COUNTRYWIDE TAX FREE TRUST, 497, 1999-11-05

COUNTRYWIDE TAX FREE TRUST
497, 1999-11-05

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Tax-Exempt

PROSPECTUS

Tax-Free Money Fund

Tax-Free
Intermediate Term Fund

November 1, 1999

[logo] COUNTRYWIDE
INVESTMENTS

These securities have not been approved or disapproved by the Securities and
Exchange Commission nor has the Securities and Exchange Commission passed upon
the accuracy or adequacy of this Prospectus. Any representation to the contrary
is a criminal offense.

This Prospectus has information you should know before you invest. Please read
it carefully and keep it with your investment records.

<PAGE>

PROSPECTUS
November 1, 1999

COUNTRYWIDE TAX-FREE TRUST
312 WALNUT STREET, 21ST FLOOR
CINCINNATI, OHIO 45202
800-543-0407

TAX-FREE MONEY FUND
TAX-FREE INTERMEDIATE TERM FUND

TABLE OF CONTENTS

RISK/RETURN SUMMARY...........................................................
RISK/RETURN SUMMARY: FEE TABLE................................................
INVESTMENT OBJECTIVE, INVESTMENT STRATEGIES AND RELATED RISKS.................
HOW TO PURCHASE SHARES........................................................
HOW TO REDEEM SHARES..........................................................
HOW TO EXCHANGE SHARES........................................................
DIVIDENDS AND DISTRIBUTIONS...................................................
TAXES.........................................................................
OPERATION OF THE FUNDS........................................................
CALCULATION OF SHARE PRICE AND PUBLIC OFFERING PRICE..........................
FINANCIAL HIGHLIGHTS..........................................................

For further information or assistance in opening an account, please contact your
broker or call us at the above number.

<PAGE>

RISK/RETURN SUMMARY
- -------------------

WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES?

The TAX-FREE MONEY FUND seeks the highest level of interest income exempt from
federal income tax, consistent with protection of capital.

The TAX-FREE INTERMEDIATE TERM FUND seeks high current income exempt from
federal income tax, consistent with protection of capital. To the extent
consistent with the Fund's primary objective, capital appreciation is a
secondary objective.

WHAT ARE THE FUNDS' PRINCIPAL INVESTMENT STRATEGIES?

Under normal market conditions, each Fund will invest so that at least 80% of
its annual income will be exempt from federal income tax. Each Fund will invest
primarily in municipal obligations, which are debt obligations issued by states
and territories of the United States which pay interest that is exempt from
federal income tax.

The TAX-FREE MONEY FUND will invest primarily in high-quality, short-term
municipal obligations. The Fund is a money market fund which seeks to maintain a
constant share price of $1.00 per share.

The TAX-FREE INTERMEDIATE TERM FUND will invest primarily in municipal
obligations rated within the 3 highest rating categories, with remaining
maturities of 20 years or less. Under normal market conditions, the Fund will
attempt to maintain an average weighted maturity of between 3 and 10 years.

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUNDS?

INVESTMENT RISKS COMMON TO BOTH FUNDS. Each Fund's yield will fluctuate due to
changes in economic conditions, interest rates, political events and other
conditions affecting the performance of the fixed-income market. Each Fund is
subject to the risk that an issuer of a municipal obligation could default on
its obligation to pay interest and repay principal. This could cause the value
of a Fund's share price to decrease.

Municipal obligations purchased by the Funds may include floating and variable
rate obligations, when-issued obligations, obligations with puts attached and,
for the Tax-Free Intermediate Term Fund, lease obligations. The Funds will
be subject to the risks associated with investments in these types of
obligations.

An investment in the Funds is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Tax- Free Money Fund seeks to preserve the value of your
investment at

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$1.00 per share, it is possible to lose money by investing in the Fund.

SPECIAL RISKS OF INVESTING IN THE TAX-FREE INTERMEDIATE TERM FUND. The Tax-Free
Intermediate Term Fund's share price will fluctuate due to changes in economic
conditions, interest rates, political conditions and other conditions affecting
the performance of the bond market. In general, bond prices fall when interest
rates rise. This effect is usually more pronounced for longer-term securities,
such as those held by the Fund. As with any investment in the bond
market, there is a risk that you may lose money by investing in the Fund.

PERFORMANCE SUMMARY

The bar charts and performance tables shown below provide an indication of the
risks of investing in the Funds by showing the changes in the performance of the
Funds from year to year during the past ten years and by showing how the average
annual returns of the Tax-Free Intermediate Term Fund compare to those of a
broad-based securities market index. Each Fund's past performance is not
necessarily an indication of its future performance.

TAX-FREE MONEY FUND (BAR CHART)

5.84% 5.56% 4.38% 2.82% 2.09% 2.49% 3.40% 2.92% 2.97% 2.98%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

During the period shown in the bar chart, the highest return for a quarter was
1.50% during the quarter ended June 30, 1989 and the lowest return for a quarter
was 0.47% during the quarter ended September 30, 1993.

For information on the Fund's current and effective 7-day yield, call
1-800-543-0407 (Nationwide) or 629-2050 (in Cincinnati).

TAX-FREE INTERMEDIATE TERM FUND - CLASS A (BAR CHART)

8.95% 5.92% 11.01% 8.76% 12.59% -5.37% 15.86% 3.07% 7.20% 5.54%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

The total returns shown above do not reflect the sales load on Class A shares
and, if included, returns would be less than those shown.

During the period shown in the bar chart, the highest return for a quarter was
4.35% during the quarter ended March 31, 1995 and the lowest return for a
quarter was -3.37% during the quarter ended March 31, 1994.

The year-to-date return of the Fund's Class A shares as of September 30, 1999 is
- -77%.

<PAGE>

AVERAGE ANNUAL TOTAL RETURNS
For Periods Ended December 31, 1998

One Five Ten Since
Year Years Years Inception*
---- ----- ----- ----------
Tax-Free Money Fund 2.98% 2.95% 3.54% Not Available

Tax-Free Intermediate Term 2.97% 4.17% 6.18% 6.29%
Fund Class A
Lehman Brothers 5-Year
Municipal General
Obligation Bond Index 5.84% 5.36% 6.98% Not Available

Tax-Free Intermediate Term 4.29% -- -- 3.90%
Fund Class C
Lehman Brothers 5-Year
Municipal General
Obligation Bond Index 5.84% 5.36% 6.98% 5.25%

* Inception date for Tax-Free Intermediate Term Fund Class A was September
10, 1981 and Class C was February 1, 1994.

RISK/RETURN SUMMARY: FEE TABLE
- ------------------------------

This table describes the fees and expenses that you will pay if you buy and hold
shares of the Funds.

TAX-FREE MONEY FUND

SHAREHOLDER FEES (fees paid directly from your investment)

Sales Load Imposed on Purchases. . . . . . . . . . . . . . None
Sales Load Imposed on Reinvested Dividends . . . . . . . . None
Redemption Fee . . . . . . . . . . . . . . . . . . . . . . None*
Exchange Fee . . . . . . . . . . . . . . . . . . . . . . . None
Check Redemption Processing Fee (per check):
First six checks per month . . . . . . . . . . . . . . . None
Additional checks per month. . . . . . . . . . . . . . . $0.25

* You will be charged $8 for each wire redemption. This fee is subject to
change.

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<PAGE>

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund
assets)

Management Fees. . . . . . . . . . . . . . . . . . . . . .50%
Distribution (12b-1) Fees. . . . . . . . . . . . . . . . .01%
Other Expenses . . . . . . . . . . . . . . . . . . . . . .44%
----
Total Annual Fund Operating Expenses . . . . . . . . . . .95%(A)
====

(A) After waivers of management fees by the Adviser, total operating expenses
were .89% for the fiscal year ended June 30, 1999. The Adviser may
discontinue these fee waivers at any time.

TAX-FREE INTERMEDIATE TERM FUND

SHAREHOLDER FEES (fees paid directly from your investment)

Class A Class C
Shares Shares
------ ------
Maximum Sales Load . . . . . . . . . . . . . . . 4.75% 2.25%
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price). . . . . . . 4.75% 1.25%
Maximum Deferred Sales Load
(as a percentage of original purchase price . . None* 1.00%
or the amount redeemed, whichever is less)
Sales Load Imposed on Reinvested Dividends . . . None None
Redemption Fee . . . . . . . . . . . . . . . . . None** None**
Exchange Fee . . . . . . . . . . . . . . . . . . None None
Check Redemption Processing Fee (per check):
First six checks per month . . . . . . . . . . . None None
Additional checks per month. . . . . . . . . . . $0.25 $0.25

* If you purchase $1 million or more shares and do not pay a front-end sales
load, you may be subject to a deferred sales load of 1% if the shares are
redeemed within one year of their purchase and a dealer's commission was
paid on the shares.
** You will be charged $8 for each wire redemption. This fee is subject to
change.

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)

Class A Class C
Shares Shares
------ ------
Management Fees. . . . . . . . . . . . . . .50% .50%
Distribution (12b-1) Fees. . . . . . . . . .09% .53%
Other Expenses . . . . . . . . . . . . . . .40% .71%
---- -----
Total Annual Fund Operating Expenses . . . .99% 1.74%
==== =====

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EXAMPLE
This Example is intended to help you compare the cost of investing in the Funds
with the cost of investing in other mutual funds. It assumes that you invest
$10,000 in a Fund for the time periods indicated and then redeem all of your
shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that a Fund's operating expenses remain
the same. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

Tax-Free Tax-Free Intermediate Term Fund
Money Class A Class C
Fund Shares Shares
---- ------ ------
1 Year $ 97 $ 571 $ 400
3 Years 303 775 666
5 Years 525 996 1,057
10 Years 1,166 1,630 2,151

You would pay the following expenses in the Tax-Free Intermediate Term Fund if
you did not redeem your shares.

1 Year $ 571 $ 300
3 Years 775 666
5 Years 996 1,057
10 Years 1,630 2,151

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INVESTMENT OBJECTIVES, INVESTMENT STRATEGIES AND RELATED RISKS
- --------------------------------------------------------------

INVESTMENT OBJECTIVES

The TAX-FREE MONEY FUND seeks the highest level of interest income exempt from
federal income tax, consistent with protection of capital.

The Tax-Free Intermediate Term Fund's investment objective may be changed by the
Board of Trustees without the approval of shareholders. You will be notified if
there is a change in the Tax-Free Intermediate Term Fund's investment objective
and you should then consider whether the Fund will continue to be an appropriate
investment under your circumstances.

PRINCIPAL INVESTMENT STRATEGIES

It is a fundamental policy that, under normal market conditions, each Fund will
invest its assets so that at least 80% of its annual income will be exempt from
federal income tax, including the alternative minimal tax. This policy may not
be changed without the approval of the applicable Fund's shareholders.

TAX-FREE MONEY FUND
The Tax-Free Money Fund will invest primarily in high-quality, short-term
municipal obligations determined by the Adviser, under the direction of the
Board of Trustees, to present minimal credit risks.

The Tax-Free Money Fund is a money market fund and will use its best efforts to
maintain a constant share price of $1.00 per share. However, there can be no
assurance that the Fund will be able to do so on a continuing basis. The Fund
will comply with the Securities and Exchange Commission's regulations for money
market funds regarding the quality, maturity and diversification of its
investments, including:

o The Fund will invest in obligations which are rated in one of the two
highest categories by any two national statistical rating agencies (or
by one rating agency if only one agency provides a rating).

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<PAGE>

o The Fund may purchase unrated obligations if the Adviser determines that
they meet the Fund's quality standards. (If an obligation no longer meets
the Fund's quality standards or no longer presents minimal credit risks,
the Fund will sell the obligation as soon as practicable).

o The Fund's dollar-weighted average maturity will be 90 days or less.

o The Fund will only invest in obligations which mature in 13 months or less.

TAX-FREE INTERMEDIATE TERM FUND
The Tax-Free Intermediate Term Fund will invest primarily in municipal
obligations with remaining maturities of 20 years or less. Under
normal market conditions, the Fund will maintain a dollar-weighted average
maturity of between 3 and 10 years, although the Fund may invest in securities
of any maturity, including tax-exempt notes and tax-exempt commercial paper. If
the Adviser determines that market conditions warrant a shorter or longer
dollar-weighted average maturity, the Fund's investments will be adjusted
accordingly.

The Adviser will invest in municipal obligations and other securities which are
rated within the three highest rating categories by a national rating agency. If
the rating of an obligation purchased by the Fund is reduced below the three
highest rating categories, the Fund will sell that obligation, subject to the
Adviser's assessment of the most opportune time for sale. The Fund may also
purchase obligations that are unrated at the time of purchase but are determined
by the Adviser to be of comparable quality.

PRINCIPAL INVESTMENT STRATEGIES COMMON TO BOTH FUNDS
MUNICIPAL OBLIGATIONS. Municipal obligations are debt obligations issued by a
U.S. state or territory and its political subdivisions, agencies, authorities
and instrumentalities which pay interest that is, in the opinion of bond counsel
to the issuer, exempt from federal income tax, including the alternative minimum
tax. Municipal obligations are issued to finance work on public facilities, to
pay general operating expenses or to refinance outstanding debts. They may also
be issued to finance various private activities, including the construction of
housing, educational or medical facilities or the financing of privately owned
or operated facilities.

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Municipal obligations consist of tax-exempt bonds, tax-exempt notes and
tax-exempt commercial paper. The two principal types of municipal obligations
are "general obligation" and "revenue" bonds. General obligation bonds are
backed by the issuer's full faith and credit and taxing power. Revenue bonds are
backed by the revenues of specific project, facility or tax. Industrial
development revenue bonds are a specific type of revenue bond backed by the
credit of the private user of the facility. Each Fund may invest in any
combination of general obligation bonds, revenue bonds and industrial
development bonds. Tax-exempt notes, such as tax anticipation notes,
revenue anticipation notes and bond anticipation notes, are issued to provide
interim financing or other short-term capital needs and generally mature in one
year or less.

Municipal obligations purchased by the Funds may also include floating and
variable rate municipal obligations, when-issued obligations, obligations with
puts attached and, for the Tax-Free Intermediate Term Fund, lease obligations.

o Floating and variable rate municipal obligations are obligations with
interest rates that are adjusted when a specific interest rate index
changes (floating rate obligations) or on a schedule (variable rate
obligations). Although there may not be an active secondary market for a
particular floating or variable rate obligation, these obligations usually
have demand features which permit a Fund to demand payment in full of the
principal and interest. Obligations with demand features are often secured
by letters of credit issued by a bank or other financial institution. A
letter of credit may reduce the risk that an entity will not be able to
meet a Fund's demand for repayment of principal and interest.

o When-Issued obligations are obligations which are paid for and delivered
within 15 to 45 days after the date of their purchase. Each Fund will
maintain a segregated account of cash or liquid securities to pay for its
when-issued obligations and this account will be valued daily in order to
account for market fluctuations in the value of its when- issued
commitments.

o Obligations with puts attached are obligations which may be resold back to
the seller at a specific price or yield within a specific period of time.
The Funds will purchase obligations with puts attached for liquidity
purposes.

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<PAGE>

o Lease Obligations are municipal obligations which constitute participations
in lease obligations of municipalities to acquire land and a wide variety
of equipment and facilities. Although lease obligations do not constitute
general obligations of the municipality for which the municipality's taxing
power is pledged, a lease obligation is ordinarily backed by the
municipality's covenant to budget for, appropriate for and make the
payments due under the obligation. However, lease obligations may contain
non- appropriation clauses which provide that the municipality has no
obligation to make lease or installment purchase payments in future years
unless money is appropriated for this purpose on an annual basis. The
Tax-Free Intermediate Term Fund may invest in lease obligations.

TEMPORARY DEFENSIVE PURPOSES. For temporary defensive purposes, each Fund may
invest, as the Adviser deems necessary, in taxable, short-term, high-quality
securities. Taxable short-term securities include certificates of deposit and
other bank debt instruments, commercial paper, obligations issued by the U.S.
Government, its agencies or instrumentalities and repurchase agreements. A
Fund may invest in these taxable securities when, for example, due to market
conditions municipal obligations are temporarily unavailable for purchase,
pending investment of proceeds of sales of Fund shares or portfolio securities
or in anticipation of redemptions. Interest earned from these securities will be
taxable to investors. However, each Fund intends to minimize taxable income
through investment, when possible, in other available securities exempt from
federal income tax, including shares of investment companies whose dividends are
tax-exempt. When taking such a temporary defensive position, a Fund may not
achieve its investment objective.

PRINCIPAL RISK CONSIDERATIONS

PRINCIPAL RISK CONSIDERATIONS COMMON TO BOTH FUNDS
INTEREST RATE RISK. The Tax-Free Money Fund's yield and the Tax- Free
Intermediate Term Fund's yield, share price and total return will fluctuate due
to changes in interest rates. Generally, the Tax-Free Money Fund's yield will
increase when interest rates increase and will decrease when interest rates
decrease. Generally, the Tax-Free Intermediate Term Fund's share price will
increase when interest rates decrease and will decrease when

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<PAGE>

interest rates increase. This effect is usually more pronounced for longer-term
securities, such as those held by the Tax-Free Intermediate Term Fund.

CREDIT RISK. A deterioration in the financial condition of an issuer of a
municipal obligation or a deterioration in general economic conditions could
cause the issuer to default on its obligation to pay interest and repay
principal. This could cause a Fund's share price to decrease. Although the
Tax-Free Money Fund seeks to keep its share price constant at $1.00 per share,
there is no assurance that the Fund will be able to do so. Each Fund's ability
to achieve its investment objective depends to a great extent on the ability of
an issuer of a municipal obligation to meet its scheduled payments of principal
and interest.

Municipal obligations purchased by the Funds may be backed by a letter of credit
issued by a bank or other financial institution. Adverse developments affecting
banks could have a negative effect on the value of a Fund's portfolio
securities.

CONCENTRATION RISK. Each Fund may invest more than 25% of its assets in
municipal obligations within a particular segment of the bond market, such as
housing agency bonds, hospital revenue bonds or airport bonds. It is possible
that economic, business or political developments or other changes affecting one
bond may also affect other bonds in the same segment in the same manner, thereby
potentially increasing the risk of such investments.

TAX RISK. Certain provisions in the Internal Revenue Code relating to the
issuance of municipal obligations may reduce the volume of municipal obligations
qualifying for federal tax exemptions. Proposals that may further restrict or
eliminate the income tax exemptions for interest on municipal obligations may be
introduced in the future. If any such proposal were enacted that would reduce
the availability of municipal obligations for investment by the Funds so as to
adversely affect their shareholders, the Funds would reevaluate their investment
objective and policies and submit possible changes in the Funds' structure to
shareholders for their consideration. If legislation were enacted that would
treat a type of municipal obligation as taxable, each Fund would treat such
security as

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a permissible taxable investment within the applicable limits set forth herein.

SPECIAL RISKS OF INVESTING IN THE TAX-FREE INTERMEDIATE TERM FUND. The Tax-Free
Intermediate Term Fund may purchase securities which have lower ratings and
longer maturities than securities purchased by the Tax-Free Money Fund. Although
lower- rated securities and securities with longer maturities will generally
have higher yields than higher rated securities with shorter maturities, they
are subject to a higher degree of market fluctuation. As a result, there is a
possibility of greater fluctuation in the Tax-Free Intermediate Term Fund's
share price. When you redeem your shares in the Tax-Free Intermediate Term Fund,
they may be worth more or less than what you paid for them.

The Tax-Free Intermediate Term Fund may purchase municipal lease obligations,
which are obligations issued by a state or local government or authority to
acquire land and a wide variety of equipment and facilities. If the funds are
not appropriated for the following year's lease payments, the lease may
terminate, with the possibility of a default on the lease obligation.

HOW TO PURCHASE SHARES
- ----------------------

You may open an account with the Funds by investing the minimum amount required
for the type of account you open. You may invest additional amounts in an
existing account at any time. For more information about how to purchase shares,
call Countrywide Fund Services, Inc. (the "Transfer Agent") (Nationwide call
toll-free 800-543-0407; in Cincinnati call 629-2050). The different account
options and minimum investment requirements are listed below.

ACCOUNT OPTIONS

Regular Accounts
- ----------------

Accounts for Countrywide Affiliates
- -----------------------------------
If you (or anyone in your immediate family) are an employee, shareholder or
customer of Countrywide Credit Industries, Inc. or any of its affiliated
companies, you may open an account for less than the minimum amount required for
regular accounts.

Automatic Investment Plan
- -------------------------
You may make automatic monthly investments in either Fund from your bank,
savings and loan or other depository institution

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account. The minimum initial and subsequent investments must be $50 under the
plan. The Transfer Agent pays the costs of your transfers, but reserves the
right, upon 30 days' written notice, to make reasonable charges for this
service.

MINIMUM INVESTMENT REQUIREMENTS
Initial Additional
------- ----------
Regular Accounts $1,000 None

Accounts for Countrywide Affiliates $ 50 None

Automatic Investment Plan $ 50 $ 50

Direct Deposit Plans
- --------------------
Your employer may offer a direct deposit plan which will allow you to have all
or a portion of your paycheck transferred automatically to purchase shares of a
Fund. Social security recipients may have all or a portion of their social
security check transferred automatically to purchase shares of a Fund.

Cash Sweep Program (Tax-Free Money Fund only)
- -----------------------------------------------
Cash accumulations in accounts with financial institutions may be automatically
invested in the Tax-Free Money Fund at the next determined net asset value
("NAV") on a day selected by the institution or customer, or when the account
balance reaches a predetermined dollar amount. Institutions participating in
this program are responsible for placing their orders in a timely manner. You
may be charged a fee by your financial institution for participating in this
program.

OPENING A NEW ACCOUNT. You may open an account directly with a Fund or through
your broker-dealer.

To open an account directly with a Fund, please follow the steps outlined below.

1. Complete the Account Application included in this Prospectus. Be sure to
indicate the type of account you wish to open, the amount of money you wish
to invest and,

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for the Tax-Free Intermediate Term Fund, the class of shares you want to
purchase. If you do not indicate which class you want to purchase in the
Tax-Free Intermediate Term Fund, we will invest your purchase in Class A
shares.

2. Write a check for your initial investment to either the "Tax-Free Money
Fund" or the "Tax-Free Intermediate Term Fund." Mail your completed Account
Application and your check to the following address:

COUNTRYWIDE FUND SERVICES, INC.
P.O. BOX 5354
CINCINNATI, OHIO 45201-5354

You may also open an account through your broker-dealer. It is the
responsibility of broker-dealers to send properly completed orders. If you open
an account through your broker-dealer, you may be charged a fee by your
broker-dealer.

ADDING TO YOUR ACCOUNT. You may make additional purchases to your account at any
time. Additional purchases may be made by mail to the address listed above, by
wire or through your broker-dealer. For more information about purchases by
wire, please telephone the Transfer Agent (Nationwide call toll-free 800-543-
0407; in Cincinnati call 629-2050). Your bank may charge a fee for sending your
wire. Each additional purchase must contain the account name and number in order
to properly credit your account.

MISCELLANEOUS. In connection with all purchases of Fund shares, we observe the
following policies and procedures:

o You may receive a dividend in the Tax-Free Money Fund on the day you
wire an investment if you notify the Transfer Agent of your wire by
4:00 p.m., Eastern time, on the previous business day, or by 12:00
noon, Eastern time, on the same day of your wire if your wire is sent
by a bank that has made appropriate arrangements with the Transfer
Agent. Your purchase in the Tax-Free Money Fund will be priced based
upon the NAV after a proper order is received.

o We price direct purchases in the Tax-Free Intermediate Term Fund based
upon the next public offering price (net asset value plus any
applicable sales load) after your order is received. Direct purchase
orders received by the Transfer Agent by 4:00 p.m., Eastern time, are
processed at that day's public offering price. Direct

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investments received by the Transfer Agent after 4:00 p.m., Eastern
time, are processed at the public offering price next determined on
the following business day. Purchase orders received from
broker-dealers before 4:00 p.m., Eastern time, and transmitted to the
Adviser by 5:00 p.m., Eastern time, are processed at that day's public
offering price. Purchase orders received from broker-dealers after
5:00 p.m., Eastern time, are processed at the public offering price
next determined on the following business day.

o We mail you confirmations of all purchases or redemptions of Fund
shares.

o Certificates for shares are no longer issued.

o We reserve the right to limit the amount of investments and to refuse
to sell to any person.

o If an order to purchase shares is canceled because your check does not
clear, you will be responsible for any resulting losses or fees
incurred by the Fund or the Transfer Agent in the transaction.

o We may open accounts for less than the minimum investment or change
minimum investment requirements at any time.

o There is no fee for purchases made by wire, but we may charge you for
this service upon 30 days' prior notice.

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

Choosing a Share Class (Tax-Free Intermediate Term Fund Only)
- -------------------------------------------------------------

The Tax-Free Intermediate Term Fund offers Class A and Class C shares.Each class
represents an interest in the same portfolio of investments and has the same
rights, but differs primarily in sales loads and distribution expense amounts.
Shares of the Tax- Free Intermediate Term Fund purchased before February 1, 1994
are Class A shares. Before choosing a class, you should consider

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<PAGE>

the following factors, as well as any other relevant facts and circumstances:

The decision as to which class of shares is more beneficial to you depends on
the amount of your investment, the intended length of your investment and the
quality and scope of the value-added services provided by financial advisers who
may work with a particular sales load structure as compensation for their
services. If you qualify for reduced sales loads or, in the case of purchases of
$1 million or more, no initial sales load, you may find Class A shares
attractive because similar sales load reductions are not available for Class C
shares. Moreover, Class A shares are subject to lower ongoing expenses than
Class C shares over the term of the investment. As an alternative, Class C
shares are sold with a lower initial sales load so more of the purchase price is
immediately invested in the Fund. If you do not plan to hold your shares in the
Fund for a long time (less than 4 1/4 years), it may be better to purchase Class
C shares so that more of your purchase is invested directly in the Fund,although
you will pay higher distribution fees. If you plan to hold your shares in the
Fund for more than 4 1/4 years, it may be better to purchase Class A shares,
since after 4 1/4 years your accumulated distribution fees may be more than the
sales load paid on your purchase.

When determining which class of shares to purchase, you may want to consider the
services provided by your financial adviser and the compensation provided to
financial advisers under each share class. Countrywide Investments works with
many experienced and very qualified financial advisers throughout the country
that may provide valuable assistance to you through ongoing education, asset
allocation programs, personalized financial planning reviews or other services
vital to your long-term success. The Adviser believes that these
value-added services can greatly benefit you through market cycles and
will work diligently with your chosen financial adviser. The Adviser has a
financial adviser referral service available, at no cost, to help you choose a
financial adviser in your area, if you do not have one.

Set forth below is a chart comparing the sales loads and distribution fees
applicable to each class of shares:

-17-
<PAGE>

- --------------------------------------------------------------------------------
DISTRIBUTION
CLASS SALES LOAD (12b-1) FEE
- --------------------------------------------------------------------------------

A Maximum of 4.75% initial 0.25%
sales load reduced for purchases
of $50,000 and over; shares sold
without an initial sales load may
be subject to a 1.00% contingent
deferred sales load during first
year if a commission was paid to
a dealer

C 1.25% initial sales load; 1.00% 1.00%
contingent deferred sales load
during first year
- --------------------------------------------------------------------------------
If you are investing $1 million or more, it is generally more beneficial for you
to buy Class A shares because there is no front-end sales load and the annual
expenses are lower.

Class A Shares
- --------------
Class A shares of the Tax-Free Intermediate Term Fund are sold at NAV plus an
initial sales load. In some cases, reduced initial sales loads for the purchase
of Class A shares may be available, as described below. Investments of $1
million or more are not subject to a sales load at the time of purchase but may
be subject to a contingent deferred sales load of 1.00% on redemptions made
within 1 year after purchase if a commission was paid by the Adviser to a
participating unaffiliated dealer. Class A shares are also subject to an annual
12b-1 distribution fee of up to .25% of the Tax-Free Intermediate Term Fund's
average daily net assets allocable to Class A shares.

The following table illustrates the initial sales load breakpoints for the
purchase of Class A shares for accounts opened after July 31, 1999:

Percentage Which Dealer
of Offering Equals this Reallowance
Price Deducted Percentage as Percentage
for Sales of Your Net of Offering
Amount of Investment Load Investment Price
- -------------------- ---- ---------- -----
Less than $50,000 4.75% 4.99% 4.00%
$50,000 but less than $100,000 4.50 4.72 3.75
$100,000 but less than $250,000 3.50 3.63 2.75
$250,000 but less than $500,000 2.95 3.04 2.25
$500,000 but less than $1,000,000 2.25 2.31 1.75
$1,000,000 or more None None

<PAGE>
The following table illustrates the initial sales load breakpoints for the
purchase of Class A shares for accounts opened before August 1, 1999 and after
January 31, 1995:

Percentage Which Dealer
of Offering Equals this Reallowance
Price Deducted Percentage as Percentage
for Sales of Your Net of Offering
Amount of Investment Load Investment Price
- -------------------- ---- ---------- -----
Less than $100,000 2.00% 2.04% 1.80%
$100,000 but less than $250,000 1.50 1.52 1.35
$250,000 but less than $500,000 1.00 1.01 .90
$500,000 but less than $1,000,000 .75 .76 .65
$1,000,000 or more None None

The following table illustrates the initial sales load breakpoints for the
purchase of Class A shares for accounts opened before February 1, 1995:

Under certain circumstances, the Adviser may increase or decrease the
reallowance to selected dealers. In addition to the compensation otherwise paid
to securities dealers, the Adviser may from time to time pay from its own
resources additional cash bonuses or other incentives to selected dealers in
connection with the sale of shares of the Tax-Free Intermediate Term Fund. On
some occasions, such bonuses or incentives may be conditioned upon the sale of a
specified minimum dollar amount of shares of the Fund and/or other funds in the
Countrywide Family of Funds during a specific period of time. Such bonuses or
incentives may include financial assistance to dealers in connection with
conferences, sales or training programs for their employees, seminars for the
public, advertising, sales campaigns and other dealer-sponsored programs or
events.

-19-
<PAGE>

For initial purchases of Class A shares of $1 million or more made after October
1, 1995 and subsequent purchases further increasing the size of the account,
participating unaffiliated dealers will receive first year compensation of up to
1.00% of such purchases from the Adviser. In determining a dealer's eligibility
for such commission, purchases of Class A shares of the Tax-Free Intermediate
Term Fund may be aggregated with simultaneous purchases of Class A shares of
other funds in the Countrywide Family of Funds. Dealers should contact the
Adviser for more information on the calculation of the dealer's commission in
the case of combined purchases.

An exchange from other Countrywide Funds will not qualify for payment of the
dealer's commission unless the exchange is from a Countrywide Fund with assets
as to which a dealer's commission or similar payment has not been previously
paid. No commission will be paid if the purchase represents the reinvestment of
a redemption from a Fund made during the previous twelve months. Redemptions of
Class A shares may result in the imposition of a contingent deferred sales load
if the dealer's commission described in this paragraph was paid in connection
with the purchase of such shares. See "Contingent Deferred Sales Load for
Certain Purchases of Class A Shares" below.

REDUCED SALES LOAD. You may use the Right of Accumulation to combine the cost or
current NAV (whichever is higher) of your existing Class A shares of any
Countrywide Fund sold with a sales load with the amount of any current purchases
in order to take advantage of the reduced sales loads set forth in the tables
above. Purchases made in any Countrywide load fund under a Letter of Intent may
also be eligible for the reduced sales loads. The minimum initial investment
under a Letter of Intent is $10,000. The Countrywide Funds which are sold with a
sales load are listed in the "How to Exchange Shares" section of this
Prospectus. You should contact the Transfer Agent for information about the
Right of Accumulation and Letter of Intent.

PURCHASES AT NET ASSET VALUE. Class A shares of the Tax-Free Intermediate Term
Fund may be purchased at NAV by pension and profit-sharing plans, pension funds
and other company-sponsored benefit plans that (1) have plan assets of $500,000
or more, or (2) have, at the time of purchase, 100 or more eligible
participants, or (3) certify that they project to have annual plan purchases of
$200,000 or more, or (4) are provided administrative services by certain
third-party administrators

-20-
<PAGE>

that have entered into a special service arrangement with the Adviser relating
to such plan.

Banks, bank trust departments and savings and loan associations, in their
fiduciary capacity or for their own accounts, may purchase Class A shares of the
Tax-Free Intermediate Term Fund at NAV. To the extent permitted by regulatory
authorities, a bank trust department may charge fees to clients for whose
account it purchases shares at NAV. Federal and state credit unions may also
purchase shares at NAV.

In addition, Class A shares of the Tax-Free Intermediate Term Fund may be
purchased at NAV by broker-dealers who have a sales agreement with the Adviser
and their registered personnel and employees, including members of the immediate
families of such registered personnel and employees.

Clients of investment advisers may also purchase Class A shares of the Tax-Free
Intermediate Term Fund at NAV if their investment adviser or broker-dealer has
made appropriate arrangements with the Trust. The investment adviser must notify
the Transfer Agent that an investment qualifies as a purchase at NAV.

Associations and affinity groups and their members may purchase Class A shares
of the Tax-Free Intermediate Term Fund at NAV provided that management of these
groups or their financial adviser has made arrangements to permit them to do so.
Investors or their financial adviser must notify the Transfer Agent that an
investment qualifies as a purchase at NAV.

Employees, shareholders and customers of Countrywide Credit Industries, Inc. or
any affiliated company, including members of the immediate families of such
individuals and employee benefit plans established by such entities, may also
purchase Class A shares of the Tax-Free Intermediate Term Fund at NAV.

CONTINGENT DEFERRED SALES LOAD FOR CERTAIN PURCHASES OF CLASS A SHARES. A
contingent deferred sales load is imposed upon certain redemptions of Class A
shares of the Tax-Free Intermediate Term Fund (or shares into which such Class A
shares were exchanged) purchased at NAV in amounts totaling $1 million or more,
if the dealer's commission described above was paid by the Adviser and the
shares are redeemed within one year from the date of purchase. The contingent
deferred sales load will be paid to the Adviser and will be equal to the
commission percentage paid at

-21-
<PAGE>

the time of purchase as applied to the lesser of (1) the NAV at the time of
purchase of the Class A shares being redeemed, or (2) the NAV of the Class A
shares at the time of redemption. If a purchase of Class A shares is subject to
the contingent deferred sales load, you will be notified on the confirmation you
receive for your purchase. Redemptions of Class A shares of the Tax-Free
Intermediate Term Fund held for at least one year will not be subject to the
contingent deferred sales load.

Class C Shares
- --------------

Class C shares of the Tax-Free Intermediate Term Fund are sold with an initial
sales load of 1.25% and are subject to a contingent deferred sales load of 1.00%
on redemptions of Class C shares made within one year of their purchase. The
contingent deferred sales load will be a percentage of the dollar amount of
shares redeemed and will be assessed on an amount equal to the lesser of (1) the
NAV at the time of purchase of the Class C shares being redeemed, or (2) the NAV
of the Class C shares being redeemed. A contingent deferred sales load will not
be imposed upon redemptions of Class C shares held for at least one year. Class
C shares are subject to an annual 12b-1 fee of up to 1.00% of the Fund's average
daily net assets allocable to Class C shares. The Adviser intends to pay a
commission of 2.00% of the purchase amount to your broker at the time you
purchase Class C shares.

Additional Information on the Contingent Deferred Sales Load
- ------------------------------------------------------------

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

All sales loads imposed on redemptions are paid to the Adviser. In determining
whether the contingent deferred sales load is payable, it is assumed that shares
not subject to the contingent deferred sales load are the first redeemed
followed by other shares held for the longest period of time. The contingent
deferred sales load will not be imposed upon shares representing reinvested
dividends or capital gains distributions, or upon amounts representing share
appreciation.

-22-
<PAGE>

The following example will illustrate the operation of the contingent deferred
sales load. Assume that you open an account and purchase 1,000 shares at $10 per
share and that six months later the NAV per share is $12 and, during such time,
you have acquired 50 additional shares through reinvestment of distributions. If
at such time you should redeem 450 shares (proceeds of $5,400), 50 shares will
not be subject to the load because of dividend reinvestment. With respect to the
remaining 400 shares, the load is applied only to the original cost of $10 per
share and not to the increase in net asset value of $2 per share. Therefore,
$4,000 of the $5,400 redemption proceeds will be charged the load. At the rate
of 1.00%, the contingent deferred sales load would be $40. In determining
whether an amount is available for redemption without incurring a deferred sales
load, the purchase payments made for all Class C shares in your account are
aggregated.

Distribution Plans

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

The annual limitation for payment of expenses pursuant to the Tax-Free Money
Plan is .25% of the Tax-Free Money Fund's average daily net assets. The annual
limitation for payment of expenses pursuant to the Class A Plan is .25% of the
Tax-Free Intermediate Term Fund's average daily net assets allocable to Class A
shares.

The Class C Plan allows Class C shares to pay two categories of fees for the
sale and distribution of its shares. First, the Class C Plan allows for the
payment to the Adviser of an account maintenance fee in an amount equal to an
annual rate of .25% of the Tax-Free Intermediate Term Fund's average daily net
assets allocable to Class C shares. The account maintenance fee may be paid to
other brokers based on the average value of Class C shares owned by a broker's
clients. In addition, Class C shares may pay an annual fee of up to .75% of the
average daily net assets of Class C shares for sales and distribution expenses.
These expenses include payments to brokers who sell Class C shares, advertising
and marketing expenses, printing expenses and other distribution-related
expenses.

Because distribution fees are paid out of a Fund's assets on an
on-going basis, over time these fees will increase the cost of your investment
and may cost shareholders in the Tax- Free Intermediate Term Fund more than
paying other types of sales loads. In the event a plan of distribution is
terminated by a

<PAGE>

Fund in accordance with its terms, the Fund will not be required to make any
payments for expenses incurred after the date the plan terminates. Distribution
expenses paid by the Adviser which are not reimbursed by the Funds cannot be
carried over from year to year.

HOW TO REDEEM SHARES
- --------------------

BY WRITTEN REQUEST. You may send a written request to the Transfer Agent with
your name, your account number and the amount to be redeemed. You must sign your
request exactly as your name appears on our account records. Mail your written
request to:

COUNTRYWIDE FUND SERVICES, INC.
P.O. BOX 5354
CINCINNATI, OHIO 45201-5354

BY TELEPHONE. If the amount of your redemption is less than $25,000, you may
redeem your shares by telephone. To redeem shares by telephone, call the
Transfer Agent (Nationwide call toll-free 800-543-0407; in Cincinnati call
629-2050). Your redemption proceeds may be mailed to the address stated on your
Account Application, wired to your bank or brokerage account as stated on your
Account Application or deposited via an Automated Clearing House (ACH)
transaction. The telephone redemption privilege is automatically available to
you, unless you specifically notify the Transfer Agent not to honor telephone
redemptions for your account.

THROUGH YOUR BROKER-DEALER. You may also redeem shares by placing a wire
redemption request through your broker-dealer. Your broker-dealer is responsible
for ensuring that redemption requests are transmitted to us in proper form in a
timely manner.

<PAGE>

BY CHECK. You may open a checking account with either Fund and redeem shares by
check. The Transfer Agent will redeem the appropriate number of shares in your
account to cover the amount of your check. Checks will be processed at the NAV
on the day the check is presented to the Custodian for payment. Shareholders of
the Tax-Free Intermediate Term Fund who write checks should keep in mind that
the Fund's NAV fluctuates daily. Checks may be payable to anyone for any amount,
but checks may not be certified.

If the amount of your check is more than the value of the shares held in your
account, the check will be returned. The Transfer Agent charges shareholders its
costs for each check returned for insufficient funds and for each stop payment.

If you do not write more than six checks during a month, you will not be charged
a fee for your checking account. If you write more than six checks during a
month, you will be charged $.25 for each additional check written that month.
However, there is no charge for any checks written by employees, shareholders
and customers (including members of their immediate family) of Countrywide
Credit Industries, Inc. or any of its affiliates.

If you invest in the Tax-Free Money Fund through a cash sweep or similar program
with a financial institution, you may not open a checking account with the Fund.
Shareholders in the Tax-Free Intermediate Term Fund should be aware that writing
a check is a taxable event.

PROCESSING OF REDEMPTIONS. If you request a redemption by wire, you will be
charged an $8 processing fee. We reserve the right to change the processing fee,
upon 30 days' notice. All charges will be deducted from your account by
redeeming shares in your account. Your bank or brokerage firm may also charge
you for processing the wire. Redemption proceeds will only be wired to a
commercial bank or brokerage firm in the United States. If it is impossible or
impractical to wire funds, the redemption proceeds will be sent by mail to the
designated account.

If you would like your redemption proceeds deposited free of charge directly
into your account with a commercial bank or other depository institution via an
ACH transaction, contact the Transfer Agent for more information.

We redeem shares based on the current NAV on the day we receive a proper request
for redemption, less any contingent deferred sales

<PAGE>

load on the redeemed shares. Be sure to review "How to Purchase Shares" above to
determine whether your redemption is subject to a contingent deferred sales
load.

A SIGNATURE GUARANTEE helps protect against fraud. You can obtain one from most
banks or securities dealers, but not from a notary public. For joint accounts,
each signature must be guaranteed. Please call us to ensure that your signature
guarantee will be submitted correctly.

A SIGNATURE GUARANTEE is required for (1) any redemption which is $25,000 or
more (2) any redemption when the name(s) or the address on the account has been
changed within 30 days of your redemption request.

ADDITIONAL INFORMATION ABOUT ACCOUNTS AND REDEMPTIONS

SMALL ACCOUNTS. Due to the high costs of maintaining small accounts, we may ask
that you increase your account balance if your account falls below the minimum
amount required for your account (based on the amount of your investment, not
on market fluctuations). If the account balance remains below our
minimum requirements for 30 days after we notify you, we may close your account
and send you the proceeds, less any applicable contingent deferred sales load.

AUTOMATIC WITHDRAWAL PLAN. If the shares in your account have a value of at
least $5,000, you (or another person you have designated) may receive monthly or
quarterly payments in a specified amount of not less than $50 each. There is no
charge for this service. Purchases of additional shares of the Tax-Free
Intermediate Term Fund while the plan is in effect are generally undesirable
because an initial sales load is incurred whenever purchases are made.

REINVESTMENT PRIVILEGE. If you have redeemed shares of the Tax- Free
Intermediate Term Fund, you may reinvest all or part of the proceeds without
paying a sales load. You must make your reinvestment within 90 days of your
redemption and you may only use this privilege once a year.

MISCELLANEOUS. In connection with all redemptions of shares of the Funds, we
observe the following policies and procedures:

o We may refuse any redemption request involving recently purchased
shares until your check for the recently

-25-
<PAGE>

purchased shares has cleared. To eliminate this delay, you may
purchase shares of the Funds by certified check or wire.

o We may refuse any telephone redemption request if the name(s) or the
address on the account has been changed within 30 days of your
redemption request.

o We may delay mailing redemption proceeds from the Tax- Free
Intermediate Term Fund for up to 7 business days (redemption proceeds
are normally mailed within 3 business days after receipt of a proper
request).

o We may delay mailing redemption proceeds from the Tax- Free Money Fund
for more than 3 business days (redemption proceeds are normally mailed
or wired within 3 business days after receipt of a proper written
request and within 1 business day after receipt of a proper telephone
request). Redemption proceeds from the Tax-Free Money Fund may be
wired to you on the same day of your telephone request, if your
request is properly made before 12:00 noon, Eastern time.

o We will consider all written and verbal instructions as authentic and
will not be responsible for processing instructions received by
telephone which are reasonably believed to be genuine or for
processing redemption proceeds by wire. We will use reasonable
procedures to determine that telephone instructions are genuine, such
as requiring forms of personal identification before acting upon
telephone instructions, providing written confirmation of the
transactions and/or tape recording telephone instructions. If we do
not use such procedures, we may be liable for losses due to
unauthorized or fraudulent instructions.

HOW TO EXCHANGE SHARES
- ----------------------
Shares of either Fund and of any other fund in the Countrywide Family of Funds
may be exchanged for each other.

Shares of the Tax-Free Money Fund and Class A shares of the Tax- Free
Intermediate Term Fund which do not have a contingent deferred sales load may be
exchanged for Class A shares of any other fund and for shares of a fund which
offers only one class of shares (provided these shares do not have a contingent
deferred sales load). If you paid a sales load on the shares being exchanged,
this amount will be credited towards the sales load (if any) on the shares being
acquired.

-26-
<PAGE>

Class C shares of the Tax-Free Intermediate Term Fund as well as Class A shares
of the Fund which have a contingent deferred sales load, may be exchanged, based
on their per share NAV, for shares of any other fund which has a contingent
deferred sales load and for shares of any fund which is a money market fund. You
will receive credit for the period of time you held the shares being exchanged
when determining whether a contingent deferred sales load will apply, unless
your shares were held in a money market fund.

The Countrywide Family of Funds consists of the following funds. Funds which may
have a front-end or a contingent deferred sales load are marked with an
asterisk.

GROWTH FUNDS GROWTH & INCOME FUNDS
- ------------ ---------------------
*Growth/Value Fund *Equity Fund
*Aggressive Growth Fund *Utility Fund

TAXABLE BOND FUNDS TAX-FREE BOND FUNDS
- ------------------ -------------------
Adjustable Rate U.S. Government *Tax-Free Intermediate Term
Securities Fund Fund
*Intermediate Bond Fund *Ohio Insured Tax-Free Fund
*Intermediate Term Government
Income Fund

TAXABLE MONEY MARKET FUNDS TAX-FREE MONEY MARKET FUNDS
- -------------------------- ---------------------------
Short Term Government Income Fund Tax-Free Money Fund
Institutional Government Income Fund Ohio Tax-Free Money Fund
Money Market Fund California Tax-Free Money
Fund
Florida Tax-Free Money
Fund

You may exchange shares by written request or by telephone. You must sign your
written request exactly as your name appears on our account records. If you are
unable to exchange shares by telephone due to such circumstances as unusually
heavy market activity, you can exchange shares by mail or in person. Your
exchange will be processed at the next determined NAV (or offering price, if
there is a sales load) after the Transfer Agent receives your request.

-27-
<PAGE>

shareholders 60 days' prior notice. An exchange will be treated as a sale of
shares and any gain or loss on an exchange of shares is a taxable event. Before
making an exchange, contact the Transfer Agent to request information about
the other funds in the Countrywide Family of Funds.

DIVIDENDS AND DISTRIBUTIONS
- ---------------------------

Each Fund expects to distribute substantially all of its net investment income
monthly and any net realized long-term capital gains at least annually.
Management will determine when to distribute any net realized short-term capital
gains. The percentage of the distribution which is tax-exempt will be based upon
the percentage of actual tax-exempt income earned by the Fund during the
distribution period. This percentage will vary from distribution to
distribution.

Your distributions will be paid under one of the following options:

Share Option - all distributions are reinvested in additional shares.

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

Cash Option - all distributions are paid in cash.

Please mark on your Account Application the option you have selected. If you do
not select an option, you will receive the Share Option. If you select the
Income Option or the Cash Option and the post office cannot deliver your checks
or if you do not cash your checks within six months, your dividends may be
reinvested in your account at the then-current NAV and your account will be
converted to the Share Option. You will not receive interest on the amount of
your uncashed checks until the checks have been reinvested in your account.

Distributions will be based on the Fund's NAV on the payable date. If you have
received a cash distribution from the Tax-Free Intermediate Term Fund, you may
reinvest it at NAV (without paying a sales load) at the next determined NAV on
the date of your reinvestment. You must make your reinvestment within 30 days of
the distribution date and you must notify the Transfer Agent that your
distribution is being reinvested under this provision.

-28-
<PAGE>

TAXES
- -----

Each Fund has qualified in all prior years and intends to continue to qualify
for the special tax treatment afforded a "regulated investment company" under
Subchapter M of the Internal Revenue Code so that it does not pay federal taxes
on income and capital gains distributed to shareholders. Each Fund also intends
to meet all IRS requirements necessary to ensure that it is qualified to pay
"exempt-interest dividends," which means that it may pass on to shareholders the
federal tax-exempt status of its investment income. Each Fund intends to
distribute substantially all of its net investment income and any net realized
capital gains to its shareholders.

Each Fund may invest a portion of its assets in securities which pay interest
that is not exempt from federal income tax. For federal income tax purposes, a
shareholder's proportionate share of taxable distributions from a Fund's net
investment income as well as from net realized short-term capital gains, if any,
is taxable as ordinary income. Since the Funds' investment income is derived
from interest rather than dividends, no portion of such distributions is
eligible for the dividends received deduction available to corporations.

Distributions of net capital gains (i.e., the excess of net long-term capital
gains over net short-term capital losses) by each Fund to its shareholders are
taxable to the recipient shareholders as capital gains, without regard to the
length of time a shareholder has held Fund shares. The maximum capital gains
rate for individuals is 20% with respect to assets held for more than 12 months.
The maximum capital gains rate for corporate shareholders is the same as the
maximum tax rate for ordinary income.

Issuers of tax-exempt securities issued after August 31, 1986 are required to
comply with various restrictions on the use and investment of proceeds of sales
of the securities. Any failure by the issuer to comply with these restrictions
would cause interest on such securities to become taxable to the security
holders as of the date the securities were issued.

Redemptions and exchanges of shares of the Tax-Free Intermediate Term Fund are
taxable events on which a shareholder may realize a gain or loss. If a
shareholder buys shares of the Tax-Free Intermediate Term Fund and sells them at
a loss within six months, any loss will be disallowed for federal income tax
purposes to the extent of the exempt-interest dividends received on such shares.
Any loss realized upon the sale of shares of the

-29-
<PAGE>

Tax-Free Intermediate Term Fund within six months from the date of their
purchase will be treated as a long-term capital loss to the extent of amounts
treated as distributions of net realized long-term capital gains during such six
month period. In addition, shareholders should be aware that interest on
indebtedness incurred to purchase or carry shares of either Fund is not
deductible for federal income tax purposes. Shareholders receiving Social
Security benefits may be taxed on a portion of those benefits as a result of
receiving tax-exempt income.

The Funds will mail to each of their shareholders a statement indicating the
amount and federal income tax status of all distributions made during the year.
Each Fund will report to its shareholders the percentage and source of income
earned on tax-exempt obligations held by it during the preceding year. An
exemption from federal income tax may not result in similar exemptions under the
laws of a particular state or local taxing authority.

Shareholders should consult their tax advisors about the tax effect of
distributions and withdrawals from the Funds and the use of the Automatic
Withdrawal Plan and the Exchange Privilege. The tax consequences described in
this section apply whether distributions are taken in cash or reinvested in
additional shares. The Funds may not be appropriate investments for persons who
are "substantial users" of facilities financed by industrial development bonds
or are "related persons" to such users; such persons should consult their tax
advisors before investing in the Funds.

OPERATION OF THE FUNDS
- ----------------------

The Funds are diversified series of Countrywide Tax-Free Trust, an open-end
management investment company organized as a Massachusetts business trust. Like
other mutual funds, the Trust retains various organizations to perform
specialized services for the Funds.

The Trust retains Countrywide Investments, Inc. (the "Adviser"), 312 Walnut
Street, Cincinnati, Ohio 45202 to manage the Funds' investments and their
business affairs. The Adviser was organized in 1974 and is the investment
adviser to all funds in the Countrywide Family of Funds. The Adviser is an
indirect wholly-owned subsidiary of The Western and Southern Life Insurance
Company which provides life and health insurance, annuities, mutual funds, asset
management and related financial services. Each Fund pays the

-30-
<PAGE>

Adviser a fee at the annual rate of .5% of its average daily net assets up to
$100 million; .45% of such assets from $100 million to $200 million; .4% of such
assets from $200 million to $300 million and .375% of such assets in excess of
$300 million.

John J. Goetz, First Vice President and Chief Investment Officer - Tax-Free
Fixed Income of the Adviser, is primarily responsible for managing the portfolio
of each Fund. Mr. Goetz has been employed by the Adviser in various capacities
since 1981 and has been managing each Fund's portfolio since October 1986.

The Adviser is the principal underwriter for the Funds and the exclusive agent
for the distribution of shares of the Funds. The Adviser receives the entire
sales load on all direct initial investments in the Tax-Free Intermediate Term
Fund and on all investments which are not made through a broker.

YEAR 2000 READINESS. Computer users around the world are faced with the dilemma
of the Year 2000 issue, which stems from the use of two digits in most computer
systems to designate the year. When the year advances from 1999 to 2000, many
computers will not recognize "00" as the Year 2000. This issue could potentially
affect every aspect of computer-related activity, on an individual and corporate
level. The Funds could be adversely impacted if the computer systems used by the
Adviser and other service providers have not been converted to meet the
requirements of the new century. The Adviser has evaluated its internal systems
and expects them to handle the change of millennium. The Adviser is monitoring
on an ongoing basis the progress of the Funds' service providers to convert
their systems to comply with the requirements of the Year 2000. The Adviser
currently has no reason to believe that these service providers will not be
fully and timely compliant. However, you should be aware that there can be no
assurance that all systems will be successfully converted prior to January 1,
2000, in which case it would become necessary for the Funds to enter into
agreements with new service providers or to make other arrangements. In
addition, although the Adviser considers an issuer's Year 2000 compliance status
in the investment decision making process, entities in which the Funds invest
may experience Year 2000 difficulties and the Funds are unable to predict to
what extent the Year 2000 issue will impact the value of those securities.

CALCULATION OF SHARE PRICE AND PUBLIC OFFERING PRICE
- ----------------------------------------------------

On each day that the Trust is open for business, the share price (NAV) of the
Tax-Free Money Fund's shares is determined as of 12:00 noon and 4:00 p.m.
Eastern time. The public offering price (NAV plus applicable sales load) of the
shares of the Tax-Free Intermediate Term Fund is determined as of the close of
the regular session of trading on the New York Stock Exchange (normally 4:00
p.m., Eastern time). The Trust is open for business on each day the New York
Stock Exchange is open for business and on any other day when there is
sufficient trading in a Fund's investments that its NAV might be materially
affected. The NAV per share of a Fund is calculated by dividing the sum of the
value of the securities held by the Fund plus cash or other assets minus all
liabilities (including estimated accrued expenses) by the total number of shares
outstanding of the Fund, rounded to the nearest cent. The price at which a
purchase or redemption of Fund shares is processed is based on the next
calculation of NAV after the order is placed.

The Tax-Free Money Fund seeks to maintain a constant share price of $1.00 per
share by valuing its securities on an amortized cost basis. Under the amortized
cost method of valuation, the Tax- Free Money Fund maintains a dollar-weighted
average portfolio maturity of 90 days or less, purchases only United States
dollar-denominated securities with maturities of thirteen months or less and
invests only in securities which meet the Fund's quality standards and present
minimal credit risks. The Fund's obligations are valued at original cost
adjusted for amortization of premium or accumulation of discount, rather than
valued at market. This method should enable the Fund to maintain a stable net
asset value per share. However, there is no assurance that the Tax-Free Money
Fund will be able to do so.

The Tax-Free Intermediate Term Fund's tax-exempt securities are valued by an
outside independent pricing service. The service uses a computerized grid matrix
of tax-exempt securities and evaluations by its staff to determine the fair
value of the securities. If the Adviser believes that the valuation provided by
the service does not accurately reflect the fair value of a tax-exempt security,
it will value the security at the average of the prices quoted by at least two
independent market makers. The

-33-
<PAGE>

quoted price will represent the market maker's opinion of the price a willing
buyer would pay for the security. All other securities (and other assets) of the
Tax-Free Intermediate Term Fund for which market quotations are not readily
available are valued at their fair value as determined in good faith using
procedures established by the Board of Trustees. The Tax-Free Intermediate Term
Fund's NAV will fluctuate with the value of the securities it holds.

-34-
<PAGE>

FINANCIAL HIGHLIGHTS
- --------------------

The financial highlights table is intended to help you understand the Funds'
financial performance for the past five years. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned or lost on an investment
in the Funds (assuming reinvestment of all dividends and distributions). This
information has been audited by Arthur Andersen LLP, whose report, along with
the Funds' financial statements, is included in the Statement of Additional
Information, which is available upon request.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
TAX-FREE MONEY FUND
Per Share Data for a Share Outstanding Throughout Each Year
- -----------------------------------------------------------------------------------------------------
Year Ended June 30,
- -----------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------------------------------------------------------------
Net investment income 0.027 0.030 0.029 0.031 0.030
-------------------------------------------------------------
Dividends from net investment
income (0.027) (0.030) (0.029) (0.031) (0.030)
-------------------------------------------------------------
Net asset value at end of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------------------------------------------------------------
Total return 2.75% 3.03% 2.89% 3.15% 3.07%
=============================================================
Net assets at end of year (000's) $ 25,234 $ 37,383 $30,126 $ 25,342 $ 26,692
=============================================================
Ratio of net expenses to
average net assets(A) 0.89% 0.92% 0.99% 0.99% 0.99%
Ratio of net investment income to
average net assets 2.74% 2.98% 2.85% 3.09% 3.00%

(A) Absent fee waivers by the Adviser, the ratio of expenses to average net
assets would have been 0.95% for the year ended June 30, 1999.

-35-
<PAGE>
TAX-FREE INTERMEDIATE TERM FUND - CLASS A
- --------------------------------------------------------------------------------------------------------
Per Share Data for a Share Outstanding Throughout Each Year
- --------------------------------------------------------------------------------------------------------
Year Ended June 30,
----------------------------------------------------------------
1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------------------

Net asset value at beginning of year $ 11.12 $ 11.01 $ 10.85 $ 10.86 $ 10.69
----------------------------------------------------------------
Income from investment operations:
Net investment income 0.48 0.50 0.50 0.50 0.49
Net realized and unrealized gains
(losses) on investments (0.25) 0.11 0.16 (0.01) 0.17
----------------------------------------------------------------
Total from investment operations 0.23 0.61 0.66 0.49 0.66
----------------------------------------------------------------

Dividends from net investment
income (0.48) (0.50) (0.50) (0.50) (0.49)
----------------------------------------------------------------

Net asset value at end of year $ 10.87 $ 11.12 $ 11.01 $ 10.85 $ 10.86
================================================================

Total return(A) 2.07% 5.63% 6.19% 4.51% 6.36%
================================================================

Net assets at end of year (000's) $ 47,899 $ 52,896 $ 58,485 $ 67,675 $81,140
================================================================

Ratio of net expenses to
average net assets 0.99% 0.99% 0.99% 0.99% 0.99%

Ratio of net investment income to
average net assets 4.33% 4.50% 4.55% 4.52% 4.59%

Portfolio turnover rate 51% 36% 30% 37% 32%

(A) Total returns shown exclude the effect of applicable sales loads.

- 36 -
<PAGE>

TAX-FREE INTERMEDIATE TERM FUND - CLASS C
- --------------------------------------------------------------------------------------------------------
Per Share Data for a Share Outstanding Throughout Each Year
- --------------------------------------------------------------------------------------------------------
Year Ended June 30,
----------------------------------------------------------------
1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------------------

Net asset value at beginning of year $ 11.12 $ 11.01 $ 10.85 $ 10.86 $ 10.69
----------------------------------------------------------------

Income from investment operations:
Net investment income 0.40 0.42 0.43 0.44 0.44
Net realized and unrealized gains
(losses) on investments (0.24) 0.11 0.16 (0.01) 0.17
----------------------------------------------------------------
Total from investment operations 0.16 0.53 0.59 0.43 0.61
----------------------------------------------------------------

Dividends from net investment
income (0.40) (0.42) (0.43) (0.44) (0.44)
----------------------------------------------------------------

Net asset value at end of year $ 10.88 $ 11.12 $ 11.01 $ 10.85 $ 10.86
================================================================

Total return(A) 1.40% 4.85% 5.49% 4.00% 5.82%
================================================================

Net assets at end of year (000's) $ 4,634 $ 4,747 $ 5,161 $ 5,239 $ 4,814
================================================================

Ratio of net expenses to
average net assets 1.74% 1.74% 1.65% 1.49% 1.49%

Ratio of net investment income to
average net assets 3.58% 3.75% 3.89% 4.02% 4.08%

Portfolio turnover rate 51% 36% 30% 37% 32%

(A) Total returns shown exclude the effect of applicable sales loads.
</TABLE>

<PAGE> -37-
<TABLE>
<S> <C>
Account Application (check appropriate Fund) ACCOUNT NO. ____________________________
(For Fund Use Only)
Please mail account application to:
Countrywide Fund Services, Inc.
P.O. Box 5354 FOR BROKER/DEALER USE ONLY
Cincinnati, Ohio 45201-5354 Firm Name:______________________________________
[ ] Tax-Free Money Fund (2) $________________ Home Office Address:____________________________
[ ] Tax-Free Intermediate Term
Fund-A Shares (3) $________________ Branch Address:_________________________________
[ ] Tax-Free Intermediate Term $________________ Rep Name & No.:_________________________________
Fund-C Shares (16) Rep Signature:__________________________________

___________________________________________________________________________________________________________________
Initial Investment of $_____________

[ ] Check or draft enclosed payable to the Fund(s) designated above.

[ ] Bank Wire From: _________________________________________________________________________________________________

[ ] Exchange From: _________________________________________________________________________________________________
(Fund Name) (Fund Account Number)

Account Name S.S. #/Tax I.D.#

_________________________________________________________________ _________________________________________________
Name of Individual, Corporation, Organization, or Minor, etc. (In case of custodial account
please list minor's S.S.#)

_________________________________________________________________ Citizenship: [ ] U.S.
Name of Joint Tenant, Partner, Custodian [ ] Other ______________________

Address Phone

_________________________________________________________________ (_____)__________________________________________
Street or P.O. Box Business Phone

_________________________________________________________________ (_____)__________________________________________
City State Zip Home Phone

Check Appropriate Box: [ ] Individual [ ] Joint Tenant (Right of survivorship presumed) [ ] Partnership
[ ] Corporation [ ] Trust [ ] Custodial [ ] Non-Profit [ ] Other

Occupation and Employer Name/Address __________________________________________________________________________________

Are you an associated person of an NASD member? [ ] Yes [ ] No
___________________________________________________________________________________________________________________

Account Number/Name Account Number/Name
___________________________________________________________- ________________________________________________________

___________________________________________________________- ________________________________________________________
<PAGE>
Letter of Intent: (Complete the Right of Accumulation section if related accounts are being applied to your
Letter of Intent.)

[ ] I agree to the Letter of Intent in the current Prospectus of Countrywide Tax-Free Trust. Although I am not obligated to
purchase, and the Trust is not obligated to sell, I intend to invest over a 13 month period beginning ______________________
19 _______ (Purchase Date of not more than 90 days prior to this Letter) an aggregate amount in the load funds of
Countrywide Investments at least equal to (check appropriate box):
[ ] $50,000 [ ] $100,000 [ ] $250,000 [ ] $500,000 [ ] $1,000,000
- -----------------------------------------------------------------------------------------------------------------------------------
ACCOUNT SECURITY
For increased security, Countrywide Fund Services, Inc. requires that you establish a Personal Identification Number [ ][ ][ ][ ]
(PIN). You will need to use this PIN when requesting account information and placing transactions. For institutional
accounts, please use a four digit number. For retail accounts, please use the first four letters of your mother's
maiden name.
- ------------------------------------------------------------------------------------------------------------------------------------
SIGNATURE AND TIN CERTIFICATION
I certify that I have full right and power, and legal capacity to purchase shares of the Funds and affirm that I have received a
current prospectus and understand the investment objectives and policies stated therein. The investor hereby ratifies any
instructions given pursuant to this Application and for himself and his successors and assigns does hereby release Countrywide
Fund Services, Inc., Countrywide Tax-Free Trust, Countrywide Investments, Inc., and their respective officers, employees, agents
and affiliates from any and all liability in the performance of the acts instructed herein. Neither the Trust, Countrywide Fund
Services, Inc., nor their respective affiliates will be liable for complying with telephone instructions they reasonably believe
to be genuine or for any loss, damage, cost or expense in acting on such telephone instructions. The investor(s) will bear the
risk of any such loss. The Trust or Countrywide Fund Services, Inc., or both, will employ reasonable procedures to determine
that telephone instructions are genuine. If the Trust and/or Countrywide Fund Services, Inc. do not employ such procedures,
they may be liable for losses due to unauthorized or fraudulent instructions. These procedures may include, among others,
requiring forms of personal identification prior to acting upon telephone instructions, providing written confirmation of the
transactions and/or tape recording telephone instructions. I certify under the penalities of perjury that (1) the Social
Security Number or Tax Identification Number shown is correct and (2) I am not subject to backup withholding. The certifications
in this paragraph are required from all non-exempt persons to prevent backup withholding of 31% of all taxable distributions and
gross redemption proceeds under the federal income tax law. The Internal Revenue Service does not require my consent to any
provision of this document other than the certifications required to avoid backup withholding. (Check here if you are subject to
backup withholding). [ ]

___________________________________ __________________________________
Applicant Date Joint Applicant Date

___________________________________ ___________________________________
Other Authorized Signatory Date Other Authorized Signatory Date

NOTE: Corporations, trusts and other organizations must provide a copy of the resolution form on the reverse side.
Unless otherwise specified, each joint owner shall have full authority to act on behalf of the account.
- ------------------------------------------------------------------------------------------------------------------------------------
SIGNATURE AUTHORIZATION - FOR USE BY CORPORATIONS, TRUSTS, PARTNERSHIPS AND OTHER INSTITUTIONS
Please retain a copy of this document for your files. Any modification of the information contained in this section will
require an Amendment to this Application Form.
[ ] New Application [ ] Amendment to previous Application dated ________ Account No. _______________
Name of Registered Owner ________________________________________________________________________________

The following named person(s) are currently authorized signatories of the Registered Owner. Any ____ of them is/are authorized
under the applicable governing document to act with full power to sell, assign or transfer securities of Countrywide Tax-Free
Trust for the Registered Owner and to execute and deliver any instrument necessary to effectuate the authority hereby conferred:

Name Title Signature

___________________ ____________________ ___________________

COUNTRYWIDE TAX-FREE TRUST, or any agent of the Trust may, without inquiry, rely upon the instruction of any person(s)
purporting to be an authorized person named above, or in any Amendment received by the Trust or its agent. The Trust
and its Agent shall not be liable for any claims, expenses or losses resulting from having acted upon any instruction reasonably
believed to be genuine.
- --------------------------------------------------------------------------------------------------------------------------------
<PAGE>
SPECIAL INSTRUCTIONS

REDEMPTION INSTRUCTIONS
I understand that the telephone redemption privilege is automatically available to me unless I indicate otherwise below.
(See the prospectus for limitations on this option.)
[ ] I do not wish to have the telephone redemption privilege on my account.
REDEMPTION OPTIONS
[ ] Please mail redemption proceeds to the name and address of record.
[ ] Please wire redemptions to the commercial bank account indicated below (subject to a minimum wire transfer of $1,000 and an
$8.00 fee. For wire redemptions please attach a voided check from the account below).
[ ] Checkwriting - Call 1-800-543-0407 for checkwriting application and signature card.

AUTOMATIC INVESTMENT (For Automatic Investment please attach a voided check from the account below.)
Please purchase shares of the Fund by withdrawing from the commercial bank account below, per the instructions below:
Amount $_________(minimum $50)

______________________________ is hereby authorized to charge to my account the bank draft amount here indicated. I
understand the payment of this draft is subject to all provisions of the contract as stated on my
bank account signature card.
Please make my automatic investment on:
[ ] the last business day of each month [ ] the 15th day of each month [ ] both the 15th and last business day

_________________________________________________________________
(Signature as your name appears on the bank account to be drafted)

Name as it appears on the account __________________________________________________

Commerical bank account #___________________________________________________________

ABA Routing #_______________________________________________________________________

City, State and Zip in which bank is located _______________________________________

Indemnification to Depositor's Bank
In consideration of your participation in a plan which Countrywide Fund Services, Inc. ("CFS") has put into effect, by which
amounts, determined by your depositor, payable to the Fund, for purchase of shares of the Fund, are collected by CFS, CFS hereby
agrees:
CFS will indemnify and hold you harmless from any liability to any person or persons whatsoever arising out of the payment by
you of any amount drawn by the Fund to its own order on the account of your depositor or from any liability to any person
whatsoever arising out of the dishonor by you whether with or without cause or intentionally or inadvertently, of any such
checks. CFS will defend, at its own cost and expense, any action which might be brought against you by any person or persons
whatsoever because of your actions taken pursuant to the foregoing request or in any manner arising by reason of your
participation in this arrangement. CFS will refund to you any amount erroneously paid by you to the Fund on any such check if
the claim for the amount of such erroneous payment is made by you within six (6) months from the date of such erroneous payment;
your participation in this arrangement and that of the Fund may be terminated by thirty (30) days written notice from either
party to the other.
- ---------------------------------------------------------------------------------------------------------------------------------
AUTOMATIC WITHDRAWAL PLAN (Complete for Withdrawals from the Fund(s))
This is an authorization for you to withdraw $_________________ from my mutual fund account beginning the last business day of the
month of _____________________.

Please Indicate Withdrawal Schedule (Check One): Please indicate which Fund: [ ] Tax Free Money Fund
[ ] Tax Free Intermediate Term Fund

[ ] Monthly - Withdrawals will be made on the last business day of each month.
[ ] Quarterly - Withdrawals will be made on or about 3/31, 6/30, 9/30 and 12/31.
[ ] Annually - Please make withdrawals on the last business day of the month of:____________________

Please Select Payment Method (Check One):

[ ] Exchange: Please exchange the withdrawal proceeds into another Countrywide account number: ___ ___ _ ___ ___ ___ ___
[ ] Check: Please mail a check for my withdrawal proceeds to the mailing address on this account.
[ ] ACH Transfer: Please send my withdrawal proceeds via ACH transfer to my bank checking or savings account as indicated below.
I understand that the transfer will be completed in two to three business days and that there is no charge.
[ ] Bank Wire: Please send my withdrawal proceeds via bank wire, to the account indicated below. I understand that the wire
will be completed in one business day and that there is an $8.00 fee.

Please attach a voided _______________________________________________________________________________________
check for ACH or bank wire Bank Name Bank Address

_______________________________________________________________________________________
Bank ABA# Account # Account Name

[ ] Send to special payee (other than applicant): Please mail a check for my withdrawal proceeds to the mailing
address below:

Name of payee_____________________________________________________________________________________________________________

Please send to: __________________________________________________________________________________________________________
Street address City State Zip
____________________________________________________________________________________________________________________________
</TABLE>
<PAGE>

Countrywide Tax-Free Trust
- --------------------------
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202-4094
Nationwide (Toll-Free) 800-543-8721
Cincinnati 513-629-2000

Board of Trustees
- -----------------
William O. Coleman
Phillip R. Cox
H. Jerome Lerner
Robert H. Leshner
Jill T. McGruder
Oscar P. Robertson
Nelson Schwab, Jr.
Robert E. Stautberg
Joseph S. Stern, Jr.

Investment Adviser
- ------------------
Countrywide Investments, Inc.
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202-4094

Transfer Agent
- --------------
Countrywide Fund Services, Inc.
P.O. Box 5354
Cincinnati, Ohio 45201-5354

Shareholder Service
- -------------------
Nationwide: (Toll-Free) 800-543-0407
Cincinnati: 513-629-2050

Additional information about the Funds is included in the Statement of
Additional Information ("SAI") which is incorporated by reference in its
entirety. Additional information about the Tax-Free Intermediate Term Fund's
investments is available in the Funds' annual and semiannual reports to
shareholders. In the Funds' annual report you will find a discussion of the
market conditions and investment strategies that significantly affected the
Tax-Free Intermediate Term Fund's performance during its last fiscal year.

To obtain a free copy of the SAI, the annual and semiannual reports or other
information about the Funds, or to make inquiries about the Funds, please call
1-800-543-0407 (Nationwide) or 629-2050 (in Cincinnati).

-38-
<PAGE>

Information about the Funds (including the SAI) can be reviewed and copied at
the Securities and Exchange Commission's public reference room in Washington,
D.C. Information about the operation of the public reference room can be
obtained by calling the Commission at 1-800-SEC-0330. Reports and other
information about the Funds are available on the Commission's Internet site at
http://www.sec.gov. Copies of information on the Commission's Internet site can
be obtained for a fee by writing to: Securities and Exchange Commission, Public
Reference Section, Washington, D.C. 20549-6009.

File No. 811-3174

-39-

<PAGE>
Tax-Exempt

PROSPECTUS

Ohio Insured
Tax-Free Fund

November 1, 1999

[logo] COUNTRYWIDE
INVESTMENTS

This Prospectus has information you should know before you invest. Please read
it carefully and keep it with your investment records.

<PAGE>

PROSPECTUS
November 1, 1999

COUNTRYWIDE TAX-FREE TRUST
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202
800-543-0407

OHIO INSURED TAX-FREE FUND

TABLE OF CONTENTS

RISK/RETURN SUMMARY.......................................................
RISK/RETURN SUMMARY: FEE TABLE............................................
INVESTMENT OBJECTIVE, INVESTMENT STRATEGIES AND RELATED RISKS.............
HOW TO PURCHASE SHARES....................................................
HOW TO REDEEM SHARES......................................................
HOW TO EXCHANGE SHARES....................................................
DIVIDENDS AND DISTRIBUTIONS...............................................
TAXES.....................................................................
OPERATION OF THE FUND.....................................................
CALCULATION OF SHARE PRICE AND PUBLIC OFFERING PRICE......................
FINANCIAL HIGHLIGHTS......................................................

FOR FURTHER INFORMATION OR ASSISTANCE IN OPENING AN ACCOUNT, PLEASE CONTACT YOUR
BROKER OR CALL US AT THE ABOVE NUMBER.

<PAGE>

RISK/RETURN SUMMARY
- -------------------
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

The Fund seeks the highest level of interest income exempt from federal income
tax and Ohio personal income tax, consistent with protection of capital.

WHAT ARE THE FUND'S PRINCIPAL INVESTMENT STRATEGIES?

The Fund will invest at least 65% of its total assets in high-quality long-term
Ohio municipal obligations which are insured as to the timely payment of
principal and interest. Ohio municipal obligations are debt obligations issued
by the State of Ohio and its agencies which pay interest that is exempt from
both federal income tax and Ohio personal income tax.

Under normal market conditions, the Fund will be invested so that at least 80%
of its annual income will be exempt from federal income tax and Ohio personal
income tax. The Fund intends to maintain an average weighted maturity of more
than 15 years.

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUND?

The Fund's share price, yield and total return will fluctuate due to changes in
economic conditions, interest rates, political events and other conditions
affecting the performance of the bond market. In general, bond prices fall when
interest rates rise. This effect is usually more pronounced for longer-term
securities, such as those held by the Fund. As with any investment in
the bond market, there is a risk that you may lose money by investing in the
Fund.

Municipal obligations purchased by the Fund may include floating and variable
rate obligations, when-issued obligations, obligations with puts attached and
lease obligations. The Fund will be subject to the risks associated with
investments in these types of obligations.

The Fund is non-diversified and may invest in a smaller number of issuers than a
diversified fund. Therefore, an investment in the Fund may be riskier than an
investment in other types of bond funds. There are also risks of reduced
diversification because the Fund invests primarily in debt obligations of
issuers within a single state. The Fund's performance is closely tied to the
financial condition of the State of Ohio and its municipalities and authorities.
A deterioration in the condition of an issuer of a municipal obligation held by
the Fund could result in a default by the issuer on its payments of interest and
principal, which could cause a decrease in the value of the Fund's shares, if
the obligation is not insured. Although the Adviser believes that the Fund's
credit risks will be substantially reduced by insurance, insurance does not
guarantee the value of the municipal obligations held by the Fund or the value
of the Fund's shares.

- 2 -

<PAGE>

An investment in the Fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

PERFORMANCE SUMMARY

The bar chart and performance table shown below provide an indication of
the risks of investing in the Fund by showing the changes in the performance of
the Fund from year to year during the past ten years and by showing how the
average annual returns of the Fund compare to those of a broad-based securities
market index. The Fund's past performance is not necessarily an indication of
its future performance.

Class A Shares (bar chart)
8.95% 5.92% 11.01% 8.76% 12.59% -5.37% 15.86% 3.07% 7.20% 5.54%

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

The total returns shown above do not reflect the sales load on Class A shares
and, if included, returns would be less than those shown.

During the period shown in the bar chart, the highest return for a quarter was
6.59% during the quarter ended March 31, 1995 and the lowest return for a
quarter was -5.28% during the quarter ended March 31, 1994.

The year-to-date return of the Fund's Class A shares as of September 30, 1999 is
- -2.29%.

AVERAGE ANNUAL TOTAL RETURNS
For Periods Ended December 31, 1998

One Five Ten Since
Year Years Years Inception*
---- ----- ----- ----------
Ohio Insured Tax-Free
Fund Class A 1.32% 4.18% 6.77% 7.64%
Lehman Brothers 15-Year
Municipal General
Obligation Bond Index 7.64% 6.86% 8.71% Not Available

Ohio Insured Tax-Free
Fund Class C 4.76% 4.38% -- 4.48%
Lehman Brothers 15-Year
Municipal General
Obligation Bond Index 7.64% 6.86% -- 6.94%

*Inception date for Class A shares was April 1, 1985; inception date for Class C
shares was November 1, 1993.

- 3 -

<PAGE>

RISK/RETURN SUMMARY: FEE TABLE
- ------------------------------
This table describes the fees and expenses that you will pay if you buy and hold
shares of the Fund.

SHAREHOLDER FEES (fees paid directly from your investment)

Class A Class C
Shares Shares
------- -------
Maximum Sales Load . . . . . . . . . . . . . . . 4.75% 2.25%
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price). . . . . . . .4.75% 1.25%
Maximum Deferred Sales Load
(as a percentage of original purchase price . . .None* 1.00%
or the amount redeemed, whichever is less)
Sales Load Imposed on Reinvested Dividends . . . None None
Redemption Fee . . . . . . . . . . . . . . . . . None** None**
Exchange Fee . . . . . . . . . . . . . . . . . . None None

* If you purchase $1 million or more shares and do not pay a front-end sales
load, you may be subject to a deferred sales load of 1% if the shares are
redeemed within one year of their purchase and a dealer's commission was paid
on the shares.
** You will be charged $8 for each wire redemption. This fee is subject to
change.

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)

Class A Class C
Shares Shares
------ ------
Management Fees .50% .50%
Distribution (12b-1) Fees .01% .54%
Other Expenses .24% .50%
---- ----
Total Annual Fund Operating Expenses .75% 1.50%
==== =====

EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. It assumes that you invest
$10,000 in the Fund for the time periods indicated and then redeem all of your
shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:

Class A Class C
Shares Shares
------- ------
1 Year $ 548 $ 376
3 Years 703 593
5 Years 872 933
10 Years 1,361 1,843

You would pay the following expenses if you did not redeem your shares:

Class A Class C
Shares Shares
------- ------
1 Year $ 548 $ 276
3 Years 703 593
5 Years 872 933
10 Years 1,361 1,843

- 4 -

<PAGE>

INVESTMENT OBJECTIVE, INVESTMENT STRATEGIES AND RELATED RISKS
- -------------------------------------------------------------
INVESTMENT OBJECTIVE

The Fund seeks the highest level of interest income exempt from federal income
tax and Ohio personal income tax, consistent with protection of capital.

The Fund's investment objective may be changed by the Board of Trustees without
the approval of shareholders. You will be notified if there is a change in the
Fund's investment objective and you should then consider whether the Fund will
continue to be an appropriate investment under your circumstances.

PRINCIPAL INVESTMENT STRATEGIES

Under normal market conditions, the Fund will invest at least 65% of its total
assets in high-quality, long-term Ohio municipal obligations which are
protected by insurance guaranteeing the payment of principal and interest in the
event of a default. The Fund intends to maintain an average weighted maturity of
more than 15 years. The Fund may invest in obligations of any maturity,
including short-term municipal obligations and tax-exempt commercial paper. If
the Adviser determines that market conditions warrant a shorter average weighted
maturity, the maturity of the Fund's investments will be reduced, but the Fund's
average weighted maturity will not be reduced below 10 years. It is a
fundamental policy that, under normal market conditions, the Fund will be
invested so that at least 80% of its annual income will be exempt from federal
income tax, including the alternative minimum tax, and Ohio personal income tax.
This policy may not be changed without the approval of the Fund's shareholders.

Under normal market conditions the Adviser will invest at least 65% ot its total
assets in Ohio municipal obligations which are rated within the highest rating
category by a national rating agency. The Adviser may also invest in Ohio
municipal obligations and other securities which are rated within the four
highest rating categories by a national rating agency. If the rating of an
obligation purchased by the Fund is reduced below the four highest rating
categories, the Fund will sell that security, subject to the Adviser's
assessment of the most opportune time for sale. The Fund may also
purchase obligations that are unrated at the time of purchase but are determined
by the Adviser to be of comparable quality.

OHIO MUNICIPAL OBLIGATIONS. Ohio municipal obligations are debt obligations
issued by the State of Ohio and its political subdivisions, agencies,
authorities and instrumentalities which

- 5 -

<PAGE>

pay interest that is, in the opinion of bond counsel to the issuer, exempt from
both federal income tax, including the alternative minimum tax and Ohio personal
income tax. Ohio municipal obligations are used to finance work on public
facilities, to pay general operating expenses or to refinance outstanding debts.
They may also be issued to finance various private activities for the
construction of housing, educational or medical facilities or the financing of
privately owned or operated facilities.

Ohio municipal obligations consist of tax-exempt bonds, tax-exempt notes and
tax-exempt commercial paper. The two principal types of Ohio municipal
obligations are "general obligation" and "revenue" bonds. General obligation
bonds are backed by the issuer's full faith and credit and taxing power. Revenue
bonds are backed by the revenues of specific project, facility or tax.
Industrial development revenue bonds are a specific type of revenue bond
backed by the credit of the private user of the facility. The Fund may
invest in any combination of general obligation bonds, revenue bonds
and industrial development bonds. Tax-exempt notes, such as tax anticipation
notes, revenue anticipation notes and bond anticipation notes are used to
provide interim financing or other short-term capital needs and generally
mature in one year or less.

Municipal obligations purchased by the Fund may include floating and variable
rate municipal obligations, when-issued obligations, obligations with puts
attached and lease obligations.

o Floating and variable rate municipal obligations are obligations with
interest rates that are adjusted when a specific interest rate index
changes (floating rate obligations) or on a schedule (variable rate
obligations). Although there may not be an active secondary market for
a particular floating or variable rate obligation, these obligations
usually have demand features which permit the Fund to demand payment
in full of the principal and interest. Obligations with demand
features are often secured by letters of credit issued by a bank or
other financial institution. A letter of credit may reduce the
risk that an entity will not be able to meet the Fund's demand for
repayment of principal and interest.

o When-Issued obligations are obligations which are paid for and
delivered within 15 to 45 days after the date of their purchase. The
Fund will maintain a segregated account of cash or liquid securities to
pay for its when-issued obligations and this account will be valued
daily in order to account for market fluctuations in the value of its
when- issued commitments.

- 6 -

<PAGE>

o Lease Obligations are municipal obligations which constitute
participations in lease obligations of municipalities to acquire land
and a wide variety of equipment and facilities. Although lease
obligations do not constitute general obligations of the municipality
for which the municipality's taxing power is pledged, a lease
obligation is ordinarily backed by the municipality's covenant to
budget for, appropriate for and make the payments due under the
obligation. However, lease obligations may contain non-
appropriation clauses which provide that the municipality has no
obligation to make lease or installment purchase payments in future
years unless money is appropriated for this purpose on an annual basis.

TEMPORARY DEFENSIVE PURPOSES. For temporary defensive purposes, the Fund may
invest, as the Adviser deems necessary, in uninsured municipal obligations which
pay interest that is exempt from federal, but not Ohio personal income tax and
taxable short-term securities. Taxable short-term securities include
certificates of deposit and other bank debt instruments, commercial paper, U.S.
Government obligations and repurchase agreements. Under normal market
conditions, no more than 5% of the Fund's net assets will be invested in any one
type of taxable obligation. Although interest earned on these short-term
obligations is taxable as ordinary income for federal and/or Ohio income tax
purposes, the Fund intends to minimize taxable income through investment, when
possible, in other available securities exempt from federal and/or Ohio income
taxes, including shares of investment companies whose dividends are tax-exempt.
The Fund may invest in these taxable securities when, for example, due to market
conditions Ohio municipal obligations are temporarily unavailable for purchase,
pending investment of proceeds of sales of Fund shares or portfolio securities
or in anticipation of redemptions. When taking such a temporary defensive
position, the Fund may not achieve its investment objective.

INSURANCE. The Fund will purchase insured Ohio municipal obligations which
require the insurer to make payments of principal and interest, when due, to the
Fund if the issuer defaults on its payments. Obligations purchased by the Fund
will be insured either through an insurance policy purchased by the issuer of
the obligation or through an insurance policy purchased by the Fund. The Fund
intends that its insured

- 7 -

<PAGE>

obligations will be insured by the issuer of the obligation under a new issue
insurance policy. A new issue insurance policy is purchased by the issuer or
underwriter of an obligation in order to increase the credit rating of the
obligation. All premiums are paid in advance by the issuer or underwriter. A new
issue insurance policy is non-cancelable and continues in effect as long as the
obligation is outstanding and the insurer remains in business. The Fund may also
purchase uninsured Ohio municipal obligations if the obligations are guaranteed
by the U.S. Government or if the obligations are short-term Ohio municipal
obligations.

PRINCIPAL RISK CONSIDERATIONS

INTEREST RATE RISK. The Fund's yield, share price and total return will
fluctuate due to changes in interest rates. Generally, the Fund's share price
will increase when interest rates decrease and will decrease when interest rates
increase. This effect is usually more pronounced for longer-term securities,
such as those held by the Fund.

CREDIT RISK. A deterioration in the financial condition of an issuer of a
municipal obligation or a deterioration in general economic conditions could
cause the issuer to default on its obligation to pay interest and repay
principal, if an obligation is not insured. This could cause the Fund's share
price to decrease. The Fund's ability to achieve its investment objective
depends to a great extent on the ability of an issuer of an obligation to meet
its scheduled payments of principal and interest, if an obligation is not
insured. The Fund may purchase obligations which are rated Baa or BBB which have
speculative characteristics and are less likely than higher-grade obligations to
pay interest and repay principal during an economic downturn.

Municipal obligations purchased by the Fund may be backed by a letter of credit
issued by a bank or other financial institution. Adverse developments affecting
banks could have a negative effect on the value of the Fund's shares, if the
obligation is not insured. The Fund may purchase municipal lease obligations,
which are obligations issued by a state or local government or authority to
acquire land and a wide variety of equipment and facilities. If the funds are
not appropriated for the following year's lease payments, the lease may
terminate, with the possibility of a default on the lease obligation, if the
obligation is not insured.

The Adviser believes that the Fund's credit risks will be substantially reduced
by insurance. Although insurance reduces the credit risks to the Fund by
protecting against losses from defaults by an issuer, it does not protect
against market fluctuation. Also, there are no guarantees that any insurer will
be able to meet its obligations under an insurance policy.

- 8 -

<PAGE>

NON-DIVERSIFICATION RISK. The Fund is a non-diversified fund, which means that
it may invest more than 5% of its assets in the securities of one issuer. This
may cause the value of the Fund's shares to be more sensitive to any single
economic, business, political or regulatory occurrence than the net asset value
of shares in a diversified fund.

CONCENTRATION RISK. The Fund may invest more than 25% of its assets in municipal
obligations within a particular segment of the bond market, such as housing
agency bonds, hospital revenue bonds or airport bonds. It is possible that
economic, business or political developments or other changes affecting one bond
may also affect other bonds in the same segment in the same manner, thereby
potentially increasing the risk of such investments.

The Fund may invest more than 25% of its assets in industrial development bonds
which may be backed only by the assets and revenues of nongovernmental users.
However, the Fund will not invest more than 25% of its assets in securities
backed by nongovernmental users which are in the same industry.

Because the Fund invests primarily in Ohio municipal obligations, economic and
political conditions in Ohio may impact the value of the Fund's shares. The
economy in the State of Ohio, once concentrated in the manufacturing of motor
vehicles and equipment, steel, rubber products and household appliances, has
diversified since the 1980s. This has brought the state's employment mix more in
line with that of the nation, although manufacturing is still above the national
average, at 19.8% of employment in 1998, versus 15.3% for the nation. Statewide
employment levels continue to increase, with total employment in 1998 up 1% over
the prior year. The state's steady economic performance has resulted in
consistently strong financial results. The 1997 and 1998 fiscal years ended with
revenues exceeding forecasts and spending below budgets. At the end of the 1998
fiscal year, the state had a general revenue fund balance exceeding $2.6
billion, or 14% of the general revenue fund's budget. The state's 2000-2001
budget will address funding for primary and secondary education in response to a
1998 Ohio Supreme Court decision declaring the current system of school funding
unconstitutional. The Ohio Supreme Court's decision poses challenges to the
state to balance education funding with competing state spending requirements
while maintaining its strong financial position. Although no issuers of Ohio
obligations are currently in default on their payments of principal and
interest, a default could adversely impact the market values and marketability
of all Ohio municipal obligations and the Fund's share price.

- 9 -

<PAGE>

TAX RISK. Certain provisions in the Internal Revenue Code relating to the
issuance of municipal obligations may reduce the volume of municipal obligations
qualifying for federal tax exemptions. Shareholders should consult their tax
advisors concerning the effect of these provisions on an investment in the Fund.
Proposals that may further restrict or eliminate the income tax exemptions for
interest on municipal obligations may be introduced in the future. If any such
proposal were enacted that would reduce the availability of municipal
obligations for investment by the Fund so as to adversely affect its
shareholders, the Fund would reevaluate its investment objective and policies
and submit possible changes in the Fund's structure to shareholders for their
consideration. If legislation were enacted that would treat a type of municipal
obligation as taxable, the Fund would treat such security as a permissible
taxable investment within the applicable limits set forth herein.

HOW TO PURCHASE SHARES
- -----------------------
You may open an account with the Fund by investing the minimum amount required
for the type of account you open. You may invest additional amounts in an
existing account at any time. For more information about how to purchase shares,
call Countrywide Fund Services, Inc. (the "Transfer Agent") (Nationwide call
toll-free 800-543-0407; in Cincinnati call 629-2050). The different account
options and minimum investment requirements are listed below.

ACCOUNT OPTIONS

REGULAR ACCOUNTS

ACCOUNTS FOR COUNTRYWIDE AFFILIATES
If you (or anyone in your immediate family) are an employee, shareholder or
customer of Countrywide Credit Industries, Inc. or any of its affiliated
companies, you may open an account for less than the minimum amount required for
regular accounts.

AUTOMATIC INVESTMENT PLAN
You may make automatic monthly investments in the Fund from your bank, savings
and loan or other depository institution account. The minimum initial and
subsequent investments must be $50 under the plan. The Transfer Agent pays the
costs of your transfers, but reserves the right, upon 30 days' written notice,
to make reasonable charges for this service.

- 10 -

<PAGE>

MINIMUM INVESTMENT REQUIREMENTS
Initial Additional

Regular Accounts $1,000 None

Accounts for Countrywide Affiliates $ 50 None

Automatic Investment Plan $ 50 $ 50

DIRECT DEPOSIT PLANS
Your employer may offer a direct deposit plan which will allow you to have all
or a portion of your paycheck transferred automatically to purchase shares of
the Fund. Social security recipients may have all or a portion of their social
security check transferred automatically to purchase shares of the Fund.

OPENING A NEW ACCOUNT. You may open an account directly with the Fund or
through your broker-dealer.

To open an account directly with the Fund, please follow the steps outlined
below.

1. Complete the Account Application included in this Prospectus. Be sure
to indicate the type of account you wish to open, the amount of money
you wish to invest and the class of shares you want to purchase. If you
do not indicate which class you want to purchase, we will invest your
purchase in Class A shares.

2. Write a check for your initial investment to the "Ohio Insured Tax-Free
Fund." Mail your completed Account Application and your check to the
following address:

COUNTRYWIDE FUND SERVICES, INC.
P.O. BOX 5354
CINCINNATI, OHIO 45201-5354

- 11 -

<PAGE>

order to properly credit your account.

MISCELLANEOUS. In connection with all purchases of Fund shares,
we observe the following policies and procedures:

o We price direct purchases based upon the next public
offering price (net asset value plus any applicable sales
load) after your order is received. Direct purchase
orders received by the Transfer Agent by 4:00 p.m.,
Eastern time, are processed at that day's public offering
price. Direct investments received by the Transfer Agent
after 4:00 p.m., Eastern time, are processed at the
public offering price next determined on the following
business day. Purchase orders received from broker-
dealers before 4:00 p.m., Eastern time, and transmitted
to the Adviser by 5:00 p.m., Eastern time, are processed
at that day's public offering price. Purchase orders
received from broker-dealers after 5:00 p.m., Eastern
time, are processed at the public offering price next
determined on the following business day.

o We mail you confirmations of all purchases or redemptions
of Fund shares.

o Certificates for shares are no longer issued.

o We reserve the right to limit the amount of investments
and to refuse to sell to any person.

o If an order to purchase shares is canceled because your check does
not clear, you will be responsible for any resulting losses or
fees incurred by the Fund or the Transfer Agent in the
transaction.

o We may open accounts for less than the minimum investment or
change minimum investment requirements at any time.

o There is no fee for purchases made by wire, but we may charge you
for this service upon 30 days' prior notice.

The Fund's account application contains provisions in favor of the Fund, the
Transfer Agent and certain of their affiliates, excluding such entities from
certain liabilities (including, among others, losses resulting from unauthorized
shareholder transactions) relating to the various services (for example,
telephone redemptions and exchanges) made available to investors.

- 12 -

<PAGE>

Choosing a Share Class
-----------------------
The Fund offers Class A and Class C shares. Each class represents an interest in
the same portfolio of investments and has the same rights, but differs primarily
in sales loads and distribution expense amounts. Shares of the Fund purchased
before November 1, 1993 are Class A shares. Before choosing a class, you should
consider the following factors, as well as any other relevant facts and
circumstances:

The decision as to which class of shares is more beneficial to you depends on
the amount of your investment, the intended length of your investment and the
quality and scope of the value-added services provided by financial advisers who
may work with a particular sales load structure as compensation for their
services. If you qualify for reduced sales loads or, in the case of purchases of
$1 million or more, no initial sales load, you may find Class A shares
attractive because similar sales load reductions are not available for Class C
shares. Moreover, Class A shares are subject to lower ongoing expenses than
Class C shares over the term of the investment. As an alternative, Class C
shares are sold with a lower initial sales load so more of the purchase price is
immediately invested in the Fund. If you do not plan to hold your shares in the
Fund for a long time (less than 4 1/3 years), it may be better to purchase Class
C shares so that more of your purchase is invested directly in the Fund,
although you will pay higher distribution fees. If you plan to hold your shares
in the Fund for more than 4 1/3 years, it may be better to purchase Class A
shares, since after 4 1/3 years your accumulated distribution fees may be more
than the sales load paid on your purchase.

When determining which class of shares to purchase, you may want to consider the
services provided by your financial adviser and the compensation provided to
financial advisers under each share class. The Adviser works with
many experienced and very qualified financial advisers throughout the country
that may provide valuable assistance to you through ongoing education, asset
allocation programs, personalized financial planning reviews or other services
vital to your long-term success. The Adviser believes that these value-added
services can greatly benefit you through market cycles and will work
diligently with your chosen financial adviser. The Adviser has a financial
adviser referral service available, at no cost, to help you choose a financial
adviser in your area, if you do not have one.

- 13 -

<PAGE>

Set forth below is a chart comparing the sales loads and distribution fees
applicable to each class of shares:

DISTRIBUTION
CLASS SALES LOAD (12b-1) FEE
- -------------------------------------------------------------------------------

C 1.25% initial sales load; 1.00% 1.00%
contingent deferred sales load
during first year
- -------------------------------------------------------------------------------

If you are investing $1 million or more, it is generally more beneficial for you
to buy Class A shares because there is no front-end sales load and the annual
expenses are lower.

Class A Shares
----------------
Class A shares are sold at net asset value ("NAV") plus an initial sales load.
In some cases, reduced initial sales loads for the purchase of Class A shares
may be available, as described below. Investments of $1 million or more are not
subject to a sales load at the time of purchase but may be subject to a
contingent deferred sales load of 1.00% on redemptions made within 1 year after
purchase if a commission was paid by the Adviser to a participating unaffiliated
dealer. Class A shares are also subject to an annual 12b-1 distribution fee of
up to .25% of the Fund's average daily net assets allocable to Class A shares.

The following table illustrates the initial sales load breakpoints for the
purchase of Class A shares for accounts opened after July 31, 1999:

Percentage Which Dealer
of Offering Equals this Reallowance
Price DeductedPercentage as Percentage
for Sales of Your Net of Offering
Amount of Investment Load Investment Price
- -------------------- --------- ---------- -------------
Less than $50,000 4.75% 4.99% 4.00%
$50,000 but less than $100,000 4.50 4.72 3.75
$100,000 but less than $250,000 3.50 3.63 2.75
$250,000 but less than $500,000 2.95 3.04 2.25
$500,000 but less than $1,000,000 2.25 2.31 1.75
$1,000,000 or more None None

- 14 -

<PAGE>

The following table illustrates the initial sales load breakpoints for the
purchase of Class A shares for accounts opened before August 1, 1999:

Percentage Which Dealer
of Offering Equals this Reallowance
Price Deducted Percentage as Percentage
for Sales of Your Net of Offering
Amount of Investment Load Investment Price
- -------------------- ---------- ------------ -----------
Less than $100,000 4.00% 4.17% 3.60%
$100,000 but less than $250,000 3.50 3.63 3.30
$250,000 but less than $500,000 2.50 2.56 2.30
$500,000 but less than $1,000,000 2.00 2.04 1.80
$1,000,000 or more None None

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

For initial purchases of Class A shares of $1 million or more made after October
1, 1995 and subsequent purchases further increasing the size of the account,
participating unaffiliated dealers will receive first year compensation of up to
1.00% of such purchases from the Adviser. In determining a dealer's eligibility
for such commission, purchases of Class A shares of the Fund may be aggregated
with simultaneous purchases of Class A shares of other funds in the Countrywide
Family of Funds. Dealers should contact the Adviser for more information on the
calculation of the dealer's commission in the case of combined purchases.

- 15 -

<PAGE>

purchase of such shares. See "Contingent Deferred Sales Load for Certain
Purchases of Class A Shares" below.

PURCHASES AT NET ASSET VALUE. Class A shares of the Fund may be purchased at NAV
by pension and profit-sharing plans, pension funds and other company-sponsored
benefit plans that (1) have plan assets of $500,000 or more, or (2) have, at the
time of purchase, 100 or more eligible participants, or (3) certify that they
project to have annual plan purchases of $200,000 or more, or (4) are provided
administrative services by certain third-party administrators that have entered
into a special service arrangement with the Adviser relating to such plan.

Banks, bank trust departments and savings and loan associations, in their
fiduciary capacity or for their own accounts, may purchase Class A shares of the
Fund at NAV. To the extent permitted by regulatory authorities, a bank trust
department may charge fees to clients for whose account it purchases shares at
NAV. Federal and state credit unions may also purchase shares at NAV.

In addition, Class A shares of the Fund may be purchased at NAV by
broker-dealers who have a sales agreement with the Adviser and their registered
personnel and employees, including members of the immediate families of such
registered personnel and employees.

Clients of investment advisers may also purchase Class A shares of the Fund at
NAV if their investment adviser or broker-dealer has made appropriate
arrangements with the Trust. The investment adviser must notify the Transfer
Agent that an investment qualifies as a purchase at NAV.

Associations and affinity groups and their members may purchase Class A shares
of the Fund at NAV provided that management of these groups or their financial
adviser has made arrangements to permit them to do so. Investors or their
financial adviser must

- 16 -

<PAGE>

notify the Transfer Agent that an investment qualifies as a purchase at NAV.

CONTINGENT DEFERRED SALES LOAD FOR CERTAIN PURCHASES OF CLASS A SHARES. A
contingent deferred sales load is imposed upon certain redemptions of Class A
shares of the Fund (or shares into which such Class A shares were exchanged)
purchased at NAV in amounts totaling $1 million or more, if the dealer's
commission described above was paid by the Adviser and the shares are redeemed
within one year from the date of purchase. The contingent deferred sales load
will be paid to the Adviser and will be equal to the commission percentage paid
at the time of purchase as applied to the lesser of (1) the NAV at the time of
purchase of the Class A shares being redeemed, or (2) the NAV of the Class A
shares at the time of redemption. If a purchase of Class A shares is subject to
the contingent deferred sales load, you will be notified on the confirmation you
receive for your purchase. Redemptions of Class A shares of the Fund held for at
least one year will not be subject to the contingent deferred sales load.

Class C Shares
---------------
Class C shares are sold with an initial sales load of 1.25% and are subject to a
contingent deferred sales load of 1.00% on redemptions of Class C shares made
within one year of their purchase. The contingent deferred sales load will be a
percentage of the dollar amount of shares redeemed and will be assessed on an
amount equal to the lesser of (1) the NAV at the time of purchase of the Class C
shares being redeemed, or (2) the NAV of the Class C shares being redeemed. A
contingent deferred sales load will not be imposed upon redemptions of Class C
shares held for at least one year. Class C shares are subject to an annual 12b-1
fee of up to 1.00% of the Fund's average daily net assets allocable to Class C
shares. The Adviser intends to pay a commission of 2.00% of the purchase amount
to your broker at the time you purchase Class C shares.

Additional Information on the Contingent Deferred Sales Load
- -------------------------------------------------------------
The contingent deferred sales load is waived for any partial or complete
redemption following death or disability (as defined in the Internal Revenue
Code) of a shareholder (including one who owns the shares with his or her spouse
as a joint tenant with rights of survivorship) from an account in which the
deceased or disabled is named. The Adviser may require documentation prior

- 17 -

<PAGE>

to waiver of the load, including death certificates, physicians' certificates,
etc.

Distribution Plans

Pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted two separate
plans of distribution under which the Fund's two classes of shares may directly
incur or reimburse the Adviser for certain expenses related to the distribution
of its shares, including payments to securities dealers and other persons,
including the Adviser and its affiliates, who are engaged in the sale of shares
of the Fund and who may be advising investors regarding the purchase, sale or
retention of Fund shares; expenses of maintaining personnel who engage in or
support distribution of shares or who render shareholder support services not
otherwise provided by the Transfer Agent or the Trust; expenses of formulating
and implementing marketing and promotional activities, including direct mail
promotions and mass media advertising; expenses of preparing, printing and
distributing sales literature and prospectuses and statements of additional
information and reports for recipients other than existing shareholders of the
Fund; expenses of obtaining such information, analyses and reports with respect
to marketing and promotional activities as the Trust may, from time to time,
deem advisable; and any other expenses related to the distribution of each class
of shares.
<PAGE>
The annual limitation for payment of expenses pursuant to the Class A Plan is
.25% of the Fund's average daily net assets allocable to Class A shares. The
annual limitation for payment of expenses pursuant to the Class C Plan is 1.00%
of the Fund's average daily net assets allocable to Class C shares. The payments
permitted by the Class C Plan fall into two categories. First, the Class C
shares may directly incur or reimburse the Adviser in an amount not to exceed
.75% per year of the Fund's average daily net assets allocable to Class C
shares for certain distribution-related expenses as described above. The Class C
Plan also provides for the payment of an account maintenance fee of up to .25%
per year of the Fund's average daily net assets allocable to Class C shares,
which may be paid to dealers based on the average value of Fund shares owned by
clients of such dealers. Because these fees are paid out of the Fund's assets on
an on-going basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales loads. In the
event a Plan is terminated by the Trust in accordance with its terms, the Fund
will not be required to make any payments for expenses incurred after the date
the Plan terminates. The Adviser may make payments to dealers and other persons
in an amount up to .75% per annum of the average value of Class C shares owned
by their clients, in addition to the .25% account maintenance fee described
above.

HOW TO REDEEM SHARES
- --------------------

COUNTRYWIDE FUND SERVICES, INC.
P.O. BOX 5354
CINCINNATI, OHIO 45201-5354

- 18 -

<PAGE>

specifically notify the Transfer Agent not to honor telephone redemptions for
your account.

We redeem shares based on the current NAV on the day we receive a proper request
for redemption, less any contingent deferred sales load on the redeemed shares.
Be sure to review "How to Purchase Shares" above to determine whether your
redemption is subject to a contingent deferred sales load.

ADDITIONAL INFORMATION ABOUT ACCOUNTS AND REDEMPTIONS

- 19 -

<PAGE>

AUTOMATIC WITHDRAWAL PLAN. If the shares in your account have a value of at
least $5,000, you (or another person you have designated) may receive monthly or
quarterly payments in a specified amount of not less than $50 each. There is no
charge for this service. Purchases of additional shares of the Fund while the
plan is in effect are generally undesirable because an initial sales load is
incurred whenever purchases are made.

REINVESTMENT PRIVILEGE. If you have redeemed shares of the Fund, you may
reinvest all or part of the proceeds without paying a sales load. You must make
your reinvestment within 90 days of your redemption and you may only use this
privilege once a year.

MISCELLANEOUS. In connection with all redemptions of shares of the Fund, we
observe the following policies and procedures:

o We may refuse any redemption request involving recently purchased
shares until your check for the recently purchased shares has
cleared. To eliminate this delay, you may purchase shares of the
Fund by certified check or wire.

o We may refuse any telephone redemption request if the name(s) or
the address on the account has been changed within 30 days of your
redemption request.

o We may delay mailing redemption proceeds for up to 7 days
(redemption proceeds are normally mailed within 3 days after
receipt of a proper request).

o We will consider all written and verbal instructions as authentic
and will not be responsible for processing instructions received
by telephone which are reasonably believed to be genuine or for
processing redemption proceeds by wire. We will use reasonable
procedures to determine that telephone instructions are genuine,
such as requiring forms of personal identification before
acting upon telephone instructions, providing written
confirmation of the transactions and/or tape recording
telephone instructions. If we do not use such procedures, we may
be liable for losses due to unauthorized or fraudulent
instructions.

HOW TO EXCHANGE SHARES
- ----------------------
Shares of the Fund and of any other fund in the Countrywide Family of Funds may
be exchanged for each other.

Class A shares of the Fund which do not have a contingent deferred sales load
may be exchanged for Class A shares of any other fund and for shares of a fund
which offers only one class of shares (provided these shares do not have a
contingent

- 20 -

<PAGE>

deferred sales load). If you paid a sales load on the shares being exchanged,
this amount will be credited towards the sales load (if any) on the shares being
acquired.

Class C shares of the Fund and Class A shares of the Fund which have a
contingent deferred sales load, may be exchanged, based on their per share NAV,
for shares of any other fund which has a contingent deferred sales load and for
shares of any fund which is a money market fund. You will receive credit for the
period of time you held the shares being exchanged when determining whether a
contingent deferred sales load will apply, unless your shares were held in a
money market fund.

The Countrywide Family of Funds consists of the following funds. Funds which may
have a front-end or a contingent deferred sales load are marked with an
asterisk.

GROWTH FUNDS GROWTH & INCOME FUNDS
*Growth/Value Fund *Equity Fund
*Aggressive Growth Fund *Utility Fund

TAXABLE BOND FUNDS TAX-FREE BOND FUNDS
Adjustable Rate U.S. Government *Tax-Free Intermediate Term
Securities Fund Fund
*Intermediate Bond Fund *Ohio Insured Tax-Free Fund
*Intermediate Term Government
Income Fund

TAXABLE MONEY MARKET FUNDS TAX-FREE MONEY MARKET FUNDS
Short Term Government Income Fund Tax-Free Money Fund
Institutional Government Income Fund Ohio Tax-Free Money Fund
Money Market Fund California Tax-Free Money
Fund
Florida Tax-Free Money
Fund

- 21 -

<PAGE>

exchange of shares is a taxable event. Before making an exchange, contact the
Transfer Agent to request information about the other funds in the Countrywide
Family of Funds.

DIVIDENDS AND DISTRIBUTIONS
- ---------------------------
The Fund expects to distribute substantially all of its net investment income
monthly and any net realized long-term capital gains at least annually.
Management will determine when to distribute any net realized short-term capital
gains. The percentage of the distribution which is tax-exempt will be based upon
the percentage of actual tax-exempt income earned by the Fund during the
distribution period. This percentage will vary from distribution to
distribution.

Your distributions will be paid under one of the following options:

Share Option - all distributions are reinvested
in additional shares.

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

Cash Option - all distributions are paid in cash.

Distributions will be based on the Fund's NAV on the payable date. If you have
received a cash distribution from the Fund, you may reinvest it at NAV (without
paying a sales load) at the next determined NAV on the date of your
reinvestment. You must make your reinvestment within 30 days of the distribution
date and you must notify the Transfer Agent that your distribution is being
reinvested under this provision.

- 22 -

<PAGE>

Code so that it does not pay federal taxes on income and capital gains
distributed to shareholders. The Fund also intends to meet all IRS requirements
necessary to ensure that it is qualified to pay "exempt-interest dividends,"
which means that it may pass on to shareholders the federal tax-exempt status of
its investment income. The Fund intends to distribute substantially all of its
net investment income and any net realized capital gains to its shareholders.

The Fund may invest a potion of its assets in obligations which pay interest
that is not exempt from federal income tax and/or Ohio personal income tax. For
federal income tax purposes, a shareholder's proportionate share of taxable
distributions from the Fund's net investment income as well as from net realized
short-term capital gains, if any, is taxable as ordinary income. Since the
Fund's investment income is derived from interest rather than dividends, no
portion of such distributions is eligible for the dividends received deduction
available to corporations.

Distributions of net capital gains (i.e., the excess of net long-term capital
gains over net short-term capital losses) by the Fund to its shareholders are
taxable to the recipient shareholders as capital gains, without regard to the
length of time a shareholder has held Fund shares. The maximum capital gains
rate for individuals is 20% with respect to assets held more than 12 months. The
maximum capital gains rate for corporate shareholders is the same as the maximum
tax rate for ordinary income.

Dividends received from the Fund that are exempt from federal income tax are
exempt from the Ohio personal income tax and the net income base of the Ohio
corporation franchise tax to the extent derived from interest on Ohio
Obligations. However, shares of the Fund will be included in the computation of
the Ohio corporation franchise tax on the net worth basis. Distributions
received from the Fund are generally not subject to Ohio municipal income
taxation.

Redemptions and exchanges of shares of the Fund are taxable events on which a
shareholder may realize a gain or loss. If a shareholder buys shares of the Fund
and sells them at a loss within six months, any loss will be disallowed for
federal and Ohio income tax purposes to the extent of the exempt-interest
dividends received on such shares. Any loss realized upon the sale of shares of
the Fund within six months from the date of their purchase will be treated as a
long-term capital loss to the extent of amounts treated as distributions of net
realized long-

- 23 -

<PAGE>

term capital gains during such six month period. In addition, shareholders
should be aware that interest on indebtedness incurred to purchase or carry
shares of the Fund is not deductible for federal income tax purposes.
Shareholders receiving Social Security benefits may be taxed on a portion of
those benefits as a result of receiving tax-exempt income.

The Fund will mail to each of its shareholders a statement indicating the amount
and federal income tax status of all distributions made during the year. The
Fund will report to its shareholders the percentage and source of income earned
on tax-exempt obligations held by it during the preceding year. An exemption
from federal income tax and Ohio personal income tax may not result in similar
exemptions under the laws of a particular state or local taxing authority.

Shareholders should consult their tax advisors about the tax effect of
distributions and withdrawals from the Fund, exchanges between funds and the use
of the Automatic Withdrawal Plan. The tax consequences described in this section
apply whether distributions are taken in cash or reinvested in additional
shares. The Fund may not be an appropriate investment for persons who are
"substantial users" of facilities financed by industrial development bonds or
are "related persons" to such users; such persons should consult their tax
advisors before investing in the Fund.

OPERATION OF THE FUND
- ---------------------
The Fund is a non-diversified series of Countrywide Tax-Free Trust, an open-end
management investment company organized as a Massachusetts business trust. Like
other mutual funds, the Trust retains various organizations to perform
specialized services for the Fund.

The Trust retains Countrywide Investments, Inc. (the "Adviser"), 312 Walnut
Street, Cincinnati, Ohio 45202 to manage the Fund's investments and its business
affairs. The Adviser was organized in 1974 and is the investment adviser to all
funds in the Countrywide Family of Funds. The Adviser is an indirect
wholly-owned subsidiary of The Western and Southern Life Insurance Company which
provides life and health insurance, annuities, mutual funds, asset management
and related financial services. The Fund pays the Adviser a fee at the annual
rate of .5% of its average daily net assets up to $100 million; .45% of such
assets from $100 million to $200 million; .4% of such assets from $200
million to $300 million and .375% of such assets in excess of $300 million.

John J. Goetz, First Vice President and Chief Investment Officer - Tax-Free
Fixed Income of the Adviser, is primarily responsible

- 24 -

<PAGE>

for managing the portfolio of the Fund. Mr. Goetz has been employed by the
Adviser in various capacities since 1981 and has been managing the Fund's
portfolio since October 1986.

The Adviser is the principal underwriter for the Fund and the exclusive agent
for the distribution of shares of the Fund. The Adviser receives the entire
sales load on all direct initial investments of shares of the Fund and on all
investments which are not made through a broker.

YEAR 2000 READINESS. Computer users around the world are faced with the dilemma
of the Year 2000 issue, which stems from the use of two digits in most computer
systems to designate the year. When the year advances from 1999 to 2000, many
computers will not recognize "00" as the Year 2000. This issue could potentially
affect every aspect of computer-related activity, on an individual and corporate
level. The Fund could be adversely impacted if the computer systems used by the
Adviser and other service providers have not been converted to meet the
requirements of the new century. The Adviser has evaluated its internal systems
and expects them to handle the change of millennium. The Adviser is monitoring
on an ongoing basis the progress of the Fund's service providers to convert
their systems to comply with the requirements of the Year 2000. The Adviser
currently has no reason to believe that these service providers will not be
fully and timely compliant. However, you should be aware that there can be no
assurance that all systems will be successfully converted prior to January 1,
2000, in which case it would become necessary for the Fund to enter into
agreements with new service providers or to make other arrangements. In
addition, although the Adviser considers an issuer's Year 2000 compliance status
in the investment decision making process, entities in which the Fund invests
may experience Year 2000 difficulties and the Fund is unable to predict to what
extent the Year 2000 issue will impact the value of those securities.

CALCULATION OF SHARE PRICE AND PUBLIC OFFERING PRICE
- ----------------------------------------------------
On each day that the Trust is open for business, the public offering price (NAV
plus applicable sales load) of the shares of the Fund is determined as of the
close of the regular session of trading on the New York Stock Exchange (normally
4:00 p.m., Eastern time). The Trust is open for business on each day the New
York Stock Exchange is open for business and on any other day when there is
sufficient trading in the Fund's investments that its NAV might be materially
affected. The NAV per share of the Fund is calculated by dividing the sum of the
value of the securities held by the Fund plus cash or other assets minus all
liabilities (including estimated accrued expenses) by the total number of shares
outstanding of the Fund, rounded to the nearest cent. The price at which a
purchase or redemption of the Fund's shares is processed is based on the next
calculation of NAV after

- 26 -

<PAGE>

the order is placed. The Fund's NAV will fluctuate with the value of the
securities it holds.

The Fund's tax-exempt securities are valued by an outside independent pricing
service. The service uses a computerized grid matrix of tax-exempt securities
and evaluations by its staff to determine the fair value of the securities. If
the Adviser believes that the valuation provided by the service does not
accurately reflect the fair value of a tax-exempt security, it will value the
security at the average of the prices quoted by at least two independent market
makers. The quoted price will represent the market maker's opinion of the price
a willing buyer would pay for the security. All other securities (and other
assets) of the Fund for which market quotations are not readily available are
valued at their fair value as determined in good faith using procedures
established by the Board of Trustees.

- 27 -

<PAGE>

FINANCIAL HIGHLIGHTS
- --------------------
The financial highlights table is intended to help you understand the Fund's
financial performance for the past five years. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by Arthur Andersen LLP, whose report, along with
the Fund's financial statements, is included in the Statement of Additional
Information, which is available upon request.
<TABLE>
<S> <C> <C> <C> <C> <C>
CLASS A
Per Share Data for a Share Outstanding Throughout Each Year
- --------------------------------------------------------------------------------------------------------
Year Ended June 30,
----------------------------------------------------------------
1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------------------

Net asset value at beginning of year $ 12.37 $ 12.22 $ 11.97 $ 11.99 $ 11.74
----------------------------------------------------------------

Income from investment operations:
Net investment income 0.58 0.61 0.61 0.62 0.63
Net realized and unrealized gains
(losses) on investments (0.34) 0.23 0.25 (0.02) 0.25
----------------------------------------------------------------
Total from investment operations 0.24 0.84 0.86 0.60 0.88
----------------------------------------------------------------

Less distributions:
Dividends from net investment
income (0.58) (0.61) (0.61) (0.62) (0.63)
Distributions from net realized
gains (0.29) (0.08) -- -- --
----------------------------------------------------------------
Total distributions (0.87) (0.69) (0.61) (0.62) (0.63)
----------------------------------------------------------------

Net asset value at end of year $ 11.74 $ 12.37 $ 12.22 $ 11.97 $ 11.99
================================================================

Total return(A) 1.81% 7.03% 7.36% 5.05% 7.75%
================================================================

Net assets at end of year (000's) $ 62,737 $ 69,289 $70,816 $ 75,938 $71,393
================================================================

Ratio of net expenses to
average net assets(B) 0.75% 0.75% 0.75% 0.75% 0.75%

Ratio of net investment income to
average net assets 4.72% 4.95% 5.05% 5.12% 5.35%

Portfolio turnover rate 26% 41% 33% 46% 29%

(A) Total returns shown exclude the effect of applicable sales loads.
(B) Absent fee waivers and/or expense reimbursements by the Adviser, the ratio
of expenses to average net assets would have been 0.77% for the year ended
June 30, 1995.
</TABLE>

<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
CLASS C
- ---------------------------------------------------------------------------------------------------------
Per Share Data for a Share Outstanding Throughout Each Year
- --------------------------------------------------------------------------------------------------------
Year Ended June 30,
----------------------------------------------------------------
1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------------------

Net asset value at beginning of year $ 12.37 $ 12.22 $ 11.97 $ 12.00 $ 11.74
----------------------------------------------------------------

Income from investment operations:
Net investment income 0.49 0.52 0.53 0.56 0.57
Net realized and unrealized gains
(losses) on investments (0.34) 0.23 0.25 (0.03) 0.26
----------------------------------------------------------------
Total from investment operations 0.15 0.75 0.78 0.53 0.83
----------------------------------------------------------------

Less distributions:
Dividends from net investment
income (0.49) (0.52) (0.53) (0.56) (0.57)
----------------------------------------------------------------
Distributions from net realized
gains (0.29) (0.08) -- -- --
----------------------------------------------------------------
Total distributions (0.78) (0.60) (0.53) (0.56) (0.57)

Net asset value at end of year $ 11.74 $ 12.37 $ 12.22 $ 11.97 $ 12.00
================================================================

Total return(A) 1.05% 6.24% 6.65% 4.44% 7.31%
================================================================

Net assets at end of year (000's) $ 4,740 $ 5,215 $ 4,639 $ 3,972 $ 4,165
================================================================

Ratio of net expenses to
average net assets(B) 1.50% 1.50% 1.42% 1.25% 1.25%

Ratio of net investment income to
average net assets 3.97% 4.20% 4.37% 4.62% 4.84%

Portfolio turnover rate 26% 41% 33% 46% 29%

<PAGE>
<TABLE>
<S> <C>
ACCOUNT NO. ____________________________
(For Fund Use Only)
Please mail account application to:
Countrywide Fund Services, Inc.
P.O. Box 5354 FOR BROKER/DEALER USE ONLY
Cincinnati, Ohio 45201-5354 Firm Name:______________________________________

OHIO INSURED TAX-FREE FUND Home Office Address:____________________________
Branch Address:_________________________________
[ ] A Shares (9) $____________________ Rep Name & No.:_________________________________
[ ] C Shares (14) $____________________ Rep Signature:__________________________________
___________________________________________________________________________________________________________________
Initial Investment of $_____________

[ ] Check or draft enclosed payable to the Fund.