MONUMENT SERIES FUND INC, 485APOS, 1998-06-12

MONUMENT SERIES FUND INC
485APOS, 1998-06-12

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As filed with the Securities and Exchange Commission on June 12, 1998.

Registration Nos.: 333-26223
811-8199

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

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No. [ ]
---
Post-Effective Amendment No. 1 [X]
---

and/or

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940

Amendment No. 3 [X]

MONUMENT SERIES FUND, INC.
(Exact Name of Registrant As Specified in Charter)

8377 Cherry Lane, Laurel, Maryland 20707 - 4831
(Address of Principal Executive Offices)

Registrant's Telephone Number, including Area Code: 301-604-1626

DAVID A. KUGLER
President
The Monument Funds Group, Inc.
8377 Cherry Lane
Laurel, Maryland 20707 - 4831
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: As soon as practicable after
this Registration Statement becomes effective. It is proposed that this
filing will become effective: (check appropriate box)

___ on __________ pursuant to paragraph (a)(1) of Rule 485

___ 60 days after filing pursuant to paragraph (a)(1) of Rule 485

_X_ 75 days after filing pursuant to paragraph (a)(2) or Rule 485

___ on __________ days after filing pursuant to paragraph (a)(2) of Rule 485

___ immediately upon filing pursuant to paragraph (b) of Rule 485

___ on __________ pursuant to paragraph (b) of Rule 485

<PAGE>

Cross-reference Sheet Required by
Rule 495 under the Securities Act of 1933

PART A
- ------
Form N-1A Item No. Caption in Prospectus
- ------------------ ---------------------
1. Cover Page Cover Page

2. Synopsis Table of Fees and Expenses; Summary

3. Condensed Financial Information Performance

4. General Description of Registrant General Information; The Funds;
Special Risk Considerations

5. Management of the Fund Management; General Information

5A. Management's Discussion of Fund Not Applicable
Performance

6. Capital Stock and Other Securities General Information; Dividends
and Distributions; Tax
Considerations; Buying, Redeeming
and Exchanging Shares; Cover Page

7. Purchase of Securities Being Offered Buying, Redeeming, and Exchanging
Shares; Services to Help You Manage
Your Account

8. Redemption or Repurchase Buying, Redeeming, and Exchanging
Shares

9. Pending Legal Proceedings Not Applicable

Part B
- ------ Caption in
Form N-1A Item No. Statement of Additional Information
- ------------------ -----------------------------------
10. Cover Page Cover Page

11. Table of Contents Table of Contents

12. General Information and History Not applicable

13. Investment Objectives and Policies Investment Policies; Potential
Risks; Investment Restrictions

i
<PAGE>

Part B
- ------ Caption in
Form N-1A Item No. Statement of Additional Information
- ------------------ -----------------------------------

14. Management of the Fund Directors and Officers

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

16. Investment Advisory and Other Directors and Officers; Investment
Services Advisory and Other Services; The
Company's Principal Underwriter

17. Brokerage Allocation and Other Portfolio Transactions and
Practices Brokerage

18. Capital Stock and Other Securities Further Description of the
Company's Shares

19. Purchase, Redemption and Pricing Buying, Redeeming, and Exchanging
of Securities Being Offered Shares; Valuation of Fund Shares

20. Tax Status Additional Information on
Distributions and Taxes

21. Underwriters The Company's Principal Underwriter

22. Calculation of Performance Data Performance Information

23. Financial Statements Financial Statements

Part C
- ------
Information required to be set forth in Part C is set forth under the
appropriate item, so numbered, in Part C of the Registration Statement.

<PAGE>

MONUMENT SERIES FUND, INC.

MONUMENT WASHINGTON REGIONAL GROWTH FUND
MONUMENT WASHINGTON REGIONAL AGGRESSIVE GROWTH FUND
MONUMENT CONVERTIBLE SECURITIES FUND
MONUMENT INTERNET FUND

PROSPECTUS DATED AUGUST [ ], 1998

This Prospectus describes the Monument Washington Regional Growth Fund, the
Monument Washington Regional Aggressive Growth Fund, the Monument Convertible
Securities Fund and the Monument Internet Fund (each, a "Fund"; collectively,
the "Funds"). Each Fund represents a separate series of shares of common stock
of the Monument Series Fund, Inc. (the "Company"), a newly organized mutual
fund.

MONUMENT WASHINGTON REGIONAL GROWTH FUND ("GROWTH FUND") seeks to maximize
long-term appreciation of capital, by investing primarily in a non-diversified
portfolio of equity securities of Washington regional area companies with market
capitalizations of $2 billion or more at the time of purchase.

MONUMENT WASHINGTON REGIONAL AGGRESSIVE GROWTH FUND ("AGGRESSIVE GROWTH FUND")
seeks to maximize long-term appreciation of capital, by investing primarily in a
non-diversified portfolio of equity securities of Washington regional area
companies with market capitalizations of less than $2 billion at the time of
purchase.

As used herein, the phrase "Washington regional area companies" includes
companies that are organized or headquartered in, have a major place of business
in, and/or derive 50% of their revenues or operating earnings from, Washington,
D.C., Maryland or Virginia.

MONUMENT CONVERTIBLE SECURITIES FUND ("CONVERTIBLE FUND") seeks to maximize
total return, by investing primarily in a diversified portfolio of convertible
securities, which combine fixed income characteristics with potential for
capital appreciation.

MONUMENT INTERNET FUND ("INTERNET FUND") seeks to maximize long term
appreciation of capital, by investing primarily in a non-diversified portfolio
of equity securities of "Internet companies."

As used herein, a company is considered an "Internet company" if at least 50% of
its assets, gross income or net profits are committed to, or derived from, the
research, design, development, manufacturing, or distribution of products,
processes or services for use with Internet or Intranet related businesses.

<PAGE>

This Prospectus sets forth concisely the information about the Company that you
should know before investing. Please read it and retain it for future
reference. For more information about the Funds, you may wish to refer to the
Company's Statement of Additional Information ("SAI"), dated August [ ] , 1998,
which is on file with the Securities and Exchange Commission ("SEC") and
incorporated herein by reference. You can obtain a free copy of the SAI upon
request by writing to "Monument Series Fund," c/o National Financial Data
Services, Inc. ("NFDS"), at P.O. Box 419332, Kansas City, MO 64141-6332 or by
calling 1-888-420-9950. You may also direct inquiries regarding the Funds to
the same address or telephone number.

The SEC maintains a web cite (http://www.sec.gov) that contains the SAI,
material incorporated by reference, and other information regarding registrants
that file electronically with the SEC.

NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
THE SECURITIES DESCRIBED IN THIS PROSPECTUS, OR PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

THE COMPANY'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND THE FUNDS' SHARES ARE NOT FEDERALLY INSURED OR
GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. THERE IS NO GUARANTEE THAT THE
FUNDS WILL ACHIEVE THEIR INVESTMENT OBJECTIVES. SHARES OF THE FUNDS INVOLVE
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.

[COVER PAGE]

<PAGE>

TABLE OF CONTENTS

DESCRIPTION PAGE
- ----------- ----

Table of Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . 3
Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Investment Objectives and Programs. . . . . . . . . . . . . . . . . . 6
Investment Policies and Restrictions. . . . . . . . . . . . . . . . . 8
Special Risk Considerations. . . . . . . . . . . . . . . . . . . . . . . . 10
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Dividends and Distributions. . . . . . . . . . . . . . . . . . . . . . . . 14
Buying, Redeeming, and Exchanging Shares . . . . . . . . . . . . . . . . . 15
Buying Fund Shares. . . . . . . . . . . . . . . . . . . . . . . . . . 15
Redeeming and Exchanging Fund Shares. . . . . . . . . . . . . . . . . 16
Waiver of Sales Charges . . . . . . . . . . . . . . . . . . . . . . . 18
Rule 12b-1 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Proper Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Services to Help You Manage Your Account . . . . . . . . . . . . . . . . . 20
General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

<PAGE>

TABLE OF FEES AND EXPENSES

The following table is designed to help you understand the various fees and
expenses that you may bear, both directly and indirectly, by investing in the
Funds.

<TABLE>
<CAPTION>
AGGRESSIVE
SHAREHOLDER TRANSACTION GROWTH GROWTH CONVERTIBLE INTERNET
EXPENSES FUND FUND FUND FUND
- -------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
Maximum Sales Charge (as a 4.75%(1) 4.75%(1) 3.75%(1) [4.75%](1)
percentage of offering
price)(1)

Maximum sales charge imposed
on reinvested income dividends None None None None
and distributions............
Redemption Fees.............. None None None None
Exchange Fee................. None None None None

ANNUAL FUND OPERATING EXPENSES

(as a percentage of average net assets)

Advisory Fee................. 1.00% 1.00% [ ] [1.00%]
12b-1 Fees(2)................ None(2) None(2) None(2) None(2)
Other Expenses(3)............ 0.40%(3) 0.40%(3) [ ](3) [0.40%](3)
-------- -------- -------- ----------
Total Fund Operating
Expenses(3).................. 1.40%(3) 1.40%(3) [ ](3) [1.40%](3)
</TABLE>

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

(1) Reduced rates apply to purchase payments over $50,000. See "Buying
Fund Shares-Public Offering Price" and "Buying Fund Shares-Rights of
Accumulation."

(2) Each Fund has approved a Plan of Distribution Pursuant to Rule 12b-1
providing for the payment of a maximum distribution fee, equal to 0.50% of its
average daily net assets, to Monument Distributors, Inc., the principal
underwriter for each Fund. See "Rule 12b-1 Plan." Distributors has agreed to
waive the distribution fee for the next 12 months. Long-term investors may pay
more than the economic equivalent of the maximum front end sales charges
permitted by the National Association of Securities Dealers.

(3) Other expenses for each Fund are based on estimated amounts for the
current fiscal year.

(NEED TO INSERT EXPENSE REIMBURSEMENT LANGUAGE ONCE CLARIFIED)

EXAMPLES. You would pay the following expenses on a $1,000 investment in shares
of a Fund, assuming (a) a 5% annual return and (b) redemption at the end of each
time period:

<PAGE>

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Growth Fund $ 62 $ 90
Aggressive Growth Fund $ 62 $ 90
Convertible Fund $ [ ] $ [ ]
Internet Fund $ 62 $ 90
</TABLE>

The above examples assume payment of the maximum initial sales charge of 4.75%
(3.50% for Convertible Fund at the time of purchase. The sales charge varies
depending upon the amount of Fund shares that an investor purchases.
Accordingly, your actual expenses may vary.

THE ABOVE EXAMPLES ARE NOT REPRESENTATIVE OF A PARTICULAR FUND'S ACTUAL OR
FUTURE EXPENSES OR PERFORMANCE, WHICH MAY BE GREATER OR LESS THAN THOSE SHOWN.
THE EXAMPLES ASSUME REINVESTMENT OF ALL INCOME DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS AND A CONSTANT LEVEL OF TOTAL FUND OPERATING EXPENSES FOR EACH
YEAR.

SUMMARY

THE COMPANY. The Company is registered with the SEC as an open-end management
investment company. The Company currently offers shares of four Funds, each
with distinct investment objectives and investment strategies. See "The
Funds."

THE ADVISOR AND SUB-ADVISOR. Monument Advisors, Ltd. ("Monument Advisors" or
"Advisors") serves as each Fund's investment advisor and provides overall
management of the Company's business affairs. Breewood Asset Management, Inc.,
an affiliate of Oxford Capital Management, Inc. (the "Sub-Advisor") is employed
by Advisors to provide day to day investment management of the Convertible Fund
and is paid by Advisors from its advisory fees. See "Management."

THE DISTRIBUTOR. Monument Distributors, Inc. ("Monument Distributors" or
"Distributors") an affiliate of Monument Advisors, serves as each Fund's
principal underwriter. See "Buying, Redeeming, and Exchanging Shares."

SHARE TRANSACTIONS. You can purchase and redeem Fund shares, or exchange
shares of one Fund for those of another, by contacting any broker authorized by
the distributor to sell shares of the Company or by contacting NFDS, the agent
of the Company's transfer and dividend disbursing agent, State Street Bank and
Trust Company ("State Street"), at the address set out on the cover page of this
Prospectus or by telephoning 1-888-420-9950. A sales charge may apply to your
purchase. See "Buying, Redeeming, and Exchanging Shares."

<PAGE>

Initial investments in a Fund must be at least $2500 and additional investments
must be at least $250. Lower minimums apply to initial investments made through
tax-qualified retirement plans, and subsequent investments made through accounts
established with an Automatic Investment Plan. See "Buying Fund Shares-Minimum
Investments."

SUITABILITY FOR INVESTORS. Before investing in a Fund, you should consider
whether the Fund suits your financial objectives. You may wish to consider such
factors as the amount of your purchases, the length of time you expect to hold
Fund shares, and the risk that the value of any mutual fund may decline. With
respect to the Growth Fund, Aggressive Growth Fund and Internet Fund, you may
also want to consider the risks of investing in a non-diversified mutual fund
that is geographically focused (Growth Fund and Aggressive Growth Fund), or
single industry focused (Internet Fund), with a newly organized investment
adviser, and whether you desire dividend income. You should not rely on the
Funds for short-term financial needs or for short-term investment in the stock
market. The Funds are intended to be part of a well-balanced, comprehensive
investment program. See "Special Risk Considerations."

DISTRIBUTIONS. The Growth Fund, Aggressive Growth Fund and Internet Fund
currently intend to declare and pay dividends from net investment income, if
any, on an annual basis. The Convertible Fund currently intends to declare and
pay dividends from net investment income, if any, on a quarterly basis. Each
Fund currently intends to make distributions of realized capital gains, if any,
on an annual basis. You may reinvest income dividends and capital gain
distributions that you receive in additional Fund shares at current net asset
value (i.e., without payment of a sales charge). See "Dividends and
Distributions" and "Tax Considerations."

PERFORMANCE

Each Fund may, from time to time, include quotations of its total return in
advertisements, sales literature, and shareholder reports. The TOTAL RETURN of
a Fund refers to the percentage change in value of a hypothetical investment in
the Fund, including the deduction of a proportional share of Fund expenses, and
assuming the reinvestment of all income dividends and capital gain distributions
during the periods shown.

CUMULATIVE TOTAL RETURN reflects the total change in value of an investment in a
Fund over a specified period, including, for example, periods of one, five, and
ten years, or the period since the Fund's inception through a stated ending
date.

AVERAGE ANNUAL TOTAL RETURN is the constant rate of return that would produce
the cumulative total return over a specified period, if compounded annually.
BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN A FUND'S RETURN,
YOU SHOULD RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR
RESULTS. Average annual total return figures are calculated according to a
formula prescribed by the SEC.

<PAGE>

To illustrate the components of overall performance, a Fund may separate its
cumulative and average annual total return information into income results and
capital gain or loss. To illustrate the effect of various sales charge
assumptions, a Fund may present its performance information without including
the effect of one or more sales charges, which tends to elevate a Fund's total
return figures as presented. Additionally, Monument Advisors may, from time to
time, assume and reimburse certain expenses of a Fund, thereby increasing that
Fund's total return.

Each Fund may compare its performance in advertisements, sales literature, and
shareholder reports to widely recognized indices and to other mutual funds. See
"Performance Information" in the SAI for more details.

The performance of each Fund will vary from time to time, depending on variables
such as economic and market conditions, and, to a lesser degree, Fund operating
expenses. Accordingly, past results are not necessarily indicative of future
results. Your investment in a Fund is not insured or guaranteed. You should
consider these factors before making an investment in a Fund.

THE FUNDS

This section describes the investment objectives, and investment policies and
restrictions, of each Fund. Each Fund's investment objective is a fundamental
policy, which means that it can not be changed without the approval of a
majority of that Fund's outstanding shares (within the meaning of the Investment
Company Act of 1940 ("1940 Act")). Each Fund's investment policies and
restrictions are not fundamental, which means that, unless otherwise required by
law, they can be changed by the Company's Board of Directors ("Board of
Directors" or "Directors") without shareholder approval. As with any mutual
fund, there can be no assurance that a Fund will meet its investment objective.

INVESTMENT OBJECTIVES AND PROGRAMS

MONUMENT WASHINGTON REGIONAL GROWTH FUND. The Fund's investment objective is
to maximize long-term appreciation of capital. The Fund seeks to achieve its
objective by investing, under normal circumstances, primarily (i.e., at least
65% of its total assets) in equity securities of Washington regional area
companies with market capitalizations of $2 billion or more at the time of
purchase. Equity securities include common stocks, preferred stocks, warrants,
and securities convertible into or exchangeable for common stocks ("convertible
securities").

When selecting investments for the Fund, Advisors will seek to identify
Washington regional area companies that it believes possess characteristics that
will lead to long-term appreciation of capital. These characteristics may
include, without limitation, the following: a history of consistent earnings
growth, leading or dominant market position in a growing industry, products or
services that are in high or growing demand, and experienced and successful
management.

<PAGE>

Although the stocks in which the Fund may invest may sometimes pay dividends,
Advisors does not expect dividend income to be a primary criterion for
selection.

Although the Fund's emphasis will be on well-established companies, the Fund
also may invest in smaller companies of the type in which the Aggressive Growth
Fund may invest, although it will not invest in an issuer that has less than
three years continuous operation, including the operations of any predecessor
companies, if it would cause more than 5% of the Fund's total assets to be
invested in such issues. The securities of these smaller companies generally
will be listed on national securities exchanges or traded in the
over-the-counter securities market ("OTC market").

For temporary defensive purposes, Advisors may invest up to 100% of the Fund's
assets in high quality, short-term debt instruments, repurchase agreements, cash
and cash equivalents. In addition, the Fund may, from time to time, invest a
portion of its assets in cash or debt securities when Advisors deems such
positions advisable in light of economic or market conditions. See "Investment
Policies and Restrictions" for further information on the types of investments
that the Fund may make.

WASHINGTON REGIONAL AGGRESSIVE GROWTH FUND. The Fund's investment objective is
to maximize long-term appreciation of capital. The Fund seeks to achieve its
objective by investing, under normal circumstances, primarily (i.e., at least
65% of its total assets) in equity securities of Washington regional area
companies with market capitalizations of less than $2 billion at the time of
purchase.

When selecting investments for the Fund, Advisors will seek to identify
Washington regional area companies that it believes are likely to benefit from
new or innovative products, services or processes that are likely to enhance the
companies' prospects for future growth in earnings. Companies with these
characteristics are likely to be relatively unseasoned companies in new and
emerging industries. These companies generally will have no established history
of paying dividends, and dividend income, if any, is likely to be incidental.

Although the Aggressive Growth Fund's emphasis will be on companies with smaller
market capitalizations than the companies in which Growth Fund will primarily
invest, the Fund intends to seek out growth companies suitable for the Fund
without regard to market capitalization. Accordingly, the Fund may invest in
well-established companies as well. The securities of these smaller companies
may be listed on national securities exchanges or traded in the OTC market.

<PAGE>

Because of its more aggressive investment program, you can expect this Fund to
be significantly more volatile than the Growth Fund.

MONUMENT CONVERTIBLE SECURITIES FUND. The Fund's investment objective is to
maximize total return. The Fund seeks to achieve its objective by investing,
under normal circumstances, primarily (i.e., at least 65% of its total assets)
in convertible securities. Securities received upon conversion of a convertible
security may be retained by the Fund to permit orderly disposition or to
establish long-term holdings for federal income tax purposes. In the event that
less than 65% of total assets are invested in convertible securities due to the
exercise of conversion rights, the Fund will invest available funds in
additional convertible securities as soon as practicable.

The Sub-Advisor selects convertible securities on the basis of the following
criteria for the underlying common stock:

- above-average profitability or improving returns on capital,
- strong industry position and/or leadership in its key markets, and
- prospects for strong and consistent earnings growth over the long
term.

In addition, the convertible security's valuation must have an attractive
risk-adjusted expected return over the long term; and the convertible security
must have good liquidity.

The Fund may also invest in non-convertible securities, including common stock
and preferred stock, corporate debt securities, U.S. Government Securities and
money market securities.

For temporary defensive purposes, the Sub-Advisor may invest up to 100% of the
Fund's assets in high quality, short-term debt instruments, repurchase
agreements, cash and cash equivalents.

MONUMENT INTERNET FUND

The Fund's investment objective is to maximize long-term appreciation of
capital. The Fund seeks to achieve its objective by investing, under normal
circumstances, primarily (i.e., at least 65% of its total assets) in equity
securities of companies principally engaged in Internet or Internet related
businesses. A company is considered principally engaged in an Internet or
Internet related business if at least 50% of its assets, gross income or net
profits are committed to, or derived from, the research, design, development,
manufacturing, or distribution of products, processes or services for use with
Internet or Intranet related businesses.

The Internet is a global matrix of computers and computer networks
interconnected through a high speed communication infrastructure to communicate
with each other and permit users to share information and transfer data quickly
and easily. Currently, the most popular application in the Internet is the
World Wide Web, "WWW", which is a graphic-user-interface which allows
communication and information sharing on the Internet. Other applications
currently include e-mail, intranet, extranet and electronic commerce. Some
particularly active areas include infrastructure deployment, internet access,
content provision, data security and electronic

<PAGE>

commerce. An Intranet is the application of Internet tools and concepts to a
company's internal network.

When selecting investments for the Fund, Advisors will seek to identify Internet
companies that it believes are likely to benefit from new or innovative
products, services or processes that are likely to enhance the companies'
prospects for future growth in earnings. Companies with these characteristics
are likely to be relatively unseasoned companies. These companies generally
will have no established history of paying dividends, and dividend income, if
any, is likely to be incidental.

INVESTMENT POLICIES AND RESTRICTIONS

In pursuit of its investment objective, each Fund may invest in a variety of
securities and employ a variety of investment practices that comprise the Fund's
investment policies. The section below describes some of the types of
securities and investment practices that Monument Advisors or the Sub-Advisor
(in the case of the Convertible Fund) may use in its day-to-day management of
each Fund's assets. The section below also describes certain restrictions
applicable to each Fund's investments. See "Investment Policies" and
"Investment Restrictions" in the SAI for more information.

U.S. GOVERNMENT SECURITIES. Each Fund may invest in U.S. Government securities,
including, among other securities, U.S. Treasury obligations such as Treasury
Bills (maturities of one year or less) or Treasury Notes (maturities of less
than three years). The market value of U.S. Government securities will
fluctuate with changes in interest rate levels. Thus, if interest rates increase
from the time the security was purchased, the market value of the security will
decrease. Conversely, if interest rates decrease, the market value of the
security will increase.

OPTIONS. Each Fund may write (sell) covered call options, including those that
trade in the OTC market, to increase its return (through the receipt of
premiums) or to provide a partial hedge against declines in the market value of
its portfolio securities. No Fund will engage in such transactions for
speculative purposes. A call option gives the purchaser the right, and
obligates the writer to sell, in return for a premium paid, a particular
security at a predetermined or "exercise" price during the period of the option.
A call option is "covered" if the writer owns the underlying security that is
the subject of the call option. Each Fund may write covered call options on
securities comprising no more than 25% of the value of each Fund's net assets at
the time of any writing. The writing of call options is subject to risks,
including the risk that the Fund will not be able to participate in any
appreciation in the value of the securities above the exercise price. See
"Investment Policies" in the SAI for more information.

<PAGE>

Each Fund may also purchase and write (sell) listed call options provided that
the value of the call options outstanding at any time will not exceed 5% of the
Fund's net assets. The Convertible Fund may also buy put options on the common
stock it owns or may acquire through conversion or exchange. In addition, the
Convertible Fund may enter into options on stock indices.

Each Fund may buy put options on common stock that it owns or may acquire
through the conversion or exchange of other securities to protect against a
decline in the market value of the underlying security or to protect the
unrealized gain in an appreciated security in its portfolio without actually
selling the security. A put option gives the holder the right to sell the
underlying security at the option exercise price at any time during the option
period. The Fund may pay for a put either separately or by paying a higher
price for securities which are purchased subject to a put, thus increasing the
cost of the securities and reducing the yield otherwise available from the same
securities.

Each Fund may buy call and put options on stock indices in order to hedge
against the risk of market or industry-wide stock price fluctuations. Call and
put options on stock indices are similar to options on securities except that,
rather than the right to buy or sell particular securities at a specified price,
options on a stock index give the holder the right to receive, upon exercise of
the option, an amount of cash if the closing level of the underlying stock index
is greater than (or less than, in the case of puts) the exercise price of the
option. This amount of cash is equal to the difference between the closing
price of the index and the exercise price of the option, expressed in dollars
multiplied by a specified number. Thus, unlike options on individual
securities, all settlements are in cash, and gain or loss depends on price
movements in the stock market generally (or in a particular industry or segment
of the market) rather than price movements in individual securities.

Transactions in options are generally considered "derivative securities." The
Fund's investment in options will be for portfolio hedging purposes in an effort
to stabilize principal fluctuations in seeking to achieve the Fund's investment
objective and not for speculation.

ILLIQUID SECURITIES. Each Fund may invest up to 15% of its net assets in
illiquid securities. Illiquid securities are securities for which there is no
ready market, which inhibits the ability to sell them and obtain their full
market value, or which are legally restricted as to their resale by the Fund.

SECURITIES ISSUED ON A WHEN-ISSUED OR DELAYED DELIVERY BASIS. Each Fund may
purchase securities on a "when-issued" basis, that is, delivery of and payment
for the securities is not fixed at the date of purchase, but is set after the
securities are issued (normally within forty-five days after the date of the
transaction). Each Fund also may purchase or sell securities on a delayed
delivery basis. The payment obligation and the interest rate that will be
received on the delayed delivery securities are fixed at the time the buyer
enters into the commitment. A Fund will only make commitments to purchase
when-issued or delayed delivery securities with the intention of actually
acquiring such securities, but the Fund may sell these securities before the
settlement

<PAGE>

date if Monument Advisors or the Sub-Advisor (in the case of the Convertible
Fund) deems it advisable.

FOREIGN INVESTMENTS. Each Fund may invest in securities of foreign issuers or
securities which are principally traded in foreign markets ("foreign
securities"). When foreign investments are made, Advisors or the Sub-Advisor
will attempt to take advantage of differences between economic trends and the
performance of securities markets in various countries to maximize investment
performance. In most instances, foreign investments will be made in companies
principally based in developed countries.

Investments in foreign securities may be made through the purchase of individual
securities on recognized exchanges and developed over-the-counter markets or
through American Depository Receipts ("ADRs") covering such securities.

To attempt to reduce exposure to currency fluctuations, each Fund may trade in
forward foreign currency exchange contracts (forward contracts), currency
futures contracts and options thereon and securities indexed to foreign
securities.

CONVERTIBLE SECURITIES. Each Fund may invest in bonds, notes, debentures,
preferred stocks and other securities that are convertible or that carry the
right to buy a certain amount of common stock of the same or a different issuer
within a specified period of time. A convertible security provides a
fixed-income stream and the opportunity, through its conversion feature, to
participate in the capital appreciation resulting from a market price advance in
its underlying stock. As with a non-convertible fixed-income security, a
convertible security tends to increase in market value when interest rates
decline and decrease in value when interest rates rise. Like a common stock,
the value of a convertible security also tends to increase as the market value
of the underlying stock rises, and it tends to decrease as the market value of
the underlying stock declines. Because its value can be influenced by both
interest rate and market movements, a convertible security generally is not as
sensitive to interest rates as a similar fixed-income security, nor is it as
sensitive to changes in share price as its underlying stock.

Each Fund may also invest in enhanced convertible securities. These include but
are not limited to: Preferred Equity Redemption Cumulative Stocks ("PERCS"),
ACES (Automatically Convertible Equity Securities), PEPS (Participating Equity
Preferred Stock), PRIDES (Preferred Redeemable Increased Dividend Equity
Securities), SAILS (Stock Appreciation Income Linked Securities), TECONS (Term
Convertible Notes), QICS (Quarterly Income Cumulative Securities), and DECS
(Dividend Enhanced Convertible Securities). ACES, PEPS, PRIDES, SAILS, TECONS,
QICS, and DECS each: is issued by the company, the common stock of which will
be received in the event the convertible preferred stock is converted: seek to
provide the investor with high current income with some prospect of future
capital appreciation; is typically issued with three to four-year maturities;
typically have some built-in call protection for the first two to three years;
provide investors the right to convert them into shares of common stock at a
present conversion ratio or hold them until maturity; and upon maturity will
automatically convert to either cash or a specified number of shares of common
stock. PERCS may have a capital appreciation limit, and are generally not
convertible into cash.

<PAGE>

There may be additional types of convertible securities not specifically
referred to herein which may be similar to those described above in which the
Funds may invest, consistent with each Fund's investment objective and policies.

An investment in an enhanced convertible security may involve additional risks
to the Funds. A Fund may have difficulty disposing of such securities because
there may be a thin trading market for a particular security at any given time.
Reduced liquidity may have an adverse impact on market price and the Fund's
ability to dispose of particular securities, when necessary, to meet the Fund's
liquidity needs or in response to a specific economic event, such as the
deterioration in the creditworthiness of an issuer. Reduced liquidity in the
secondary market for certain securities may also make it more difficult for the
Fund to obtain market quotations based on actual trades for purposes of valuing
the Fund's portfolio. The Fund, however, intends to acquire liquid securities,
though there can be no assurances that this will be achieved.

SYNTHETIC CONVERTIBLES. The Convertible Fund may invest a portion of its assets
in "synthetic convertible" securities. A synthetic convertible is created by
combining distinct securities which together possess the two principal
characteristics of a true convertible security, i.e., fixed income and the right
to acquire the underlying security. This combination is achieved by investing
in non-convertible fixed-income securities and in warrants or stock or stock
index call options which grant the holder the right to buy a specified quantity
of securities within a specified period of time at a specified price or to
receive cash in the case of stock index options.

Synthetic convertible securities differ from the true convertible security in
several respects. The value of a synthetic convertible is the sum of the values
of its fixed-income component and its convertibility component. Thus, the
values of a synthetic convertible and a true convertible security will respond
differently to market fluctuations. Further, although the Sub-Advisor expects
normally to create synthetic convertibles whose two components represent one
issuer, the character of a synthetic convertible allows the Convertible Fund to
combine components representing distinct issuers, or to combine a fixed income
security with a call option on a stock index, when the Sub-Advisor determines
that such combination would better promote the Fund's investment objective. In
addition, the component parts of a synthetic convertible security may be
purchased simultaneously or separately; and the holder of a synthetic
convertible faces the risk that the price of the stock, or the level of the
market index underlying the convertibility component will decline.

LOWER RATED SECURITIES. When investing in convertible securities and
non-convertible fixed-income debt securities, the Convertible Fund may buy both
securities rated by nationally recognized statistical rating agencies or in
unrated securities, depending upon prevailing market and economic conditions.
Lists of these ratings are shown in the Appendix to this prospectus.

Ratings which represent the opinions of the rating services with respect to the
securities and are not absolute standards of quality, will be considered in
connection with the investment of the Fund's assets but will not be a
determining or limiting factor. Rather than relying principally on the ratings
assigned by rating services, the investment analysis of securities being
considered for

<PAGE>

the Fund's portfolio may also include, among other things, consideration of
relative values, based on such factors as anticipated cash flow, interest or
dividend coverage, asset coverage, earnings prospects, the experience and
managerial strength of the issuer, responsiveness to changes in interest rates
and business conditions, debt maturity schedules and borrowing requirements and
the issuer's changing financial condition and public recognition thereof.

Higher yields are ordinarily available from securities in the lower-rated
categories or from unrated securities of comparable quality. Convertible
securities generally fall within the lower-rated categories of rating agencies,
that is, securities rated Baa or lower by Moody's or BBB or lower by S&P. The
Convertible Fund may only invest in convertible and non-convertible securities
rated at least B or above by Moody's, or S&P, or if unrated, are at least of
comparable quality as determined by the Sub-Advisor. To the extent the Fund
acquires securities rated B or unrated securities of comparable quality, these
securities are regarded as speculative in nature and there may be a greater
risk, including the risk of bankruptcy or default by the issuer, as to the
timely repayment of the principal, and timely payment of interest or dividends
on such securities. The Fund will not invest in securities the Sub-Advisor
believes involve excessive risk. In the event the rating on an issue held in
the Fund's portfolio is changed by the ratings service or the security goes into
default, such event will be considered by the Sub-Advisor in its evaluation of
the overall investment merits of that security but will not generally result in
an automatic sale of the security.

LOANS OF PORTFOLIO SECURITIES. Each Fund may lend its portfolio securities to
qualified securities dealers or other institutional investors, provided that
such loans do not exceed 10% of the value of the Fund's total assets at the time
of the most recent loan. The borrower must deposit with the Fund's custodian
collateral with an initial market value of at least 102% of the initial market
value of the securities loaned, including any accrued interest, with the value
of the collateral and loaned securities marked-to-market daily to maintain
collateral coverage of at least 100%. This collateral may consist of cash,
securities issued by the U.S. Government, its agencies or instrumentalities, or
irrevocable letters of credit. The lending of securities is a common practice in
the securities industry. The Funds may engage in security loan arrangements
with the primary objective of increasing the Fund's income either through
investing the cash collateral in short-term interest bearing obligations or by
receiving a loan premium from the borrower. Under the securities loan agreement,
as utilized by the Funds, the Funds continue to be entitled to all dividends or
interest on any loaned securities. As with any extension of credit, there are
risks of delay in recovery and loss of rights in the collateral should the
borrower of the security fail financially.

STOCK INDEX FUTURES CONTRACTS. Each Fund may enter into stock index futures
contracts. No Fund has a current intention of entering into a futures contract
if it would result in the obligations underlying all such instruments exceeding
5% of net assets.

REPURCHASE AGREEMENTS. Each Fund may enter into repurchase agreements. No Fund
has a current intention of entering into a repurchase agreement if it would
result in the obligations underlying all such instruments exceeding 5% of net
assets.

<PAGE>

WARRANTS. Each Fund may invest in warrants. No Fund has a current intention of
investing in excess of 5% of its net assets, valued at the lower of cost or
market, in warrants.

BORROWING. Each Fund may borrow money to meet redemption requests and for
other temporary or emergency purposes in an amount not exceeding 33 1/3% of its
total assets, including the amount borrowed (less liabilities other than
borrowings). While borrowings exceed 5% of a Fund's total assets, the Fund will
not make any additional investments.

OTHER INVESTMENT POLICIES AND RESTRICTIONS. The Funds have adopted a number of
additional investment restrictions that limit their activities to some extent.
Some of these restrictions may only be changed with shareholder approval. For a
list of these restrictions and more information about the Funds' investment
policies, see "Investment Policies" and "Investment Restrictions" in the SAI.

PORTFOLIO TURNOVER. There are no limitations on the length of time that a Fund
must hold a portfolio security. A Fund may sell a portfolio security, and will
reinvest the proceeds, whenever Advisors deems such action prudent from the
viewpoint of a Fund's investment objective. A Fund's annual portfolio turnover
rate may vary significantly from year to year. A higher rate of portfolio
turnover may result in higher transaction costs, including brokerage
commissions. Also, to the extent that higher portfolio turnover results in a
higher rate of net realized capital gains to a Fund, the portion of a Fund's
distributions constituting taxable capital gains may increase. Monument Advisors
or the Sub-Advisor (in the case of the Convertible Fund) does not expect the
annual portfolio turnover rates for a Fund to exceed [120%].

SPECIAL RISK CONSIDERATIONS

When you own shares of a Fund, you not only have the ability to participate in
potential increases in share value, you also bear the risk that the value of the
Fund's shares may decline. This section discusses some of the special risks
associated with an investment in the Funds.

WASHINGTON REGIONAL AREA COMPANIES. Because the Growth Fund and the Aggressive
Growth Fund intend to invest primarily in Washington regional area companies,
changes in the economic, political, regulatory, and business environment in the
Washington regional area are likely to have a greater impact on these Funds than
on mutual funds whose investments are not likewise geographically focused.

SMALL COMPANIES. The Aggressive Growth Fund, Internet Fund, and, to a lesser
extent, the Growth Fund and Convertible Fund, may invest in companies with small
market capitalizations (i.e., less than $500 million) or companies that have
relatively small revenues, limited product lines, and a small share of the
market for their products or services (collectively, "small companies"). Small
companies may lack depth of management, they may be unable to internally
generate funds necessary for growth or potential development or to generate such
funds through

<PAGE>

external financing on favorable terms, and they may be developing or marketing
new products or services for which markets are not yet established and may never
become established. Due to these and other factors, small companies may suffer
significant losses, as well as realize substantial growth. Securities of small
companies present greater risks than securities of larger, more established
companies.

Historically, stocks of small companies have been more volatile than stocks of
larger companies and are, therefore, more speculative than investments in larger
companies. Among the reasons for the greater price volatility are the less
certain growth prospects of smaller companies, the lower degree of liquidity in
the markets for such stocks, and the greater sensitivity of small companies to
changing economic conditions. Besides exhibiting greater volatility, small
company stocks may, to a degree, fluctuate independently of larger company
stocks. Small company stocks may decline in price as large company stocks rise,
or rise in price as large company stocks decline. You should therefore expect
that the value of the Aggressive Growth Fund and the Internet Fund's shares to
be more volatile than the shares of a mutual fund, such as the Growth Fund, that
invests primarily in larger company stocks.

INTERNET COMPANIES. The Internet Fund will invest primarily in companies
engaged in Internet and Intranet related activities. The value of such
companies is particularly vulnerable to rapidly changing technology, extensive
government regulation and relatively high risks of obsolescence caused by
scientific and technological advances. The Fund may involve significantly
greater risks and therefore may experience greater volatility than a mutual fund
that does not concentrate its investments in one industry

TECHNOLOGY AND RESEARCH COMPANIES AND CURRENCY RISK. Consistent with its
investment objective, each of the Growth Fund, the Aggressive Growth Fund and
the Internet Fund expects to invest a portion of its assets in securities of
companies involved in biological technologies, computing technologies, or
communication technologies (collectively, "technology sectors"), and companies
related to these industries. Typically, these companies' products or services
compete on a global, rather than a predominately domestic or regional basis. The
technology sectors historically have been volatile and securities of companies
in these sectors may be subject to abrupt or erratic price movements. Advisors
will seek to reduce such risks through extensive research, and emphasis on more
globally-competitive companies. In addition, because these companies compete
globally, the securities of these companies may be subject to fluctuations in
value due to the effect of changes in the relative values of currencies on such
companies' businesses. The history of these markets reflect both decreases and
increases in worldwide currency valuations, and these may reoccur unpredictably
in the future.

CONVERTIBLE SECURITIES. The Sub-Advisor believes that convertible securities
generally have less potential for gain or loss than common stocks. In general,
a convertible security performs more like a stock when the underlying stock's
price is high (because it is assumed it will be converted into the stock) and
more like a bond when the underlying stock's price is low (because it is assumed
that it will mature without being converted). Each convertible security offers
a different combination of upside potential and downside risk. Securities that
are convertible other

<PAGE>

than at the option of the holder generally do no limit the potential for loss to
the same extent as securities convertible at the option of the holder.

Because convertible securities have both an equity and a fixed-income component,
the value of the fund's investments varies in response to many factors. The
equity component makes the value of convertible securities subject to the
activities of individual companies, and general market and economic conditions.
The fixed-income component causes fluctuations based on changes in interest
rates and in the credit quality of the issuer. In addition, convertible
securities are often lower-quality securities. (Please comment on this last
statement.)

DERIVATIVES. A fund's risk is mostly dependent on the types of securities it
purchases and its investment techniques. Each Fund is authorized to use
options, futures and forward foreign currency exchange contracts, which are
types of derivative instruments. Derivative instruments are instruments that
derive their value from a different underlying security, index or financial
indicator. The use of derivative instruments exposes the Fund to additional
risks and transaction costs. Risks inherent in the use of derivative
instruments include: (1) the risk that interest rates, securities prices and
currency markets will not move in the direction that a portfolio manager
anticipates; (2) imperfect correlation between the price of derivative
instruments and movements in the prices of the securities, interest rates or
currencies being hedged; (3) the fact that skills needed to use these strategies
are different than those needed to select portfolio securities; (4) inability to
close out certain hedged positions to avoid adverse tax consequences; (5) the
possible absence of a liquid secondary market for any particular instrument and
possible exchange-imposed price fluctuation limits, either of which may make it
difficult or impossible to close out a position when desired; (6) leverage risk,
that is, the risk that adverse price movements in an instrument can result in a
loss substantially greater than the Fund's initial investment in that instrument
(in some cases, the potential loss is unlimited); and (7) particularly in the
case of privately-negotiated instruments, the risk that the counterparty will
not perform its obligations, which could leave the Fund worse off than if it had
not entered into the position.

ILLIQUID SECURITIES. To the extent that the Fund invests in illiquid
securities, the Fund risks not being able to sell securities at the time and the
price that it would like. The Fund may therefore have to lower the price, sell
substitute securities or forego an investment opportunity, each of which might
adversely affect the Fund.

FOREIGN INVESTMENTS. There are certain risks and costs involved in investing in
securities of companies and governments of foreign nations. These risks may
involve more risk than investing in a U.S. fund for the following reasons: (1)
there may be less public information available about foreign companies than is
available about U.S. companies; (2) foreign companies are not generally subject
to the uniform accounting, auditing and financial reporting standards and
practices applicable to U.S. companies; (3) foreign markets have less volume
than U.S. markets, and the securities of some foreign companies are less liquid
and more volatile than the securities of comparable U.S. companies; (4) there
may be less government regulation of stock exchanges, brokers, listed companies
and banks in foreign countries than in the United States; (5) the Fund may incur
fees on currency exchanges when it changes investments from one country to
another; (6) the Fund's foreign investments could be affected by expropriation,
confiscatory

16
<PAGE>

taxation, nationalization of bank deposits, establishment of exchange controls,
political or social instability or diplomatic developments; (7) fluctuations in
foreign exchange rates will affect the value of the Fund's portfolio securities,
the value of dividends and interest earned, gains and loses realized on the sale
of securities, net investment income and unrealized appreciation or depreciation
of investments; and (8) possible imposition of dividend or interest withholding
by a foreign country.

DIVERSIFICATION. The Growth Fund, the Aggressive Growth Fund and the Internet
Fund are non-diversified under the 1940 Act, which means that there is no
restriction under the 1940 Act on how much these Funds may invest in the
securities of any one issuer. However, to qualify for tax treatment as a
regulated investment company under the Internal Revenue Code ("Code"), the
Growth Fund, the Aggressive Growth Fund and the Internet Fund intend to comply,
as of the end of each taxable quarter, with certain diversification requirements
imposed by the Code. Pursuant to these requirements, each of these Funds will,
among other things, limit its investments in the securities of any one issuer
(other than U.S. Government securities or securities of other regulated
investment companies) to no more than 25% of the value of the Fund's total
assets. In addition, the Growth Fund, the Aggressive Growth Fund and the
Internet Fund, with respect to 50% of their total assets, will limit their
investments in the securities of any issuer to 5% of the Fund's total assets,
and will not purchase more than 10% of the outstanding voting securities of any
one issuer. Nevertheless, as a general matter, the Growth Fund, the Aggressive
Growth Fund and the Internet Fund may be more susceptible than a diversified
mutual fund to the effects of adverse economic, political or regulatory
developments affecting a single issuer or industry sector in which these Funds
may maintain investments.

The Convertible Fund is a diversified fund which means that with respect to 75%
of its assets, it cannot invest more than 5% of its assets in one issuer (other
than the U.S. Government and its agencies and instrumentalities) or purchase
more than 10% of the outstanding voting securities of any one issuer.

EXPERIENCE. Monument Advisors is a newly organized investment adviser managing
the portfolio investments of qualified individuals, retirement plans, and
trusts. Monument Advisors had no previous experience in advising a mutual fund,
prior to advising the Funds. David A. Kugler, President of the Company, and
Alexander C. Cheung, an employee of Monument Advisors and portfolio manager of
the Growth Fund, the Aggressive Growth Fund and the Internet Fund, have served,
respectively, as financial consultant to individual investors and investment
adviser to certain management accounts.

YEAR 2000. The Funds' operations depend on the seamless functioning of computer
systems in the financial service industry, including those of Advisors, the
Administrator, the Custodian and the Transfer Agent. Many computer software
systems in use today cannot properly process date-related information after
December 31, 1999 because of the method by which dates are encoded and
calculated. This failure, commonly referred to as the "Year 2000 Issue," could
adversely affect the handling of securities trades, pricing and account
servicing for the Funds. Advisors has made compliance with the Year 2000 Issue
a high priority and is taking steps that it believes are reasonably designed to
address the Year 2000 Issue with respect to its computer systems.

<PAGE>

Advisors has also been informed that comparable steps are being taken by the
Fund's other major service providers. Advisors does not currently anticipate
that the Year 2000 Issue will have a material impact on its ability to continue
to fulfill its duties as investment adviser.

MANAGEMENT

BOARD OF DIRECTORS. The Board of Directors is responsible for managing each
Fund's business affairs.

INVESTMENT ADVISOR. Monument Advisors serves as the investment advisor to each
Fund pursuant to an investment advisory agreement, dated October 30, 1997
("Advisory Agreement"). Subject to the supervision of the Board of Directors,
Advisors is responsible under the Advisory Agreement for selecting and managing
each Fund's (other than the Convertible Fund's) portfolio investments in
accordance with each Fund's investment objective, policies and restrictions.
Advisors also is responsible for placing orders for the purchase and sale of
each Fund's investments with broker-dealers selected by Advisors. In addition,
pursuant to the Advisory Agreement, Advisors provides overall management of the
Company's business affairs. Under the Advisory Agreement, Advisors has, among
other things, agreed to render regular reports to the Board of Directors
regarding its investment decisions and brokerage allocation practices for each
Fund, to assist each Fund's custodian in valuing portfolio securities and
computing each Fund's net asset value, and to furnish each Fund with the
assistance, cooperation, and information necessary for the Fund to meet various
legal requirements regarding registration and reporting. See "Investment
Advisory and Other Services" in the SAI for further information.

Monument Advisors, located at 8377 Cherry Lane, Laurel, Maryland 20707-4831, is
a wholly-owned subsidiary of The Monument Group, Inc., which in turn is
principally owned and controlled by David A. Kugler, President of Advisors, and
President of the Company. David A. Kugler and Herbert Klein, III are each
affiliates of the Company and Monument Advisors. Monument Advisors is a newly
organized company that also manages the portfolio investments of qualified
individuals, retirement plans, and trusts. As of [ ], 1998, Advisors
managed approximately $[ ] million in assets.

For its services, Advisors receives, pursuant to the Advisory Agreement, a
monthly fee from each Fund equal to an annualized rate of 1.00% of the monthly
average net assets of such Fund through $50 million in net assets; 0.75% of the
monthly average net assets of such Fund greater than $50 million through $100
million in net assets; and 0.625% of the average monthly net assets exceeding
$100 million in net assets.

CONVERTIBLE FUND SUB-ADVISOR. Breewood Asset Management, Inc., an affiliate of
Oxford Capital Management, Inc. ("Oxford Capital") located at 606 Baltimore
Avenue, Suite 300, Towson, Maryland 21204 is principally owned and controlled by
John G. Danz, Jr., President of Oxford Capital. Oxford capital is the
sub-advisor of the Convertible Fund and is responsible for buying and selling
securities for that Fund. Oxford Capital is a Maryland corporation which has

<PAGE>

been providing professional investment management to retirement plans, financial
institutions and private investors since 1983. As of [ ], 1998, Oxford
Capital managed approximately $[ ] million in assets.

[PLEASE PROVIDE INFORMATION REGARDING OWNERS OF OXFORD IF OTHER THAN STATED
ABOVE]

PORTFOLIO MANAGERS. Alexander C. Cheung, C.F.A., serves as the portfolio
manager for both the Growth Fund, the Aggressive Growth Fund and the Internet
Fund, and is primarily responsible for the portfolios of each of these Funds.
Mr. Cheung has managed each Fund since its inception. Mr. Cheung has eight
years investment management experience and has been with Advisors since August
1997. Prior to that, Mr. Cheung was Managing Director of Lion Rock Capital
Management, Inc., and, prior to that, a portfolio manager at Anchor Asset
Management, Inc. Before joining Anchor Asset Management, Inc., Mr. Cheung
worked as an investment counselor at W.H. Newbold's Sons & Co.

John G. Danz, Jr. serves as the portfolio manager for the Convertible Fund.
During his 28-year career in investment management, Mr. Danz has been Chairman,
Capital Management Group, Baker Watts of Baltimore; Senior Portfolio Manager for
First National Bank of Maryland; Assistant Vice President, Mercantile-Safe
Deposit & Trust Company; and an Associate Professor of Business Administration,
Towson State University. Mr. Danz is a graduate of the Virginia Polytechnic and
Virginia State University. He is a Fellow of the Baltimore Security Analysts
Society as well as a member of the International Society of Financial Analysts.

ADMINISTRATOR. State Street Bank and Trust Company ("State Street") has agreed
to provide certain administrative services to each Fund pursuant to an
administration agreement, dated October 31, 1997 ("Administration Agreement").
Among other things, State Street has agreed to oversee various matters for each
Fund, including the determination of net asset values by each Fund's custodian,
the maintenance of books and records by each Fund's custodian, and the payment
of fees to each Fund's investment adviser, custodian, and transfer and dividend
disbursing agent. State Street also has agreed to assist with the preparation
of each Fund's income tax returns; prepare periodic reports to shareholders,
proxy materials, and other shareholder communications; prepare certain
regulatory and other reports as may be requested by the Board of Directors; make
reports and recommendations to the Board of Directors concerning the performance
and fees paid to certain third party service providers; assist each Fund's
investment advisor with respect to various compliance matters; perform certain
blue sky services; prepare amendments to the Company's registration statement;
and prepare agenda and background materials for Board of Directors meetings.
For its services under the Administration Agreement, State Street receives from
each Fund a monthly fee equal to an annualized rate of 0.10% of the Fund's
average daily net assets or an annual fee of $85,000, whichever is greater.

CODE OF ETHICS. The Company, Monument Advisors, the Sub-Advisor and Monument
Distributors have adopted a joint Code of Ethics relating to the personal
investment activities of certain affiliated persons of each company
(collectively, "Access Persons"). Under the terms of the Code of Ethics, Access
Persons may invest in securities for their own accounts (including securities
that may be held or purchased by a Fund), but may do so only in accordance with

19
<PAGE>

certain restrictions and procedures set out in the Code of Ethics. The Code of
Ethics has been drafted with a view towards meeting the standards suggested in
1994 by the Investment Company Institute's Advisory Group on Personal Trading.

PORTFOLIO BROKERAGE. In accordance with policies established by the Board of
Directors, Monument Advisors or the Sub-Advisor may take into account sales of
shares of the Funds in selecting broker-dealers to effect portfolio transactions
on behalf of the Funds. For a discussion of Monument Advisors' and the
Sub-Advisors' brokerage allocation policies and practices, see "Portfolio
Transactions and Brokerage" in the SAI.

FUND EXPENSES. Each Fund will bear certain expenses attributable to it,
including the following: (a) advisory fees; (b) fees and expenses of
independent auditors and independent legal counsel retained by the Company; (c)
brokerage commissions for transactions in portfolio investments and similar fees
and charges for the acquisition, disposition, lending or borrowing of such
portfolio investments; (d) fees and expenses of the transfer agent and
administrator, custodian and any depository appointed for the safekeeping of its
cash, portfolio securities and other property; (e) all taxes, including issuance
and transfer taxes, and corporate fees payable by the Fund to federal, state or
other governmental agencies; (f) interest payable on the Fund's borrowings; (g)
extraordinary or non-recurring expenses, such as legal claims and liabilities
and litigation costs and indemnification payments by the Fund in connection
therewith; (h) all expenses of shareholders and Board of Directors meetings
(exclusive of compensation and travel expenses of those Directors and employees
of the Company who are "interested persons" of the Company within the meaning of
the 1940 Act, but including compensation and travel expenses of those Directors
who are not "interested persons" of the Company within the meaning of the 1940
Act); (i) fees and expenses involved in the preparation of all reports as
required by federal or state law or regulations; (j) fees and expenses involved
in registering or otherwise qualifying (by notice filing or otherwise) the
Fund's shares with the SEC and various states and other jurisdictions, and
maintaining such registrations or qualifications; (k) the expense of preparing,
setting in type, printing in quantity, and distributing to then-current
shareholders such materials as prospectuses, statements of additional
information, and supplements thereto, as well as periodic reports to
shareholders, communications, and proxy materials (including proxy statements
and proxy cards) relating to the Fund, and the processing, including
tabulation, of the results of proxy solicitations; (l) the expense of furnishing
or causing to be furnished to each shareholder statements of account, including
the expense of mailing; (m) membership or association dues for the Investment
Company Institute or similar organizations; (n) postage; and (o) the cost of the
fidelity bond required by 1940 Act Rule 17g-1 and any errors and omissions
insurance or other liability insurance covering the Company and/or its officers,
Directors and employees.

TAX CONSIDERATIONS

THE FUNDS. Each Fund intends to qualify for special tax treatment afforded to
regulated investment companies under the Code. To establish and continue its
qualification, each Fund intends to diversify its assets as the Code requires.
Each Fund also intends to distribute

<PAGE>

substantially all of its net investment income and capital gains to its
shareholders to avoid federal income tax on the income and gains so distributed.

SHAREHOLDERS. For federal income tax purposes, any income dividend that you
receive from the Funds, as well as any net short term capital gain distribution,
is generally taxable to you as ordinary income whether you have elected to
receive it in cash or in additional shares.

Distributions of net long-term capital gains are generally taxable to you as
long-term capital gains, regardless of how long you have owned your Fund shares
and regardless of whether you have elected to receive such distributions in cash
or in additional shares.

Dividends and certain interest income earned from foreign securities by the
Fund may be subject to foreign withholding or other taxes. The Fund may be
permitted to pass on to its shareholders the right to a credit or deduction
for income or other tax credits earned from foreign investments and will do
so if possible. These deductions or credits may be subject to tax law
limitations. Generally, distributions are taxable to you for the year in
which they are paid. In addition, certain distributions that are declared and
payable in October, November or December, but which, for operational
purposes, are paid the following January, are taxable as though they were
paid by December 31 of the year in which they are declared.

Redemptions and exchanges of Fund shares are taxable events on which you may
realize a gain or loss.

TAX INFORMATION. The Funds will advise you promptly, after the close of each
calendar year, of the tax status for federal income tax purposes of all income
dividends and capital gain distributions paid for such year.

The foregoing is only a general discussion of applicable federal income tax
provisions. For further information, see "Additional Information on
Distributions and Taxes" in the SAI. YOU SHOULD CONSULT WITH YOUR OWN TAX
ADVISER ABOUT YOUR PARTICULAR TAX SITUATION.

DIVIDENDS AND DISTRIBUTIONS

Each of the Growth Fund, the Aggressive Growth Fund and the Internet Fund
declares and pays income dividends from its net investment income, usually
December. [THE CONVERTIBLE FUND DECLARES AND PAYS INCOME DIVIDENDS FROM ITS NET
INVESTMENT INCOME QUARTERLY.] Each Fund distributes capital gains, if any,
annually, usually in December. Income dividends and capital gain distributions
are calculated and distributed the same way for each Fund. The amount of any
income dividends per share will differ, however, due to the individual
investment strategies of the Funds. Income dividend payments are not
guaranteed, are subject to the Board's discretion, and may vary from time to
time. NONE OF THE FUNDS PAY "INTEREST" OR GUARANTEE ANY FIXED RATE OF RETURN ON
AN INVESTMENT IN THEIR SHARES.

<PAGE>

Each Fund will reinvest any income dividends and capital gains distributions in
additional shares of the Fund unless you select another option on your
application. You may change your distribution option at any time by notifying us
by mail or phone, as directed on the cover page of this Prospectus. Please
allow at least seven days prior to the record date for us to process the new
option.

BUYING, REDEEMING, AND EXCHANGING SHARES

PRINCIPAL UNDERWRITER. Monument Distributors, located at 8377 Cherry Lane,
Laurel, Maryland 20707-4831, serves as the principal underwriter of each Fund,
is a wholly-owned subsidiary of The Monument Group, Inc. Monument Advisors,
David A. Kugler and Herbert Klein, III are each affiliates of the Company and
Monument Distributors.

BUYING FUND SHARES

BY BROKER. You can buy Fund shares from any broker authorized by the
Distributor.

BY MAIL. You can buy shares of each Fund by sending a completed application,
along with a check, drawn on a U.S. bank in U.S. funds, to "Monument Series
Fund," c/o NFDS, at the address set out on the cover page of this Prospectus.
NFDS is the agent of the Company's transfer and dividend disbursing agent, State
Street. See "Proper Form."

Third party checks are not accepted for purchase of Fund shares.

BY WIRE. You may also wire payments for Fund shares to the wire bank account
for the appropriate Fund. Before wiring funds, please call 1-888-420-9950 to
advise the Fund of your investment and to receive instructions as to how and
where to wire your investment. Please remember to return your completed and
signed application to the address set out on the cover page of this Prospectus.
See "Proper Form."

MINIMUM INVESTMENTS. The minimum initial investment in a Fund is $2500.
Subsequent investments must be at least $250. The minimum initial and subsequent
investments are $500 and $200, respectively, when purchasing through a
tax-qualified retirement plan. The minimum initial and subsequent investments
are $2500 and $100, respectively, when purchasing through an Automatic
Investment Plan.

PUBLIC OFFERING PRICE. When you buy shares of a Fund, you will receive the
public offering price per share next determined after your order is received.
Each Fund's public offering price per share is equal to the Fund's net asset
value per share plus a sale charge, described below, paid to Distributors.
Growth Fund, Aggressive Growth Fund and Internet Fund

<PAGE>

<TABLE>
<CAPTION>
SALES CHARGE AS A PERCENTAGE OF
-------------------------------
AMOUNT PAID TO
AMOUNT OF PURCHASE AT THE OFFERING NET AMOUNT DEALERS AS A PERCENTAGE
PUBLIC OFFERING PRICE PRICE INVESTED OF OFFERING PRICE
- ---------------------- ----- -------- -----------------
<S> <C> <C> <C>
$50,000 or less 4.75% 4.99% 4.00%
Over $50,000 through $100,000 3.50% 3.63% 3.00
Over $100,000 through $500,000 2.50% 2.56% 2.25
Over $500,000 through $1,000,000
Above $1,000,000 0.25% 0.25% 0.25
</TABLE>

Convertible Fund

<TABLE>
<CAPTION>
SALES CHARGE AS A PERCENTAGE OF
-------------------------------
AMOUNT PAID TO
AMOUNT OF PURCHASE AT THE OFFERING NET AMOUNT DEALERS AS A PERCENTAGE
PUBLIC OFFERING PRICE PRICE INVESTED OF OFFERING PRICE
- --------------------- ----- -------- -----------------
<S> <C> <C> <C>
$50,000 or less 3.75% 3.90% 2.75%
Over $50,000 through $100,000 2.75% 2.83% 2.00%
Over $100,000 through $500,000 2.00% 2.06% 1.25%
Over $500,000 through $1,000,000
Above $1,000,000 0.25% 0.25% 0.25%
</TABLE>

RIGHT OF ACCUMULATION. You may reduce the sales charge by combining the amount
invested in a Fund with certain previous purchases of shares of any Monument
Fund. Your shares in a Fund previously purchased will be taken into account on
a combined basis at the current net asset value per share of a Fund in order to
establish the aggregate investment amount to be used in determining the
applicable sales charge. Only previous purchases of Fund shares that were sold
subject to the sales charge that are still held in the Fund will be included in
the calculation. To take advantage of this privilege, you must give notice at
the time you place your initial order and subsequent orders that you wish to
combine purchases. When you send payment along with your request to combine
purchases, please specify your account number.

WHEN SHARES ARE PRICED. Each Fund is open for business each day the New York
Stock Exchange ("Exchange") is open. Each Fund determines its share price as of
the close of regular trading on the Exchange, generally 4:00 p.m. New York time.
It is expected that the Exchange will be closed during the next twelve months on
Saturdays and Sundays and on the observed holidays of New Year's Day, Martin
Luther King Day, President's Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day, plus on the

<PAGE>

preceding Friday or subsequent Monday when one of these holidays falls on
a Saturday or Sunday, respectively.

NET ASSET VALUE. Each Fund's share price is equal to the net asset value
("NAV") per share of the Fund. Each Fund calculates its NAV per share by
valuing and totaling its assets, subtracting any liabilities, and dividing the
remainder, called net assets, by the number of Fund shares outstanding. The
value of each Fund's portfolio securities is generally based on market quotes if
they are readily available. If they are not readily available, Advisors will
determine their market value in accordance with procedures adopted by the Board.
For information on how the Funds value their assets, see "Valuation of Fund
Shares" in the SAI.

WAIVER OF SALES CHARGES

No sales charge shall apply to:

(1) reinvestment of income dividends and capital gain distributions;

(2) exchanges of Fund shares for those of another Fund;

(3) redemptions by a Fund when an account falls below the minimum required
account size;

(4) purchases of Fund shares made by current or former Directors, officers, or
employees of the Company, Advisors, Monument Distributors, The Monument Funds
Group, Inc. or The Monument Group, Inc., and by members of their immediate
families;

(5) purchases of Fund shares by Distributors for its own investment account for
investment purposes only;

(6) a "qualified institutional buyer," as such term is defined under Rule 144A
of the Securities Act of 1933, including, but not limited to, insurance
companies, investment companies registered under the 1940 Act, business
development companies registered under the 1940 Act, small business investment
companies, plans established by a state for the benefit of its employees,
employee benefit plans within the meaning of Title I of the Employee Retirement
Income Security Act of 1974, trust funds, organizations described in Section
501(c)(3) of the Internal Revenue Code ("Code"), investment advisers registered
under the Investment Advisors Act of 1940, and dealers registered pursuant to
Section 15 of the Securities Exchange Act of 1934, that comply with the minimum
investment and other requirements as set forth in Rule 144A;

(7) a tax qualified plan, including a plan under Sections 401(a), 401(k),
403(a), and 403(b)(7) of the Code, and tax favored plan, including a plan under
Section 457 of the Code;

(8) a charitable organization, as defined in Section 501(c)(3) of the Code, as
well as other charitable trusts and endowments, investing $50,000 or more;

<PAGE>

(9) a charitable remainder trust, under Section 664 of the Code, or a life
income pool, established for the benefit of a charitable organization as defined
in Section 501(c)(3) of the Code; and

(10) investment advisers registered under the Advisers Act and broker-dealers
registered under the Exchange Act purchasing securities for their own accounts.

Additional information regarding the waivers may be obtained by calling
1-888-420-9950. All account information is subject to acceptance and
verification by Monument Distributors.

GENERAL. The Company reserves the right in its sole discretion to withdraw all
or any part of the offering of shares of any Fund when, in the judgment of the
Fund's management, such withdrawal is in the best interest of the Fund. An
order to purchase shares is not binding on, and may be rejected by, Distributors
until it has been confirmed in writing by Distributors and payment has been
received.

REDEEMING FUND SHARES

You can redeem shares of the Funds by submitting your order in proper form
through your authorized broker or directly to the Fund either in writing to NFDS
at the address set out on the cover page of this Prospectus, or by telephoning
1-888-420-9950. See "Proper Form."

EXCHANGING FUND SHARES

You can exchange shares of one fund for those of the other fund, under the
Company's exchange privilege ("Exchange Privilege"), by submitting your order in
proper form, as explained under "Redeeming Fund Shares."

EXCHANGE PRICE. Your exchange request will be processed based on the NAV of the
Fund shares to be exchanged, and the Fund shares to be bought, next determined
after receipt of your order in proper form.

Exchanges are taxable transactions. See "Additional Information on
Distributions and Taxes" in the SAI.

MINIMUM ACCOUNT. The minimum amount permitted for each exchange between
existing accounts in the Funds is $250. The minimum amount permitted for an
exchange that establishes a new Fund account is $2500.

EXCHANGE RESTRICTION. You may not exchange shares that have previously been
exchanged for a period of 90 days from the date of exchange.

MODIFICATION OR TERMINATION. Excessive trading can adversely impact Fund
performance and shareholders. Therefore, the Company reserves the right to
temporarily or permanently modify

<PAGE>

or terminate the Exchange Privilege. The Company also reserves the right to
refuse exchange requests by any person or group if, in the Company's judgment,
either Fund would be unable to invest the money effectively in accordance with
its investment objective and policies, or would otherwise potentially be
adversely affected. The Company further reserves the right to restrict or
refuse an exchange request if the Company has received or anticipates
simultaneous orders affecting significant portions of either Fund's assets or
detects a pattern of exchange requests that coincides with a "market timing"
strategy. Although the Company will attempt to give you prior notice when
reasonable to do so, the Company may modify or terminate the Exchange Privilege
at any time.

SMALL ACCOUNT REDEMPTIONS. Due to the relatively high cost of maintaining
accounts with smaller holdings, each Fund reserves the right to redeem your
shares if, as a result of redemptions, the value of your account drops below
each Fund's $500 minimum balance requirement ($250 in the case of IRAs, or other
retirement plans and custodial accounts). Each Fund will give you 30 days'
advance written notice and a chance to increase your Fund balance to the minimum
requirement before the Fund redeems your shares.

REDEMPTION PRICE. Your redemption request will be processed based on the NAV of
the applicable Fund's shares next determined after receipt of your order in
proper form.

REDEMPTION PROCEEDS. Redemption proceeds will generally be paid by the next
business day after processing, but in no event later than three business days
after receipt by NFDS of your redemption order in proper form, subject to the
following. If you are redeeming shares that you just purchased and paid for by
personal check, the mailing of your redemption proceeds may be delayed for up to
ten (10) calendar days to allow your check to clear (this holding period does
not apply to cashier's, certified, or treasurer's checks). Additionally, the
Company, on behalf of each Fund, may suspend the right of redemption or postpone
the date of payment during any period that the Exchange is closed, or trading in
the markets that a Fund normally utilizes is restricted, or during any period
that redemption is otherwise permitted to be suspended by the SEC.

REDEMPTIONS IN KIND. The Company reserves the right to redeem its shares in
kind, which means that upon tendering shares of a Fund, you could receive assets
other than cash in return. Nevertheless, the Company has committed itself to pay
in cash all requests for redemption by any shareholder of record, limited in
amount with respect to each shareholder during any 90-day period to the lesser
of $250,000 from a Fund or one percent of the net asset value of a Fund at the
beginning of such period. See "Buying, Redeeming, and Exchanging Shares" in the
SAI for more information.

RULE 12B-1 PLAN

The Board of Directors has adopted a Plan of Distribution pursuant to Rule 12b-1
under the 1940 Act ("Rule 12b-1 Plan"). Pursuant to the Plan, each Fund may
finance any activity or expense that is intended primarily to result in the sale
its shares. Under the Plan, each Fund may pay a fee ("12b-1 fee") to
Distributors up to a maximum of 0.50%, on an annualized basis, of its average

26
<PAGE>

daily net assets. The Company may pay the 12b-1 fee for activities and expenses
borne in the past in connection with its shares as to which no 12b-1 fee was
paid because of the maximum limitation.

The activities and expenses financed by the 12b-1 fee may include, but are not
limited to: (a) compensation to and expenses, including overhead and telephone
expenses, of employees of Distributors who engage in the distribution of the
shares of each Fund; (b) printing and mailing of prospectuses, statements of
additional information, and periodic reports to prospective shareholders of each
Fund; (c) expenses relating to the development, preparation, printing, and
mailing of advertisements, sales literature, and other promotional materials
describing and/or relating to each Fund; (d) compensation to financial
intermediaries and broker-dealers to pay or reimburse them for their services or
expenses in connection with the distribution of the shares of each Fund; (e)
expenses of holding seminars and sales meetings designed to promote the
distribution of the shares of each Fund; (f) expenses of obtaining information
and providing explanations to prospective shareholders of each Fund regarding
its investment objectives and policies and other information pertaining to it,
including its performance; (g) expenses of training sales personnel offering and
selling each Fund's shares; and (h) expenses of personal services and/or
maintenance of shareholder accounts with respect to the shares of each Fund.
Distributors has advised the Company that it intends to waive the 12b-1 fee for
each Fund's first year of operations. See "Rule 12b-1 Plan" in the SAI.

PROPER FORM

Your order to buy shares is in proper form when your completed and signed
shareholder application and check or wire payment is received. Your written
request to sell or exchange shares is in proper form when written instructions
signed by all registered owners, with a signature guarantee if necessary is
received.

WRITTEN INSTRUCTIONS. All registered owners must sign any written
instructions. To avoid any delay in processing your transaction, such
instructions should include:

- your name,
- the Fund's name,
- a description of the request,
- for exchanges, the name of the Fund you are exchanging into,
- your account number,
- the dollar amount or number of shares, and
- your daytime or evening telephone number.

SIGNATURE GUARANTEES. For our mutual protection, we require a signature
guarantee in the following situations:

- you wish to redeem over $50,000 worth of shares,

<PAGE>

- you want redemption proceeds to be paid to someone other than the
registered owners,
- you want redemption proceeds to be sent to an address other than
the address of record, preauthorized bank account, or
preauthorized brokerage firm account,
- we receive instructions from an agent, not the registered owners,
or
- we believe a signature guarantee would protect us against
potential claims based on the instructions received.

A signature guarantee verifies the authenticity of your signature. You can
obtain a signature guarantee from certain banks, brokers or other eligible
guarantors. YOU SHOULD VERIFY THAT THE INSTITUTION IS AN ELIGIBLE GUARANTOR
PRIOR TO SIGNING. A NOTARIZED SIGNATURE IS NOT SUFFICIENT.

SHARE CERTIFICATES. We do not issue share certificates. This eliminates the
costly problem of replacing lost, stolen or destroyed certificates.

RETIREMENT PLAN ACCOUNTS. You may not sell shares or change distribution
options on retirement plan accounts by telephone. While you may exchange shares
by phone, certain restrictions may be imposed on other retirement plans. To
obtain any required forms or more information about distribution or transfer
procedures, please call 1-888-420-9950.

SERVICES TO HELP YOU MANAGE YOUR ACCOUNT

AUTOMATIC INVESTMENT PLAN. Our automatic investment plan offers a convenient
way to invest in the Funds. Under the plan, you can automatically transfer money
from your checking account to the Fund(s) each month to buy additional shares.
If you are interested in this plan, please refer to the automatic investment
plan application. The value of the Funds' shares will fluctuate and the
systematic investment plan will not assure a profit or protect against a loss.
You may discontinue the plan at any time by notifying us by mail or phone.

TELEPHONE TRANSACTIONS. You may redeem shares of a Fund, or exchange shares
of one Fund for that of another Fund, by telephone. Please refer to the sections
of this Prospectus that discuss the transaction you would like to make, or call
1-888-420-9950. We may only be liable for losses resulting from unauthorized
telephone transactions if we do not follow reasonable procedures designed to
verify the identity of the caller. When you call, we will request personal or
other identifying information, and may also record calls. For your protection,
we may delay a transaction or not implement one if we are not reasonably
satisfied that telephone instructions are genuine. If this occurs, we will not
be liable for any loss. If our lines are busy or you are otherwise unable to
reach us by phone, you may wish to send written instructions to us, as described
elsewhere in this Prospectus. If you are unable to execute a transaction by
telephone, we will not be liable for any loss.

<PAGE>

STATEMENTS AND REPORTS. You will receive transaction confirmations and
account statements on a regular basis. Confirmations and account statements
will reflect transactions in your account, including additional purchases and
reinvestments of income dividends and capital gain distributions. PLEASE VERIFY
THE ACCURACY OF YOUR STATEMENTS WHEN YOU RECEIVE THEM. You will also receive
semi-annual financial reports for each Fund in which you have invested. To
reduce Fund expenses, we attempt to identify related shareholders within a
household and send only one copy of a report. Please call 1-888-420-9950 if you
would like an additional free copy of the Funds' financial reports.

GENERAL INFORMATION

THE COMPANY. The Company, a Maryland corporation organized on April 7, 1997, is
an open-end management investment company. ThreeTwo of its four Funds are
non-diversified and one is diversified. The Company's authorized capital
consists of 2 billion shares of common stock with a par value of $0.001 per
share. The Company currently offers, on a continuous basis, four series of
common stock, namely, the Growth Fund, the Aggressive Growth Fund, the
Convertible Fund and the Internet Fund, each of which is currently authorized to
issue up to 250 million shares. The Company may offer additional series in the
future.

Shares of each Fund, when issued, are fully-paid and non-assessable and have
equal rights as to redemption and participation in income dividends, earnings,
and assets remaining in liquidation. Shareholders have no preemptive or
conversion rights. As of [ ], [ ] may be deemed to be a
control person of each Fund as a result of their ownership of more than 25% of
each Fund's outstanding shares.

VOTING. Shares of each Fund have equal voting rights, except that shareholders
of each Fund will vote separately on matters affecting only that Fund.
Fractional shares have proportionately the same rights as do full shares. The
voting rights of each Fund's shares are non-cumulative, which means that the
holders of more than 50% of the shares of the Funds voting for the election of
Directors have the ability to elect all of the Directors, with the result that
the holders of the remaining voting shares will not be able to elect any
Director.

The Company does not intend to hold annual shareholder meetings, though it may,
from time to time, hold special meetings of Fund shareholders, as required by
applicable law. The Board of Directors, in its discretion, as well as the
holders of at least 10% of the outstanding shares of a Fund, also may call a
shareholders meeting. The federal securities laws require that the Funds help
you communicate with other shareholders in connection with the election or
removal of members of the Board.

CUSTODIAN AND TRANSFER AGENT. Investors Fiduciary Trust Company, a subsidiary
of State Street located at 127 West 10th Street, Kansas City, MO 64105, serves
as custodian and an investment accounting agent for each Fund's portfolio
securities and other assets. State Street,

<PAGE>

225 Franklin Street, Boston, MA 02110, serves as the transfer agent and dividend
dispersing agent for each Fund. State Street is affiliated with NFDS.

LEGAL COUNSEL. Freedman, Levy, Kroll & Simonds, Washington, D.C., has advised
the Company on certain federal securities law matters.

OTHER INFORMATION. This Prospectus does not report any financial information or
performance results for the Funds, which only recently commenced operations.
Audited statements of assets and liabilities of the Company, and the report of
the Company's independent auditors thereon, are located in the SAI. In the
future, financial statements and performance results of the Funds will appear in
this Prospectus and the SAI. Additional information about the performance of the
Funds will appear in the Company's annual report to shareholders, which the
Company will provide free of charge.

Apart from the Prospectus and the SAI, the Company's registration statement
contains certain additional information that may be of interest to you. You may
obtain that information from the SEC by paying the charges prescribed under its
rules and regulations.

<PAGE>

This Prospectus does not constitute an offer to sell Fund shares in any state or
jurisdiction in which the offering is not authorized. No sales representative,
dealer, or other person is authorized to give any information or make any
representations other than those contained in this Prospectus or in the SAI.

[BACK COVER PAGE]

31
<PAGE>

MONUMENT SERIES FUND, INC.

MONUMENT WASHINGTON REGIONAL GROWTH FUND
MONUMENT WASHINGTON REGIONAL AGGRESSIVE GROWTH FUND
MONUMENT CONVERTIBLE FUND
MONUMENT INTERNET FUND

STATEMENT OF ADDITIONAL INFORMATION DATED AUGUST [ ], 1998

This Statement of Additional Information ("SAI") is not a Prospectus. It
contains additional information that you should read in conjunction with the
prospectus, dated August [ ], 1998 ("Prospectus"), for the Monument Series
Fund, Inc. Capitalized terms appearing in this SAI that are not otherwise
defined herein have the same meaning given to them in the Prospectus. You may
obtain a copy of the Prospectus by writing "Monument Series Fund," c/o NFDS, at
P.O. Box 419332, Kansas City, MO 64141-6332, or by calling 1-888-420-9950.

TABLE OF CONTENTS PAGE

Investment Policies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Potential Risks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Investment Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Investment Advisory and Other Services . . . . . . . . . . . . . . . . . . . 10
Portfolio Transactions and Brokerage . . . . . . . . . . . . . . . . . . . . 12
Buying, Redeeming, and Exchanging Shares . . . . . . . . . . . . . . . . . . 13
Principal Holders of Securities. . . . . . . . . . . . . . . . . . . . . . . 15
Valuation of Fund Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Additional Information On Distributions and Taxes. . . . . . . . . . . . . . 17
Further Description of the Company's Shares. . . . . . . . . . . . . . . . . 20
The Company's Principal Underwriter. . . . . . . . . . . . . . . . . . . . . 21
Performance Information. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Appendix A: Performance Comparisons. . . . . . . . . . . . . . . . . . . . . 25

<PAGE>

INVESTMENT POLICIES

The Prospectus describes the fundamental investment objectives and certain
investment policies and restrictions applicable to each Fund. The following is
additional information for your consideration.

ILLIQUID AND RESTRICTED SECURITIES. Each Fund may invest up to 15% of its net
assets in illiquid securities, including repurchase agreements with maturities
in excess of seven days. Subject to this limitation, the Board of Directors has
authorized each Fund to invest in restricted securities where such investment is
consistent with that Fund's investment objective, and has authorized such
securities to be considered liquid to the extent Advisors determines that there
is a liquid institutional or other market for such securities -- for example,
restricted securities that may be freely transferred among qualified
institutional buyers under Rule 144A of the Securities Act of 1933 ("1933 Act"),
and for which a liquid institutional market has developed. The Board of
Directors will review any determination by Advisors to treat a restricted
security as a liquid security on an ongoing basis, including Advisors'
assessment of current trading activity and the availability of reliable price
information. In determining whether a restricted security is properly
considered a liquid security, Advisors and the Board of Directors will take into
account the following factors: (a) the frequency of trades and quotes for the
security; (b) the number of dealers willing to buy or sell the security and the
number of other potential buyers; (c) dealer undertakings to make a market in
the security; (d) the nature of the security and marketplace trades, including
the time needed to dispose of the security, the method of soliciting offers, and
the mechanics of transfer; and (e) such other factors as Advisors may determine
to be relevant to such determination.

WRITING CALL OPTIONS. Each Fund may write (sell) covered call options. Covered
call options written by a Fund give the holder the right to buy the underlying
securities from the Fund at a stated exercise price. A call option written by a
Fund is "covered" if the Fund owns the underlying security that is subject to
the call or has an absolute and immediate right to acquire that security without
additional cash consideration (or for additional cash consideration held in a
segregated account by its custodian bank) upon conversion or exchange of other
securities held in its portfolio. A call option is also covered if a Fund holds
a call on the same security and in the same principal amount as the call written
where the exercise price of the call held (a) is equal to or less than the
exercise price of the call written or (b) is greater than the exercise price of
the call written if the difference is maintained by the Fund in cash and high
grade debt securities in a segregated account with its custodian bank.

The premium paid by the buyer of an option will reflect, among other things, the
relationship of the exercise price to the market price and volatility of the
underlying security, the remaining term of the option, supply and demand and
interest rates.

The writer of a call option may have no control over when the underlying
securities must be sold because the writer may be assigned an exercise notice at
any time prior to the termination of the

2
<PAGE>

obligation. Whether or not an option expires unexercised, the writer retains
the amount of the premium. This amount, of course, may, in the case of a
covered call option, be offset by a decline in the market value of the
underlying security during the option period. If a call option is exercised,
the writer experiences a profit or loss from the sale of the underlying
security.

The writer of an option that wishes to terminate its obligation may effect a
"closing purchase transaction," by buying an option of the same series as the
option previously written. The effect of the purchase is that the writer's
position will be canceled by the clearing corporation. However, a writer may
not effect a closing purchase transaction after being notified of the exercise
of an option. There is no guarantee that a Fund will be able to effect a closing
purchase transaction for the options it has written.

Effecting a closing purchase transaction in the case of a written call option
will permit a Fund to write another call option on the underlying security with
either a different exercise price, expiration date or both. Also, effecting a
closing purchase transaction will permit the Fund to use cash or proceeds from
the concurrent sale of any securities subject to the option to make other
investments. If a Fund desires to sell a particular security from its portfolio
on which it has written a call option, it will effect a closing purchase
transaction before or at the same time as the sale of the security.

A Fund will realize a profit from a closing purchase transaction if the price of
the transaction is less than the premium received from writing the option. A
Fund will realize a loss from a closing purchase transaction if the price of the
transaction is more than the premium received from writing the option. Because
increases in the market price of a call option will generally reflect increases
in the market price of the underlying security, any loss resulting from the
repurchase of a call option is likely to be offset in whole or in part by
appreciation of the underlying security owned by a Fund.

WRITING COVERED OVER-THE-COUNTER ("OTC") OPTIONS. A Fund may write ("sell")
covered call options that trade in the OTC market to the same extent that it
will engage in exchange traded options. Just as with exchange traded options,
OTC call options give the holder the right to buy an underlying security from an
option writer at a stated exercise price. However, OTC options differ from
exchange traded options in certain material respects.

OTC options are arranged directly with dealers and not, as is the case with
exchange traded options, with a clearing corporation. Thus, there is a risk of
non-performance by the dealer. Because there is no exchange, pricing is
typically done by reference to information from market makers. However, OTC
options are available for a greater variety of securities, and in a wider range
of expiration dates and exercise prices, than exchange traded options, and the
writer of an OTC option is paid the premium in advance by the dealer.

There can be no assurance that a continuous liquid secondary market will exist
for any particular option at any specific time. When a Fund writes an OTC
option, it generally can close out that

3
<PAGE>

option prior to its expiration only by entering into a closing purchase
transaction with the dealer to which the Fund originally wrote the option.

FUTURES CONTRACTS. Each Fund may buy and sell stock index futures contracts
traded on domestic stick exchanges to hedge the value of its portfolio against
changes in market conditions. A stock index futures contract is an agreement
between two parties to take or make delivery of an amount of cash equal to a
specified dollar amount times the difference between the stock index value at
the close of the last trading day of the contract and the price at which the
futures contract is originally struck. A stock index futures contract does not
involve the physical delivery of the underlying stocks in the index. Although
stock index futures contracts call for the actual taking or delivery of cash, in
most cases, each Fund expects to liquidate its stock index futures positions
through offsetting transactions, which may result in a gain or a loss, before
cash settlement is required.

A Fund will incur brokerage fees when it purchases and sells stock index futures
contract, and, at the time a Fund purchases or sells a stock index futures
contract, it must make a good faith deposit known as the "initial margin."
Thereafter, a Fund may need to make subsequent deposits, known as "variation
margin," to reflect changes in the level of the stock index. A Fund may buy or
sell a stock index futures contract so long as the sum of the amount of margin
deposits on open positions with respect to all stock index futures contracts
does not exceed 5% of the Fund's net assets.

To the extent a Fund enters into a stock index futures contract, it will
maintain with its custodian bank, to the extent required by the rules of the
SEC, assets in a segregated account to cover its obligations with respect to
such contract, which will consist of cash, cash equivalents or high quality debt
securities from its portfolio in an amount equal to the difference between the
fluctuating market value of such futures contract and the aggregate value of the
initial and variation margin payments made by the Fund with respect to such
futures contracts.

REPURCHASE AGREEMENTS. Each Fund may enter into repurchase agreements. A
repurchase agreement is an instrument under which the Fund acquires ownership of
a debt security and the seller agrees, at the time of the sale, to repurchase
the obligation at a mutually agreed upon time and price, thereby determining the
yield during the Fund's holding period.

WARRANTS. Each Fund may invest in warrants. A warrant is a security that gives
the holder the right, but not the obligation, to purchase a given number of
shares of a particular company at a fixed price within a certain period of time.
Warrants generally trade in the open market and may be sold rather than
exercised.

4
<PAGE>

POTENTIAL RISKS

OPTIONS AND FUTURES. Although each Fund may write covered call options and
purchase and sell stock index futures contracts to hedge against declines in
market value of its portfolio securities, the use of these instruments involves
certain risks. As the writer of covered call options, a Fund receives a premium,
but loses any opportunity to profit from an increase in the market price of the
underlying securities above the exercise price during the option period. A Fund
also retains the risk of loss if the price of the security declines, though the
premium received may partially offset such loss.

Although stock index futures contracts may be useful in hedging against adverse
changes in the value of a Fund's portfolio securities, they are derivative
instruments that are subject to a number of risks. During certain market
conditions, purchases and sales of stock index futures contracts may not
completely offset a decline or rise in the value of a Fund's Portfolio. In the
futures markets, it may not always be possible to execute a buy or sell order at
the desired price, or to close out an open position due to market conditions,
limits on open positions and/or daily price fluctuations. Changes in the market
value of a Fund's portfolio may differ substantially from the changes
anticipated by the Fund when it established its hedged positions, and
unanticipated price movements in a futures contract may result in a loss
substantially greater than a Fund's initial investment in such contract.
Successful use of futures contracts depends upon Advisors' ability to predict
correctly movements in the direction of the securities markets generally or of a
particular segment of a securities market. No assurance can be given that
Advisors' judgment in this respect will be correct.

The CFTC and the various exchanges have established limits referred to as
"speculative position limits" on the maximum net long or net short position that
any person may hold or control in a particular futures contract. Trading limits
are imposed on the maximum number of contracts that any person may trade on a
particular trading day. An exchange may order the liquidation of positions
found to be in violation of these limits and it may impose other sanctions or
restrictions. Each Fund does not believe that these trading and positions
limits will have an adverse impact on its strategies for hedging its securities.

REPURCHASE AGREEMENTS. Although each Fund will enter into repurchase agreements
only with institutions that Advisors believes present minimal credit risk, it is
conceivable that a repurchase agreement issuer could seek relief under
bankruptcy laws or otherwise default on its obligations under its repurchase
agreement. In that event, a Fund could experience both delays in liquidating
the underlying securities and losses, including: (a) a possible decline in the
value of the underlying security during the period while the Fund seeks to
enforce its rights thereto; (b) possible subnormal levels of income and lack of
access to income during this period; (c) a possible loss on the sale of the
underlying collateral; and (d) expenses of enforcing its rights.

WARRANTS. The purchaser of a warrant expects the market price of the security
underlying the warrant to exceed the purchase price of the warrant plus the
exercise price of the warrant, thus

5
<PAGE>

yielding a profit. Of course, it is possible that the market price of the
security underlying a warrant won't exceed the exercise price of the warrant
before the expiration date of the warrant. Consequently, the purchaser of a
warrant risks the loss of the entire purchase price of the warrant.
Additionally, price movements in the security underlying a warrant are generally
magnified in the price movements of the warrant. Therefore, the price of a
warrant tends to be more volatile than, and may not correlate exactly to, the
price of its underlying security.

INVESTMENT RESTRICTIONS

The Company has adopted the following restrictions as fundamental policies for
each Fund as stated. These restrictions are fundamental policies of the Fund
and may not be changed for any given Fund without the approval of the lesser of
(i) more than 50% of the outstanding voting securities of the Fund or (ii) 67%
or more of the voting securities present at a shareholder meeting of the Fund if
more than 50% of the outstanding voting securities of the Fund are represented
at the meeting in person or by proxy. The investment restrictions of one Fund
thus may be changed without affecting those of the other Fund. Under the
restrictions, each Fund MAY NOT:

1. issue senior securities, except to the extent permitted by the 1940 Act,
including permitted borrowings;

2. make loans, except for collateralized loans of portfolio securities in an
amount not exceeding 33 1/3% of the Fund's total assets (at the time of the
most recent loan). This limitation does not apply to purchases of debt
securities or to repurchase agreements;

3. borrow money, except for temporary or emergency purposes in an amount not
exceeding 33 1/3% of the Fund's total assets (including the amount
borrowed) less liabilities (other than borrowings). No Fund will purchase
securities when its borrowings exceed 5% of its total assets;

4. invest more than 25% of the Fund's total assets (at the time of the most
recent investment) in any single industry. This limitation does not apply
to investments in obligations of the U.S. Government or any of its agencies
or instrumentalities;

5. act as an underwriter, except to the extent that, in connection with the
disposition of portfolio securities, the Fund may be deemed to be an
underwriter for purposes of the 1933 Act;

6. invest in securities for the purpose of exercising management or control of
the issuer, except that each Fund may purchase securities of other
investment companies to the extent permitted by the 1940 Act, regulations
thereunder, or exemptions therefrom;

6
<PAGE>

7. purchase or sell commodity contracts, except that each Fund may, as
appropriate and consistent with its investment objectives and policies,
enter into financial futures contracts, options on such futures contracts,
forward foreign currency exchange contracts, forward commitments, and
repurchase agreements;

8. effect short sales, unless at the time the Fund owns securities equivalent
in kind and amount to those sold;

9. purchase or sell real estate or any interest therein, except that each Fund
may, as appropriate and consistent with its investment objectives and
policies, invest in securities of corporate and governmental entities
secured by real estate or marketable interests therein, or securities of
issuers that engage in real estate operations or interests therein, and may
hold and sell real estate acquired as a result of ownership of such
securities; or

10. invest in the securities of other investment companies, except that each
Fund may acquire securities of another investment company pursuant to a
plan of reorganization, merger, consolidation or acquisition, or except
where the Fund would not own, immediately after the acquisition, securities
of other investment companies which exceed in the aggregate (i) more than
3% of the issuer's outstanding voting stock, (ii) more than 5% of the
Fund's total assets, and (iii) together with the securities of all other
investment companies held by the Fund, exceed, in the aggregate, more than
10% of the Fund's total assets, or except as otherwise permitted by the
1940 Act and the regulations thereunder or exemptions therefrom.

In addition to these fundamental policies, it is the present policy of each Fund
(which may be changed without the shareholder approval) not to pledge, mortgage
or hypothecate its assets as security for loans, nor to engage in joint or joint
and several trading accounts in securities, except that it may participate in
joint repurchase arrangements, or invest its short-term cash in shares of a
money market mutual fund (pursuant to the terms of any order, and any conditions
therein, issued by the SEC permitting such investments). It is also the present
policy of each Fund not to invest in excess of 5% of its net assets, valued at
the lower of cost or market, in warrants, nor more than 2% of its net assets in
warrants not listed on either the New York or American Stock Exchange.

7
<PAGE>

DIRECTORS AND OFFICERS

The Board of Directors has the responsibility for the overall management of the
Company, including general supervision and review of its investment activities.
The Board of Directors, in turn, elects the officers of the Company who are
responsible for administering the Company's day-to-day operations. The
affiliations of the officers and Board of Directors members and their principal
occupations for the past five years are shown below. Members of the Board of
Directors who are considered "interested persons" of the Company under the 1940
Act are indicated by an asterisk (*).

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS
NAME, ADDRESS, AND AGE POSITIONS HELD WITH THE COMPANY DURING THE PAST FIVE YEARS
- ---------------------- ------------------------------- --------------------------
<S> <C> <C>
*David A. Kugler (38) Director, President and Treasurer President and Director, The
8377 Cherry Lane Monument Group, Inc. (a holding
Laurel, MD 20707 company), 1997-Present;
President and Director, The
Monument Funds Group, Inc. (a
holding company), 1997-Present;
President and Director, Monument
Advisors, Ltd; 1997-Present
President and Director, Monument
Distributors, Inc.,
1997-Present; Account Vice
President, Paine Webber, Inc.,
1994-1997; Financial Consultant,
Merrill Lynch & Co., 1990-1994

*Herbert Klein, III (39) Director, Vice President and Director and Principal, The
8377 Cherry Lane Secretary Monument Group, Inc.,
Laurel, MD 20707 1997-Present; Consultant, The
Highland Group (firm
specializing in operational
aspects of mergers and
acquisitions), 1997; Managing
Associate, Coopers & Lybrand
L.L.P., Management Consulting
Services, 1994-1997; Andersen
Consulting L.L.P., Arthur
Andersen & Co., S.C., Systems
Integration Practice, 1988-1994.

Francine F. Carb (39) Director President, Markitects, Inc.
421 Woodland Circle (marketing consulting),
Radnor, PA 19087-4640 1994-Present; President,
Francine Carb & Associates
(marketing consulting), 1992-1994

Victor Dates (60) Director Assistant Professor, Howard
2107 Carter Dale Road University, 1988-Present
Baltimore, MD 21209
</TABLE>

8
<PAGE>

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS
NAME, ADDRESS, AND AGE POSITIONS HELD WITH THE COMPANY DURING THE PAST FIVE YEARS
- ---------------------- ------------------------------- --------------------------
<S> <C> <C>
George DeBakey (48) Director Instructor at American
53303 Marlyn Drive University, 1992-Present;
Bethesda, MD 20816 Private Investor.

G. Frederic White, III Director Management Consultant (small
(44) business management consulting),
3107 Albemarle Road 1985-1997; Business Manager,
Wilmington, DE 19808 Trinity Episcopal Parish,
1997-Present; Private Investor

Rhonda Wiles-Roberson, J.D Director Principal, RWR Consults
(46) (business advisors),
623 Sonata Way 1995-Present; General Counsel,
Silver Spring, MD 20901 NAPWA Services, Inc.
(pharmaceutical company),
1993-1995; General Counsel,
Calvert Group (sponsor of
investment companies), 1990-1993
</TABLE>

Directors and officers of the Company who are affiliated with Advisors and/or
Distributors receive no remuneration from the Company. Each Director who is
not an interested person of the Company receives as compensation for serving on
the Board of Directors an annual fee of $2,000 plus a fee of $500 per day for
attendance at any meeting of the Board of Directors or committee established by
the Board of Directors, including any meeting held by telephonic conference.
The Directors also receive reimbursement for their expenses incurred in
attending any meeting of the Board of Directors or committee established by the
Board of Directors. The Board of Directors generally meets quarterly.

Additionally, certain Directors and officers of the Company who are shareholders
of The Monument Group, Inc., the parent company of Advisors and Distributors,
may be deemed to receive indirect remuneration by virtue of their indirect
interests in Advisors and Distributors, respectively.

Director White provided business consultation services to Monument Advisors on
two limited projects in 1997 for compensation totaling less than $1,500.

COMMITTEES ESTABLISHED BY THE BOARD OF DIRECTORS.

The Company has an Audit Committee, an Executive Committee, a Pricing and
Investment Committee, and a Nominating Committee. The duties of these four
Committees and their present membership are as follows:

9
<PAGE>

AUDIT COMMITTEE: The Audit Committee assists the Board of Directors in
fulfilling its responsibilities for the Company's accounting and financial
reporting practices, and provides a channel of communication between the Board
of Directors and Deloitte & Touche LLP, the Company's independent public
accountant. Directors Carb, Dates, DeBakey, White and Wiles-Roberson are
members of the Audit Committee.

EXECUTIVE COMMITTEE: During intervals between meetings of the Board of
Directors, the Executive Committee possesses and may exercise all of the powers
of the Board of Directors in the management of the Company except as to those
matters that specifically require action by the Board of Directors. Directors
Kugler, Klein, and Wiles-Roberson are members of the Executive Committee.

PRICING AND INVESTMENT COMMITTEE: During intervals between meetings of the
Board of Directors, the Pricing and Investment Committee determines or
establishes in good faith a fair value for any portfolio investment of the
Company not having a readily available market quotation or sales price, and
presents to the full Board of Directors such valuations and the basis therefore
at the next meeting held by the Board of Directors for their good faith
confirmation or change. Directors Kugler and Klein are members of the Pricing
and Investment Committee. In addition to Mr. Kugler and Mr. Klein, E. Frederick
Bair, Alexander Cheung, and Sheila Twible are also members of the Pricing and
Investment Committee. Mr. Bair and Mr. Cheung are employees of Monument
Advisors. Ms. Twible is an employee of State Street, the Administrator, and
Transfer and Service Agent, of the Company.

NOMINATING COMMITTEE: The Nominating Committee nominates candidates for
election to the Board of Directors, whether such candidates be interested or
non-interested persons of the Company. Directors Carb, Dates, DeBakey, White,
and Wiles-Roberson are members of the Nominating Committee.

INVESTMENT ADVISORY AND OTHER SERVICES

ADVISORY AGREEMENT. Pursuant to the Advisory Agreement, Advisors provides
certain services to each Fund. The services provided by Advisors include: (a)
furnishing an investment program by determining what investments a Fund should
purchase, hold, sell, or exchange; determining the manner in which to exercise
any voting rights, rights to consent to corporate action, or other rights
pertaining to a Fund's investment securities; and rendering regular reports to
the Company regarding the decisions that it has made with respect to the
investment of the assets of each Fund and the purchase and sale of its
investment securities, the reasons for such decisions, the extent to which is
has implemented such decisions, and the manner in which it has exercised any
voting rights, rights to consent to corporate action, or other rights pertaining
to a Fund's investment securities; (b) placing orders for the execution of each
Fund's securities transactions, in accordance with any applicable directions
from the Board of Directors, and rendering certain

10
<PAGE>

reports to the Company regarding brokerage business placed by Advisors; (c)
using its best efforts to recapture all available tender offer solicitation fees
in connection with tenders of the securities of any Fund, and any similar
payments; (d) advising the Board of Directors of any fees or payments of
whatever type that it may be possible for Advisors or an affiliate thereof to
receive in connection with the purchase or sale of investment securities for any
Fund; (e) assisting the Custodian with the valuation of the securities of each
Fund, and in calculating the net asset value of each Fund; (f) providing
assistance to the Company with respect to the Company's registration statement,
regulatory reports, periodic reports to shareholders and other documents
(including tax returns), required by applicable law; (g) providing assistance to
the Company with respect to the development, implementation, maintenance, and
monitoring of a compliance program; and (h) furnishing, at its own expense,
adequate facilities and personnel for the Directors and officers of the Company
to manage the Company's affairs.

Under the Advisory Agreement, the advisory fee for each Fund is payable at the
end of each calendar month, determined by applying the annual rates, as set out
in the Prospectus, to the average daily net assets of each Fund.

The Advisory Agreement was approved, with regard to each Fund, on October 27,
1997, by the Board of Directors, and was subsequently approved by the initial
shareholder of each Fund, following his investment of the initial capitalization
of each Fund. The Advisory Agreement will remain in effect for two years from
the date of its execution, with respect to each Fund and will continue in effect
from year to year thereafter for each Fund as long as its continuance is
specifically approved at least annually by a vote of the Board of Directors (on
behalf of such Fund) or by a vote of the holders of a majority of such Fund's
outstanding voting securities (as defined by the 1940 Act), and in either event,
by a majority vote of the Board of Directors members who are not interested
persons of Advisors or the Company (other than as members of the Board of
Directors), cast in person at a meeting called for the purpose of voting on such
approval. The Advisory Agreement may be terminated without penalty at any time
by the Board of Directors, Advisors, or with respect to any Fund, by a vote of a
majority of that Fund's shareholders, in each case on 60 days' written notice,
and will automatically terminate in the event of its assignment, as defined in
the 1940 Act.

CUSTODIAN. Investors Fiduciary Trust Company acts as custodian of the
securities and other assets of each Fund, and for cash received in connection
with the purchase of Fund shares. The custodian does not participate in
decisions relating to the purchase and sale of portfolio securities.

INDEPENDENT PUBLIC ACCOUNTANT. Deloitte & Touche LLP, located at University
Square, 117 Campus Drive, Princeton, New Jersey 08540, serves as the Company's
independent public accountant. Their accounting services include rendering a
report on the financial statements of the Company.

11
<PAGE>

PORTFOLIO TRANSACTIONS AND BROKERAGE

Advisors, pursuant to the Advisory Agreement, and subject to the general control
of the Board of Directors, places all orders for the purchase and sale of
securities of each Fund. In executing portfolio transactions and selecting
brokers and dealers, it is the Company's policy to seek the best combination of
price and execution ("best execution") available. Advisors will consider such
factors as it deems relevant, including the breadth of the market in the
security, the financial condition and execution capability of the broker-dealer,
and the reasonableness of the commission, if any, for the specific transaction
or on a continuing basis.

Advisors is authorized to pay brokerage commissions, on behalf of each Fund, in
an amount in excess of that which another broker might have charged that Fund,
in recognition of certain brokerage and research services provided by that
broker. More specifically, in the allocation of brokerage business used to
purchase securities for a Fund, Advisors may give preference to those broker-
dealers who provide brokerage and research or other services to Advisors as long
as there is no sacrifice in obtaining best execution. Such services may
include, for example: advice concerning the value of securities, the
advisability of investing in, purchasing, or selling securities, and the
availability of securities or the purchasers or sellers of securities; analyses
and reports concerning issuers, industries, securities, economic factors and
trends, portfolio strategy, and performance of accounts; and various functions
incidental to effecting securities transactions, such as clearance and
settlement. The receipt of research from broker-dealers that execute
transactions on behalf of the Company may be useful to Advisors in rendering
investment management services to other clients (including affiliates of
Advisors), and conversely, such research provided by broker-dealers who have
executed transaction orders on behalf of other clients may be useful to Advisors
in carrying out its obligations to the Company. While such research is
available to and may be used by Advisors in providing investment advice to all
its clients (including affiliates of Advisors), not all of such research may be
used by Advisors for the benefit of the Company. Such research and services
will be in addition to and not in lieu of research and services provided by
Advisors, and the expenses of Advisors will not necessarily be reduced by the
receipt of such supplemental research.

When portfolio transactions are executed on a securities exchange, the amount of
commission paid by a Fund is negotiated between Advisors and the broker
executing the transaction. Advisors will ordinarily place orders to buy and sell
over-the-counter securities on a principal rather than agency basis with a
principal market maker unless, in the opinion of Advisors, a better price and
execution can otherwise be obtained. Purchases of portfolio securities from
underwriters will include a commission or concession paid by the issuer to the
underwriter, and purchases from dealers will include a spread between the bid
and ask price. Occasionally, securities may be purchased directly from the
issuer, which does not involve the payment of commissions.

Monument Advisors may sometimes receive certain fees when a Fund tenders
portfolio securities pursuant to a tender offer solicitation. As a means of
recapturing brokerage for the benefit of such Fund, any portfolio securities
tendered by the Fund will be tendered through Advisors if it

12
<PAGE>

is legally permissible to do so. In turn, the next advisory fee payable to
Advisors will be reduced by the amount of any fees received by Advisors in cash,
less any costs and expenses incurred in connection with the tender.

Securities of the same issuer may be purchased, held, or sold at the same time
by the Company for both of its Funds, or by other accounts or companies for
which Advisors provides investment advice (including affiliates of Advisors).
On occasions when Advisors deems the purchase or sale of a security to be in the
best interest of the Company, as well as Advisors' other clients, Advisors, to
the extent permitted by applicable laws and regulations, may aggregate such
securities to be sold or purchased for the Company with those to be sold or
purchased for other customers in order to obtain best execution and lower
brokerage commissions, if any. In such event, Advisor will allocate the
securities so purchased or sold, as well as the expenses incurred in the
transaction, in the manner it considers to be most equitable and consistent with
its fiduciary obligations to all such customers, including the Company. In some
instances, this procedure may impact the price and size of the position
obtainable for the Company.

BUYING, REDEEMING, AND EXCHANGING SHARES

ADDITIONAL INFORMATION ON BUYING SHARES. The Company continuously offers shares
of the Funds through advertisements, mailings and, in the future, the Internet.
When you buy shares, if you submit a check or a draft that is returned unpaid to
the Company we may impose a $50 charge against your account for each returned
item.

REINVESTMENT DATE. Fund shares acquired through the reinvestment of dividends
will be purchased at the Fund's net asset value determined on the business day
following the dividend record date (sometimes known as the "ex-dividend date").
The processing date for the reinvestment of dividends may vary and does not
affect the amount or value of the shares acquired.

ADDITIONAL INFORMATION ON REDEEMING SHARES: REDEMPTIONS IN KIND. The Company,
on behalf of the Funds, has committed itself to pay in cash (by check) all
requests for redemption by any shareholder of record of a Fund, limited in
amount, however, during any 90-day period to the lesser of $250,000 or 1% of the
value of a Fund's net assets at the beginning of the 90-day period. This
commitment is irrevocable without the prior permission of the SEC. In the case
of redemption requests in excess of these amounts, the Board of Directors
reserves the right to make payments in whole or in part in securities or other
assets of a Fund, in case of an emergency, or if the payment of such a
redemption in cash would be detrimental to the existing shareholders of the
Fund. In these circumstances, the securities distributed would be valued at the
price used to compute the Fund's net assets and you may incur brokerage fees in
converting the securities to cash. The Company does not intend to redeem
illiquid securities in kind. If this happens, however, you may not be able to
recover your investment in a timely manner.

13
<PAGE>

ADDITIONAL INFORMATION ON EXCHANGING SHARES. If you request the exchange of the
total value of your account from one Fund to another Fund, we will reinvest any
declared but unpaid income dividends and capital gain distributions in the new
Fund at the Fund's net asset value. Backup withholding and information
reporting may apply. Information regarding the possible tax consequences of an
exchange appears in the tax section in this SAI.

If a substantial number of shareholders should, within a short period, sell
their shares of a Fund under the exchange privilege, the Fund might have to sell
portfolio securities that it might otherwise hold and would incur the additional
costs related to such transactions. On the other hand, increased use of the
exchange privilege may result in periodic large inflows of money. If large
inflows of money occur, it is each Fund's general policy to initially invest
this money in short-term, interest-bearing money market instruments. However,
if Advisors believes that attractive investment opportunities, consistent with a
Fund's investment objective and policies, exist immediately, then it will invest
such money in portfolio securities in as orderly a manner as is possible.

The proceeds from the sale of shares of each Fund may not be available until the
third business day following the sale. The Fund you are seeking to exchange
into may delay issuing shares pursuant to an exchange until that third business
day. The sale of Fund shares to complete an exchange will be effected at net
asset value of the Fund next computed after your request for exchange is
received in proper form. See "Buying, Redeeming, and Exchanging Shares" in the
Prospectus.

ADDITIONAL INFORMATION ON SALES CHARGES. As described in the Prospectus, the
offering price of each Fund's shares is based on that Fund's NAV per share, plus
an initial sales charge that is paid to Monument Distributors. See "Public
Offering Price," "Redemption Price," and "Net Asset Value" in the Prospectus.
Initial sales charges do not apply to certain classes of persons or
transactions, as described in "Waiver of Sales Charges" in the Prospectus. The
reason for the waiver of sales charges in these situations is that they do not
involve the same level of expenses that are associated with the sale of Fund
shares to the general public. In addition, as shown in the table under "Public
Offering Price" in the Prospectus, initial sales charges decline as the amount
of Fund shares purchased increases to reflect certain economies of scale in the
selling effort associated with larger purchases.

GENERAL INFORMATION. We will consider dividend and capital gain distribution
checks that the U.S. Postal Service returns marked "unable to forward" as a
request by you to change your dividend option to reinvest all distributions. We
will reinvest the proceeds in additional shares at the net asset value of the
applicable Fund(s) until we receive new instructions.

If mail is returned as undeliverable or we are unable to locate you or verify
your current mailing address, we may deduct, from your account, the costs of our
efforts to find you. These costs may include a percentage of the account when a
search company charges a percentage fee in exchange for its location services.

14
<PAGE>

All checks, drafts, wires and any other available payment mediums that you use
buy or sell shares of a Fund must be denominated in U.S. dollars. We may, in
our sole discretion, either (a) reject any order to buy or sell shares
denominated in any other currency or (b) honor the transaction or make
adjustments to your account for the transaction as of a date and with a foreign
currency exchange factor determined by the drawee bank.

PRINCIPAL HOLDERS OF SECURITIES

As of December 12, 1997, David A. Kugler, whose address is 810 E. Belvedere
Avenue, Baltimore, Maryland 21212, was presumed to control both the Growth Fund,
and Aggressive Growth Fund, by virtue of his beneficial ownership of the shares
of each Fund, of 26.87% and 27.41%, respectively. As of such date, Mr. Kugler
owned of record 9.90% of the shares of the Growth Fund, and 10.10% of the shares
of the Aggressive Growth Fund. The remainder of Mr. Kugler's beneficial
ownership of the shares of each Fund (16.97% of the shares of the Growth Fund,
and 17.31% of the shares of the Aggressive Growth Fund, respectively), were due
to his ownership interests in The Monument Group, Inc.

As of December 12, 1997, Herbert Klein, III, whose address is 15708 Blossom
Lane, North Potomac, Maryland 20878, beneficially owned 20.65% of the shares of
the Growth Fund, and 21.07% of the shares of the Aggressive Growth Fund,
respectively. As of such date, Mr. Klein owned of record 19.80% of the shares
of the Growth Fund, and 20.20% of the shares of the Aggressive Growth Fund. The
remainder of Mr. Klein's beneficial ownership of the shares of each Fund (0.85%
of the shares of the Growth Fund, and 0.87% of the shares of the Aggressive
Growth Fund, respectively) were due to his ownership interests in The Monument
Group, Inc.

As of December 12, 1997, The Monument Group, Inc., located at 8377 Cherry Lane,
Laurel, Maryland 20707, owned of record 17.82% of the shares of the Growth Fund,
and 18.18% of the shares of the Aggressive Growth Fund. As of such date,
ownership interests in The Monument Group, Inc. were held exclusively by Mr.
Kugler and Mr. Klein, respectively.

In addition to the foregoing, the following individuals owned of record and
beneficially, as of December 12, 1997, the following percentages of the shares
of the Growth Fund (addresses supplied): John C. Siewers II (109 Seneca Road,
Richmond, Virginia 23226), 19.80%; and G. Frederic White, III (3107 Albemarle
Road, Wilmington, Delaware 19808), 5.94%.

In addition to the foregoing, the following individuals owned of record and
beneficially, as of December 12, 1997, the following percentages of the shares
of the Aggressive Growth Fund (addresses supplied): Heather and Thomas Young
(2645 International Drive, TH-16, McLean, Virginia 22102), 15.15% (shares owned
jointly); Janine and Jeff Coyle (13226 Shady Ridge Lane, Fairfax, Virginia
22033), 10.10% (shares owned jointly); George DeBakey (53303

15
<PAGE>

Marlyne Drive, Bethesda, Maryland 20816), 5.05%; John H. Vivadelli (5632 Langdon
Court, Richmond, Virginia 23225), 5.05%; and Richard E. and Sarah H. Collier
(9310 Walhala Point, Richmond, Virginia 23236), 5.05% (shares owned jointly).

As of December 12, 1997, the Company's Directors and officers, as a group,
beneficially owned 65.34% of the shares of the Growth Fund, and 59.59% of the
shares of the Aggressive Growth Fund, respectively.

VALUATION OF FUND SHARES

For the purpose of determining the aggregate net assets of a Fund, cash and
receivables are valued at their realizable amounts. Interest is recorded as
accrued and dividends are recorded on the ex-dividend date. Portfolio securities
listed on a securities exchange or on the NASDAQ National Market System for
which market quotations are readily available are valued at the last quoted sale
price of the day or, if there is no such reported sale, at the mean between the
closing bid and asked prices on that day. Over-the-counter portfolio securities
(other than securities reported on the NASDAQ National Market System) are valued
at the mean between the last bid and asked prices based upon quotes furnished by
market makers for such securities. Portfolio securities that are traded both in
the over-the-counter market and on a stock exchange are valued according to the
broadest and most representative market as determined by Advisors. Exchange
listed convertible debt securities are valued at the mean between the last bid
and asked prices obtained from broker-dealers or a comparable alternative, such
as Bloomberg or Telerate.

Portfolio securities underlying actively traded call options are valued at their
market price as determined above. The current market value of any option held
by a Fund is its last sale price on the relevant exchange prior to the time when
assets are valued. Lacking any sales that day or if the last sale price is
outside the bid and asked prices, options are valued within the range of the
current closing bid and asked prices if the valuation is believed to fairly
reflect the contract's market value.

Generally, trading in corporate bonds, U.S. government securities and money
market instruments is substantially completed each day at various times before
the scheduled close of the Exchange. The value of these securities used in
computing the net asset value of each Fund is determined as of such times.
Occasionally, events affecting the values of these securities may occur between
the times at which they are determined and the scheduled close of the Exchange
that will not be reflected in the computation of the net asset value of a Fund.
If events materially affecting the values of these securities occur during this
period, the securities will be valued at their fair value as determined in good
faith by the Board of Directors.

Other securities for which market quotations are readily available are valued at
the current market price, which may be obtained from a pricing service, based on
a variety of factors

16
<PAGE>

including recent trades, institutional size trading in similar types of
securities (considering yield, risk and maturity) and/or developments related to
specific issues. Securities and other assets for which market prices are not
readily available are valued at fair value as determined following procedures
approved by the Board of Directors. With the approval of the Board of
Directors, a Fund may utilize a pricing service to perform any of the above
described functions.

ADDITIONAL INFORMATION ON DISTRIBUTIONS AND TAXES

DISTRIBUTIONS. You may receive two types of distributions from a Fund:

1. INCOME DIVIDENDS. Each Fund receives income generally in the form of
dividends, interest and other income derived from its investments. This
income, less the expenses incurred in the Fund's operations, is its net
investment income from which income dividends may be distributed. Thus,
the amount of dividends paid per share may vary with each distribution.

2. CAPITAL GAIN DISTRIBUTIONS. The Funds may derive capital gains or losses
in connection with sales or other dispositions of their portfolio
securities. Distributions by a Fund derived from net short-term and net
long-term capital gains (after taking into account any capital loss carry
forward or post-October loss deferral) may generally be made once a year in
December to reflect any net short-term and net long-term capital gains
realized by the Fund as of October 31 of the current fiscal year and any
undistributed capital gains from the prior fiscal year. Each Fund may make
more than one distribution derived from net short-term and net long-term
capital gains in any year or adjust the timing of these distributions for
operational or other reasons.

TAXES. As stated in the Prospectus, each Fund has elected to be treated as a
regulated investment company under Subchapter M of the Code. The Board of
Directors reserves the right not to maintain the qualification of a Fund as a
regulated investment company if it determines this course of action to be
beneficial to shareholders. In that case, that Fund will be subject to federal
and possibly state corporate taxes on its taxable income and gains. In either
case, distributions to shareholders will be taxable to the extent of the Fund's
available earnings and profits.

Subject to the limitations discussed below, all or a portion of the income
dividends paid by a Fund may be treated by corporate shareholders as qualifying
dividends for purposes of the dividends received deduction under federal income
tax law. If the aggregate qualifying dividends received by a Fund (generally,
dividends from U.S. domestic corporations, the stock in which is not
debt-financed by the Fund and is held for at least a minimum holding period) is
less than 100% of its distributable income, then the amount of the Fund's income
dividends paid to corporate shareholders which may be designated as eligible for
such deduction will be an amount that does not exceed the aggregate qualifying
dividends received by the Fund for the taxable year. The amount or percentage
of income qualifying for the corporate dividends-received

17
<PAGE>

deduction will be declared by each Fund annually in the Company's annual report
to shareholders.

Corporate shareholders should note that income dividends and distributions paid
by a Fund from sources other than the qualifying dividends it receives will not
qualify for the dividends-received deduction. For example, any interest income
and net short-term capital gain (in excess of any net long-term capital loss or
capital loss carryover) included in investment company taxable income and
distributed by a Fund as a dividend will not qualify for the dividends-received
deduction. Corporate shareholders should also note that availability of the
corporate dividends-received deduction is subject to certain restrictions. For
example, the deduction is eliminated unless Fund shares have been held (or
deemed held) for more than 45 days in a substantially unhedged manner. The
dividends-received deduction also may be reduced to the extent interest paid or
accrued by a corporate shareholder is directly attributable to its investment in
shares of a Fund. Corporate shareholders whose investment in a Fund is "debt
financed" for these tax purposes should consult with their tax advisors
concerning the availability of the dividends-received deduction. The entire
income dividend and capital gain distribution, including the portion which is
treated as a deduction, is includable in the tax base on which the alternative
minimum tax is computed and may also result in a reduction in the shareholder's
tax basis in its Fund shares, under certain circumstances, if the shares have
been held for less than two years.

The Code requires each Fund to distribute at least 98% of its taxable ordinary
income earned during the calendar year and at least 98% of its capital gain net
income earned during the 12 month period ending October 31 of each year (in
addition to amounts from the prior year that were neither distributed nor taxed
to the Fund) to you by December 31 of each year in order to avoid the imposition
of a federal excise tax. Under these rules, certain capital gain distributions
that are declared in October, November or December but that, for operational
reasons, may not be paid to you until the following January, will be treated for
tax purposes as if paid by the Fund and received by you on December 31 of the
calendar year in which they are declared. Each Fund intends as a matter of
policy to declare such capital gain distributions, if any, in December and to
pay these capital gain distributions in December or January to avoid the
imposition of this tax, but does not guarantee that its capital gain
distributions will be sufficient to avoid any or all federal excise taxes.

Redemptions of a Fund's shares and exchanges of shares of one Fund for those of
the other Fund are taxable transactions for federal and state income tax
purposes. For most shareholders, gain or loss will be recognized in an amount
equal to the difference between the shareholder's basis in the shares and the
amount realized from the transaction, subject to the rules described below. If
such shares are a capital asset in the hands of the shareholder, gain or loss
will be capital gain or loss and will be long-term for federal income tax
purposes if the shares have been held for more than one year.

All or a portion of a loss realized upon a redemption of shares of a Fund will
be disallowed to the extent that other shares of the Fund are purchased (through
reinvestment of income dividends, capital gain distributions or otherwise)
within 30 days before or after such redemption. Any loss

18
<PAGE>

disallowed under these rules will be added to the tax basis of the shares
repurchased. All or a portion of the sales charge incurred in buying shares of
a Fund will not be included in the federal tax basis of any of such shares sold
or exchanged within 90 days of their purchase (for purposes of determining gain
or loss with respect to such shares) if the sales proceeds are reinvested in
another Fund of the Company and a sales charge which would otherwise apply to
the reinvestment is reduced or eliminated. Any portion of such sales charge
excluded from the tax basis of the shares sold will be added to the tax basis of
the shares acquired in the reinvestment. You should consult with your tax
advisor concerning the tax rules applicable to the redemption or exchange of a
Fund's shares.

A Fund's investment in options and futures contracts, including any stock
options, stock index options, stock index futures and options on stock index
futures are subject to many complex and special tax rules. For example, OTC
options on debt securities and equity options, including options on stock and on
narrow-based stock indexes, will be subject to tax under Section 1234 of the
Code, generally producing a long-term or short-term capital gain or loss upon
exercise, lapse, or closing out of the option or sale of the underlying stock or
security. By contrast, a Fund's treatment of certain other options, futures and
forward contracts entered into by the Fund is generally governed by Section 1256
of the Code. These "Section 1256" positions generally include listed options on
debt securities, options on broad-based stock indexes, options on securities
indexes, options on futures contracts, regulated futures contracts and certain
foreign currency contracts and options thereon.

Absent a tax election to the contrary, each Section 1256 position held by a Fund
will be marked-to-market (i.e., treated as if it were sold for fair market
value) on the last business day of the Fund's fiscal year, and all gain or loss
associated with fiscal year transactions and mark-to-market positions at fiscal
year end (except certain foreign currency gain or loss covered by Section 988 of
the Code) will generally be treated as 60% long-term capital gain or loss and
40% short-term capital gain or loss. The effect of Section 1256 mark-to-market
rules may be to accelerate income or to convert what otherwise would have been
long-term capital gains into short-term capital gains or short-term capital
losses into long-term capital losses within a Fund. The acceleration of income
on Section 1256 positions may require a Fund to accrue taxable income without
the corresponding receipt of cash. In order to generate cash to satisfy the
distribution requirements of the Code, a Fund may be required to dispose of
portfolio securities that it otherwise would have continued to hold or to use
cash flows from other sources such as the sale of its shares. In these ways,
any or all of these rules may affect the amount, character and timing of income
distributed to you by a Fund.

When a Fund holds an option or other contract that substantially diminishes the
Fund's risk of loss with respect to another position of the Fund (as might occur
in some hedging transactions), this combination of positions could be treated as
a straddle for tax purposes, resulting in possible deferral of losses,
adjustments in the holding periods of Fund securities and conversion of
short-term capital losses into long-term capital losses. Certain tax elections
exist for mixed straddles (i.e., straddles comprised of at least one Section
1256 position and at least one non-Section 1256 position) which may reduce or
eliminate the operation of these straddle rules.

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<PAGE>

In order for each Fund to qualify as a regulated investment company, at least
90% of each Fund's annual gross income must consist of dividends, interest and
certain other types of qualifying income. Foreign exchange gains derived by a
Fund with respect to the Fund's business of investing in stock or securities, or
options or futures with respect to such stock or securities is qualifying income
for purposes of this 90% limitation.

The Funds may be subject to foreign withholding taxes or other foreign taxes on
income (possibly including, in some cases, capital gains) on certain of its
foreign investments, which will reduce the yield on or return from those
investments. In any year in which a Fund qualifies, it may make an election
that would permit certain of its shareholders to take a credit or a deduction
for their shares of qualified foreign taxes paid by the Fund. Each shareholder
would then include in gross income (in addition to dividends actually received)
his or her share of the amount of qualified foreign taxes paid by the Fund. If
this election is made, the Fund will notify its shareholders annually as to
their share of the amount of qualified foreign taxes paid and the foreign source
income of the Fund.

FURTHER DESCRIPTION OF THE COMPANY'S SHARES

VOTING RIGHTS. Under the Company's By-Laws and in accordance with applicable
Maryland law, no annual meeting of shareholders is required in any year in which
the election of Directors is not required to be acted upon under the 1940 Act.
On any matter submitted to the shareholders, the holder of each Fund share is
entitled to one vote per share (with proportionate voting for fractional shares)
regardless of the relative NAV of the Fund's shares. However, on matters
affecting one Fund differently from the other Fund, a separate vote of the
shareholders of that Fund is required. Shareholders of a Fund are not entitled
to vote on any matter that does not affect that Fund. Shares do not have
cumulative voting rights, which means the holders of more than 50% of the shares
voting for the election of Directors can elect 100% of the Board of Directors,
and the holders of less than 50% of the shares voting for the election of
Directors will not be able to elect any person as a Director. Shareholders of a
particular Fund might have the power to elect all of the Company's Directors
because that Fund has a majority of the total outstanding shares of the Company.

DIVIDEND RIGHTS. Income dividends and capital gain distributions on shares of a
particular Fund may be paid with such frequency as the Board of Directors may
determine, which may be daily or otherwise, pursuant to a standing resolution or
resolutions adopted with such frequency as the Board of Directors may determine.
Such dividends and distributions may be paid to the holders of shares of a
particular Fund, from such of the income and capital gains, accrued or realized,
attributable to the assets belonging to that Fund, as the Board of Directors may
determine, after providing for actual and accrued liabilities belonging to that
Fund. All such dividends and distributions on shares of a particular series or
class will be distributed pro rata to the holders of that Fund in proportion to
the number of shares of that Fund held by such holders at the date and

20
<PAGE>

time of record established for the payment of such dividends or distributions.
The Board of Directors may declare and distribute a stock dividend to holders of
shares of a Fund by the distribution of shares of another Fund.

LIQUIDATION RIGHTS. In the event of the liquidation of a Fund, the shareholders
of that Fund will be entitled to receive, when and as declared by the Board of
Directors, the excess of the assets belonging to that Fund over the liabilities
belonging to that Fund. The holders of shares of a Fund will not be entitled
thereby to any distribution upon liquidation of any other Fund. The assets that
may be distributed to the shareholders of a Fund will be distributed among such
shareholders in proportion to the number of shares of that Fund held by each
such shareholder and recorded on the books of the Company. The liquidation of
any particular Fund in which there are shares then outstanding may be authorized
by an instrument in writing signed by a majority of the Directors then in
office, subject to the affirmative vote of "a majority of the outstanding voting
securities" of that Fund, as the quoted phrase is defined in the 1940 Act.

PRE-EMPTIVE, CONVERSION AND TRANSFER RIGHTS. When issued, each Fund's shares
are fully paid and nonassessable, have no pre-emptive or subscription rights,
and are fully transferable (the Board of Directors may, however, from time to
time, adopt lawful rules and regulations with reference to the method of
transfer). Subject to the 1940 Act, the Board of Directors has the authority to
provide that the holders of shares of a Fund will have the right to convert or
exchange such shares for or into shares of the other Fund in accordance with
such requirements and procedures as the Board of Directors may establish.

THE COMPANY'S PRINCIPAL UNDERWRITER

Pursuant to a distribution agreement ("Distribution Agreement"), Monument
Distributors has agreed to use its best efforts as principal underwriter to
promote the sale of each Fund's shares in a continuous public offering. The
Distribution Agreement, dated November 27, 1997 was approved, with regard to
each Fund, on October 27, 1997, by the Board of Directors. The Distribution
Agreement will continue in effect for two years from the date of its execution
and thereafter, but only so long as its continuance is specifically approved at
least annually by a vote of the Board of Directors or by a vote of the holders
of a majority of the Company's outstanding voting securities, and in either
event by a majority vote of the Board of Directors members who are not parties
to the Distribution Agreement or interested persons of any such party (other
than as members of the Board of Directors), cast in person at a meeting called
for that purpose. The Distribution Agreement terminates automatically in the
event of its assignment and may be terminated by either party on 60 days'
written notice.

Monument Distributors pays the expenses of the distribution of the Company's
shares, including advertising expenses and the costs of printing sales material
and prospectuses used to offer shares to the public. The Company pays the
expenses of preparing and printing amendments to its

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<PAGE>

registration statements and prospectuses (other than those necessitated by the
activities of Monument Distributors) and of sending prospectuses to existing
shareholders.

For its services, Monument Distributors receives a sales commission on the sale
of the shares of each Fund in the amount set forth, and as described, in the
Prospectus.

RULE 12b-1 PLAN. On October 27, 1997, the Board of Directors, on behalf of each
Fund, unanimously approved a Plan of Distribution pursuant to Rule 12b-1
("Plan"), pursuant to which Monument Distributors is entitled to receive a 12b-1
fee for certain activities and expenses that are intended to result in the sale
of Fund shares. See "Rule 12b-1 Plan" in the Prospectus for a description of
these activities and expenses and the maximum 12b-1 fee payable under the Plan
("Rule 12b-1 fee"). As described in the Prospectus, Monument Distributors has
agreed to voluntarily waive the Rule 12b-1 fee for the first year of operations
of each Fund.

In adopting the Plan, the Board of Directors concluded that the increased sales
of Fund shares that may result from the Plan are reasonably likely to benefit
each Fund and its shareholders, over time, by lowering overall Fund expenses per
share through economies of scale. The Plan is in effect for an initial one year
period, and will remain continuously in effect thereafter, provided that the
Board of Directors, including a majority of Rule 12b-1 Directors (described
below) annually approves its continuance by votes cast at an in person meeting
called for the purpose of voting on the Plan. Rule 12b-1 Directors include
those Directors who are not interested persons of the Company and who have no
direct or indirect financial interest in the operation of the Plan or any
agreements related thereto.

A majority of the Rule 12b-1 Directors must approve any material amendment to
the Plan. In addition, the amount payable by a Fund under the Plan may not
materially increase without the approval of a majority of the outstanding voting
securities of that Fund. The Plan may be terminated at any time, with respect
to a Fund, by a majority of the Rule 12b-1 Directors or by a majority of the
outstanding voting securities of that Fund.

PERFORMANCE INFORMATION

From time to time, each Fund may state its average annual and cumulative total
returns in advertisements and sales literature. SUCH PERFORMANCE DOES NOT
REPRESENT THE ACTUAL EXPERIENCE OF ANY PARTICULAR INVESTOR, AND IS NOT
NECESSARILY INDICATIVE OF FUTURE RESULTS.

AVERAGE ANNUAL TOTAL RETURN. Each Fund computes its average annual total
return according to the following formula prescribed by the SEC:

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<PAGE>

n
P(l+T) = ERV

Where:

P = a hypothetical initial investment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000
investment made at the beginning of the one-, five-,
ten-year or shorter period shown

Average annual total return calculations will reflect the deduction of the
maximum front-end sales charge from the hypothetical initial $1,000 purchase,
and the reinvestment of income dividends and capital gain distributions at net
asset value. The calculations will not reflect the deduction for the Rule 12b-1
fee until such charge is actually assessed. Each Fund also may show average
annual total return calculations.

CUMULATIVE TOTAL RETURN. Each Fund also may quote its cumulative total return
in advertisements and sales literature. Each Fund will compute cumulative total
return in a manner similar to average annual total return, except that it will
not annualize the results. The SEC has not prescribed a standard formula for
computing cumulative total return. Cumulative total return is calculated
according to the following formula:

C = (ERV/P) -1

Where:

P = a hypothetical initial investment of $1,000
C = cumulative total return
ERV = ending redeemable value of a hypothetical $1,000
investment made at the beginning of the one-, five-,
ten-year or shorter period shown

Cumulative total return calculations will reflect the deduction of the maximum
front-end sales charge from the hypothetical initial $1,000 purchase, and the
reinvestment of income dividends and capital gain distributions at net asset
value. The calculations will not reflect the deduction for the Rule 12b-1 fee
until such charge is actually assessed.

OTHER PERFORMANCE QUOTATIONS. Each Fund may, from time to time, quote average
annual and cumulative total returns using different assumptions about applicable
sales charges.

VOLATILITY. Occasionally, a Fund may include in advertisements and sales
literature statistics that show the volatility or risk of an investment in the
Fund, as compared to a market index. One measure of volatility is beta. Beta is
the volatility of a Fund relative to the total market, as

23
<PAGE>

represented by an index considered representative of the types of securities in
which the Fund invests. A beta of more than 1.00 indicates volatility greater
than the market and a beta of less than 1.00 indicates volatility less than the
market. Another measure of volatility or risk is standard deviation. Standard
deviation measures the variability of net asset value or total return of a Fund
around an average over a specified period of time. The greater the standard
deviation, the greater the assumed risk in achieving performance.

PERFORMANCE COMPARISONS. To help you better evaluate how an investment in a
Fund may satisfy your investment objectives, advertisements and sales materials
about a Fund may discuss certain measures of performance as reported by various
financial publications. These materials also may compare a Fund's performance
to that of other investments, indices, and averages. See the Appendix for
examples of the types of performance comparisons that a Fund may make.

FINANCIAL STATEMENTS

The Company's audited Statement of Assets and Liabilities, dated December 12,
1997, showing the initial capital received by each Fund, and the report thereon
of Deloitte & Touche LLP, the Company's independent public accountant, are set
out on the pages that follow the attached Appendix.

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<PAGE>

APPENDIX

PERFORMANCE COMPARISONS

Each Fund may compare its performance to the various averages, indices, and
investments listed below. In addition, advertisements and sales literature for
each Fund may discuss certain performance information set out in the various
financial publications listed below.

1. Dow Jones Composite Average or its component averages - an unmanaged
index composed of 30 blue-chip industrial corporation stocks (Dow Jones
Industrial Average), 15 utilities company stocks (Dow Jones Utilities Average),
and 20 transportation company stocks. Comparisons of performance assume
reinvestment of dividends.

2. Standard & Poor's 500 Stock Index or its component indices - an
unmanaged index composed of 400 industrial stocks, 40 financial stocks, 40
utilities stocks, and 20 transportation stocks. Comparisons of performance
assume reinvestment of dividends.

3. The New York Stock Exchange composite or component indices - an
unmanaged index of all industrial, utilities, transportation, and finance stocks
listed on the New York Stock Exchange.

4. Wilshire 5000 Equity Index - represents the return on the market value
of all common equity securities for which daily pricing is available.
Comparisons of performance assume reinvestment of dividends.

5. Lipper - Mutual Fund Performance Analysis and Lipper - Fixed Income
Fund Performance Analysis - measure of total return and average current yield
for the mutual fund industry and ranks individual mutual fund performance over
specified time periods, assuming reinvestment of all distributions, exclusive of
any applicable sales charges.

6. CDA Mutual Fund Report, published by CDA Investment Technologies, Inc.
- - analyzes price, current yield, risk, total return, and average rate of return
(average annual compounded growth rate) over specified time periods for the
mutual fund industry.

7. Mutual Fund Source Book, published by Morningstar, Inc. - analyzes
price, yield, risk, and total return for equity Fund.

8. Value Line Index - an unmanaged index which follows the stock of
approximately 1,700 companies.

9. Consumer Price Index (or Cost of Living Index), published by the U.S.
Bureau of Labor Statistics a statistical measure of change, over time, in the
price of goods and services in major expenditure groups.

25
<PAGE>

10. Historical data supplied by the research departments of First Boston
Corporation, the J.P. Morgan companies, Salomon Brothers, Merrill Lynch, Lehman
Brothers and Bloomberg L.P.

11. Financial publications: THE WALL STREET JOURNAL, BUSINESS WEEK,
CHANGING TIMES, FINANCIAL WORLD, FORBES, FORTUNE, and MONEY magazines - provide
performance statistics over specified time periods.

12. Russell 3000 Index - composed of 3,000 large U.S. companies by market
capitalization, representing approximately 98% of the U.S. equity market. The
average market capitalization (as of May 1995) is $1.74 billion.

13. Russell 2000 Small Stock Index - consists of the smallest 2,000
companies in the Russell 3000 Index, representing approximately 11% of the
Russell 3000 total market capitalization. The average market capitalization (as
of May 1995) is $288 million.

14. Stocks, Bonds, Bills, and Inflation, published by lbbotson
Associates - historical measure of yield, price, and total return for common and
small company stock, long-term government bonds, Treasury bills, and inflation.

15. Morningstar - information published by Morningstar, Inc., including
Morningstar proprietary mutual fund ratings. The ratings reflect Morningstar's
assessment of the historical risk adjusted performance of a fund over specified
time periods relative to other funds within its class.

Advertisements also may compare a Fund's performance to the return on
certificate of deposits ("CDs") or other investments. You should be aware,
however, that an investment in a Fund involves the risk of fluctuation of
principal value, a risk generally not present in an investment in a CD issued by
a bank. For example, as the general level of interest rates rise, the value of
a Fund's fixed-income investments, if any, as well as the value of its shares
that are based upon the value of such portfolio investments, can be expected to
decrease. Conversely, when interest rates decrease, the value of a Fund's
shares can be expected to increase. CDs are frequently insured by an agency of
the U.S. Government. An investment in a Fund is not insured by any federal,
state or private entity.

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<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
Monument Series Fund:

We have audited the accompanying statements of assets and liabilities of the
Monument Washington Regional Growth Fund and Monument Washington Regional
Aggressive Growth Fund of the Monument Series Fund (the "Fund") as of December
12, 1997. These financial statements are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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 statements of assets and liabilities are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statements 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 audits of
the statements of assets and liabilities provides a reasonable basis for our
opinion.

In our opinion, the statements of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of the
Monument Washington Regional Growth Fund and Monument Washington Regional
Aggressive Growth Fund of the Monument Series Fund as of December 12, 1997 in
conformity with generally accepted accounting principles.

Deloitte & Touche LLP
Princeton, New Jersey
December 19, 1997

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<PAGE>

MONUMENT SERIES FUND, INC.
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 12, 1997

Monument Washington Monument Washington
Regional Growth Fund Regional Aggressive
Growth Fund
Cash $50,500 $49,500

Deferred Organization
Expenses 92,676 92,676

Total Assets 143,176 142,176

Due to Monument Advisors,
Inc. 92,676 92,676

Net Assets $50,500 $49,500

Shares outstanding 5,050 4,950

Net asset value per share $10 $10

Par value per share $.001 $.001

Shares authorized 250,000,000 250,000,000

The accompanying notes are an integral part of the statements of assets and
liabilities.

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<PAGE>

MONUMENT SERIES FUND, INC.
NOTES TO STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 12, 1997

NOTE 1 : ORGANIZATION

Monument Series Fund (the "Fund") is an open-end investment company established
under the laws of Maryland by Articles of Incorporation dated April 7, 1997. The
Fund currently consists of the Monument Washington Regional Growth Fund and
Monument Washington Regional Aggressive Growth Fund (each a "Fund"; collectively
the "Funds"). The Funds have had no operations other then those related to
organizational matters and the sale and issuance of initial shares (5,050 for
the Regional Growth Fund and 4,950 for the Regional Aggressive Growth Fund) to
shareholders. All organizational expenses incurred or to be incurred in
connection with the organization and initial registration of the Funds were paid
by Monument Advisors, Inc. However, the Funds will reimburse the investment
advisor for such costs. Organizational expenses of $185,352 will be deferred
and amortized on a straight-line basis over a period of sixty months from the
date the Funds commence operations. The Funds have agreed with the investment
advisor that if any of the initial shares of the Funds are redeemed during the
amortization period, the Funds will reduce the redemption proceeds for the then
unamortized organizational expenses in the same ratio as the number of redeemed
shares bears to the number of initial shares at the time of such redemption.

NOTE 2: INVESTMENT ADVISORY AGREEMENT

Under the Investment Advisory Agreement, the Funds pay Monument Advisors, Inc.,
a related party, a fee for services based on the each Fund's average daily net
assets which is calculated daily and payable monthly. See "Management" in the
Prospectus for additional information concerning the agreement.

NOTE 3: INCOME TAXES

Each Fund intends to qualify as a regulated investment company under the
requirements of the Internal Revenue Code and intends to distribute
substantially all of its taxable income. As such, the Funds do not expect to be
subject to federal income or excise taxes.

NOTE 4: PLAN OF DISTRIBUTION (RULE 12B-1 PLAN)

On October 27, 1997, the Board of Directors, on behalf of each Fund, unanimously
approved a Plan of Distribution pursuant to Rule 12b-1, pursuant to which
Monument Distributors, Inc., a related party, is entitled to receive a 12b-1 fee
for certain activities and expenses that are intended to result in the sale of
Fund shares. Monument Distributors, Inc. has agreed to voluntarily waive the
Rule 12b-1 fee for the first year of operations for each Fund.

29
<PAGE>

REGISTRATION STATEMENT ON FORM N-1A
PART C - OTHER INFORMATION

ITEM 24. Financial Statements and Exhibits

(a) List of Financial Statements

1. PART A. Not Applicable.

2. PART B. The Registrant's Statement of Assets and Liabilities (showing the
Registrant's initial capitalization), and the report of the Company's
independent auditor's thereon, is filed herewith.

(b) Exhibits:

Exhibit
No. Description of Exhibits
--- -----------------------

(1)(a) Articles of Incorporation of Monument Series Fund, Inc.(*/)

(1)(b) Articles of Amendment to Articles of Incorporation of Monument
Series Fund, Inc.(**)

(1)(c) Articles of Amendment to Articles of Incorporation of Monument
Series Fund, Inc. (to be filed by amendment.)

(2) Bylaws of Monument Series Fund, Inc.(*/)

(3) Not Applicable.

(4) Not Applicable.

(5)(a) Investment Advisory Agreement dated October 20, 1997 by and
between Monument Series Fund, Inc. and Monument Advisors, Ltd.(+)

(5)(b) Form of Amendment to the Investment Advisory Agreement by and
between Monument Series Fund, Inc. and Monument Advisors, Ltd.
(to be filed by amendment.)

(5)(c) Form of Investment Subadvisory Agreement by and between Monument
Series Fund, Inc. and Breewood Asset Management, Inc. (to be
filed by amendment.)

- -----------------------
(*/) Previously filed with the initial filing, on April 30, 1997, of this
Registration Statement.

(**) Previously filed with Pre-Effective Amendment No. 1 to the Fund's
Registration Statement on October 21, 1997.
(+) Previously filed with Pre-Effective Amendment No. 2 to the Fund's
Registration Statement on December 22, 1997.

<PAGE>

(6)(a) Distribution Agreement dated November 27, 1997 by and between
Monument Series Fund, Inc. and Monument Distributors, Inc.(+)

(6)(b) Form of Distribution Agreement by and between Monument Series
Fund, Inc. and Monument Distributors, Inc. (to be filed by
amendment.)

(7) Not Applicable.

(8)(a) Custody and Investment Accounting Agreement dated November 2,
1997 by and between Monument Series Fund, Inc. and Investors
Fiduciary Trust Company.(+)

(8)(b) Form of Amendment to the Custody and Investment Accounting
Agreement by and between Monument Series Fund, Inc. and Investors
Fiduciary Trust Company (to be filed by amendment).

(9)(a) Transfer Agency and Service Agreement dated October 31, 1997, by
and between Monument Series Fund, Inc. and State Street Bank and
Trust Company.(+)

(9)(b) Administration Agreement dated October 31, 1997, by and between
Monument Series Fund, Inc. and State Street Bank and Trust
Company.(+)

(9)(c) Form of Amendment to the Transfer Agency and Service Agreement by
and between Monument Series Fund, Inc. and State Street Bank and
Trust Company (to be filed by amendment.)

(9)(d) Form of Amendment to the Administration Agreement by and between
Monument Series Fund, Inc. and State Street Bank and Trust
Company (to be filed by amendment.)

(10) Opinion and Consent of Counsel as to the legality of the
securities being registered (to be filed by amendment).

(11) Consent of Independent Auditors (to be filed by amendment).

(12) Not Applicable.

(13)(a) Subscription Agreement, dated November 17, 1997, by and
between Monument Series Fund, Inc. and The Monument Group,
Inc.(+)

- -------------------------
(*/) Previously filed with the initial filing, on April 30, 1997, of this
Registration Statement.

<PAGE>

(13)(b) Subscription Agreement, dated December 11, 1997, by and between
Monument Series Fund, Inc. and The Monument Group.(+)

(13)(c) Subscription Agreement, dated December 12, 1997, by and between
Monument Series Fund, Inc. and The Monument Group, Inc.(+)

(13)(d) Subscription Agreement, dated November 26, 1997, by and between
Monument Series Fund, Inc. and David A. Kugler.(+)

(13)(e) Subscription Agreement, dated November 21, 1997, by and between
Monument Series Fund, Inc. and Herbert Klein, III (+)

(13)(f) Subscription Agreement, dated December 5, 1997, by and between
Monument Series Fund, Inc. and Herbert Klein, III.(+)

(13)(g) Subscription Agreement, dated November 18, 1997, by and between
Monument Series Fund, Inc. and John H. Vivadelli.(+)

(13)(h) Subscription Agreement, dated November 18, 1997, by and between
Monument Series Fund, Inc. and John C. Siewers, II.(+)

(13)(i) Subscription Agreement, dated November 24, 1997, by and between
Monument Series Fund, Inc. and Francine and Brian Carb.(+)

(13)(j) Subscription Agreement, dated November 25, 1997, by and between
Monument Series Fund, Inc. and Richard E. and Sarah H.
Collier.(+)

(13)(k) Subscription Agreement, dated November 26, 1997, by and between
Monument Series Fund, Inc. and G. Frederic White, III.(+)

(13)(l) Subscription Agreement, dated December 2, 1997, by and between
Monument Series Fund, Inc. and Victor H. Dates.(+)

(13)(m) Subscription Agreement, dated December 3, 1997, by and between
Monument Series Fund, Inc. and Heather and Thomas Young.(+)

(13)(n) Subscription Agreement, dated December 5, 1997, by and between
Monument Series Fund, Inc. and Janine and Jeff Coyle.(+)

(13)(o) Subscription Agreement, dated December 5, 1997, by and between
Monument Series Fund, Inc. and Paul E. Raposo.(+)

- -------------------------
(*/) Previously filed with the initial filing, on April 30, 1997, of this
Registration Statement.
(**) Previously filed with Pre-Effective Amendment No. 1 to the Fund's
Registration Statement on October 21, 1997.
(+) Previously filed with Pre-Effective Amendment No. 2 to the Fund's
Registration Statement on December 22, 1997.

<PAGE>

(13)(p) Subscription Agreement, dated December 5, 1997, by and between
Monument Series Fund, Inc. and Lynda F. Williams.(+)

(13)(q) Subscription Agreement, dated December 5, 1997, by and between
Monument Series Fund, Inc. and Jason Alexander.(+)

(13)(r) Subscription Agreement, dated December 10, 1997, by and between
Monument Series Fund, Inc. and Alexander C. Cheung.(+)

(13)(s) Subscription Agreement, dated December 11, 1997, by and between
Monument Series Fund, Inc. and George DeBakey.(+)

(14) Not Applicable.

(15)(a) Plan of Distribution dated October 27, 1997 Pursuant to Rule
12b-1.(**)

(15)(b) Form of Amended Plan of Distribution Pursuant to Rule 12b-1 (to
be filed by amendment)

(16) Not Applicable.

(17) The Financial Data Schedule required to be filed pursuant to Form
N-1A, Item 24(b)(17) (to be filed by amendment).

(18) Not Applicable.

(*/) Previously filed with the initial filing, on April 30, 1997, of this
Registration Statement.
(**) Previously filed with Pre-Effective Amendment No. 1 to the Fund's
Registration Statement on October 21, 1997.
(+) Previously filed with Pre-Effective Amendment No. 2 to the Fund's
Registration Statement on December 22, 1997.

ITEM 25. Persons Controlled by or Under Common Control with Registrant

To be filed by amendment.

ITEM 26. Number of Holders of Securities

As of June 10, 1998, the number of holders of securities were as follows:

<TABLE>
<S> <C>
Monument Washington Regional Growth 29
Monument Washington Aggressive Growth 30
Monument Internet Fund 0
Monument Convertible Fund 0
</TABLE>

4
<PAGE>

ITEM 27. Indemnification

Under Section 2-418 of Maryland General Corporation Law, a corporation may
indemnify certain Directors, officers, employees, or agents. Consistent with
Maryland law, Article Seventh of Registrant's Articles of Incorporation
("Articles") permits it to indemnify its Directors and officers to the fullest
extent permitted by law. In addition, Section 10 of Registrant's By-Laws
permits it to insure and indemnify its Directors, officers, employees and agents
to the fullest extent permitted by law. The above-cited provisions of
Registrant's Articles and By-Laws, which were filed with the initial filing of
this Registration Statement, are incorporated by reference into this Item.

The Registrant has entered into agreements with various service providers,
pursuant to which Directors, officers and employees of the Registrant have been
indemnified, to the extent permitted by applicable law. These agreements have
been filed as exhibits to this Registration Statement, and are hereby
incorporated by reference into this Item to the extent necessary.

Insofar as indemnification for liabilities arising under Securities Act of
1933 (the "1933 Act") may be permitted to Directors, 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
1933 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 Director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Director, 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 a controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.

ITEM 28. Business and Other Connections of Investment Adviser

Monument Advisors, Ltd. ("Advisors"), the Registrant's investment adviser,
located at 8377 Cherry Lane, Laurel, Maryland 20707-4831, acts as manager or
adviser to qualified individuals, retirement plans, charitable foundations and
trusts. David A. Kugler and Herbert Klein, III are both officers of Advisors.
Mr. Kugler was an account executive for Paine Webber, Inc., located at 100 East
Pratt Street, Baltimore, Maryland 21202, from September 1994 through January
1997. Mr. Kugler now serves as President of The Monument Group, Inc., Monument
Distributors, Inc., and the Registrant, in addition to Advisors. Mr. Klein
worked as a managing associate at Coopers & Lybrand, LLP, located at __________,
from 1995 into 1997, and since that time has been a consultant for the Highland
Group, located at __________, which specializes in operational aspects of
mergers and acquisitions. In addition, Mr. Klein now serves as Secretary of The
Monument Group, Inc., and Monument Distributors, Inc., and Vice President and
Secretary of the Registrant, in addition to Secretary of Advisors. The
principal business address for each of the Monument entities listed above is
identical to that of Advisors.

<PAGE>

ITEM 29. Principal Underwriters

(a) Not applicable.

(b) Following is certain information concerning Directors and executive
officers of Monument Distributors, Inc.

<TABLE>
<CAPTION>
POSITION AND
NAME AND PRINCIPAL BUSINESS POSITION AND OFFICES OFFICES WITH
ADDRESS* WITH UNDERWRITER REGISTRANT
--------------------------- -------------------- ------------
<S> <C> <C>
David A. Kugler Director, President and Director,
Treasurer President and
Treasurer

Herbert Klein, III Secretary Vice President
and Secretary
</TABLE>

* The principal business address of David A. Kugler and Herbert Klein, III
is 8377 Cherry Lane, Laurel, Maryland 20707.

iTEM 30. Location of Accounts and Records

The following entities prepare, maintain and preserve the records required
by Section 31(a) of the 1940 Act for the Registrant. These services are
provided to the Registrant through written agreements between the parties to the
effect that such records will be maintained on behalf of the Registrant for the
periods prescribed by the rules and regulations of the Commission under the 1940
Act and that such records are the property of the entity required to maintain
and preserve such records and will be surrendered promptly on request:

(1) Monument Advisors, Ltd.
8377 Cherry Lane
Laurel, Maryland 20707

(2) Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105

(3) State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110

(4) Monument Distributors, Inc.
8377 Cherry Lane
Laurel, Maryland 20707

<PAGE>

ITEM 31. Management Services

Not Applicable.

ITEM 32. Undertakings

(a) Not applicable.

(b) Not applicable.

50278 v2/306101

7
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, Registrant has duly caused this amended
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Laurel and the State of Maryland on the 12th day
of June, 1998.

MONUMENT SERIES FUND, INC.

BY:
----------------------------
David A. Kugler
President
MONUMENT SERIES FUND, INC.

<PAGE>

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

(SIGNATURE) (TITLE) (DATE)

Director, President June 12, 1998
- ------------------------ (Principal Executive
David A. Kugler Officer) and Treasurer
(Principal
Financial Officer and
Principal Accounting
Officer)

50281v1 / 306101