets:
Before waiver of fees by Adviser 2.80% 3.54%
After waiver of fees by Adviser 1.80% 2.54%

Ratio of net investment income (loss) to
average net assets (C) 2.06% 0.68%

Portfolio turnover rate (C) 44% 44%

(B) The total returns shown do not include the effect of applicable
sales loads.

- 40 -

DEAN FAMILY OF FUNDS

NOTES TO FINANCIAL STATEMENTS

August 31, 1997
(Unaudited)

1. ORGANIZATION

The Dean Family of Funds (the Trust) is registered under the Investment Company
Act of 1940, as amended (the 1940 Act), as an open-end management investment
company. The Trust was organized as an Ohio business trust under a Declaration
of Trust dated December 18, 1996. The Trust has established three fund series to
date, the Large Cap Value Fund, the Small Cap Value Fund and the Balanced Fund
(the Funds).

The Large Cap Value Fund seeks to provide growth of capital over the long-term
by investing primarily in the common stocks of large companies.

The Small Cap Value Fund seeks to provide capital appreciation by investing
primarily in the common stocks of small companies.

The Balanced Fund seeks to preserve capital while producing a high total return
by allocating its assets among equity securities, fixed-income securities and
money market instruments.

The Funds each offer two classes of shares: Class A shares (sold subject to a
maximum front-end sales load of 5.25% and a distribution fee of up to 0.25% of
the average daily net assets of each Fund) and Class C shares (sold subject to a
maximum contingent deferred sales load of 1% if redeemed within a one-year
period from purchase and a distribution fee of up to 1% of average daily net
assets). Each Class A and Class C share of a Fund represents identical interests
in the Fund's investment portfolio and has the same rights, except that (i)
Class C shares bear the expenses of higher distribution fees, which is expected
to cause Class C shares to have a higher expense ratio and to pay lower
dividends than Class A shares; (ii) certain other class specific expenses will
be borne solely by the class to which such expense are attributable; and (iii)
each class has exclusive voting rights with respect to matters relating to its
own distribution arrangements.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of the Trust's significant accounting policies:

Security valuation -- The Funds' portfolio securities are valued as of the close
of business of the regular session of trading on the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities traded on a national stock
exchange or quoted by NASDAQ are valued based upon the closing price on the
principal exchange where the security is traded, or, if not traded on a
particular day, at the closing bid price. U.S. Government obligations are valued
at their most recent bid prices as obtained from one or more of the major market
makers for such securities.

Share valuation -- The net asset value per share of each class of shares of each
Fund is calculated daily by dividing the total value of a Fund's assets
attributable to that class, less liabilities attributable to that class, by the
number of shares of that class outstanding. The maximum offering price of Class
A shares of each Fund is equal to the net asset value per share plus a sales
load equal to 5.54% of the net asset value (or 5.25% of the offering price). The
offering price of Class C shares of each Fund is equal to the net asset value
per share.

<PAGE>

DEAN FAMILY OF FUNDS

NOTES TO FINANCIAL STATEMENTS

August 31, 1997
(Unaudited)

The redemption price per share of Class A shares and Class C shares of each Fund
is equal to net asset value per share. However, Class C shares of each Fund are
subject to a contingent deferred sales load of 1% of the original purchase price
if redeemed within a one-year period from the date of purchase.

Investment income -- Dividend income is recorded on the ex-dividend date.
Interest income is accrued as earned. Discounts and premiums on securities
purchased are amortized in accordance with income tax regulations which
approximate generally accepted accounting principles.

Distributions to shareholders -- The Large Cap Value Fund and the Balanced Fund
each expects to distribute substantially all of its net investment income, if
any, on a quarterly basis. The Small Cap Value Fund expects to distribute
substantially all of its net investment income, if any, on an annual basis. Each
Fund expects to distribute any net realized long-term capital gains at least
once each year. Management will determine the timing and frequency of the
distributions of any net realized short-term capital gains.

Organization expenses -- Expenses of organization have been capitalized and are
being amortized on a straight-line basis over five years. In the event any of
the initial shares of the Fund are redeemed during the amortization period, the
redemption proceeds will be reduced by a pro rata portion of any unamortized
organization expenses in the same proportion as the number of initial shares
being redeemed bears to the number of initial shares of the Fund outstanding at
the time of the redemption.

Security transactions -- Security transactions are accounted for on the trade
date. Securities sold are valued on a specific identification basis.

Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

Federal income tax -- It is each Fund's policy to comply with the special
provisions of the Internal Revenue Code available to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.

In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.

<PAGE>

DEAN FAMILY OF FUNDS

NOTES TO FINANCIAL STATEMENTS

August 31, 1997
(Unaudited)

The following information is based upon the federal income tax cost of portfolio
investments as of August 31, 1997:

<TABLE>
<CAPTION>
LARGE CAP SMALL CAP
VALUE VALUE BALANCED
FUND FUND FUND
<S> <C> <C> <C>
Gross unrealized appreciation $ 336,703 $ 1,301,309 $ 270,948
Gross unrealized depreciation (114,203) (276,504) (55,210)
------------ ----------- -----------
Net unrealized appreciation $ 222,500 $ 1,024,805 $ 215,738
============ =========== ===========
</TABLE>
The Federal income tax cost of portfolio investments is equal to book cost as
shown on the statement of assets and liabilities.

3. INVESTMENT TRANSACTIONS

During the five months ended August 31, 1997, purchases and proceeds from sales
of portfolio securities, other than short-term investments, amounted to
$6,495,388 and $132,582, respectively, for the Large Cap Value Fund, $14,243,720
and $717,641, respectively, for the Small Cap Value Fund, and $6,094,868 and
$276,081, respectively, for the Balanced Fund.

4. TRANSACTIONS WITH AFFILIATES

Certain trustees and officers of the Trust are also officers of C.H. Dean &
Associates, Inc. (the Adviser) or of Countrywide Fund Services, Inc. (CFS), the
administrative services agent, shareholder servicing and transfer agent, and
accounting services agent for the Trust.

INVESTMENT ADVISORY AGREEMENT
The Funds' investments are managed by the Adviser pursuant to the terms of an
Advisory Agreement. Each Fund pays the Adviser an investment management fee,
computed and accrued daily and paid monthly, at an annual rate of 1.00% of
average daily net assets of each Fund.

ADMINISTRATION AGREEMENT

Under the terms of an Administration Agreement, CFS supplies non-investment
related administrative and compliance services for the Funds. CFS supervises the
preparation of tax returns, reports to shareholders, reports to and filings with
the Securities and Exchange Commission and state securities commissions, and
materials for meetings of the Board of Trustees. For these services, CFS
receives a monthly fee from each Fund at an annual rate of 0.10% on its average
daily net assets up to $100 million; 0.075% on the next $100 million of such net
assets and 0.05% on such net assets in excess of $200 million, subject to a
$1,000 minimum monthly fee.

<PAGE>

DEAN FAMILY OF FUNDS

NOTES TO FINANCIAL STATEMENTS

August 31, 1997
(Unaudited)

TRANSFER AGENT AND SHAREHOLDER SERVICING AGREEMENT

Under the terms of a Transfer, Dividend, Shareholder Service and Plan Agency
Agreement, CFS maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of the Funds shares, acts as dividend and distribution disbursing
agent and performs other shareholder service functions. For these services, CFS
receives a monthly fee based on the number of shareholder accounts in each class
of each Fund, subject to a $1,200 minimum monthly fee for each class of shares
of a Fund. In addition, each Fund pays out-of-pocket expenses, including but not
limited to, postage and supplies.

ACCOUNTING SERVICES AGREEMENT

Under the terms of an Accounting Services Agreement, CFS calculates the daily
net asset value per share and maintains the financial books and records of the
Funds. For these services, CFS receives a monthly fee of $3,000 from each Fund.

<PAGE>

<PAGE>
<TABLE>
LARGE CAP VALUE FUND

PORTFOLIO OF INVESTMENTS

AUGUST 31, 1997
(Unaudited)
<CAPTION>
SHARES VALUE
<S> <C> <C>
COMMON STOCKS-98.4%
AIRLINES-1.0%
2,500 Southwest Airlines Co. $ 70,000
----------------
AUTOMOTIVE-4.0%
4,500 Chrysler Corp. 158,063
2,500 Ford Motor Co. 107,500
----------------
265,563
----------------

CAPITAL GOODS-3.5%
4,500 Agco Corp. 146,250
2,000 Foster Wheeler Corp. 91,375
----------------
237,625
----------------

CHEMICALS-6.2%
1,000 Dow Chemical Co. 88,500
3,000 Great Lakes ChemicalCorp. 139,500
2,500 Potash Corp. Saskatchewan 184,844
----------------
412,844
----------------

DATA STORAGE-1.7%
3,000 Seagate Technology, Inc.(a) 114,562
----------------

ELECTRONICS-3.8%
1,200 Arrow Electronics, Inc.(a) 73,725
1,500 Avnet, Inc. 103,781
1,400 Raytheon Co. 77,000
----------------
254,506
----------------

ENERGY-2.9%
1,000 Atlantic Richfield Co. 75,000
2,500 Phillips Petroleum Co. 118,906
----------------
193,906
----------------

FINANCIAL SERVICES-14.3%
1,700 Ambac, Inc. 137,381
4,000 Bear Stearns Co., Inc. 158,250
1,700 Beneficial Corp. 121,656
1,500 Chase Manhattan Corp. 166,781
3,000 Edwards (A.G.), Inc. 119,250
3,500 Green Tree Financial Corp. 153,781
400 Merrill Lynch & Company, Inc. 24,600
3,000 United Asset Management Corp. 80,438
----------------
962,137
----------------
<PAGE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Government Sponsored Enterprises-1.6%
2,500 Federal National Mortgage Association $ 110,000
----------------

HOUSING-2.5%
10,000 Clayton Homes, Inc. 168,125
----------------

INSURANCE-9.0%
2,000 Aflac, Inc. 110,125
1,200 American General Corp. 57,825
1,000 American National Insurance Co. 97,000
600 General RE Corp. 116,325
800 TransAmerica Corp. 78,850
2,000 TransAtlantic Holdings, Inc. 141,375
----------------
601,500
----------------

MEDIA-1.4%
6,000 News Corporation LTD.(ADR) 90,750
----------------

Metals-2.0%
1,500 Alumax, Inc. (a) 62,156
900 Aluminum Co. of America 74,025
----------------
136,181
----------------

MISCELLANEOUS-14.3%
1,800 CSX Corp. 102,937
2,500 Columbia/ HCA Healthcare Corp. 78,906
2,500 Hasbro, Inc. 67,188
500 Norfolk Southern Corp. 49,000
1,500 Parker Hannifin Corp. 96,469
2,000 Phelps Dodge Corp. 160,875
1,500 SAFECO, Inc. 73,688
3,500 Union Texas Petroleum Holdings, Inc. 81,594
2,000 Vulcan Materials Co. 175,750
1,700 York International Corp. 76,287
----------------
962,694
----------------

MORTGAGE SERVICES-5.0%
2,500 Countrywide Credit Industries, Inc.. 84,219
1,200 MBIA, Inc. 135,900
2,000 PMI Group, Inc. 115,625
----------------
335,744
----------------
<PAGE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
RETAIL-4.0%
2,500 Dillard's, Inc. $ 100,000
15,000 Food Lion, Inc. 111,094
1,000 J.C. Penney Company, Inc. 60,000
----------------
271,094
----------------

SEMICONDUCTOR-1.1%
800 Intel Corp. 73,700
----------------

TECHNOLOGY-2.3%
5,000 Cabletron Systems, Inc. (a) 151,250
----------------

TELECOMMUNICATIONS-6.2%
7,000 360 Communications Co. (a) 128,625
1,400 AT&T Corp. 54,600
2,000 Century Telephone Enterprises, Inc. 72,625
3,000 Frontier Corp. 66,188
2,000 Sprint Corp. 94,000
----------------
416,038
----------------

TOBACCO-4.2%
1,500 Loews Corp. 152,906
1,600 Phillip Morris Cos., Inc. 69,800
2,000 Ust, Inc. 57,750
----------------
280,456
----------------

UTILITIES-7.4%
2,000 Consolidated Edison Co. of New York 61,250
4,000 DPL, Inc. 94,750
3,000 Houston Industries, Inc. 60,750
4,000 Illinova Corporation 92,000
2,500 Nipsco Industries, Inc. 102,031
4,000 Southern Co. 84,250
----------------
495,031
----------------

TOTAL COMMON STOCKS (COST $6,381,206) $ 6,603,706
----------------
<PAGE>
<CAPTION>
FACE
VALUE VALUE
MONEY MARKET-1.0%
$67,038 One Group Prime Money Market Fund $ 67,038
----------------

TOTAL INVESTMENTS AT VALUE-99.4%
(COST $6,448,244) $ 6,670,744

OTHER ASSETS IN EXCESS OF LIABILITIES - 0.6% 39,759
----------------
NET ASSETS - 100.0% $ 6,710,503
================
<FN>
(a) Non-income producing securities.
</FN>
</TABLE>
<PAGE>
<TABLE>

DEAN SMALL CAP VALUE FUND

PORTFOLIO OF INVESTMENTS

AUGUST 31, 1997
(Unaudited)
<CAPTION>
SHARES VALUE
<S> <C> <C>
COMMON STOCKS-98.3%
AUTOMOTIVE-2.8%
6,000 Excel Industries, Inc. $ 153,000
7,000 Oshkosh Truck Corp. 105,875
7,000 Republic Automotive Parts, Inc. (a) 108,500
7,000 TBC Corp. (a) 57,750
----------------
425,125
----------------

AUTOMOTIVE PARTS-1.1%
12,000 Durakon Industries, Inc. (a) 106,500
9,000 Jason, Inc. (a) 67,500
----------------
174,000
----------------

BUILDING PRODUCTS-4.6%
7,000 BMC West Corp. (a) 91,000
6,000 Dayton Superior Corp. (a) 93,000
1,000 Florida Rock Industries, Inc. 49,375
21,000 Martin Industries, Inc. 123,375
15,000 Morgan Products LTD (a) 122,813
7,000 Patrick Industries, Inc. 104,125
8,000 Shelter Components Corp. 108,000
----------------
691,688
----------------

BUILDING SUPPLIES-0.7%
9,000 Wolohan Lumber Co. 109,125
----------------

CAPITAL GOODS-5.3%
40,000 Baldwin Technology-Class A (a) 207,500
11,000 Bridgeport Machines, Inc. (a) 118,250
4,000 Central Sprinkler Corp. (a) 70,000
6,000 Defiance, Inc. 50,250
3,000 GEHL Co. (a) 67,125
3,000 Hardinge, Inc. 103,125
1,500 Nacco Industries, Inc.-Class A 129,375
7,000 Perini Corp. (a) 49,000
----------------
794,625
----------------

CHEMICALS-0.7%
5,000 Mississippi Chemical Corp. 108,438
<PAGE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
ELECTRONICS-2.8%
9,000 Bel Fuse, Inc. (a) $ 160,875
8,760 Bell Industries, Inc. (a) 154,395
6,500 ESCO Electronics Corp. (a) 107,656
----------------
422,926
----------------

ENERGY-4.9%
8,000 Aquila Gas Pipeline Corp. 83,500
8,000 BP Prudhoe Bay Royalty Trust 139,500
15,000 Burlington Res Coal Seam Gas Royalty Trust 106,875
10,000 Castle Energy Corp. (a) 140,000
4,000 Giant Industries, Inc. 73,750
5,000 NUI Corp. 115,000
8,000 Torch Energy Royalty Trust 79,500
----------------
738,125
----------------

FINANCIAL SERVICES-0.6%
2,700 Arcadia Financial LTD (a) 26,831
1,800 Everen Capital Corp. 59,175
----------------
86,006
----------------

FOOD-2.0%
6,000 Fleming Cos., Inc. 113,250
10,000 Mauna Loa Macadamia Partners LP-Class A 40,625
7,000 Nash-Finch Co. 149,625
----------------
303,500
----------------

FURNITURE-0.9%
8,000 Flexsteel Industries, Inc. 94,000
2,000 Pulaski Furniture Corp. 34,500
----------------
128,500
----------------

GAMING-1.7%
6,000 Grand Casinos, Inc. (a) 92,625
7,000 Harveys Casino Resorts 120,750
6,000 Station Casinos, Inc. (a) 45,375
----------------
258,750
----------------

HEALTH CARE-1.0%
1,000 Mine Safety Appliances Co. (a) 63,000
30,000 Staff Builders, Inc.-Class A (a) 84,375
----------------
147,375
----------------
<PAGE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
HOUSING-7.9%
6,000 Beazer Homes U.S.A., Inc. (a) $ 113,250
10,000 Cavalier Homes, Inc. 102,500
5,000 Continental Homes Holding Corp. 115,000
10,000 Engle Homes, Inc. 140,000
17,000 Hovnanian Enterprises Inc.-Class A (a) 114,750
8,000 MDC Holdings, Inc. 83,000
8,000 M/I Schottenstein Homes (a) 108,000
3,200 NVR, Inc. (a) 68,400
4,000 Pacific Greystone Corp. (a) 69,500
1,100 Pulte Corp. 40,287
8,000 Webb (Del E.) Corp. 140,000
9,000 Zaring National Corp. (a) 87,187
----------------
1,181,874
----------------

INSURANCE-8.7%
2,000 Allied Life Financial Corp. 40,500
2,500 Chartwell RE Corp. 85,625
1,300 Citizens Corp. 36,725
1,733 Donegal Group, Inc. 35,093
8,000 EMC Insurance Group, Inc. 108,000
3,000 FBL Financial Group, Inc.-Class A 96,000
1,300 Farm Family Holdings, Inc. (a) 37,700
3,500 First American Financial Corp. 156,625
1,500 Guaranty National Corp. 42,281
900 Harleysville Group, Inc. 38,138
6,000 Lawyers Title Corp. 167,250
600 Navigators Group, Inc. (a) 11,100
3,300 Omni Insurance Group, Inc. (a) 43,313
3,000 PXRE Corp. 89,625
1,000 Selective Insurance Group, Inc. 49,250
4,900 Sphere Drake Holdings LTD 42,875
6,000 Stewart Information Services Corp. 147,375
3,000 Terra Nova (Bermuda) Holding LTD-Class A 67,875
----------------
1,295,350
----------------
<PAGE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
METALS-6.8%
6,000 Ampco-Pittsburgh Corp. $ 107,250
8,000 A.P. Green Industries, Inc. 82,000
4,000 Chaparral Steel Co. 60,500
3,000 Cleveland-Cliffs, Inc. 125,062
3,000 Commercial Metals Co. 92,250
9,000 National Steel Corp.-Class B (a) 169,313
1,600 Pitt-Des Moines, Inc. 54,800
6,000 Roanoke Electric Steel Co. 130,500
4,000 Rouge Industries, Inc.-Class A 61,500
4,000 Texas Industries, Inc. 133,250
----------------
1,016,425
----------------

MISCELLANEOUS-6.6%
2,000 Arvin Industries, Inc. 69,625
6,000 Atchison Casting Corp. (a) 115,875
5,000 Burlington Industries, Inc. (a) 60,313
8,000 Cameron Ashley Building Products (a) 120,000
7,000 Continental Can, Inc. (a) 138,687
11,000 Designer Holdings LTD. (a) 68,750
5,000 Global Industrial Technologies, Inc. (a) 94,687
3,000 PMC Commerical Trust 57,375
9,000 Primesource Corp. 91,125
8,000 R & B, Inc. (a) 64,000
6,000 Superior Surgical Manufacturing Co. 92,250
----------------
972,687
----------------

MORTGAGE SERVICES-1.1%
2,200 North American Mortgage Co. 56,925
4,000 Scpie Holdings, Inc. 112,000
----------------
168,925
----------------

PAPER AND CONTAINERS-1.3%
10,000 Mercer International, Inc. 103,750
6,000 Paragon Trade Brands, Inc. (a) 95,625
----------------
199,375
----------------

POLLUTION-0.6%
6,000 Graphic Industries, Inc. 96,750
----------------
<PAGE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
RESTAURANTS-2.0%
11,000 Bertuccin's, Inc.(a) $ 66,688
5,000 El Chico Restaurants, Inc. (a) 50,313
10,000 Morrison Restaurants, Inc. 47,500
5,000 Rare Hospitality International, Inc. (a) 62,500
8,000 Ryan's Family Steak Houses, Inc. (a) 74,000
----------------
301,001
----------------

RETAIL-17.5%
13,000 Advanced Marketing Service, Inc. (a) 139,750
9,000 Blair Corp. 141,750
16,000 Bon-Ton Stores, Inc. (a) 153,000
20,000 Books A Million, Inc. (a) 122,500
9,000 Brookstone, Inc. (a) 91,125
6,000 Brown Group, Inc. 100,125
5,000 Burlington Coat Factory Warehouse 115,000
8,000 Dixie Group, Inc. (a) 106,500
10,000 Duckwall-Alco Stores, Inc. (a) 136,250
25,000 Donnkenny, Inc. (a) 92,188
10,000 Dyersburg Corp. 110,000
11,000 GT Bicycles, Inc. (a) 86,625
9,000 Haverty Furniture Co., Inc. 118,125
6,000 Hills Stores Co. (a) 22,500
5,000 Ingles Markets, Inc.-Class A 66,875
40,000 Jan Bell Marketing, Inc. (a) 100,000
10,000 Maris Christina, Inc. (a) 51,250
6,000 Marsh Supermarkets, Inc.-Class B 90,000
11,000 Mikasa, Inc. 130,625
30,000 Movie Gallery, Inc. (a) 127,500
8,000 Rex Stores Corp. (a) 79,000
3,000 The Rival Co. 55,125
30,000 Service Merchandise Co., Inc. (a) 116,250
3,000 Supreme International Corp. (a) 39,000
21,000 Tultex Corp. (a) 120,750
13,000 Worldtex, Inc. (a) 83,687
----------------
2,595,500
----------------
<PAGE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
REAL ESTATE-5.6%
1,000 Capstone Capital Corp $ 23,750
9,000 Commercial Net Lease Realty 141,750
10,000 Dynex Capital, Inc. 141,875
5,000 Health Care REIT, Inc. 130,625
10,000 Horizon Group, Inc. 125,625
7,000 RFS Hotel Investors, Inc. 129,500
6,000 Thornburg Mortgage Asset Corp. 138,750
----------------
831,875
----------------

TECHNOLOGY-2.4%
8,000 Franklin Electronic Publisher, Inc. (a) 98,000
14,000 Microtest, Inc. (a) 69,125
5,600 Software Spectrum, Inc. (a) 84,700
10,000 Spacehab, Inc. (a) 101,250
----------------
353,075
----------------

TELECOMMUNICATIONS-1.2%
8,000 Atlantic Tele-Network, Inc. (a) 104,500
9,000 Audiovox Corp.- Class A (a) 70,313
----------------
174,813
----------------

TRANSPORTATION-1.0%
5,000 InternationalShipholding Corp. 82,187
2,100 Petroleum Helicopters Inc. 29,400
1,500 Sea Containers LTD-Class A 35,625
----------------
147,212
----------------

UTILITY-6.5%
8,000 Bangor Hydro-Electric Co. (a) 43,500
4,000 Central Hudson Gas & Electric 133,500
6,000 Central Maine Power Co. 76,125
9,000 Central Vermont Public Service 108,562
4,000 Commonwealth Energy System 98,500
5,000 Eastern Utilities Association 95,625
2,000 Orange & Rockland Utilities, Inc. 67,875
5,000 Rochester Gas & Electric Corp. 117,812
3,000 Southern California Water Co. 65,625
3,000 TNP Enterprises, Inc. 70,313
2,500 United Illuminating Co. 87,344
----------------
964,781
----------------

TOTAL COMMON STOCKS (COST $13,663,021) $ 14,687,826
----------------
<PAGE>
<CAPTION>
FACE
VALUE VALUE
<S> <C> <C>
MONEY MARKET AND EQUIVALENTS-1.4%
$ 87,736 One Group Prime Money Market Fund $ 87,736
125,000 Merrill Lynch CP 9/3/97 124,883
----------------

TOTAL MONEY MARKET AND EQUIVALENTS
(COST $212,619) $ 212,619
----------------

TOTAL INVESTMENTS AT VALUE-99.7%
(COST $13,875,640) $ 14,900,445

OTHER ASSETS IN EXCESS OF LIABILITIES-0.3% 37,537
----------------

NET ASSETS - 100.0% $ 14,937,982
================
<FN>
(a) Non-income producing securities.
</FN>
</TABLE>
<PAGE>
<TABLE>
DEAN BALANCED FUND

PORTFOLIO OF INVESTMENTS

AUGUST 31, 1997
(Unaudited)
<CAPTION>
SHARES VALUE
<S> <C> <C>
COMMON STOCKS-54.8%
AIRLINES-1.3%
3,500 Comair Holdings, Inc. $ 94,062
----------------

AUTOMOTIVE-2.7%
3,000 Chrysler Corp. 105,375
2,000 Ford Motor Co. 86,000
----------------
191,375
----------------

CAPITAL GOODS-2.6%
4,000 Agco Corp. 130,000
1,100 Briggs & Stratton Corp. 53,144
----------------
183,144
----------------

CHEMICALS-2.5%
700 Dow Chemical Co. 61,950
1,550 Potash Corp. Saskatchewan 114,603
----------------
176,553
----------------

DATA STORAGE-1.7%
3,150 Seagate Technology, Inc.(a) 120,291
----------------

ELECTRONICS-2.5%
1,050 Arrow Electronics, Inc.(a) 64,509
2,050 Raytheon Co. 112,750
----------------
177,259
----------------

FINANCIAL SERVICES-3.1%
1,000 Ambac, Inc. 80,812
3,100 Green Tree Financial Corp. 136,206
----------------
217,018
----------------

GOVERNMENT SPONSORED ENTERPRISES-0.9%
1,500 Federal National Mortgage Association 66,000
----------------

HOUSING-1.5%
6,200 Clayton Homes, Inc. 104,238
----------------
<PAGE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
INSURANCE-0.8%
1,000 Aflac, Inc. $ 55,063
----------------

MEDIA-4.2%
4,000 Comcast Corp. 93,750
4,000 Cox Communications-Class A (a) 108,250
6,000 News Corporation LTD. (ADR) 90,750
----------------
292,750
----------------

METALS-3.0%
2,000 Alumax, Inc. (a) 82,875
1,500 Aluminum Co. of America 123,375
----------------
206,250
----------------

MISCELLANEOUS-1.9%
4,000 CCA Prison Realty Trust (a) 132,500
----------------

MORTGAGE SERVICES-3.6%
3,000 Countrywide Credit Industries, Inc. 101,063
2,600 PMI Group, Inc. 150,313
----------------
251,376
----------------

RETAIL-3.4%
4,200 Fingerhut Companies Inc. 85,050
1,000 Payless Shoesource, Inc. (a) 64,125
2,500 Toys R Us, Inc. (a) 86,406
----------------
235,581
----------------

REAL ESTATE-4.3%
1,500 Health Care Property Investors, Inc. 55,781
2,000 Merry Land & Investment Co., Inc. 43,500
2,000 Simon Debartolo Group, Inc. 63,375
3,000 Trizec Hahn Corp. 67,687
5,000 United Dominion Realty Trust, Inc. 70,625
----------------
300,968
----------------

SEMICONDUCTOR-1.9%
800 Intel Corp. 73,700
2,000 MEMC Electronic Materials, Inc. (a) 58,000
----------------
131,700
----------------
<PAGE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
TECHNOLOGY-3.1%
3,550 Cabletron Systems (a) $ 107,388
3,000 NCR Corp. (a) 106,312
----------------
213,700
----------------

TELECOMMUNICATIONS-3.2%
7,200 360 Communications Co. (a) 132,300
2,000 Sprint Corp. 94,000
----------------
226,300
----------------

TOBACCO-2.0%
3,150 Phillip Morris Cos., Inc. 137,419
----------------

UTILITIES-4.6%
4,000 Houston Industries, Inc. 81,000
4,000 Illinova Corporation 92,000
2,000 Nipsco Industries, Inc. 81,625
3,000 Southern Co. 63,188
----------------
317,813
----------------

TOTAL COMMON STOCKS (COST $3,619,773) $ 3,831,360
----------------

FIXED INCOME-32.3%
300,000 U.S. Treasury Note 6.375% 7/15/99 $ 302,344
200,000 U.S. Treasury Note 6.250% 2/15/03 199,938
200,000 U.S. Treasury Note 6.125% 9/30/00 200,063
300,000 U.S. Treasury Note 6.375% 3/31/01 301,969
250,000 U.S. Treasury Note 6.125% 8/31/98 250,781
300,000 U.S. Treasury Note 5.875% 11/15/99 299,156
250,000 U.S. Treasury Note 6.125% 12/31/01 249,219
200,000 U.S. Treasury Note 6.625% 3/31/02 203,062
250,000 Hilton Hotels 7.000% 7/15/04 246,946
----------------

Total Fixed Income (Cost $2,249,327) $ 2,253,478
----------------
<CAPTION>
VALUE VALUE
<S> <C> <C>
MONEY MARKET AND EQUIVALENTS-12.9%
145,053 One Group Prime Money Market Fund $ 145,053
250,000 4 Winds Commercial Paper 9/3/97 249,922
125,000 Korea Dev Bank Commercial Paper 9/12/97 124,780
100,000 Merrill Lynch Commercial Paper 9/3/97 99,969
----------------
273,000 Sumitomo Bank Cap Commercial Paper 9/9/97 272,661
----------------

TOTAL MONEY MARKET AND EQUIVALENTS
(COST $892,385) $ 892,385
----------------

TOTAL INVESTMENTS AT VALUE-100%
(COST $6,761,485) $ 6,977,223
----------------

LIABILITIES IN EXCESS OF OTHER ASSETS-0.0% (1,259)
----------------

NET ASSETS - 100.0% $ 6,975,964
================
<FN>
(a) Non-income producing securities.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DEAN FAMILY OF FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 1997 (UNAUDITED)

DEAN DEAN
LARGE CAP SMALL CAP DEAN
VALUE VALUE BALANCED
FUND FUND FUND
ASSETS
Investments in securities:
<S> <C> <C> <C>
At acquisition cost $ 6,448,244 $ 13,875,640 $ 6,761,485
=============== ============== ==============
At value (Note 2) $ 6,670,744 $ 14,900,445 $ 6,977,223
Dividends and interest receivable 12,712 20,034 43,659
Receivable for capital shares sold -- 158,256 16,280
Receivable for securities sold -- 23,188 --
Organization expenses, net (Note 2) 14,720 14,720 14,720
Other assets 20,807 22,564 20,466
--------------- -------------- --------------
TOTAL ASSETS 6,718,983 15,139,207 7,072,348
--------------- -------------- --------------

LIABILITIES
Payable for securities purchased -- 152,578 86,695
Payable to affiliates (Note 4) 6,400 22,590 6,400
Payable for capital shares redeemed -- 20,333 --
Other liabilities 2,080 5,724 3,289
--------------- -------------- --------------
TOTAL LIABILITIES 8,480 201,225 96,384
--------------- -------------- --------------

NET ASSETS $ 6,710,503 $ 14,937,982 $ 6,975,964
=============== ============== ==============
Net assets consist of:
Paid-in capital $ 6,465,544 $ 13,756,283 $ 6,693,084
Undistributed net investment income 4,099 19,997 16,803
Accumulated net realized gains from security transactions 18,360 136,897 50,339
Net unrealized appreciation on investments 222,500 1,024,805 215,738
--------------- -------------- --------------
Net assets $ 6,710,503 $ 14,937,982 $ 6,975,964
=============== ============== ==============

PRICING OF CLASS A SHARES

Net assets applicable to Class A shares $ 6,704,634 $ 14,800,643 $ 6,783,871
=============== ============== ==============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 626,863 1,313,173 636,436
=============== ============== ==============

Net asset value and redemption price per share (Note 2) $ 10.70 $ 11.27 $ 10.66
=============== ============== ==============
Maximum offering price per share (Note 2) $ 11.29 $ 11.89 $ 11.25
=============== ============== ==============

PRICING OF CLASS C SHARE

Net assets applicable to Class C shares $ 5,869 $ 137,339 $ 192,093
=============== ============== ==============

Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 549 12,194 18,031
=============== ============== ==============

Net asset value and offering price per share (Note 2) $ 10.69 $ 11.26 $ 10.65
=============== ============== ==============

<FN>

See accompanying notes to financial statements.
</FN>
</TABLE>

<PAGE>

<TABLE>
DEAN FAMILY OF FUNDS
STATEMENTS OF OPERATIONS
For the Five Months Ended August 31, 1997 (Unaudited)
<CAPTION>
DEAN DEAN
LARGE CAP SMALL CAP DEAN
VALUE VALUE BALANCED
FUND FUND FUND

<S> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 23,030 $ 48,956 $ 12,566
Interest 6,953 14,569 36,322
-------- ---------- --------
TOTAL INVESTMENT INCOME 29,983 63,525 48,888
-------- ---------- --------

EXPENSES
Investment advisory fees (Note 4) 12,048 23,500 12,331
Registration fees - Common 965 965 965
Registration fees - Class A 2,444 3,069 2,444
Registration fees - Class C 2,455 2,455 2,455
Accounting services fees (Note 4) 6,000 6,000 6,000
Custodian fees 3,775 5,430 4,359
Shareholder services and transfer
agent fees - Class A (Note 4) 2,400 2,400 2,400
Shareholder services and transfer
agent fees - Class C (Note 4) 1,200 1,200 1,200
Administration fees (Note 4) 2,000 2,190 2,000
Amortization of organization
expenses (Note 2) 1,051 1,051 1,051
Other expenses -- 2,768 --
-------- ---------- --------
TOTAL EXPENSES 34,338 51,028 35,205
Fees waived (12,048) (7,500) (12,331)
-------- ---------- --------
NET EXPENSES 22,290 43,528 22,874
-------- ---------- --------
7,693 19,997 26,014
-------- ---------- --------
NET INVESTMENT INCOME

REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from
security transactions 18,360 136,897 50,339
Net change in unrealized
appreciation/depreciation
on investments 222,500 1,024,805 215,738
-------- ---------- --------
NET REALIZED AND UNREALIZED
GAINS ON INVESTMENTS 240,860 1,161,702 266,077
-------- ---------- --------

NET INCREASE IN NET ASSETS
FROM OPERATIONS $248,553 $1,181,699 $292,091
======== ========== ========

See accompanying notes to financial statements.
</TABLE>
<PAGE>

DEAN FAMILY OF FUNDS

PART C. OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) (i) Financial Statements included in Part A:

Financial Highlights for the Period Ended August
31, 1997

(ii) Financial Statements included in Part B:

Statement of Assets and Liabilities,
March 17, 1997, Notes to Statement of Assets and
Liabilities, Report of Independent Auditors

Statement of Assets & Liabilities, August 31,
1997 (unaudited)

Statement of Operations for the Period Ended
August 31, 1997 (unaudited)

Statement of Changes in Net Assets for the Period
Ended August 31, 1997 (unaudited)

Financial Highlights for the Period Ended August
31, 1997 (unaudited)

Portfolio of Investments, August 31, 1997
(unaudited)

(b) Exhibits

(1) Agreement and Declaration of Trust*

(2) Bylaws*

(3) Inapplicable

(4) Inapplicable

(5)(i) Advisory Agreement with C.H. Dean &
Associates, Inc. for the Large Cap Fund, the
Small Cap Fund and the Balanced Fund*

(ii) Form of Advisory Agreement with C.H. Dean &
Associates, Inc. for the International Value
Fund*

(iii) Form of Sub-Advisory Agreement with Newton
Capital Management Ltd.*

- 41 -

<PAGE>

(6) Underwriting Agreement with 2480 Securities
LLC*

(7) Directors Deferred Compensation Plan*

(8)(i) Custody Agreement with Bank One Trust
Company*

(ii) Form of Custody Agreement with The Northern
Trust Company*

(9)(i) Administration Agreement with Countrywide
Fund Services, Inc.*

(ii) Accounting Services Agreement with
Countrywide Fund Services, Inc.*

(iii) Transfer, Dividend Disbursing, Shareholder
Service and Plan Agency Agreement with
Countrywide Fund Services, Inc.*

(10) Opinion and Consent of Counsel*

(11) Consent of Independent Auditors

(12) Inapplicable

(13) Agreement Relating to Initial Capital*

(14) Inapplicable

(15)(i) Plan of Distribution Pursuant to Rule 12b-1
for Class A Shares*

(ii) Plan of Distribution Pursuant to Rule 12b-1
for Class C Shares*

(16) Inapplicable

(17)(i) Financial Data Schedule for Large Cap Value
Fund*

(ii) Financial Data Schedule for Small Cap Value
Fund*

(iii) Financial Data Schedule for Balanced Fund*

(18) Rule 18f-3 Multi-Class Plan*
- --------------------------------------

* Incorporated by reference to the Trust's Registration
Statement on Form N-1A.

- 42 -

<PAGE>

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

After commencement of the public offering of the Registrant's
shares, the Registrant expects that no person will be directly
or indirectly controlled by or under common control with the
Registrant.

ITEM 26. NUMBER OF HOLDERS OF SECURITIES.

As of August 31, 1997, there are 335 holders of the shares of
beneficial interest of the Registrant.

ITEM 27. INDEMNIFICATION

Article VI of the Registrant's Agreement and Declaration of
Trust provides for indemnification of officers and Trustees as
follows:

"SECTION 6.4 INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC.
Subject to and except as otherwise provided in the
Securities Act of 1933, as amended, and the 1940 Act,
the Trust shall indemnify each of its Trustees and
officers, including persons who serve at the Trust's
request as directors, officers or trustees of another
organization in which the Trust has any interest as a
shareholder, creditor or otherwise (hereinafter referred
to as a "Covered Person") against all liabilities,
including but not limited to amounts paid in
satisfaction of judgments, in compromise or as fines and
penalties, and expenses, including reasonable
accountants' and counsel fees, incurred by any 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, and except that no Covered Person shall be
indemnified against any liability to the Trust or its
Shareholders to which such Covered Person would
otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's
office.

- 43 -

<PAGE>

SECTION 6.5 ADVANCES OF EXPENSES. The Trust shall
advance attorneys' fees or other expenses incurred by a
Covered Person in defending a proceeding to the full
extent permitted by the Securities Act of 1933, as
amended, the 1940 Act, and Ohio Revised Code Chapter
1707, as amended. In the event any of these laws
conflict with Ohio Revised Code Section 1701.13(E), as
amended, these laws, and not Ohio Revised Code Section
1701.13(E), shall govern.

SECTION 6.6 INDEMNIFICATION NOT EXCLUSIVE, ETC. The
right of indemnification provided by this Article VI
shall not be exclusive of or affect any other rights to
which any such Covered Person may be entitled. As used
in this Article VI, "Covered Person" shall include such
person's heirs, executors and administrators. Nothing
contained in this article shall affect any rights to
indemnification to which personnel of the Trust, other
than Trustees and officers, and other persons may be
entitled by contract or otherwise under law, nor the
power of the Trust to purchase and maintain liability
insurance on behalf of any such person.

Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to Trustees, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of
expenses incurred or paid by a Trustee, officer or controlling
person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such Trustee,
officer or controlling person in connection with the
securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.

The Registrant maintains a standard mutual fund and investment
advisory professional and directors and officers liability
policy. The policy provides

- 44 -

<PAGE>

coverage to the Registrant, its Trustees and officers,
C.H. Dean & Associates, Inc. ("Dean Investment
Associates") and 2480 Securities LLC. Coverage under
the policy will include losses by reason of any act,
error, omission, misstatement, misleading statement,
neglect or breach of duty.

The Advisory Agreements with Dean Investment Associates each
provide that Dean Investment Associates shall not be liable
for any action taken, omitted or suffered to be taken by it in
its reasonable judgment, in good faith and believed by it to
be authorized or within the discretion or rights or powers
conferred upon it by the applicable Advisory Agreement, or in
accordance with (or in the absence of) specific directions or
instructions from the Trust; provided, however, that such acts
or omissions shall not have resulted from Dean Investment
Associates' willful misfeasance, bad faith or gross
negligence, a violation of the standard of care established by
and applicable to Dean Investment Associates in its actions
under the appropriate Advisory Agreement or breach of its duty
or of its obligations under the appropriate Advisory
Agreement.

The Sub-Advisory Agreement with the Sub-Adviser provides that
the Sub-Adviser shall give the International Value Fund the
benefit of its best judgment and effort in rendering services
under the Sub-Advisory Agreement, but that neither the
Sub-Adviser nor any of its officers, directors, employees,
agents or controlling persons shall be liable for any act or
omission or for any loss sustained by the International Value
Fund in connection with the matters to which the Sub-Advisory
Agreement relates, except a loss resulting from the
Sub-Adviser's willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of
its reckless disregard of its obligations and duties under the
Sub-Advisory Agreement; provided, however, that the foregoing
shall not constitute a waiver of any rights which the Trust
may have which may not be waived under applicable law.

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT
ADVISER

(a) Dean Investment Associates is a registered
investment adviser, providing investment advisory
services to the Registrant. Dean Investment

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<PAGE>

Associates has been engaged since 1973 in the
business of providing investment advisory services to
individual, institutional and corporate clients.

The Sub-Adviser is a United Kingdom investment
advisory firm registered with the Securities and
Exchange Commission. The Sub-Adviser is affiliated
with Newton Investment Management Ltd., an English
investment advisory firm which has been managing
assets for institutional investors, mutual funds and
individuals since 1977.

(b) The directors and officers of Dean Investment
Associates and any other business, profession,
vocation or employment of a substantial nature
engaged in at any time during the past two years:

(i) Chauncey H. Dean - Chairman of the Board,
Chief Executive Officer and controlling
shareholder of Dean Investment Associates.

A Trustee of the Trust.

(ii) Dennis D. Dean - Treasurer of Dean
Investment Associates. He formerly was
President, Chief Operating Officer and
Secretary of Dean Investment Associates.

(iii) Zada L. Dean - Secretary of Dean
Investment Associates.

(iv) Robert D. Dean - Director of Research of
Dean Investment Associates. He formerly
was Professor of Economics of the
University of Memphis.

A Trustee of the Trust.

(v) Frank H. Scott - Senior Vice President of
Dean Investment Associates.

President and a Trustee of the Trust.

(vi) Richard M. Luthman - Senior Vice President
of Dean Investment Associates.

The directors and officers of Newton Capital
Management Ltd. and any other business,
profession, vocation or employment of a
substantial nature engaged in at any time during
the past two years:

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<PAGE>

(i) Guy Bowles - Chairman of the Sub-Adviser.

(ii) Colin R. Harris - Director and Chief
Operating Officer of the Sub-Adviser.

(iii) Shreekant P. Panday - Director of the
Sub-Adviser.

(iv) Andrew J.W. Powell - Director of the
Sub-Adviser.

ITEM 29. PRINCIPAL UNDERWRITERS

(a) Inapplicable

(b) POSITION WITH POSITION WITH
NAME UNDERWRITER REGISTRANT

Frank H. Scott President President and a
Trustee

Edward J. Blake Vice President None

Stephen M. Miller Treasurer None

The address of the above-named persons is 2480 Kettering Tower, Dayton,
Ohio 45423.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

Accounts, books and other documents required to be maintained
by Section 31(a) of the Investment Company Act of 1940 and the
Rules promulgated thereunder will be maintained by the
Registrant at its offices located at 2480 Kettering Tower,
Dayton, Ohio 45423 as well as at the offices of the
Registrant's transfer agent located at 312 Walnut Street, 21st
Floor, Cincinnati, Ohio 45202.

ITEM 31. MANAGEMENT SERVICES NOT DISCUSSED IN PARTS A OR B

Inapplicable

ITEM 32. UNDERTAKINGS

(a) Inapplicable

<PAGE>

(b) The Registrant undertakes to file a post-effective
amendment, using financial statements of the
International Value Fund which need not be certified,
within four to six months from the effective date
of this Registration Statement.

(c) The Registrant undertakes to furnish each person to
whom a Prospectus is delivered with a copy of the
Registrant's latest annual report to shareholders,
upon request and without charge.

(d) The Registrant undertakes to call a meeting of
shareholders, if requested to do so by holders of
at least 10% of the Fund's outstanding shares, for
the purpose of voting upon the question of removal
of a trustee or trustees and to assist in
communications with other shareholders as required
by Section 16(c) of the Investment Company Act of
1940.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Registration Statement to be signed below on its behalf by the undersigned,
thereunto duly authorized, in the City of Dayton and State of Ohio, on the 2nd
day of October, 1997.

DEAN FAMILY OF FUNDS

By:/S/ FRANK H. SCOTT
Frank H. Scott
President

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

SIGNATURE TITLE DATE

/S/ FRANK H. SCOTT President October 2, 1997
Frank H. Scott and Trustee

/S/ MARK J. SEGER Treasurer October 2, 1997
- ----------------------------
Mark J. Seger

/S/ CHAUNCEY H. DEAN Trustee October 2, 1997
- -----------------------------
Chauncey H. Dean

/S/ ROBERT D. DEAN Trustee October 2, 1997
- -----------------------------
Robert D. Dean

/S/ VICTOR S. CURTIS Trustee October 2, 1997
- -----------------------------
Victor S. Curtis

<PAGE>

Trustee
Frank J. Perez* By:/S/TINA D. HOSKING
Tina D. Hosking
Attorney-in-Fact*
October 2, 1997
Trustee
David H. Ponitz*

Trustee
Gilbert P. Williamson*

<PAGE>

INDEX TO EXHIBITS

(1) Agreement and Declaration of Trust*

(2) Bylaws*

(3) Inapplicable

(4) Inapplicable

(5)(i) Advisory Agreement for the Large Cap Value Fund, the
Small Cap Value Fund and the Balanced Fund*

(ii) Form of Advisory Agreement for the International Value
Fund*

(iii) Form of Sub-Advisory Agreement for the International
Value Fund*

(6) Underwriting Agreement*

(7) Directors Deferred Compensation Plan*

(8)(i) Custody Agreement*

(9)(i) Administration Agreement*

(ii) Accounting Services Agreement*

(iii) Transfer, Dividend Disbursing, Shareholder
Service and Plan Agency Agreement*

(10) Opinion and Consent of Counsel*

(11) Consent of Independent Auditors

(12) Inapplicable

(13) Agreement Relating to Initial Capital*

(14) Inapplicable

(15)(i) Plan of Distribution Pursuant to Rule 12b-1 for Class A
Shares*

(ii) Plan of Distribution Pursuant to Rule 12b-1 for Class C
Shares*

(16) Inapplicable

<PAGE>

(17)(i) Financial Data Schedule for Large Cap Value Fund*

(ii) Financial Data Schedule for Small Cap Value Fund*

(iii) Financial Data Schedule for Balanced Fund*

(18) Rule 18f-3 Multi-Class Plan*

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

* Incorporated by reference to the Trust's Registration
Statement on Form N-1A.

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CONSENT OF INDEPENDENT AUDITORS

We consent to the references to our firm under the captions "Auditors"
and "Statement of Assets and Liabilities" in the Statement of Additional
Information and to the incorporation by reference, in Post-Effective Amendment
No. 4 to the Registration Statement (Form N-1A No. 333-18653) and related
Prospectus of Dean Family of Funds, of those references and of our report dated
March 18, 1997 on the Dean Family of Funds (comprising respectively, the Large
Cap Value Fund, Small Cap Value Fund, and Balanced Fund).

/s/Ernst & Young LLP
Ernst & Young, LLP

Cincinnati, Ohio
September 30, 1997

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