<PAGE> 1
SUPPLEMENT DATED JULY 30, 1999
TO PROSPECTUS DATED NOVEMBER 30, 1998
THE CARNEGIE FUNDS GROUP
LIQUID CAPITAL INCOME TRUST
CARNEGIE GOVERNMENT SECURITIES TRUST
CARNEGIE TAX FREE INCOME TRUST
CARNEGIE TAX EXEMPT INCOME TRUST
On July 27, 1999, the board of trustees of each of the Funds determined
that it would be in the best interests of the Funds and their shareholders to
terminate the Funds by liquidating and distributing the Funds' assets to
shareholders and dissolving the Funds under applicable state law.
Under the governing Declaration of Trust for each Fund, this
termination must be approved by shareholders in order to become effective. Each
Fund will hold a special meeting of shareholders to vote upon its termination,
and you will be furnished with a proxy statement for that special meeting, which
is scheduled to be held on October 4, 1999. The proxy statement will contain an
explanation of the events that led the trustees to consider terminating the
Funds and the reasons for their determination that it would be appropriate to do
so.
In view of the circumstances, each of the Funds has suspended sales of
its shares to new investors, effective July 28, 1999. This suspension does not
affect the automatic reinvestment of dividends and other distributions, which
will continue to be made on behalf of shareholders. As an existing shareholder,
you may continue to purchase additional shares of the Funds if you desire, and
you continue to have the right to redeem your shares in any of the Funds.
Also in view of the circumstances, Carnegie Capital Management Company,
the adviser for each of the Funds, has waived its advisory fee for its future
services to be performed under the existing investment advisory contract with
each Fund. This fee waiver is effective August 1, 1999 and will continue until
November 30, 1999 or such earlier time as a Fund's assets may be liquidated and
distributed to shareholders.
Please keep this supplement with your prospectus.
