FLEX FUNDS, 497, 2000-11-13

FLEX FUNDS
497, 2000-11-13

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Rule 497(e)
SEC File No. 002-85378

THE FLEX-FUNDS

PROSPECTUS MUIRFIELD FUND(R)
APRIL 30, 2000
TOTAL RETURN UTILITIES FUND

HIGHLANDS GROWTH FUND

[LOGOS] DYNAMIC GROWTH FUND

AGGRESSIVE GROWTH FUND

U. S. GOVERNMENT BOND FUND

MONEY MARKET FUND

The Flex-funds is a family of funds that includes seven no-load mutual
funds covering a variety of investment opportunities.

This Prospectus gives you important information about the funds that you
should know before you invest. Please read this Prospectus carefully and keep it
handy for future reference.

The Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.

The Flex-funds
6000 Memorial Drive
Dublin, OH 43017
614-760-2159
Toll Free 800-325-3539
Fax: 614-766-6669
[email protected]
www.flexfunds.com

<PAGE>

TABLE OF CONTENTS

FUND OVERVIEW 2
--------------------------------------------------------------------------------
A fund by fund look at investment goals, strategies, risks, expenses and
performance
Muirfield Fund(R) 2
Total Return Utilities Fund 5
Highlands Growth Fund 8
Dynamic Growth Fund 11
Aggressive Growth Fund 14
U.S. Government Bond Fund 17
Money Market Fund 20

WHO MAY WANT TO INVEST 23
--------------------------------------------------------------------------------
Information on who may want to invest and who may not want to invest

RESULTS OF A $10,000 INVESTMENT 25
--------------------------------------------------------------------------------
Information about the results of a hypothetical $10,000 investment in the funds
versus benchmark indexes

MORE INFORMATION ABOUT THE FUNDS 33
--------------------------------------------------------------------------------
More information about the funds you should know before investing
Who Manages the Funds? 40
How is the Trust Organized? 49
How Does Taxation Affect the Funds and Their Shareholders? 49
How to Read the Financial Highlights Table 52

SHAREHOLDER MANUAL 58
--------------------------------------------------------------------------------
Information about account transactions and services
How to Buy Shares 58
Distribution Fees 60
How to Make Withdrawals (Redemptions) 60
Transaction Policies 63
Other Shareholder Services 64

MORE ABOUT RISK 66
--------------------------------------------------------------------------------
Investment Practices, Securities and Related Risks 66
Risk and Investment Glossary 68

FOR MORE INFORMATION Back Cover
--------------------------------------------------------------------------------
Where to learn more about the funds

Page 1

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THE MUIRFIELD FUND(R) - FLMFX

INVESTMENT GOAL

The fund seeks growth of capital. To pursue this goal, the fund invests all
of its assets in a portfolio which invests primarily in other growth mutual
funds that are not affiliated with the fund.

MAIN STRATEGIES

The fund invests all of its assets in the Mutual Fund Portfolio, a master
fund having the same investment goal as the fund. See "Each Fund's
Investment in a Portfolio" under "More Information About the Funds." The
Portfolio is a "fund of funds" that pursues its investment goal through
asset allocation and mutual fund selection. Normally, at least 65% of the
value of the Portfolio's total assets will be invested in mutual funds. The
mutual funds in which the Portfolio invests are primarily growth funds
investing in common stocks. In the underlying mutual funds, current income
will usually be of secondary importance. The adviser overweights mutual
fund types that it believes represent above average market potential with
below average market risk. The adviser continually evaluates market
capitalization (for example, blue chip versus small capitalization) and
sector rotation (for example, high tech versus industrial companies) when
selecting mutual funds.

The Portfolio may invest up to 100% of its assets in money market
securities and investment grade bonds as a defensive tactic. When invested
defensively, the Portfolio could be unable to achieve its investment
objective. The Portfolio places a high degree of importance on maintaining
and protecting portfolio values from adverse market conditions. The
Portfolio strives to avoid losses during high risk market environments and
strives to provide attractive returns during low risk markets. When the
adviser's evaluation of the stock market indicates that the risks of the
stock market are greater than the potential rewards, the Portfolio will
reduce or eliminate its position in growth mutual funds in order to attempt
to preserve your capital. The Portfolio may also invest in common stocks
directly.

The Portfolio may invest in "traditional" derivatives, such as financial
futures contracts and related options as a hedge against changes, resulting
from market conditions, in the value of securities held or intended to be
held by the Portfolio.

None of the fund's investment goals are fundamental and may be changed
without shareholder approval.

For more information, see "How Does the Fund Pursue Its Investment Goal?"
under "More Information About the Funds."

MAIN RISK FACTORS

When the Portfolio is invested primarily in growth mutual funds, the value
of your investment will fluctuate in response to stock market movements.
Because the fund invests primarily in underlying funds, the value of your
investment will fluctuate in response to the performance of the underlying
funds. In addition, investing through the fund in an underlying portfolio

Page 2

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of funds involves additional expenses and tax results that would not arise
if you invested directly in the funds that the fund owns. By investing
indirectly in underlying funds through the fund, you will bear not only
your proportionate share of the fund's expenses (including operating costs
and investment advisory, 12b-1 and administrative fees), but also,
indirectly, similar expenses and charges of the underlying funds, including
any contingent deferred sales charges and redemption charges. Finally, you
may receive taxable capital gains distributions to a greater extent than
would be the case if you invested directly in the underlying funds. The
underlying mutual funds may invest in smaller or newer companies which are
more likely to grow as well as suffer more significant losses than larger
or more established companies. Investments in such companies can be both
more volatile and more speculative. In addition, if the adviser does not
accurately predict changing market conditions and other economic factors,
the Portfolio's assets might be allocated in a manner that is
disadvantageous. As with any mutual fund, loss of money is a risk of
investing in the fund. Please read "More About Risk" carefully before
investing.

PERFORMANCE

The bar chart on the left shown below provides some indication of the risks
of investing in The Muirfield Fund(R) by showing changes in the fund's
performance from year to year over a 10-year period. The table on the right
compares the fund's performance with a broad measure of market performance
and the returns of an index of funds with similar investment objectives.
How the fund has performed in the past is not necessarily an indication of
how the fund will perform in the future.

[Plot points for Edgar format]:

YEAR ANNUAL TOTAL RETURN
---- -------------------
1990 2.33%
1991 29.83%
1992 6.91%
1993 8.11%
1994 2.70%
1995 25.82%
1996 5.99%
1997 18.59%
1998 29.33%
1999 16.43%

During the 10-year period shown in the bar chart, the highest return for a
quarter was 25.45% (quarter ended December 31, 1998) and the lowest return for a
quarter was -6.19% (quarter ending September 30, 1990).

Average Annual Total Returns
(for the periods ending
DECEMBER 31, 1999) PAST ONE YEAR PAST 5 YEARS PAST 10 YEARS
------------------ ------------- ------------ -------------
The Muirfield Fund(R) 16.43% 18.95% 14.15%
The S&P 500 Composite
Stock Price Index* 21.04% 28.54% 18.20%
Morningstar's Average Asset
Allocation Fund 9.40% 15.68% 11.42%

*The S&P 500 Composite Stock Price Index is a widely recognized unmanaged index
of common stock prices. The S&P 500 does not take into account the deduction of
expenses associated with a mutual fund, such as investment management and
accounting fees. One cannot invest directly in an index.

Page 3

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FEES AND EXPENSES OF THE FUND

The following table describes the fees and expenses that you may pay if you
buy and hold shares of the fund.

There are no sales loads, fees or other charges

o to buy fund shares directly from the fund
o to reinvest dividends in additional shares
o to exchange into shares of other funds in the Flex-funds family
of funds
o or to redeem your shares.

ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND
ASSETS)1

Management Fees 0.77%
Distribution (12b-1) Fees2 0.16%
Other Expenses3 0.28%
-----
Total Annual Fund Operating Expenses 1.21%

1 This table and the Example below reflect the expenses of the fund and its
proportionate share of expenses from its corresponding Portfolio. See "Each
Fund's Investment in a Portfolio" under "More Information About the Funds."

2 "Distribution (12b-1) Fees" are based upon expenses actually incurred by
the fund for the year ended December 31, 1999; however, the Fund may incur
up to 0.20% in distribution (12b-1) fees.

3 "Other Expenses" are based upon expenses actually incurred by the fund
for the year ended December 31, 1999.

EXAMPLE

The example in the table below is intended to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds.

Assuming you

o invest $10,000 in the fund
o redeem your shares at the end of the periods shown below
o earn a 5% return each year and
o incur the same fund operating expenses shown above,

your cost of investing in the fund would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
$123 $384 $665 $1,466

Of course, your actual costs may be higher or lower.

Page 4

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TOTAL RETURN UTILITIES FUND - FLRUX

INVESTMENT GOAL

The fund seeks current income and growth of income by investing primarily
in equity securities of domestic and foreign public utility companies;
however, the fund will not invest in electric utilities that generate power
from nuclear reactors. The fund also seeks capital appreciation, but only
when consistent with its primary investment objective.

MAIN STRATEGIES

The fund invests all of its assets in the Utilities Stock Portfolio, a
master fund having the same investment goal as the fund. See "Each Fund's
Investment in a Portfolio" under "More Information About the Funds." The
Portfolio generally invests at least 65% of its total assets in equity
securities of domestic or foreign companies that provide electricity,
natural gas, water, telecommunications or sanitary services to the public.
The remaining 35% of the Portfolio's total assets may be invested in debt
securities of public utility companies, or debt or equity securities of
other issuers who stand to benefit from developments in the utilities
industry.

The subadviser uses fundamental analysis to identify those securities that
it believes provide current income and growth of income. Fundamental
analysis involves assessing a company and its business environment,
management, balance sheet, income statement, anticipated earnings and
dividends, and other related measures of value.

None of the fund's investment goals are fundamental and may be changed
without shareholder approval.

For more information, see "How Does the Fund Pursue Its Investment Goal?"
under "More Information About the Funds."

MAIN RISK FACTORS

Utility stocks are subject to interest rate risk - i.e., price fluctuations
due to changing interest rates. Rising interest rates can be expected to
reduce the fund's net asset value. Because the fund concentrates in the
utility industry, its performance is largely dependent on the utility
industry's performance, which may differ from that of the overall stock
market. Governmental regulation of public utility companies can limit their
ability to expand their business or to pass cost increases on to customers.
Companies providing power or energy-related services may also be affected
by fuel shortages or cost increases, environmental protection or energy
conservation regulations, as well as fluctuating demand for their services.
Investments in securities of foreign companies involve additional risks

Page 5

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relating to political and economic developments abroad, including currency
fluctuations. As with any mutual fund, loss of money is a risk of investing
in the fund. Please read "More About Risk" carefully before investing.

PERFORMANCE

The bar chart below provides some indication of the risks of investing in
The Total Return Utilities Fund by showing changes in the fund's
performance from year to year over a four year period. The table below
compares the fund's performance with a broad measure of market performance
and the returns of an index of funds with similar investment objectives.
How the fund has performed in the past is not necessarily an indication of
how the fund will perform in the future.

[Plot points for Edgar format]:

YEAR ANNUAL TOTAL RETURN
1996 13.33%
1997 28.68%
1998 8.77%
1999 20.01%

During the period shown in the bar chart, the highest return for a quarter
was 13.53% (quarter ending December 31, 1998), and the lowest return for a
quarter was -10.29% (quarter ending September 30, 1998).

Average Annual Total Returns
(for the periods ending
DECEMBER 31, 1999) PAST ONE YEAR SINCE INCEPTION (6/21/95)
------------------ ------------- -------------------------
Total Return Utilities Fund 20.01% 18.89%
S&P 500 Composite Stock
Price Index1 21.04% 28.61%
Morningstar's Average
Utilities Fund 15.13% 19.52%

1 The S&P 500 Composite Stock Price Index is a widely recognized unmanaged index
of common stock prices. The S&P 500 does not take into account the deduction of
expenses associated with a mutual fund, such as investment management and
accounting fees. One cannot invest directly in an index.

Page 6

<PAGE>

FEES AND EXPENSES OF THE FUND

The following table describes the fees and expenses that you may pay if you
buy and hold shares of the fund.

There are no sales loads, fees or other charges

o to buy fund shares directly from the fund
o to reinvest dividends in additional shares
o to exchange into shares of other funds in the Flex-funds
family of funds
o or to redeem your shares.

ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND
ASSETS)1

Management Fees 1.00%
Distribution (12b-1) Fees 0.25%
Other Expenses2 0.74%
-----
Total Annual Fund Operating Expenses 1.99%
Expense Reimbursement3 -0.19%
-----
Net Expenses 1.80%

2 "Other Expenses" are based upon expenses actually incurred by the fund
for the year ended December 31, 1999.

3 The adviser has agreed to reduce its fees and/or absorb expenses to limit
the fund's total annual operating expenses to 1.80%. The adviser may
terminate this agreement after April 30, 2001.

EXAMPLE

The example in the table below is intended to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds.

Assuming you

o invest $10,000 in the fund
o redeem your shares at the end of the periods shown below
o earn a 5% return each year and
o incur the same fund operating expenses shown above,

your cost of investing in the fund would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
$183 $606 $1,055 $2,301

Of course, your actual costs may be higher or lower.

Page 7

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HIGHLANDS GROWTH FUND - FLCGX

INVESTMENT GOAL

The fund seeks growth of capital. To pursue this goal, the fund invests in
a diversified portfolio of domestic common stocks with greater than average
growth characteristics selected primarily from the Standard & Poor's 500
Composite Stock Price Index (S&P 500). Current income is not a primary
objective.

MAIN STRATEGIES

The fund invests all of its assets in the Growth Stock Portfolio, a master
fund having the same investment goal as the fund. See "Each Fund's
Investment in a Portfolio" under "More Information About the Funds."
Normally, at least 80% of the Portfolio's total assets will be invested in
domestic common stocks and at least 65% of the Portfolio's total assets
will be invested in growth stocks. At least 70% of the Portfolio's assets
invested in common stocks will be invested in S&P 500 stocks.

The Portfolio consists of investment portfolios representing each of the
industry sectors comprising the S&P 500: utilities, transportation, capital
goods, consumer durables, consumer non-durables, energy, materials and
services, finance, technology and health. The Portfolio's assets will be
allocated to each of these industry sectors in approximately the same
proportion as these industry sectors are represented in the S&P 500 on a
market-capitalization weighted basis.

The assets of the Portfolio representing each of these industry sectors are
managed by one or more separate investment advisers.

None of the fund's investment goals are fundamental and may be changed
without shareholder approval.

For more information, see "How Does the Fund Pursue Its Investment Goal?"
under "More Information About the Funds."

MAIN RISK FACTORS

The value of your investment will fluctuate in response to stock market
movements. To the extent that the fund invests in higher risk securities,
it encounters additional risks that could adversely affect its performance.
The use of several sector advisers or the replacement of a sector adviser
may increase the Portfolio's turnover, gains or losses, and brokerage
commissions. As with any mutual fund, loss of money is a risk of investing
in this fund. Please read "More About Risk" carefully before investing.

Page 8

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PERFORMANCE

The bar chart on the left below provides some indication of the risks of
investing in The Highlands Growth Fund by showing changes in the fund's
performance from year to year over a 10-year period. The table on the right
compares the fund's performance with a broad measure of market performance
and the returns of an index of funds with similar investment objectives.
How the fund has performed in the past is not necessarily an indication of
how the fund will perform in the future.

[Plot points for Edgar format]:

YEAR ANNUAL TOTAL RETURN
---- -------------------
1990 4.31%
1991 21.46%
1992 6.35%
1993 7.21%
1994 -0.69%
1995 24.61%
1996 9.08%
1997* 29.28%
1998* 23.67%
1999* 21.16%

* The fund changed its investment objective and strategies on January 1,
1997. The annual total return reflects the results of the change in
investment objective and strategies.

During the 10 year period shown in the bar chart, the highest return for a
quarter was 19.82% (quarter ending December 31, 1998), and the lowest
return for a quarter was -10.99% (quarter ending September 30, 1998).

Average Annual Total Returns
(for the periods ending
DECEMBER 31, 1999) PAST ONE YEAR PAST 5 YEARS PAST 10 YEARS
------------------ ------------- ------------ -------------
The Highlands Growth Fund 21.16% 21.37% 14.21%
The S&P 500 Composite Stock
Price Index* 21.04% 28.54% 18.20%
Morningstar's Average Growth
Mutual Fund 29.92% 24.44% 16.75%

Page 9

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FEES AND EXPENSES OF THE FUND

The following table describes the fees and expenses that you may pay if you
buy and hold shares of the fund.

There are no sales loads, fees or other charges

o to buy fund shares directly from the fund
o to reinvest dividends in additional shares
o to exchange into shares of other funds in the Flex-funds
family of funds
o or to redeem your shares.

ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND
ASSETS)1

Management Fees 0.96%
Distribution (12b-1) Fees2 0.15%
Other Expenses3 0.45%
-----
Total Annual Fund Operating Expenses 1.56%

2 "Distribution (12b-1) Fees" are based upon expenses actually incurred by
the fund for the year ended December 31, 1999; however, the Fund may incur
up to 0.20% in distribution (12b-1) fees.

3 "Other Expenses" are based upon expenses actually incurred by the fund
for the year ended December 31, 1999.

EXAMPLE

The example in the table below is intended to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds.

Assuming you

o invest $10,000 in the fund
o redeem your shares at the end of the periods shown below
o earn a 5% return each year and
o incur the same fund operating expenses shown above,

your cost of investing in the fund would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
$159 $493 $850 $1,856

Of course, your actual costs may be higher or lower.

Page 10

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THE DYNAMIC GROWTH FUND - FLDGX

INVESTMENT GOAL

The fund seeks growth of capital. To pursue this goal, the fund invests all
of its assets in a portfolio which invests primarily in other mutual funds
that are not affiliated with the fund.

MAIN STRATEGIES

The fund invests all of its assets in the Growth Mutual Fund Portfolio, a
master fund having the same investment goal as the fund. See "The Fund's
Investment in a Portfolio" under "More Information About the Fund." The
Portfolio is a "fund of funds" that pursues its investment goal by
investing primarily in open-end or closed-end investment companies (the
"underlying funds"). The underlying funds in which the Portfolio invests
seek primarily capital growth or appreciation, without regard to current
income, by investing in common stock or securities convertible into or
exchangeable for common stock (such as convertible preferred stock,
convertible debentures or warrants). The adviser overweights mutual fund
types that it believes represent above average market potential. The
adviser continually evaluates market capitalization (for example, blue chip
versus small capitalization) and sector rotation (for example, high tech
versus industrial companies) when selecting mutual funds. Except when it
may be necessary to accumulate cash in order to satisfy minimum purchase
requirements of the underlying funds or to meet anticipated redemptions,
the Portfolio normally will be fully invested in underlying funds.

The Portfolio may invest in common stocks directly.

The Portfolio may invest in unit investment trusts, which are investment
vehicles that purchase a fixed portfolio of securities.

The Portfolio may invest up to 100% of its assets directly in, or in
underlying funds investing in, future contracts and options on futures
contracts.

Under normal circumstances, the underlying funds in which the Growth Mutual
Fund Portfolio invests may incur less risk and volatility than those in
which the Aggressive Growth Mutual Fund Portfolio invests. For example,
they may trade their portfolios less actively and/or invest in companies
whose securities are subject to less erratic movements. Under normal
conditions, the underlying funds in which the Growth Mutual Fund Portfolio
invests will be likely to own a lower percentage of smaller or newer
companies than those in which the Aggressive Growth Mutual Fund Portfolio
invests. In addition, under normal circumstances, the underlying funds in
which the Growth Mutual Fund Portfolio invests will be less likely to use
leverage than those in which the Aggressive Growth Mutual Fund Portfolio
invests. Furthermore, under normal circumstances, the Growth Mutual Fund
Portfolio will be more likely to be invested in more sectors of the economy
than the Aggressive Growth Mutual Fund Portfolio. Although the Portfolios
may invest in shares of the same underlying fund, the percentage of each
Portfolio's assets so invested may vary, and the adviser will determine
that such investments are consistent with the investment objectives and
policies of each Portfolio.

Page 11

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None of the fund's investment goals are fundamental and may be changed
without shareholder approval.

For more information, see "How Does the Fund Pursue Its Investment Goal?"
under "More Information About the Fund."

MAIN RISK FACTORS

When the Portfolio is invested in underlying funds that own stocks, the
value of your investment in the fund will fluctuate in response to stock
market movements.

The underlying funds may invest in smaller or newer companies, which are
more likely to grow, as well as suffer more significant losses, than larger
or more established companies. Investments in such companies can be both
more volatile and more speculative.

The underlying funds may invest in aggressive growth stocks, which may be
more expensive relative to their earnings or assets compared to value or
other stocks. The prices of aggressive growth stocks are based largely on
projections of the issuer's future earnings and revenues. If a company's
earnings or revenues fall short of expectations, its stock price may fall
dramatically.

The underlying funds may invest in technology companies. The technology
sector has historically been more volatile due to the rapid pace of product
change and development within the sector. The stock prices of companies
operating within this sector may be subject to abrupt or erratic movements.

When the Portfolio invests in underlying funds that use margin, leverage,
short sales and other forms of financial derivatives, such as options and
futures, an investment in the fund may be more volatile than investments in
other mutual funds.

Because the fund invests primarily in underlying funds, the value of your
investment will fluctuate in response to the performance of the underlying
funds. In addition, investing through the fund in an underlying portfolio
of funds involves additional expenses and tax results that would not arise
if you invested directly in the funds that the fund owns. By investing
indirectly in underlying funds through the fund, you will bear not only
your proportionate share of the fund's expenses (including operating costs
and investment advisory, 12b-1 and administrative fees), but also,
indirectly, similar expenses and charges of the underlying funds, including
any contingent deferred sales charges and redemption charges. Finally, you
may receive taxable capital gains distributions to a greater extent than
would be the case if you invested directly in the underlying funds.

As with any mutual fund, loss of money is a risk of investing in the fund.
Please read "More About Risk" carefully before investing.

Page 12

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PERFORMANCE

Performance history will be available for the fund after it has been in
operation for one calendar year. The fund commenced operation on February
28, 2000.

FEES AND EXPENSES OF THE FUND

The following table describes the fees and expenses that you may pay if you
buy and hold shares of the fund.

There are no sales loads, fees or other charges

o to buy fund shares directly from the fund
o to reinvest dividends in additional shares
o to exchange into shares of other funds in the Flex-funds
family of funds
o or to redeem your shares.

ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND
ASSETS)1

Management Fees 0.75%
Distribution (12b-1) Fees 0.25%
Other Expenses2 0.48%
-----
Total Annual Fund Operating Expenses 1.48%
Expense Reimbursement3 - 0.23%
-----
Net Expenses 1.25%

1 This table and the Example below reflect the expenses of the fund and its
proportionate share of expenses from its corresponding portfolio. See "The
Fund's Investment in the Portfolio" under "More Information About the
Fund."

2 "Other Expenses" are based upon estimated amounts for the current fiscal
year.

3 The adviser has agreed to waive its fees and/or absorb expenses to limit
the fund's total annual operating expenses to 1.25%. The adviser may
terminate this agreement after April 30, 2001.

EXAMPLE

The example in the table below is intended to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds.

Assuming you

o invest $10,000 in the fund
o redeem your shares at the end of the periods shown below
o earn a 5% return each year and
o incur the same fund operating expenses shown above,

your cost of investing in the fund would be:

1 YEAR 3 YEARS
------ -------
$127 $445

Of course, your actual costs may be higher or lower.

Page 13

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THE AGGRESSIVE GROWTH FUND - FLAGX

INVESTMENT GOAL

The fund seeks growth of capital. To pursue this goal, the fund invests all
of its assets in a portfolio which invests primarily in other mutual funds
that are not affiliated with the fund.

MAIN STRATEGIES

The fund invests all of its assets in the Aggressive Growth Mutual Fund
Portfolio, a master fund having the same investment goal as the fund. See
"The Fund's Investment in a Portfolio" under "More Information About the
Fund." The Portfolio is a "fund of funds" that pursues its investment goal
by investing primarily in open-end or closed-end investment companies (the
"underlying funds"). The underlying funds in which the Portfolio invests
seek primarily capital growth or appreciation, without regard to current
income, by investing in common stock or securities convertible into or
exchangeable for common stock (such as convertible preferred stock,
convertible debentures or warrants). The adviser overweights mutual fund
types that it believes represent above average market potential. The
adviser continually evaluates market capitalization (for example, blue chip
versus small capitalization) and sector rotation (for example, high tech
versus industrial companies) when selecting mutual funds. Except when it
may be necessary to accumulate cash in order to satisfy minimum purchase
requirements of the underlying funds or to meet anticipated redemptions,
the Portfolio normally will maintain its assets invested in underlying
funds.

The Portfolio may invest in common stocks directly.

The Portfolio may invest in unit investment trusts, which are investment
vehicles that purchase a fixed portfolio of securities.

The Portfolio may invest up to 100% of its assets directly in, or in
underlying funds investing in, future contracts and options on futures
contracts.

The underlying funds in which the Aggressive Growth Mutual Fund Portfolio
invests may incur more risk and volatility than those in which the Growth
Mutual Fund Portfolio invests. For example, they may trade their portfolios
more actively (which results in higher brokerage commissions and increased
realization of taxable gains) and/or invest in companies whose securities
are subject to more erratic movements. Under normal conditions, the
underlying funds in which the Aggressive Growth Mutual Fund Portfolio
invests will be likely to own a higher percentage of smaller or newer
companies than those in which the Growth Mutual Fund Portfolio invests. In
addition, under normal circumstances, the underlying funds in which the
Aggressive Growth Mutual Fund Portfolio invests will be more likely to use
leverage than those in which the Growth Mutual Fund Portfolio invests.
Furthermore, under normal circumstances, the Aggressive Growth Mutual Fund
Portfolio will be more likely to be invested in fewer sectors of the
economy than the Growth Mutual Fund Portfolio. Although the Portfolios may
invest in shares of the same underlying fund, the percentage of each
Portfolio's assets so invested may vary, and the adviser will determine

Page 14

<PAGE>

that such investments are consistent with the investment objectives and
policies of each Portfolio.

None of the fund's investment goals are fundamental and may be changed
without shareholder approval.

For more information, see "How Does the Fund Pursue Its Investment Goal?"
under "More Information About the Fund."

MAIN RISK FACTORS

The adviser uses an aggressive growth strategy in choosing the fund's
investments. As a result, an investment in the fund involves a greater
degree of risk, and its share price may be more volatile, than an
investment in a conservative equity fund or a growth fund invested entirely
in proven growth stocks.

When the Portfolio is invested in underlying funds that own stocks, the
value of your investment in the fund will fluctuate in response to stock
market movements.

As with any mutual fund, loss of money is a risk of investing in the fund.
Please read "More About Risk" carefully before investing.

Page 15

<PAGE>

PERFORMANCE

Performance history will be available for the fund after it has been in
operation for one calendar year. The fund commenced operation on February
28, 2000.

FEES AND EXPENSES OF THE FUND

The following table describes the fees and expenses that you may pay if you
buy and hold shares of the fund.

There are no sales loads, fees or other charges

o to buy fund shares directly from the fund
o to reinvest dividends in additional shares
o to exchange into shares of other funds in the Flex-funds
family of funds
o or to redeem your shares.

ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND
ASSETS)1

Management Fees 0.75%
Distribution (12b-1) Fees 0.25%
Other Expenses2 0.48%
-----
Total Annual Fund Operating Expenses 1.48%
Expense Reimbursement3 - 0.23%
-----
Net Expenses 1.25%

2 "Other Expenses" are based upon estimated amounts for the current fiscal
year.

3 The adviser has agreed to waive its fees and/or absorb expenses to limit
the fund's total annual operating expenses to 1.25%. The adviser may
terminate this agreement after April 30, 2001.

EXAMPLE

The example in the table below is intended to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds.

Assuming you

o invest $10,000 in the fund
o redeem your shares at the end of the periods shown below
o earn a 5% return each year and
o incur the same fund operating expenses shown above,

your cost of investing in the fund would be:

1 YEAR 3 YEARS
------ -------
$127 $445

Of course, your actual costs may be higher or lower.

Page 16

<PAGE>

U.S. GOVERNMENT BOND FUND - FLXBX

INVESTMENT GOAL

The fund seeks to maximize current income through investment in:

o securities which are issued, or guaranteed as to principal
and interest, by the U.S. government or any of its agencies
or instrumentalities and

o repurchase agreements involving these U.S. government
securities

MAIN STRATEGIES

The fund invests all of its assets in the Bond Portfolio, a master fund
having the same investment goal as the fund. See "Each Fund's Investment in
a Portfolio" under "More Information About the Funds." Normally, the
Portfolio invests at least 65% of the value of its assets in U.S.
government debt securities. The Portfolio may invest in U.S. Treasuries;
agency securities such as Ginnie Maes, Sally Maes, Fanny Maes and Freddie
Macs; and repurchase agreements involving these securities.

The Portfolio may invest in U.S. government securities having any maturity.
Normally, the Portfolio will invest in 10 year U.S. government securities
if the adviser believes the risk/reward relationship of the bond market is
positive. The Portfolio will invest in short-term U.S. government
securities or money market securities when the adviser believes the
risk/reward relationship of the bond market is negative. If the adviser
believes that long-term interest rates are significantly greater than
inflation, the Portfolio may invest in U.S. government securities with
maturities as long as 30 years.

When analyzing the market for U.S. government securities, the adviser
monitors the following indicators:

o momentum - the trend of U.S. government securities prices
compared to moving averages

o real interest rates - the 10-year Treasury bond yield
compared to the rate of inflation

o yield spread - the 10-year Treasury bond yield as compared
to the 90-day Treasury bill yield

None of the fund's investment goals are fundamental and may be changed
without shareholder approval.

For more information, see "How Does the Fund Pursue Its Investment Goal?"
under "More Information About the Funds."

Page 17

<PAGE>

MAIN RISK FACTORS

As with most bond funds, the value of your investment will fluctuate with
changes in interest rates. Typically, a rise in interest rates causes a
decline in the market value of debt securities (including U.S. government
securities). These and other risks of investing in the fund are set forth
in "More About Risk." Other factors may affect the market price and yield
of the fund's securities, including investor demand and domestic and
worldwide economic conditions. As with any mutual fund, loss of money is a
risk of investing in the fund.

PERFORMANCE

The bar chart below provides some indication of the risks of investing in
the U.S. Government Bond Fund by showing changes in the fund's performance
from year to year over a 10-year period. The table below compares the
fund's performance with a broad measure of market performance and the
returns of an index of funds with similar investment objectives. How the
fund has performed in the past is not necessarily an indication of how the
fund will perform in the future.

[Plot points for Edgar format]:

YEAR ANNUAL TOTAL RETURN
---- -------------------
1990 8.35%
1991 15.30%
1992 3.26%
1993 8.22%
1994 -0.99%
1995 18.32%
1996 0.15%
1997 7.70%
1998 9.62%
1999 0.35%

During the 10-year period shown in the bar chart, the highest return for a
quarter was 7.60% (quarter ended June 30, 1995) and the lowest return for a
quarter was -4.05% (quarter ending March 31, 1992).

Average Annual Total Returns
(for the periods ending
DECEMBER 31, 1999) PAST ONE YEAR PAST 5 YEARS PAST 10 YEARS
------------------ ------------- ------------ -------------
U.S. Government Bond Fund 0.35% 7.03% 6.86%
The Lehman Brothers Intermediate
Government Bond Index* 0.40% 6.95% 7.13%
Morningstar's Average General
Government Bond Fund -1.31% 6.17% 6.46%

*The Lehman Brothers Intermediate Government Bond Index is an unmanaged index of
fixed-rate bonds issued by the U.S. government and its agencies that are rated
investment grade or higher and have one to ten years remaining until maturity
and at least $100 million outstanding. The Lehman Brothers Intermediate
Government Bond Index does not take into account the deduction of expenses
associated with a mutual fund, such as investment management and accounting
fees. One cannot invest directly in an index.

Page 18

<PAGE>

FEES AND EXPENSES OF THE FUND

The following table describes the fees and expenses that you may pay if you
buy and hold shares of the fund.

There are no sales loads, fees or other charges

o to buy fund shares directly from the fund
o to reinvest dividends in additional shares
o to exchange into shares of other funds in the Flex-funds
family of funds
o or to redeem your shares.

ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND
ASSETS)1

Management Fees 0.40%
Distribution (12b-1) Fees 0.20%
Other Expenses2 0.58%
-----
Total Annual Fund Operating Expenses 1.18%
Fee Waiver and Expense
Reimbursement3 -0.18%
-----
Net Expenses 1.00%

2 "Other Expenses" are based upon expenses actually incurred by the fund
for the year ended December 31, 1999.

3 The adviser has agreed to reduce its fees and/or absorb expenses to limit
the fund's total annual operating expenses to 1.00%. The adviser may
terminate this agreement after April 30, 2001.

EXAMPLE

The example in the table below is intended to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds.

Assuming you

o invest $10,000 in the fund
o redeem your shares at the end of the periods shown below
o earn a 5% return each year and
o incur the same fund operating expenses shown above,

your cost of investing in the fund would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
$102 $357 $632 $1,416

Of course, your actual costs may be higher or lower.

Page 19

<PAGE>

MONEY MARKET FUND - FFMXX

INVESTMENT GOAL

The fund seeks to provide current income while maintaining a stable share
price of $1.00. To pursue this goal, the fund invests primarily in
high-quality, short-term money market instruments, such as securities
backed by the full faith and credit of the U.S. government, securities
issued by U.S. government agencies, or obligations issued by corporations
and financial institutions.

MAIN STRATEGIES

The fund invests all of its assets in the Money Market Portfolio, a master
fund having the same investment goal as the fund. See "Each Fund's
Investment in a Portfolio" under "More Information about the Funds." The
Portfolio, like all money funds, follows SEC guidelines on the quality,
maturity and diversification of its investments. These guidelines are
designed to help reduce a money fund's risks so that it is more likely to
keep its share price at $1.00.

o The Portfolio only buys securities that the adviser
determines present minimal credit risks and that are rated
in one of the top two short-term rating categories or that
are comparable unrated securities in the adviser's opinion.

o The Portfolio only buys securities with remaining maturities
of 397 calendar days or less and maintains a dollar-weighted
average portfolio maturity of 90 days or less.

o Generally, the Portfolio may not invest more than 5% of its
total assets in the securities of a single issuer, other
than in U.S. government securities.

o Generally, the adviser will attempt to purchase securities
with longer maturities when it believes interest rates are
falling and will attempt to purchase securities with shorter
maturities when it believes interest rates are rising.

The Portfolio will limit its purchases to U.S. government securities and
securities of its agencies and instrumentalities, bank obligations and
instruments secured thereby, high quality commercial paper, high grade
corporate obligations, funding agreements and repurchase agreements.

None of the fund's investment goals are fundamental and may be changed
without shareholder approval.

For more information, see "How Does the Fund Pursue Its Investment Goal?"
under "More Information About the Funds."

Page 20

<PAGE>

MAIN RISK FACTORS

The fund is subject to income risk, which is the possibility that the
fund's dividends or income will decline because of falling interest rates.
The fund is subject, to a limited extent, to credit risk which is the
possibility that the issuer of a security owned by the fund will be unable
to repay interest and principal in a timely manner.

An investment in the fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the
fund seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the fund. Please read "More About
Risk" carefully before investing.

PERFORMANCE

The bar chart below provides some indication of the risks of investing in
the Money Market Fund by showing changes in the fund's performance from
year to year over a 10-year period. The table below compares the fund's
performance with the returns of an index of funds with similar investment
objectives. How the fund has performed in the past is not necessarily an
indication of how the fund will perform in the future.

[Plot points for Edgar format]:

YEAR ANNUAL TOTAL RETURN
---- -------------------
1990 8.21%
1991 6.12%
1992 3.70%
1993 2.98%
1994 4.10%
1995 5.85%
1996 5.27%
1997 5.38%
1998 5.31%
1999 4.96%

During the 10-year period shown in the bar chart, the highest return for a
quarter was 2.02% (quarter ended June 30, 1990) and the lowest return for a
quarter was 0.71% (quarter ending June 30, 1993).

The fund's seven-day simple yield ended on December 31, 1999 was 5.49% and
the seven-day compound yield ended December 31, 1999 was 5.63%. To request
the fund's current seven-day yield, please call 1-800-325-3539 or
614-760-2159.

Average Annual Total Returns
(for the periods ending
DECEMBER 31, 1999) PAST ONE YEAR PAST 5 YEARS PAST 10 YEARS
------------------ ------------- ------------ -------------
Money Market Fund 4.96% 5.36% 5.18%
Lipper's Average General Purpose
Money Market Fund 4.49% 4.95% 4.79%

Page 21

<PAGE>

FEES AND EXPENSES OF THE FUND

The following table describes the fees and expenses that you may pay if you
buy and hold shares of the fund.

There are no sales loads, fees or other charges

o to buy fund shares directly from the fund
o to reinvest dividends in additional shares
o to exchange into shares of other funds in the Flex-funds
family of funds
o or to redeem your shares.

ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND
ASSETS)1

Management Fees 0.26%
Distribution (12b-1) Fees2 0.08%
Other Expenses3 0.20%
-----
Total Annual Fund Operating Expenses 0.54%
Fee Waiver and Expense
Reimbursement4 -0.13%
-----
Net Expenses 0.41%

2 "Distribution (12b-1) Fees" are based upon expenses actually incurred by
the fund for the year ended December 31, 1999; however, the Fund may incur
up to 0.20% in distribution (12b-1) fees.

3 "Other Expenses" are based upon expenses actually incurred by the fund
for the year ended December 31, 1999.

4 Reflects the adviser's agreement to reduce its fees and/or absorb
expenses to the extent necessary to achieve an effective yield for the fund
that will rank in the top 10% of yields for all general purpose money
market funds in 2000. The adviser may terminate this agreement after April
30, 2001.

EXAMPLE

The example in the table below is intended to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds.

Assuming you

o invest $10,000 in the fund
o redeem your shares at the end of the periods shown below
o earn a 5% return each year and
o incur the same fund operating expenses shown above,

your cost of investing in the fund would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
$42 $160 $289 $665

Of course, your actual costs may be higher or lower.

Page 22

<PAGE>

WHO MAY WANT TO INVEST

MUIRFIELD FUND(R)

The fund may be appropriate if you:

o are seeking long-term growth potential but are concerned about
moderating the risks associated with being invested in stocks at all
times

o are seeking to diversify your portfolio

o are investing with a long-term horizon

The fund may not be appropriate if you:

o are investing to meet short-term financial goals

o are seeking to be invested in the stock market at all times

o are seeking to maximize returns from an aggressive growth strategy
that is invested in stocks at all times

TOTAL RETURN UTILITIES FUND

The fund may be appropriate if you:

o are seeking a more conservative, income-oriented equity investment or
are looking to supplement your core equity holdings

o are a socially responsible investor

The fund may not be appropriate if you:

o are seeking a short-term investment vehicle

o desire an investment that is diversified over several market sectors

HIGHLANDS GROWTH FUND

The fund may be appropriate if you:

o are seeking long-term growth potential

o are seeking a fund for the growth portion of an asset allocation
portfolio

o are more comfortable with a focus on established, well-known companies

o are seeking to diversify your portfolio

o are willing to accept higher short-term risk along with potentially
higher long-term returns

The fund may not be appropriate if you:

o are unwilling to accept an investment that will go up and down in
value

o are investing to meet short-term financial goals

THE DYNAMIC GROWTH FUND

The fund may be appropriate if you:

o are seeking long-term growth potential

o are seeking to be invested in the stock market at all times

o are seeking to diversify your portfolio

o are investing with a long-term horizon

The fund may not be appropriate if you:

o are investing to meet short-term financial goals

o are unwilling to accept an investment that will go up and down in
value

Page 23

<PAGE>

THE AGGRESSIVE GROWTH FUND

The fund may be appropriate if you:

o are seeking long-term growth potential

o are seeking to maximize returns from an aggressive growth strategy
that is invested in the stock market at all times

o are seeking to diversify your portfolio

o are investing with a long-term horizon

The fund may not be appropriate if you:

o are investing to meet short-term financial goals

o are unwilling to accept an investment that will go up and down in
value

U.S. GOVERNMENT BOND FUND

The fund may be appropriate if you:

o are seeking a regular stream of income

o have common stock holdings and want a bond investment in order to
diversify your portfolio

o are seeking higher potential returns than money market investments
provide and are willing to accept moderate risk of volatility

o have retired or are about to retire

The fund may not be appropriate if you:

o require maximum stability of principal

o are investing for a maximum return over a long-term horizon

MONEY MARKET FUND

The fund may be appropriate if you:

o like to earn income at current money market rates while preserving the
value of your investment

o are looking for a short-term component of an asset allocation program

o characterize your investment outlook as "very conservative"

o want to be able to move your money into stock or bond investments
quickly and without penalty

The fund may not be appropriate if you:

o are investing for maximum return over a long-term horizon

Page 24

<PAGE>

RESULTS OF A $10,000 INVESTMENT

THE MUIRFIELD FUND(R) VS. BENCHMARK INDEXES

AVERAGE ANNUAL TOTAL RETURNS
AS OF 12/31/99

1 YEAR 16.43%
5 YEARS 18.95%
10 YEARS 14.15%
SINCE INCEPTION (8/10/88) 14.22%

[Plot Points for EDGAR]:
Morningstar's
Average Asset
The Muirfield Fund(R) S&P 500 Allocation Fund Index
YEAR DOLLAR AMOUNT YEAR DOLLAR AMOUNT YEAR DOLLAR AMOUNT
---- ------------- ---- ------------- ---- -------------
01/01/90 $10,000 01/01/90 $10,000 01/01/90 $10,000
12/31/90 $10,233 12/31/90 $ 9,688 12/31/90 $10,109
12/31/91 $13,285 12/31/91 $12,642 12/31/91 $12,417
12/31/92 $14,203 12/31/92 $13,605 12/31/92 $13,462
12/31/93 $15,354 12/31/93 $14,973 12/31/93 $15,035
12/31/94 $15,769 12/31/94 $15,170 12/31/94 $14,838
12/31/95 $19,840 12/31/95 $20,863 12/31/95 $18,388
12/31/96 $21,029 12/31/96 $25,651 12/31/96 $20,684
12/31/97 $24,939 12/31/97 $34,206 12/31/97 $24,181
12/31/98 $32,252 12/31/98 $43,981 12/31/98 $26,883
12/31/99 $37,550 12/31/99 $53,234 12/31/99 $29,205

The chart compares The Muirfield Fund(R)'s shares to benchmark indexes. It is
intended to give you a general idea of how the Fund performed compared to these
benchmarks over the period 1/1/90 -12/31/99. It is important to understand
differences between your Fund and these indexes. An index measures performance
of a hypothetical portfolio.

A market index such as the S&P 500 Composite Stock Price Index is not managed,
incurring no sales charges, expenses, or fees. If you could buy all the
securities that make up a market index, you would incur expenses that would
affect your investment's return. An index of funds such as the Morningstar's
Average Asset Allocation Fund Index includes a number of mutual funds grouped by
investment objective. Each of those funds interprets that objective differently,
and each employs a different management style and investment strategy.

For a description of indexes referred to on this page, please refer to
"Performance."

PAST PERFORMANCE IS NO GUARANTEE OF COMPARABLE FUTURE RESULTS. MARKET VOLATILITY
CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS OF AN INVESTMENT MADE
TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL PERFORMANCE SHOWN.

Page 25

<PAGE>

1999 IN REVIEW

1999 was another year of double-digit returns for The Muirfield Fund(R).
For the 12 months ended December 31, the Fund returned 16.43%, comparing
favorably with the 9.40% return of the average asset allocation fund,
according to Morningstar.

This was another year, as well, for volatility and narrowness in the stock
market. Of the annual returns of the major stock market indices, over 90%
of the S&P 500, 60% of the Dow Jones Industrial Average, and 70% of the
NASDAQ came in the final 11 weeks of the year. And, for the year, the 100
largest capitalization stocks in the S&P 500 contributed over 80% of the
21% gain of the Index, and the technology sector contributed 65% to the
gain of the S&P 500.

The advance of stock market indices was dramatic, but the Fund spent part
of the year in a defensive position with large allocations to cash
equivalent securities. Two reasons for this decision were the narrowness of
the market and the increasing interest rate environment. As of December 31,
over 60% of the stocks listed on the New York Stock Exchange and the NASDAQ
were down more than 20% from their annual highs. This condition is normally
not a good sign for the future health of the stock market.

The increase in interest rates was influenced partially by Y2K concerns,
but a large part was due to fears of future inflation. These two areas -
the breadth of the market and interest rates - are two of the most
important components in our Defensive Investing discipline, and both were
negative much of the year. In fact, we never owned bonds this year due to
our negative evaluation of the interest rate environment.

When the Fund was exposed to the risk of the stock market, fund selection
was extremely important because of the narrowness of the market. During the
first four months of the year, fund positions were selected to emphasize
large cap growth and technology. In the second four months of the year
(from mid-April to mid-August) our fund selection emphasized value stocks
and energy issues. From mid-August through the end of the year, our fund
selection emphasis returned to large-cap and technology funds.

Page 26

<PAGE>

RESULTS OF A $10,000 INVESTMENT

THE TOTAL RETURN UTILITIES FUND VS. BENCHMARK INDEXES

AVERAGE ANNUAL TOTAL RETURNS
AS OF 12/31/99

1 YEAR 20.01%
SINCE INCEPTION (6/21/95) 18.89%

[Plot Points for EDGAR]:

Morningstar's
The Total Average Utility
Return Utilities Fund S&P 500 Fund Index
DATE AMOUNT DATE AMOUNT DATE AMOUNT
---- ------ ---- ------ ---- ------
6/21/95 $10,000 6/21/95 $10,000 6/21/95 $10,000
9/30/95 $10,427 9/30/95 $10,809 9/30/95 $10,755
12/31/95 $11,500 12/31/95 $11,460 12/31/95 $11,499
3/31/96 $11,415 3/31/96 $12,075 3/31/96 $11,479
6/30/96 $12,103 6/30/96 $12,616 6/30/96 $11,942
9/30/96 $12,085 9/30/96 $13,006 9/30/96 $11,730
12/31/96 $13,032 12/31/96 $14,089 12/31/96 $12,715
3/31/97 $12,729 3/31/97 $14,468 3/31/97 $12,585
6/30/97 $13,749 6/30/97 $16,992 6/30/97 $13,687
9/30/97 $14,898 9/30/97 $18,264 9/30/97 $14,451
12/31/97 $16,770 12/31/97 $18,788 12/31/97 $15,968
3/31/98 $18,465 3/31/98 $21,407 3/31/98 $17,625
6/30/98 $17,910 6/30/98 $22,114 6/30/98 $17,326
9/30/98 $16,067 9/30/98 $19,918 9/30/98 $17,116
12/31/98 $18,241 12/31/98 $24,157 12/31/98 $18,958
3/31/99 $18,356 3/31/99 $25,361 3/31/99 $18,383
6/30/99 $20,556 6/30/99 $27,148 6/30/99 $20,287
9/30/99 $20,709 9/30/99 $25,454 9/30/99 $19,610
12/31/99 $21,891 12/31/99 $29,240 12/31/99 $21,689

The chart compares The Total Return Utilities Fund's shares to benchmark
indexes. It is intended to give you a general idea of how the Fund performed
compared to these benchmarks over the period 6/21/95-12/31/99. (Please note that
performance figures for the indexes are from 6/30/95-12/31/99.) It is important
to understand differences between your Fund and these indexes. An index measures
performance of a hypothetical portfolio.

A market index such as the S&P 500 Composite Stock Price Index is not managed,
incurring no sales charges, expenses, or fees. If you could buy all the
securities that make up a market index, you would incur expenses that would
affect your investment's return. An index of funds such as the Morningstar's
Average Utility Fund Index includes a number of mutual funds grouped by
investment objective. Each of those funds interprets that objective differently,
and each employs a different management style and investment strategy.

For a description of indexes referred to on this page, please refer to
"Performance."

Page 27

<PAGE>

1999 IN REVIEW

For 1999, The Total Return Utilities Fund returned 20.01%, outperforming
the 15.13% return for the average utility fund, according to Morningstar,
and the -6.02% return for the Dow Jones Utility Average for the same time
period.

Utility stocks suffered greatly in 1999 - their worst annual performance
since 1994 - even as the robust economy drove up demand for utility
services and improved the financial performance of many utility companies.
Our strategy of industry diversification, notably in our weighting toward
the telecommunications sector, helped the Fund outperform most large-cap
utility stocks this past year. We have been saying for many years that the
distribution of returns in the utility sector was widening, and that
deregulation would separate the winners from the losers. The performance of
the Fund in 1999 stamped a seal of approval on this view.

We also overcame an increasing interest rate environment in 1999,
demonstrating to investors that a yield-oriented portfolio does not have to
decline when interest rates rise. The connection between interest rates and
prices for utility stocks has weakened in recent years, and the results of
the Fund's individual stock picking strategy - seeking out companies that
we believe offer sustainable and reliable growth - affirms this view.

Strong performance from the telecom stocks in our portfolio helped the Fund
achieve good returns throughout the year. The gas and electric distribution
sector has also been ripe with opportunities, with deregulation driving
consolidations and buyouts within the industry. General lack of interest in
the utility sector, however, resulted in declines in some of our more
traditional holdings, even as they increased earnings and dividends. The
silver lining here is that the depressed values of these stocks allows us
to add to our positions at lower prices.

Page 28

<PAGE>

RESULTS OF A $10,000 INVESTMENT

THE HIGHLANDS GROWTH FUND VS. BENCHMARK INDEXES

AVERAGE ANNUAL TOTAL RETURNS
AS OF 12/31/99

1 YEAR 21.16%
5 YEARS 21.37%
10 YEARS 14.21%
SINCE INCEPTION (1/1/88) 11.57%

[Plot Points for EDGAR]:

Morningstar's
Average Growth
The Highlands Growth Fund S&P 500 Mutual Fund Index
YEAR DOLLAR AMOUNT YEAR DOLLAR AMOUNT YEAR DOLLAR AMOUNT
---- ------------- ---- ------------- ---- -------------
01/01/90 $10,000 01/01/90 $10,000 01/01/90 $10,000
12/31/90 $10,431 12/31/90 $ 9,688 12/31/90 $ 9,557
12/31/91 $12,670 12/31/91 $12,642 12/31/91 $13,146
12/31/92 $13,475 12/31/92 $13,605 12/31/92 $14,342
12/31/93 $14,447 12/31/93 $14,973 12/31/93 $16,112
12/31/94 $14,346 12/31/94 $15,170 12/31/94 $15,853
12/31/95 $17,878 12/31/95 $20,863 12/31/95 $20,837
12/31/96 $19,501 12/31/96 $25,651 12/31/96 $25,026
12/31/97 $25,211 12/31/97 $34,206 12/31/97 $31,310
12/31/98 $31,179 12/31/98 $43,981 12/31/98 $37,374
12/31/99 $37,777 12/31/99 $53,234 12/31/99 $47,909

The chart compares The Highlands Growth Fund's shares to benchmark indexes. It
is intended to give you a general idea of how the Fund performed compared to
these benchmarks over the period 1/1/90-12/31/99. It is important to understand
differences between your Fund and these indexes. An index measures performance
of a hypothetical portfolio.

A market index such as the S&P 500 Composite Stock Price Index is not managed,
incurring no sales charges, expenses, or fees. If you could buy all the
securities that make up a market index, you would incur expenses that would
affect your investment's return. An index of funds such as the Morningstar's
Average Growth Mutual Fund Index includes a number of mutual funds grouped by
investment objective. Each of those funds interprets that objective differently,
and each employs a different management style and investment strategy.

For a descriptions of indexes referred to on this page, please refer to
"Performance."

Page 29

<PAGE>

1999 IN REVIEW

For 1999, The Highlands Growth Fund performed exactly as expected -
outperforming the S&P 500 - thanks in large part to the Fund's "sector
neutral, style neutral" investment strategy. Through the market
fluctuations of this past year, the Fund held to its investment strategy
and avoided the underperformance that hampered other equity funds that
employ a more style-focused strategy. For the 12 months ended December 31,
1999, the Fund returned 21.16%, while the S&P 500 Index returned 21.04%.

The stock market was relatively tame through the first half of the year,
and performance was broad across many market sectors. Investors seemed more
willing to consider other sectors and styles besides technology and growth,
as the market rotated to energy, cyclical, and small-cap stocks. Overall
performance for the first six months of the year were by and large more
balanced than we had seen in a year.

This broadening trend, however, fizzled after June, as interest rate
worries and inflation fears rattled investors in the third quarter. No
sector or style seemed to be in favor, save for a handful of energy and
technology companies. The market surged back with an impressive fourth
quarter, as technology stocks carried many indices into record territory by
year-end.

Advance/decline statistics for many market indices were narrower in 1999
than they were the previous year, making it difficult to outperform the
market with a diversified portfolio. Only two sectors of the S&P 500
outperformed the index as a whole during 1999; technology gained 71.46% and
capital goods gained 42.16%. The other sectors enjoyed positive performance
for the year, with the exception of transportation which declined -9.61%,
and healthcare which declined -9.60%.

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<PAGE>

RESULTS OF A $10,000 INVESTMENT

THE U.S. GOVERNMENT BOND FUND VS. BENCHMARK INDEXES

AVERAGE ANNUAL TOTAL RETURNS
AS OF 12/31/99

1 YEAR 0.35%
5 YEARS 7.03%
10 YEARS 6.86%
SINCE INCEPTION (1/1/88) 6.91%

[Plot Points for EDGAR]:

Morningstar's
The Lehman Bros. Average General
Intermediate Government Government Bond
The U.S. Govt. Bond Fund Bond Index Fund Index
YEAR DOLLAR AMOUNT YEAR DOLLAR AMOUNT YEAR DOLLAR AMOUNT
---- ------------- ---- ------------- ---- -------------
01/01/90 $10,000 01/01/90 $10,000 01/01/90 $10,000
12/31/90 $10,835 12/31/90 $10,956 12/31/90 $10,851
12/31/91 $12,493 12/31/91 $12,501 12/31/91 $12,367
12/31/92 $12,900 12/31/92 $13,368 12/31/92 $13,098
12/31/93 $13,960 12/31/93 $14,477 12/31/93 $14,119
12/31/94 $13,821 12/31/94 $14,224 12/31/94 $13,611
12/31/95 $16,354 12/31/95 $16,276 12/31/95 $15,663
12/31/96 $16,379 12/31/96 $16,963 12/31/96 $16,065
12/31/97 $17,645 12/31/97 $18,273 12/31/97 $17,341
12/31/98 $19,343 12/31/98 $19,828 12/31/98 $18,628
12/31/99 $19,412 12/31/99 $19,908 12/31/99 $18,380

The chart compares The U.S. Government Bond Fund's shares to benchmark indexes.
It is intended to give you a general idea of how the Fund performed compared to
these benchmarks over the period 1/1/90-12/31/99. It is important to understand
differences between your Fund and these indexes. An index measures performance
of a hypothetical portfolio.

A market index such as The Lehman Brothers Intermediate Government Bond Index is
not managed, incurring no sales charges, expenses, or fees. If you could buy all
the securities that make up a market index, you would incur expenses that would
affect your investment's return. An index of funds such as the Morningstar's
Average General Government Bond Fund Index includes a number of mutual funds
grouped by investment objective. Each of those funds interprets that objective
differently, and each employs a different management style and investment
strategy.

For a description of indexes referred to on this page, please refer to
"Performance."

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<PAGE>

1999 IN REVIEW

For the 12 months ended December 31, The Flex-funds U.S. Government Bond
Fund returned 0.35%, outperforming the average general government bond fund
which declined -1.31% for the year, according to Morningstar. The Lehman
Brothers Intermediate Government Bond Index returned 0.40% for the year.

The increasing interest rate environment in 1999 hampered the performance
on many bond funds. In contrast, the U.S. Government Bond Fund's "Defensive
Investing" discipline helped investors gain a positive return on their
investment by maintaining a fully defensive position for most of the year.
We began 1999 with a fully invested position in ten-year Treasury notes,
foreseeing a flat interest rate environment as dictated by global economic
conditions. However, continued strength in the U.S. economy and fears of
Fed rate increases led to a decline in the bond market and triggered a sell
signal in our investment discipline. During the first six months of 1999,
the rate on the 30-year Treasury bond increased by nearly one full
percentage point, from 5.12% on December 31, 1998, to 6.10% on June 30,
1999.

Brief bond market rallies following the Federal Reserve's three interest
rate hikes this summer were not enough to turn our investment discipline
decidedly positive. Except for a partially-invested position during two
weeks in July, we were fully defensive in the Fund as the bond market
virtually collapsed from November 16 through year-end.

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MORE INFORMATION ABOUT THE FUNDS

EACH FUND'S INVESTMENT IN A PORTFOLIO

Each fund seeks to achieve its investment goal by investing all of its
assets in a corresponding portfolio. The funds and their corresponding
portfolios are as follows:

FUND PORTFOLIO
---- ---------
Muirfield Fund(R) = Mutual Fund Portfolio
Total Return Utilities Fund = Utilities Stock Portfolio
Highlands Growth Fund = Growth Stock Portfolio
Dynamic Growth Fund = Growth Mutual Fund Portfolio
Aggressive Growth Fund = Aggressive Growth Mutual Fund Portfolio
U.S. Government Bond Fund = Bond Portfolio
Money Market Fund = Money Market Portfolio

Each portfolio has the same investment goal as its corresponding fund. Each
fund's investment policies are also substantially similar to its corresponding
portfolio's, except the fund may pursue its policies by investing in an open-end
management investment company with the same investment goal and substantially
similar policies and restrictions as the fund. Each fund buys shares of its
corresponding portfolio at net asset value. An investment in a fund is an
indirect investment in its corresponding portfolio.

It is possible that a fund may withdraw its investment in its corresponding
portfolio and subsequently invest in another open-end management investment
company with the same investment goal and substantially similar policies. This
could happen if a portfolio changes its investment goal or if the board of
trustees, at any time, considers it in the fund's best interest.

A fund's structure, where it invests all of its assets in its corresponding
portfolio, is sometimes called a "master/feeder" structure. You will find more
detailed information about this structure and the potential risks associated
with it in the Statement of Additional Information.

MUIRFIELD FUND(R)

HOW DOES THE FUND PURSUE ITS INVESTMENT GOAL?

The Portfolio will seek to achieve its investment goal through asset
allocation and mutual fund selection. Under normal circumstances, at least
65% of the value of the Portfolio's total assets will be invested in mutual
funds. The underlying mutual funds will consist of diversified mutual funds
which invest primarily in common stock or securities convertible into or
exchangeable for common stock (such as convertible preferred stock,
convertible debentures or warrants) and which seek long-term growth or
appreciation, with current income typically of secondary importance. The
Portfolio will not invest in other funds of the Flex-funds family of funds

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<PAGE>

or the Meeder Advisor Funds family of funds, the corresponding portfolios
of which are also managed by the adviser.

The Portfolio will generally purchase "no-load" mutual funds, which are
sold and purchased without a sales charge. However, the Portfolio may
purchase "load" mutual funds only if the load, or sales commission, is
waived for purchases or sales made by the Portfolio.

The Portfolio may at times desire to gain exposure to the stock market
through the purchase of "index" funds (funds which purchase stocks
represented in popular stock market averages) with a portion of its assets.

The manager addresses asset allocation decisions by making shifts in the
mix of stocks, bonds and cash in the Portfolio. The Portfolio may at times
assume a defensive position by investing up to 100% of its assets in money
market securities and investment grade bonds.

TOTAL RETURN UTILITIES FUND

HOW DOES THE FUND PURSUE ITS INVESTMENT GOAL?

The Portfolio seeks to achieve its goal by investing, under normal
conditions, at least 65% of its total assets in a diversified portfolio of
common stocks, preferred stocks, warrants and rights, and securities
convertible into common or preferred stock of public utility companies.
Public utility companies include domestic or foreign companies that provide
electricity, natural gas, water, telecommunications or sanitary services to
the public. The Portfolio will not invest more than 5% of its total assets
in equity securities of issuers whose debt securities are rated below
investment grade, that is, rated below one of the four highest rating
categories by Standard & Poor's Corporation ("S&P") or Moody's Investors
Service, Inc. ("Moody's") or deemed to be of equivalent quality in the
judgment of the subadviser. Debt securities rated below investment grade
are rated below Baa or BBB.

The remaining 35% of the Portfolio's assets may be invested in debt
securities issued by public utility companies, and/or equity and debt
securities of issuers outside of the public utility industry which in the
opinion of the subadviser stand to benefit from developments in the public
utilities industry. The Portfolio will not invest more than 40% of its
total assets in the telephone industry. The Portfolio may invest up to 25%
of its total assets in securities of foreign issuers. The Portfolio will
not invest more than 10% of its net assets in securities that are deemed to
be illiquid.

Investments are selected on the basis of fundamental analysis to identify
those securities that, in the judgment of the subadviser, provide current
income and growth of income, and secondarily, capital appreciation, but
only when consistent with its primary investment goal.

Fundamental analysis involves assessing a company and its business
environment, management, balance sheet, income statement, anticipated
earnings and dividends and other related measures of value. The subadviser
monitors and evaluates the economic and political climate of the area in
which each company is located. The relative weightings among common stocks,

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<PAGE>

debt securities and preferred stocks will vary from time to time based upon
the subadviser's judgment of the extent to which investments in each
category will contribute to meeting the Portfolio's investment goal.

The subadviser emphasizes quality in selecting investments for the
Portfolio. In addition to looking for high credit ratings, the subadviser
ordinarily looks for several of the following characteristics: above
average earnings growth; above average growth of book value; an above
average balance sheet; high earnings to debt service coverage; low ratio of
dividends to earnings; high return on equity; low debt to equity ratio; an
above average rating with respect to government regulation; growing rate
base; lack of major construction programs and strong management.

The Portfolio may invest up to 35% of its total assets in debt securities
of issuers in the public utility industries. Debt securities in which the
Portfolio invests are limited to those rated A or better by S&P or Moody's
or deemed to be of equivalent quality in the judgment of the subadviser.

During periods when the subadviser deems it necessary for temporary
defensive purposes, the fund may invest without limit in high quality money
market instruments. These instruments consist of commercial paper,
certificates of deposit, banker's acceptances and other bank obligations,
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, high grade corporate obligations and repurchase
agreements.

The Portfolio, under normal circumstances, will invest 25% or more of its
total assets in securities of public utility companies. This concentration
policy is fundamental and may not be changed without shareholder approval.

HIGHLANDS GROWTH FUND

HOW DOES THE FUND PURSUE ITS INVESTMENT GOAL?

Under normal conditions, at least 80% of the Portfolio's total assets will
be invested in domestic common stocks and at least 65% of the Portfolio's
total assets will be invested in growth stocks.

The manager selects for the Portfolio common stocks from all domestic
publicly traded common stocks; however, at least 70% of the assets of the
Portfolio invested in common stocks will be invested in common stocks which
are included in the S & P 500.

The Portfolio consists of investment portfolios representing each of the
industry sectors (identified by the Portfolio's subadviser) comprising the
S & P 500. The assets of the Portfolio will be allocated to each of these
industry sectors in approximately the same proportion as these industry
sectors are represented in the S & P 500 on a market
capitalization-weighted basis. The subadviser continuously reviews the
representation of the industry sectors in the S & P 500 and continuously
groups domestic publicly traded common stocks into a specific industry
sector.

The Portfolio subadviser compares the total market value of the common
stocks in each industry sector of the S & P 500 to the total market value
of all common stocks in the S & P 500 to determine each industry sector's

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<PAGE>

weighting in the S & P 500. If the weighting of any industry sector in the
Portfolio varies from the weighting on a market-capitalization basis of
that industry sector in the S & P 500 at the end of any month, the
Portfolio subadviser will reallocate the amount of assets in the Portfolio
allocated to that industry sector. The subadviser may reallocate more
frequently than monthly if it chooses to do so. These reallocations may
cause additional transaction costs to the extent that securities may be
sold as part of such reallocations.

The assets of the Portfolio representing each of these industry sectors are
managed on a discretionary basis by one or more separate investment
advisers, called sector advisers, selected by the Portfolio subadviser. The
Portfolio subadviser's selection of sector advisers is reviewed and
approved by the trustees of the Portfolio.

Assets of the Portfolio representing each of the industry sectors are
managed by one or more sector advisers. However, if an advisory agreement
between a sector adviser and the Portfolio is terminated leaving no sector
adviser to manage the assets of the Portfolio representing an industry
sector, the Portfolio's subadviser will, upon termination and until a new
sector adviser is selected, manage and "index" the assets of the Portfolio
representing the applicable industry sector. In this case, the subadviser
will "index" the assets of the Portfolio representing its industry sector
by selling any stocks representing the industry sector that are not
included in the S&P 500 and investing the assets comprising the industry
sector in S&P 500 stocks identified by the Portfolio's subadviser as
belonging to that industry sector in the same proportion as those stocks
are represented in the S&P 500 on a market capitalization-weighted basis.

Each sector adviser is limited to the list of companies identified by the
Portfolio's subadviser which represents the sector adviser's specific
industry sector. Each sector adviser then selects those common stocks
which, in its opinion, best represent the industry sector the sector
adviser has been assigned. In selecting securities for the Portfolio, the
sector advisers evaluate factors believed to be favorable to long term
growth of capital, including specific financial characteristics of the
issuer such as historical earnings growth, sales growth, profitability and
return on equity. The sector advisers also analyze the issuer's position
within its industry sector as well as the quality and experience of the
issuer's management.

Up to 20% of the Portfolio's assets may be invested in temporary defensive
investments such as money market instruments and investment grade bonds.
The Portfolio may purchase stock index futures contracts and related
options. Up to 5% of the total assets of the Portfolio may be invested in
American Depositary Receipts.

THE DYNAMIC GROWTH AND AGGRESSIVE GROWTH FUNDS

HOW DO THE FUNDS PURSUE THEIR INVESTMENT GOAL?

The underlying funds in which the Growth Mutual Fund Portfolio and
Aggressive Growth Fund Portfolio invest will consist of mutual funds and
closed end funds that invest primarily in common stock or securities
convertible into or exchangeable for common stock (such as convertible
preferred stock, convertible debentures or warrants), and that seek capital
growth or appreciation, without regard to current income. The portfolios

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<PAGE>

will not invest in other funds of the Flex-funds family of funds or the
Meeder Advisor Funds family of funds, the corresponding portfolios of which
are also managed by the adviser.

Investment decisions by the investment advisers of the underlying funds are
made independently of a portfolio and the adviser. Therefore, the
investment adviser of one underlying fund may be purchasing shares of the
same issuer whose shares are being sold by the investment adviser of
another such fund. The result of this would be an indirect expense to a
portfolio without accomplishing any investment purpose.

The portfolios will generally purchase "no-load" mutual funds, which are
sold and purchased without a sales charge. A portfolio may also purchase
"load" mutual funds, but only if the load, or sales commission, is waived
for purchases or sales made by the portfolio.

A portfolio may also invest in "closed-end" funds. Shares of closed-end
funds are typically offered to the public in a one-time initial public
offering by a group of underwriters who retain a spread or underwriting
commission of between 4% and 6% of the initial public offering price. Such
securities are then listed for trading on the New York Stock Exchange, the
American Stock Exchange, the National Association of Securities Dealers
Automated Quotation System (commonly known as NASDAQ), and in some cases
may be traded in other over-the-counter markets. Because the shares of
closed-end funds cannot be redeemed upon demand by the issuer like shares
of a mutual fund, investors seek to buy and sell shares of closed-end funds
in the secondary market.

A portfolio may invest in shares of closed-end funds that are trading at a
discount to net asset value or at a premium to net asset value. There can
be no assurance that the market discount on shares of any closed-end fund
that a portfolio purchases will ever decrease. In fact, it is possible that
this market discount may increase, and a fund may suffer realized or
unrealized capital losses due to further decline in the market price of the
securities of such closed-end funds, thereby adversely affecting the net
asset value of a portfolio's shares. Similarly, there can be no assurance
that any shares of a closed-end fund purchased by a portfolio at a premium
will continue to trade at a premium or that the premium will not decrease
subsequent to a purchase of such shares by a portfolio.

TYPES OF FUNDS. Normally, a portfolio invests in the following types of
mutual funds: aggressive growth, growth, small capitalization, specialty
and industry sector funds. In addition, a portfolio may at times desire to
gain exposure to the stock market through the purchase of "index" funds
(funds that purchase stocks represented in popular stock market averages)
with a portion of its assets. A portfolio may also invest in underlying
funds holding foreign securities. The adviser will vary the proportion of
each type of underlying fund based on the mix of such funds that may, in
the adviser's view, be most likely to achieve the funds' investment goals.

The adviser selects underlying funds in which to invest based in part on
their investment goals and strategies, their investment adviser and
portfolio manager, and on the analysis of their past performance (absolute,
relative, and risk-adjusted). The adviser also considers other factors in
the selection of funds, such as fund size, liquidity, expense ratio,
general composition of its investment portfolio, and current and expected

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<PAGE>

portfolio holdings. Many funds in which a portfolio invests may not share
the same investment goal and investment limitations as the portfolio.

INDEX-BASED INVESTMENTS. A portfolio may invest in index-based investments
(IBIs), including Standard & Poor's Depositary Receipts (SPDRs). IBIs are
shares of publicly traded unit investment trusts that own the stocks in the
relevant index. For example, SPDRs represent ownership interests in unit
investment trusts holding a portfolio of securities closely reflecting the
price performance and dividend yield of the S&P 500 Index. IBIs, including
SPDRs, are subject to the risk of an investment in a broadly based
portfolio of common stocks, including the risk of declines in the general
level of stock prices. They are also subject to trading halts due to market
conditions or other reasons that, in the view of the American Stock
Exchange, make trading IBIs inadvisable.

U.S. GOVERNMENT BOND FUND

HOW DOES THE FUND PURSUE ITS INVESTMENT GOAL?

Under normal circumstances, at least 65% of the value of the Portfolio's
total assets will be invested in U.S. government debt securities.

The U.S. government securities in which the Portfolio invests are either
issued or guaranteed by the U.S. government, its agencies, or
instrumentalities. These securities are limited to:

o direct obligations of the U.S. Treasury, such as U.S. Treasury
bills, notes, and bonds;

o notes, bonds, and discount notes of U.S. government agencies or
instrumentalities, such as: the Farm Credit System, including the
National Bank for Cooperatives, Farm Credit Banks, and Banks for
Cooperatives; Farmers Home Administration; Federal Home Loan
Banks; Federal Home Loan Mortgage Corporation; Federal National
Mortgage Association; Government National Mortgage Association;
and Student Loan Marketing Association; and

o repurchase agreements relating to any of the foregoing U.S.
government securities.

Some obligations issued or guaranteed by agencies or instrumentalities of
the U.S. government, such as Government National Mortgage Association
participation certificates, are backed by the full faith and credit of the
U.S. Treasury. No assurance can be given that the U.S. government will
provide financial support to other agencies or instrumentalities, since it
is not obligated to do so. These agencies and instrumentalities are
supported by:

o the issuer's right to borrow an amount limited to a specific line
of credit from the U.S. Treasury;

o discretionary authority of the U.S. government to purchase
certain obligations of an agency or instrumentality; or

o the credit of the agency or instrumentality.

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<PAGE>

The Portfolio will invest in U.S. government securities of varying
maturities. Normally, the Portfolio will invest in 10-year U.S. government
securities if the adviser believes the risk/reward relationship of the bond
market is positive. The Portfolio will invest in short-term U.S. government
securities or money market securities when the adviser believes the
risk/reward relationship of the bond market is negative. If the Portfolio's
adviser believes that long-term interest rates are significantly greater
than inflation, the Portfolio may invest in U.S. government securities with
maturities as long as 30 years.

The Portfolio's adviser believes the appropriate way to defend assets
against shifts in interest rates is to be invested in short-term U.S.
government securities only when it believes that the risk/reward
relationship of the bond market is negative. To determine the maturities of
U.S. government securities for purchase, the Manager monitors the following
indicators:

o Momentum - the trend of U.S. government securities prices versus
various moving averages

o Real Rates - the 10-year treasury bond yield as compared to
inflation and

o Yield Spread - the 10-year treasury bond yield as compared to the
90-day T-bill yield.

THE MONEY MARKET FUND

HOW DOES THE FUND PURSUE ITS INVESTMENT GOAL?

The manager seeks to achieve its goal by investing in high-quality money
market instruments which mature in 397 days or less. Also, the Portfolio
will seek to minimize changes in the value of its assets due to market
factors by maintaining a dollar-weighted average portfolio maturity of 90
days or less.

The Portfolio may change its average portfolio maturity or level of quality
to protect its net asset value when it is perceived that changes in the
liquidity of major financial institutions may adversely affect the money
markets. Consequently, for temporary defensive purposes, the Portfolio may
shorten the average maturity of its investments and/or invest only in the
highest quality debt instruments, including, for example, U.S. government
or agency obligations.

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WHAT ARE DERIVATIVES?

A derivative is a financial contract whose value is based on or derived
from a traditional security (such as a stock or a bond), an asset (such as a
commodity like gold), or a market index (such as the S&P 500 Index). Futures and
options are derivatives that have been trading on regulated exchanges for over
20 years. These "traditional" derivatives are standardized contracts that can
easily be bought and sold, and whose market values are determined and published
daily. It is these characteristics that differentiate futures and options from
the relatively new types of derivatives. If used for speculation or as leveraged
investments, derivatives can carry considerable risks.

Similar risks exist for warrants (securities that permit their owners to
purchase a specific number of shares of stock at a predetermined price), and
convertible securities (securities that may be exchanged for a different asset).
For this reason, the Portfolios will not use futures, options, warrants or
convertible securities for speculative purposes or as leveraged investments that
magnify the gains or losses of an investment.

The reasons for which a Portfolio will invest in futures and options are:

o To keep cash on hand to meet shareholder redemptions or other
needs while simulating full investment in stocks or bonds;

o To reduce the Portfolio's transaction costs or add value when
these instruments are favorably priced;

o To forego taxes that would otherwise have to be paid on gains
from the sale of the Portfolio securities; and

o To attempt to protect the value of certain securities owned or
intended to be purchased by the Portfolio while the manager is
making a change in the Portfolio's investment position.

WHO MANAGES THE FUNDS?

THE BOARD. The board of trustees oversees the management of the funds and the
portfolios, and elects their officers. The officers are responsible for the
funds and the portfolios' day-to-day operations. Information concerning the
trustees and officers of the funds and the portfolios appears in the Statement
of Additional Information.

MANAGERS. The Portfolios investment advisers and subadvisers are as follows:

<TABLE>
<CAPTION>
Portfolio and Investment Investment
CORRESPONDING FUND ADVISER SUBADVISER(S)
------------------ ------- -------------
<S> <C> <C>
Mutual Fund Portfolio Meeder Asset Management, Inc. None
(Muirfield Fund(R))

Utilities Stock Portfolio Meeder Asset Management, Inc. Miller/Howard Investments, Inc.
(Total Return Utilities Fund)

Growth Stock Portfolio Meeder Asset Management, Inc. Sector Capital Management, L.L.C.
(Highlands Growth Fund) and the Sector Advisers (see
"Sector Advisers - Growth Stock
Portfolio")

Growth Mutual Fund Portfolio Meeder Asset Management, Inc. None
(Dynamic Growth Fund)

Aggressive Growth Mutual
Fund Portfolio Meeder Asset Management, Inc. None
(Aggressive Growth Fund)

Bond Portfolio Meeder Asset Management, Inc. None
(U.S. Government Bond Fund)

Money Market Portfolio Meeder Asset Management, Inc. None
(Money Market Fund)
</TABLE>

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<PAGE>

INVESTMENT ADVISER. Meeder Asset Management, Inc. ("Meeder"), formerly known as
R. Meeder & Associates, Inc., serves as investment adviser to the portfolios.
Meeder has been an investment adviser to individuals, pension and profit sharing
plans, trusts, charitable organizations, corporations and other institutions
since 1974. As of December 31, 1999, Meeder and its affiliates managed
approximately $2.2 billion in assets. Meeder has its principal offices at 6000
Memorial Drive, Dublin, OH 43017.

INVESTMENT SUBADVISER - UTILITIES STOCK PORTFOLIO

Miller/Howard Investments, Inc. ("Miller/Howard"), the Utilities Stock
Portfolio's subadviser, makes investment decisions for the Utilities Stock
Portfolio. Meeder continues to have responsibility for all investment advisory
services provided to the Utilities Stock Portfolio and supervises
Miller/Howard's performance of such services. Miller/Howard is a registered
investment adviser that has been providing investment services to
broker-dealers, investment advisers, employee benefit plans, endowment
portfolios, foundations and other institutions and individuals since 1984. As of
December 31, 1999, Miller/Howard managed approximately $272 million in assets.
Miller/Howard has its principal offices at 141 Upper Byrdcliffe Road, P. O. Box
549, Woodstock, New York 12498.

INVESTMENT SUBADVISER - GROWTH STOCK PORTFOLIO

Sector Capital Management, L.L.C. ("Sector Capital"), the Growth Stock
Portfolio's subadviser, furnishes investment advisory services in connection
with the management of the Growth Stock Portfolio. Sector Capital has been a
registered investment adviser to individuals, pension and profit sharing plans,
trusts, charitable organizations, corporations and other institutions since
January 1995. As of December 31, 1999, Sector Capital managed approximately $877
million in assets. Sector Capital has its principal offices at 5350 Poplar
Avenue, Suite 490, Memphis, Tennessee 38119.

Sector Capital utilizes its "Sector Plus" investment strategy to manage the
assets of the Growth Stock Portfolio. Pursuant to this strategy, Sector Capital
divides the assets of the Growth Stock Portfolio among ten industry sectors of
the S&P 500, each of which is managed by a separate sector adviser. Sector
Capital is responsible for overseeing the sector advisers and recommending their
hiring, termination and replacement. Meeder and Sector Capital are ultimately
responsible for the investment performance of the Growth Stock Portfolio because
of Meeder's responsibility to oversee Sector Capital and Sector Capital's
responsibility to oversee the sector advisers and recommend their hiring,
termination and replacement.

Sector Capital and the Growth Stock Portfolio have entered into a
sub-subadvisory agreement with each Sector Adviser selected for the Portfolio.
Sector Capital is responsible for selecting, subject to the review and approval
of the Growth Stock Portfolio's Board of Trustees, the sector advisers that have
distinguished themselves by able performance in respective areas of expertise in
sector management, and to review their continued performance. In addition,
Sector Capital is responsible for categorizing publicly traded domestic common
stocks into a specific industry sector. Sector Capital may also invest the
Growth Stock Portfolio's financial futures contracts and related options.

During the sector adviser selection process, Sector Capital performs initial due
diligence on all prospective sector advisers. In evaluating prospective sector

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advisers, Sector Capital considers, among other factors, each candidate's level
of expertise; relative performance and consistency of performance; level of
adherence to investment discipline or philosophy; personnel, facilities and
financial strength; and quality of service and client communications.

Sector Capital monitors sector adviser performance through quantitative and
qualitative analysis, as well as periodic in-person, telephonic and written
consultations with sector advisers. Sector Capital has responsibility for
communicating performance expectations and evaluations to sector advisers and
ultimately recommending to the Board of Trustees of the Growth Stock Portfolio
whether sector advisers' contracts should be renewed, modified, or terminated.
Sector Capital provides reports to the Growth Stock Portfolio's Board of
Trustees regarding the results of its evaluation and monitoring functions.

The Securities and Exchange Commission has granted the Growth Stock Portfolio an
exemptive order that permits the Growth Stock Portfolio and Sector Capital to
enter into and materially amend sub-subadvisory agreements with sector advisers,
without such agreements being approved by the Growth Stock Portfolio's investors
or the Highlands Growth Fund's shareholders. The exemptive order does not apply,
however, to sub-subadvisory agreements with affiliated persons of the Growth
Stock Portfolio, the Manager or Sector Capital, other than by reason of such
affiliated person serving as an existing sector adviser to the Growth Stock
Portfolio, which still require shareholder approval. The exemptive order also
permits the Growth Stock Portfolio and the Highlands Growth Fund to disclose, on
an aggregate basis rather than individually, the fees paid to sector advisers
that are not such affiliated persons. In addition, the exemptive order includes
the condition that within 90 days of the hiring of any new sector advisers, the
Manager and Sector Capital will furnish shareholders of the fund with an
information statement about the new sector adviser and sub-subadvisory
agreement. Any changes to the advisory contract between the Growth Stock
Portfolio and the manager or the subadvisory agreement among the Growth Stock
Portfolio, Manager and Sector Capital will still require shareholder approval. A
majority of the shareholders of The Highlands Growth Fund approved the operation
of the Trust in accordance with the exemption.

SECTOR ADVISERS - GROWTH STOCK PORTFOLIO

Subject to the supervision and direction of Sector Capital and, ultimately, the
Board of Trustees of the Growth Stock Portfolio, each sector adviser's
responsibilities are limited to:

o managing its portion of the securities held by the Growth Stock
Portfolio in accordance with the Portfolio's stated investment goals
and strategies,

o making investment decisions for the Growth Stock Portfolio, and

o placing orders to purchase and sell securities on behalf of the Growth
Stock Portfolio.

The following sets forth certain information about each of the sector advisers:

MILLER/HOWARD INVESTMENTS, INC. serves as sector adviser to the utilities
and transportation sectors of the Growth Stock Portfolio. Miller/Howard is a
registered investment adviser that has been providing investment services to
broker-dealers, investment advisers, employee benefit plans, endowment
portfolios, foundations and other institutions and individuals since 1984. As of
December 31, 1999, Miller/Howard managed approximately $272 million in assets.

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<PAGE>

Lowell G. Miller, President and CIO of Miller/Howard, is the portfolio manager
primarily responsible for the day-to-day management of those assets of the
Growth Stock Portfolio allocated to Miller/Howard. Mr. Miller has served as
President and portfolio manager of Miller/Howard since 1984. Miller/Howard is
also the subadviser to the Utilities Stock Portfolio, a corresponding portfolio
to The Flex-funds' Total Return Utilities Fund and the Meeder Advisor Funds'
Utility Growth Fund. Miller/Howard's principal executive offices are located at
141 Upper Byrdcliffe Road, Post Office Box 549, Woodstock, New York 12498.

HALLMARK CAPITAL MANAGEMENT, INC. serves as sector adviser to the capital
goods sector of the Growth Stock Portfolio. Hallmark is a registered investment
adviser that has been providing investment services to individuals; banks;
pension, profit sharing, and other retirement plans; trusts; endowments;
foundations; and other charitable organizations since 1986. As of December 31,
1999, Hallmark managed approximately $190 million in assets. Peter S. Hagerman
is the portfolio manager primarily responsible for the day-to-day management of
those assets of the Growth Stock Portfolio allocated to Hallmark. Mr. Hagerman
has been Chairman of the Board, President, and Chief Executive Officer of
Hallmark since 1994 and has been associated with Hallmark since 1986. Hallmark's
principal executive offices are located at One Greenbrook Corporate Center, 100
Passaic Avenue, Fairfield, New Jersey 07004.

BARROW, HANLEY, MEWHINNEY & STRAUSS, INC. serves as sector adviser to the
consumer durable and non-durable sectors of the Growth Stock Portfolio. Barrow
is a registered investment adviser that has been providing investment services
to banks; investment companies; pension and profit sharing plans; charitable
organizations and corporations since 1979. As of December 31, 1999, Barrow
managed approximately $29.1 billion in assets. Jane Gilday, CFA, is the
portfolio manager primarily responsible for the day-to-day management of those
assets of the Growth Stock Portfolio allocated to Barrow. From 1993 to 1998, Ms.
Gilday worked as a securities analyst at Hancock Institutional Equity Services
and Advest, Inc. Ms. Gilday has served as a portfolio manager and Principal for
Barrow since 1998. Barrow's principal executive offices are located at 3232
McKinney Avenue, 15th Floor, Dallas, Texas 75204-2429.

THE MITCHELL GROUP, INC. serves as sector adviser to the energy sector of
the Growth Stock Portfolio. The Mitchell Group is a registered investment
adviser that has been providing investment services to individuals, banks,
investment companies, pension and profit sharing plans, charitable
organizations, corporations and other institutions since 1989. As of December
31, 1999, The Mitchell Group held discretionary investment authority over
approximately $311 million in assets. Rodney Mitchell, who has served as
President, Chief Executive Officer, and Chief Financial Officer of The Mitchell
Group since 1989, is the portfolio manager primarily responsible for the
day-to-day management of those assets of the Growth Stock Portfolio allocated to
The Mitchell Group. The Mitchell Group's principal executive offices are located
at 1100 Louisiana, #4810, Houston, Texas 77002.

ASHLAND MANAGEMENT INCORPORATED serves as sector adviser to the materials
and services sector of the Growth Stock Portfolio. Ashland is a registered
investment adviser that has been providing investment services to individuals,
pension and profit sharing plans, charitable organizations, corporations and
other institutions since 1975. As of December 31, 1999, Ashland managed

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<PAGE>

approximately $2.1 billion in assets. Terence J. McLaughlin, Managing Director
of Ashland, and Deborah C. Ohl, a Vice President and Portfolio Manager, are the
portfolio managers primarily responsible for the day-to-day management of those
assets of the Growth Stock Portfolio allocated to Ashland. Mr. McLaughlin has
been a Portfolio Manager for Ashland since 1984. Ms. Ohl has been employed by
Ashland since August 1992 and has served as a Portfolio Manager for Ashland
since 1993. Ashland's principal executive offices are located at 26 Broadway,
New York, New York 10004.

DELTA CAPITAL MANAGEMENT INC. serves as sector adviser to the finance
sector of the Growth Stock Portfolio. Delta Capital is a registered investment
adviser that has been providing investment services to individuals, endowments,
corporations and other institutions since 1992. As of December 31, 1999, Delta
Capital managed approximately $900 million in assets. Jonathan Kay is the
portfolio manager primarily responsible for the day-to-day management of those
assets of the Portfolio allocated to Delta Capital. Mr. Kay has been a portfolio
manager for Delta Capital since April 1998. From 1993 to March 1998, Mr. Kay was
a portfolio manager for Scudder Kemper Investments, Inc., a registered
investment adviser. Delta Capital's principal executive offices are located at
745 Fifth Avenue, Suite 816, New York, New York 10151.

DRESDNER RCM GLOBAL INVESTORS, L.L.C. (formerly RCM Capital Management,
L.L.C.) serves as sector adviser to the technology sector of the Growth Stock
Portfolio. Dresdner RCM is a registered investment adviser that provides
investment services to institutional and individual clients and registered
investment companies. Dresdner RCM was established in April 1996 as the
successor to the business and operations of RCM Capital Management, a California
Limited Partnership that, with its predecessors, has been in operation since
1970. As of December 31, 1999, Dresdner RCM had approximately $82.7 billion
under management and advice. This includes approximately $47.0 billion under
management and advice in San Francisco and an additional $35.7 billion by
affiliates in London, Hong Kong, and San Diego. Walter C. Price and Huachen
Chen, each Principals of Dresdner RCM, are the portfolio managers primarily
responsible for the day-to-day management of those assets of the Growth Stock
Portfolio allocated to Dresdner RCM. Messrs. Price and Chen have managed equity
portfolios on behalf of Dresdner RCM since 1985. Dresdner RCM's principal
executive offices are located at Four Embarcadero Center, San Francisco, CA
94111.

ALLIANCE CAPITAL MANAGEMENT L.P. serves as sector adviser to the health
sector of the Growth Stock Portfolio. Alliance, a registered investment adviser,
is an international investment manager supervising client accounts with assets
as of December 31, 1999 totaling approximately $368 billion. Alliance provides
investment services primarily to corporate employee benefit funds, public
employee retirement systems, investment companies, foundations, and endowment
funds. Raphael L. Edelman, Vice President of Alliance, is the portfolio manager
primarily responsible for the day-to-day management of those assets of the
Growth Stock Portfolio allocated to Alliance. Mr. Edelman, who has seventeen
years of investment experience, joined Alliance's research department in 1986 as
an analyst after working two years as a manager in Alliance's mutual fund
division. Alliance's principal executive offices are located at 1345 Avenue of
the Americas, New York, NY 10105.

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PORTFOLIO MANAGERS

The individuals primarily responsible for the management of each of the
portfolios are listed below:

THE GROWTH STOCK PORTFOLIO. William L. Gurner, President of Sector Capital, is
primarily responsible for the day-to-day management of the Growth Stock
Portfolio through interaction with each of the sector advisers. Mr. Gurner is
also primarily responsible for managing the futures contracts and related
options of the portfolio on behalf of the subadviser. Mr. Gurner has managed the
portfolio since December 1996. Mr. Gurner has been President and portfolio
manager of Sector Capital since January 1995. From September 1987 through
December 1994, Mr. Gurner served as Manager of Pension Funds for Federal
Express. Philip A. Voelker, Senior Vice President and Chief Investment Officer
of Meeder, is primarily responsible for managing the portfolio's liquidity
reserve and managing the futures contracts and related options of the Portfolio
on behalf of Meeder. Mr. Voelker has managed assets on behalf of Meeder since
1975. Please see "Sector Advisers - Growth Stock Portfolio" for more information
about each of the portfolio's sector advisers.

THE UTILITIES STOCK PORTFOLIO. The portfolio manager responsible for the
Utilities Stock Portfolio's investments is Lowell G. Miller, a director and the
President of Miller/Howard, the subadviser to the portfolio. Mr. Miller has
served as President and portfolio manager of Miller/Howard and its predecessor
since 1984 and has managed the portfolio since its inception in 1995.

THE MUTUAL FUND PORTFOLIO. The portfolio managers responsible for the Mutual
Fund Portfolio's investments are Robert S. Meeder, Jr. and Philip A. Voelker.
Mr. Meeder, President of Meeder, joined Meeder in 1983 and has been the
portfolio manager for the portfolio since 1988. Mr. Voelker, Senior Vice
President and Chief Investment Officer of Meeder, has managed assets on behalf
of Meeder since 1975 and began co-managing the portfolio in April 1998.

THE BOND PORTFOLIO. The portfolio manager responsible for the Bond Portfolio's
investments is Joseph A. Zarr. Mr. Zarr has been associated with Meeder as a
portfolio manager since 1991 and has managed the portfolio since 1996.

THE MONEY MARKET PORTFOLIO. The portfolio manager responsible for the Money
Market Portfolio's investments is Philip A. Voelker, Senior Vice President and
Chief Investment Officer of Meeder. Mr. Voelker has managed assets on behalf of
Meeder since 1975 and has managed the portfolio since 1985.

THE AGGRESSIVE GROWTH MUTUAL FUND PORTFOLIO. Philip A. Voelker is primarily
responsible for the day-to-day management of the Aggressive Growth Mutual Fund
Portfolio. Mr. Voelker, Senior Vice President and Chief Investment Officer of
Meeder, has managed assets on behalf of Meeder since 1975.

THE GROWTH MUTUAL FUND PORTFOLIO. Philip A. Voelker is primarily responsible for
the day-to-day management of the Growth Mutual Fund Portfolio. Mr. Voelker,
Senior Vice President and Chief Investment Officer of Meeder, has managed assets
on behalf of Meeder since 1975.

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<PAGE>

MANAGEMENT FEES. During the calendar year ended December 31, 1999, the
portfolios paid management fees totaling the following:

Management Fee as Percentage
FUND OF AVERAGE DAILY NET ASSETS
---- ---------------------------
The Mutual Fund Portfolio 0.77%
The Utilities Stock Portfolio 1.00%
The Growth Stock Portfolio 0.96%
The Bond Portfolio 0.21%
The Money Market Portfolio 0.15%

For each of the Growth Mutual Fund Portfolio and the Aggressive Growth Mutual
Fund Portfolio, the management fee is paid at the rate of 0.75% of the first
$200 million of average daily net assets and 0.60% of average daily net assets
in excess of $200 million.

For more information about management fees, see "Investment Adviser" and
"Investment Subadviser" in the Statement of Additional Information.

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<PAGE>

PAST PERFORMANCE OF PRIVATE ACCOUNTS - GROWTH MUTUAL FUND AND
AGGRESSIVE GROWTH MUTUAL FUND PORTFOLIOS

PURPOSE OF PAST PERFORMANCE. The performance information below is provided
to show the past performance of the adviser in managing substantially similar
accounts to the Growth Mutual Fund Portfolio and the Aggressive Growth Mutual
Fund Portfolio, and to measure the past performance against a market index, the
S&P 500 Composite Stock Price Index, and against peer fund indexes,
Morningstar's Average Growth Fund Index and Morningstar's Average Aggressive
Growth Fund Index, respectively.

WHAT PAST PERFORMANCE DOES NOT REPRESENT. THE PAST PERFORMANCE SHOWN BELOW
DOES NOT REPRESENT THE PERFORMANCE OF THE GROWTH MUTUAL FUND PORTFOLIO OR THE
DYNAMIC GROWTH FUND, OR THE AGGRESSIVE GROWTH MUTUAL FUND PORTFOLIO OR THE
AGGRESSIVE GROWTH FUND. You should not consider the past performance shown below
as an indication of the future performance of the Growth Mutual Fund Portfolio
or the Dynamic Growth Fund, or the Aggressive Growth Portfolio or the Aggressive
Growth Fund.

SIMILAR ACCOUNTS. Mr. Voelker served as the adviser's portfolio manager for
privately managed accounts having investment goals, policies, strategies and
risks substantially similar to those of the Growth Mutual Fund Portfolio and the
Dynamic Growth Fund, and the Aggressive Growth Mutual Fund Portfolio and the
Aggressive Growth Fund. Substantially all of the assets of these privately
managed accounts have invested in mutual funds.

CALCULATION OF PAST PERFORMANCE. All returns presented were calculated on a
total return basis and include all dividends and interest, accrued income and
realized and unrealized gains and losses. All returns reflect the deduction of
investment advisory fees, brokerage commissions and execution costs paid by the
private accounts without providing for federal or state income taxes. Custodial
fees, if any, were not used to reduce performance returns. The adviser's
composite includes all actual, fee paying, discretionary, private accounts
managed by the adviser that have investment objectives, policies, strategies and
risks substantially similar to those of the Growth Mutual Fund Portfolio and the
Dynamic Growth Fund, and the Aggressive Growth Mutual Fund Portfolio and the
Aggressive Growth Fund. Cash and equivalents are included in performance
returns. The yearly returns of the adviser's composite combine the individual
accounts' returns by asset-weighting each individual account's asset value as of
the beginning of each quarter. The yearly returns are computed by linking the
returns of each quarter within the calendar year.

DIFFERENCES IN REGULATION. The private accounts that are included in the
adviser's composite are not subject to the same types of expenses to which the
Growth Mutual Fund Portfolio or the Dynamic Growth Fund, or the Aggressive
Growth Mutual Fund Portfolio or the Aggressive Growth Fund are subject nor to
the diversification requirements, specific tax restrictions and investment
limitations imposed on the Growth Mutual Fund Portfolio and the Dynamic Growth
Fund, or the Aggressive Growth Mutual Fund Portfolio and the Aggressive Growth
Fund by federal securities laws governing mutual funds and tax laws.
Consequently, the performance results for the adviser's composite could have
been adversely affected if the private accounts included in the composite had
been regulated as mutual funds under the federal securities laws.

The investment results of the adviser's composite presented below are
unaudited and not intended to predict or suggest the returns that might be
experienced by the Growth Mutual Fund Portfolio or the Aggressive Growth Mutual
Fund Portfolio or that you might experience by investing in The Dynamic Growth
Fund or The Aggressive Growth Fund. You should also be aware that the SEC uses a
method different from that used below to calculate mutual fund performance,
which could result in different performance returns.

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PAST PERFORMANCE OF PRIVATE ACCOUNTS

MEEDER ASSET
MANAGEMENT, INC. MORNINGSTAR'S
GROWTH ACCOUNTS AVERAGE
YEAR COMPOSITE S&P 500(1) GROWTH FUND(2)
---- --------------- --------- --------------
1995 25.88% 37.53% 31.47%
1996 13.90% 22.95% 19.93%
1997 20.75% 33.35% 24.92%
1998 28.20% 28.58% 20.25%
1999 57.56% 21.04% 29.92%

MEEDER ASSET
MANAGEMENT, INC. MORNINGSTAR'S
AGGRESSIVE AVERAGE
GROWTH ACCOUNTS AGGRESSIVE
YEAR COMPOSITE S&P 500(1) GROWTH FUND(2)
---- --------------- ---------- --------------

1995 24.02% 37.53% 36.81%
1996 11.72% 22.95% 13.86%
1997 18.05% 33.35% 16.90%
1998 31.98% 28.58% 16.41%
1999 70.93% 21.04% 60.18%

(1) The S&P 500 Index is an unmanaged index containing common stocks of 500
industrial, transportation, utility and financial companies, regarded as
generally representative of the U.S. stock market. The Index reflects the
reinvestment of income dividends and capital gain distributions, if any, but
does not reflect fees, brokerage commissions, or other expenses of investing.

(2) An index of mutual funds, such as Morningstar's Average Growth Fund Index or
Morningstar's Average Aggressive Growth Fund Index, includes a number of mutual
funds grouped by investment objective. Each of those funds interprets that
objective differently, and each employs a different management style and
investment strategy.

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HOW IS THE TRUST ORGANIZED?

Each fund is a no-load, open-end management investment company that is a
series of The Flex-funds trust (the "Trust").

The Trust is supervised by a board of trustees, an independent body that
has ultimate responsibility for the funds' activities. The board retains various
companies to carry out the funds' operations, including the investment adviser,
custodian, transfer agent and others. The board has the right, and the
obligation, to terminate the funds' relationship with any of these companies and
to retain a different company if the board believes it is in the shareholders'
best interests. At a mutual fund's inception, the initial shareholder (typically
the adviser) appoints the fund's board. Thereafter, the board and the
shareholders determine the board's membership. The board of the Trust may
include individuals who are affiliated with the investment adviser.

The funds do not hold annual shareholder meetings, but may hold special
meetings for such purposes as electing or removing board members, changing
fundamental policies, approving a management contract or approving a 12b-1 plan
(12b-1 fees are explained in "Distribution Fees"). A shareholder meeting for the
purpose of removing board members may be called by a vote of 10% of the
outstanding shares of the Trust.

PORTFOLIO TRADES

As long as the advisers believe a brokerage firm can provide a combination
of quality execution (i.e., timeliness and completeness) and favorable price,
they may consider research and related services when choosing a brokerage firm.
Brokerage firms may use a portion of the commissions paid by a portfolio to
reduce it, or its corresponding fund's, expenses.

DIVERSIFICATION

All of the funds are diversified, which means each fund may not, with
respect to at least 75% of its assets (100% of its assets in the case of the
Money Market Fund), invest more than 5% of its assets in the securities of one
company. However, under certain circumstances, each of the Muirfield Fund(R),
Aggressive Growth Fund and the Dynamic Growth Fund may invest more than 5% of
its assets in the shares of one mutual fund.

HOW DOES TAXATION AFFECT THE FUNDS AND THEIR SHAREHOLDERS?

HOW DOES A PORTFOLIO EARN INCOME AND GAINS?

A Portfolio may earn dividends and interest (a Portfolio's "income") on its
investments. When a Portfolio sells a security for a price that is higher than
it paid, it has a gain. When a Portfolio sells a security for a price that is
lower than it paid, it has a loss. If a Portfolio has held the security for more
than one year, the gain or loss will be a long-term capital gain or loss. If a
Portfolio has held the security for one year or less, the gain or loss will be a
short-term capital gain or loss. The Portfolio's gains and losses are netted
together, and, if a Portfolio has a net gain (a Portfolio's "gain"), that gain
will generally be distributed to you.

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TAXATION OF A PORTFOLIO'S INVESTMENTS

A Portfolio invests your money in the securities that are described in the
sections "Main Strategies" and "How Does the Fund Pursue Its Investment Goal?"
Special tax rules may apply in determining the income and gains that a Portfolio
earns on its investments. These rules may, in turn, affect the amount of
distributions that the funds pay to you. These special tax rules are discussed
in the SAI.

TAXATION OF A FUND. As a regulated investment company, a fund generally
pays no federal income tax on the income and gains that it distributes to you.

FOREIGN TAXES. Foreign governments may impose taxes on the income and gains
from a Portfolio's investments in foreign securities. These taxes will reduce
the amount of the fund's distributions to you.

TAXATION OF SHAREHOLDERS

WHAT IS A DISTRIBUTION?

As a shareholder, you will receive your share of a fund's income and gains
on its corresponding Portfolio's investments in stocks and other securities. The
fund's income and short-term capital gains are paid to you as ordinary
dividends. The fund's long-term capital gains are paid to you as capital gain
distributions. If the fund pays you an amount in excess of its income and gains,
this excess will generally be treated as a non-taxable return of capital. These
amounts, taken together, are what we call the fund's distributions to you. The
Total Return Utilities Fund, U.S. Government Bond Fund and Money Market Fund pay
dividends from their net investment income on a monthly basis. The Muirfield
Fund(R), The Highlands Growth Fund, The Aggressive Growth Fund and The Dynamic
Growth Fund pay dividends from their net investment income on a quarterly basis.
All funds distribute capital gains, if any, annually.

DISTRIBUTIONS. Distributions from a fund, whether you receive them in cash
or in additional shares, are generally subject to income tax. A fund will send
you a statement in January of the current year that reflects the amount of
ordinary dividends, capital gain distributions and non-taxable distributions you
received from the fund in the prior year. This statement will include
distributions declared in December and paid to you in January of the current
year, but which are taxable as if paid on December 31 of the prior year. The IRS
requires you to report these amounts on your income tax return for the prior
year.

DISTRIBUTIONS TO RETIREMENT PLANS. Fund distributions received by your
qualified retirement plan, such as a 401(k) plan or IRA, are generally
tax-deferred; this means that you are not required to report fund distributions
on your income tax return when paid to your plan, but, rather, when your plan
makes payments to you. Special rules apply to payouts from Roth and Education
IRAs.

DIVIDENDS-RECEIVED DEDUCTION. Corporate investors may be entitled to a
dividends-received deduction on a portion of the ordinary dividends they receive
from a fund.

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whether the value of your investment decreased, increased or remained the same
after you bought the fund shares. The risk in buying a dividend is that the
portfolios may build up taxable gains throughout the period covered by a
distribution, as securities are sold at a profit. We distribute those gains to
you, after subtracting any losses, even if you did not own the shares when the
gains occurred.

DIVIDEND REINVESTMENTS. Most investors have their dividends reinvested in
additional shares of the same fund. If you choose this option, or if you do not
indicate any choice, your dividends will be reinvested on the dividend payable
date. Alternatively, you can choose to have a check for your dividends mailed to
you. However, if the check is not deliverable, your dividends will be
reinvested.

REDEMPTIONS AND EXCHANGES

WHAT IS A REDEMPTION?

A redemption is a sale by you to a fund of some or all of your shares in
the fund. The price per share you receive when you redeem fund shares may be
more or less than the price at which you purchased those shares. An exchange of
shares in a fund for shares of another Flex-funds' fund is treated as a
redemption of fund shares and then a purchase of shares of the other Flex-funds'
fund. When you redeem or exchange your shares, you will generally have a gain or
loss, depending upon whether the amount you receive for your shares is more or
less than your cost or other basis in the shares.

If you redeem your shares or if you exchange your shares in a fund for
shares in another Flex-funds fund, you will generally have a gain or loss that
the IRS requires you to report on your income tax return. All or a portion of
any loss on the redemption or exchange of your shares in a fund will be
disallowed by the IRS if you purchase other shares in that fund within 30 days
before or after your redemption or exchange.

U.S. GOVERNMENT INTEREST. Many states grant tax-free status to dividends
paid from interest earned on direct obligations of the U.S. Government, subject
to certain restrictions. The funds will provide you with information at the end
of each calendar year on the amount of any such dividends that may qualify for
exemption from reporting on your individual income tax returns.

NON-U.S. INVESTORS. Ordinary dividends generally will be subject to U.S.
income tax withholding. Your home country may also tax ordinary dividends,
capital gain distributions and gains arising from redemptions or exchanges of
your fund shares. Fund shares held by the estate of a non-U.S. investor may be
subject to U.S. estate tax. You may wish to contact your tax adviser to
determine the U.S. and non-U.S. tax consequences of your investment in the
funds.

STATE TAXES. Ordinary dividends and capital gain distributions that you
receive from the funds, and gains arising from redemptions or exchanges of your
funds shares will generally by subject to state and local income tax. The
holding of funds shares may also be subject to state and local intangibles
taxes. You may wish to contact your tax adviser to determine the state and local
tax consequences of your investment in the funds.

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HOW TO READ THE FINANCIAL HIGHLIGHTS TABLE

This explanation uses the Highlands Growth Fund as an example. The fund
began calendar year 1999 with a net asset value (price) of $21.23 per share.
During the year, the fund lost ($0.01) per share from net investment income
(interest and dividends less operating expenses) and earned $4.37 per share from
investments that had appreciated in value or that were sold for higher prices
than the fund paid for them.

Shareholders received $3.22 per share in the form of dividend and capital
gains distributions. A portion of each year's distributions may come from the
prior year's income or capital gains.

The earnings ($4.36 per share) minus the distributions ($3.22 per share)
resulted in a share price of $22.37 at the end of the year. This was an increase
of $1.14 per share (from $21.23 at the beginning of the year to $22.37 at the
end of the year). For a shareholder who reinvested the distributions in the
purchase of more shares, the total return from the fund was 21.16% for the year.

As of December 31, 1999, the fund had $53,086,920 in net assets. For the
year, its expense ratio was 1.56% ($15.60 per $1,000 of net assets); and its net
investment income amounted to (0.04%) of its average net assets. It sold and
replaced securities valued at 51.22% of its net assets.

FINANCIAL HIGHLIGHTS

The financial highlights tables are intended to help you understand the
funds' financial performance for the past 5 years (or, if shorter, the period of
the funds' operations). 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 KPMG LLP, independent auditors, whose report, along with the funds'
financial statements, are included in the annual report, which is available upon
request.

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THE MUIRFIELD FUND(R)
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------------------------------------------
1999 1998 1997 1996 1995

<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $6.88 $5.47 $5.47 $5.73 $5.34
Income from Investment Operations
Net Investment Income 0.09 0.08 0.11 0.10 0.06
Net Gains or Losses from Securities
(both realized and unrealized) 0.89 1.51 0.91 0.25 1.31
Total From Investment Operations 0.98 1.59 1.02 0.35 1.37

Less Distributions
Dividends (from net investment income) (0.09) (0.08) (0.11) (0.10) (0.06)
Distributions (from capital gains) (1.45) (0.10) (0.91) (0.51) (0.92)
Total Distributions (1.54) (0.18) (1.02) (0.61) (0.98)

Net Asset Value, End of Period $6.32 $6.88 $5.47 $5.47 $5.73

Total Return 16.43% 29.33% 18.59% 5.99% 25.82%

Ratios/Supplemental Data
Net Assets, End of Period ($000) $155,827 $125,547 $130,783 $121,335 $111,751
Ratio of Expenses to Average Net Assets 1.21% 1.24% 1.29% 1.19% 1.26%
Ratio of Net Investment Income to
Average Net Assets 1.33% 1.23% 1.69% 1.54% 0.97%
Portfolio Turnover Rate1 787.66% 128.31% 395.42% 297.41% 186.13%

<FN>
1 Turnover rate of corresponding portfolio
</FN>
</TABLE>

Financial Statements and Notes pertaining thereto appear in the Statement of
Additional Information.

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<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
THE TOTAL RETURN UTILITIES FUND

Years Ended December 31,
---------------------------------------------------------
1999 1998 1997 1996 1995*

<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $19.01 $17.72 $14.98 $14.14 $12.50

Income from Investment Operations
Net Investment Income 0.30 0.25 0.25 0.37 0.21
Net Gains or Losses from Securities
(both realized and unrealized) 3.45 1.29 3.99 1.48 1.64
Total From Investment Operations 3.75 1.54 4.24 1.85 1.85

Less Dividends and Distributions
Dividends (from net investment income) (0.30) (0.25) (0.25) (0.37) (0.21)
Distributions (from capital gains) (2.12) --- (1.25) (0.64) --
Total Distributions (2.42) (0.25) (1.50) (1.01) (0.21)

Net Asset Value, End of Period $20.34 $19.01 $17.72 $14.98 $14.14

Total Return 20.01% 8.77% 28.68% 13.33% 15.00%

Ratios/Supplemental Data
Net Assets, End of Period ($000) $13,893 $10,455 $8,405 $5,074 $2,881
Ratio of Expenses to Average Net Assets 1.80% 1.80% 1.80% 1.25% 1.25%+
Ratio of Net Investment Income to
Average Net Assets 1.48% 1.35% 1.57% 2.55% 3.18%+
Ratio of Expenses to Average Net Assets,
before waiver of fees(1)(2) 1.99% 2.11% 2.51% 2.95% 4.35%+
Ratio of Net Investment Income to Average
Net Assets, before waiver of fees(1)(2) 1.29% 1.04% 0.86% 0.85% 0.08%+
Portfolio Turnover Rate(3) 69.20% 51.36% 41.22% 50.79% 5.06%

<FN>
* For the period June 21, 1995 to December 31, 1995.
(1) See "Annual Fund Operating Expenses" for explanation of waiver of advisory
fees.
(2) Includes directed brokerage payments in corresponding portfolio.
(3) Turnover rate of corresponding portfolio.
+ Annualized
</FN>
</TABLE>

Financial Statements and Notes pertaining thereto appear in the Statement of
Additional Information.

Page 54

<PAGE>

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
THE HIGHLANDS GROWTH FUND

Years Ended December 31,
-----------------------------------------------------------
1999 1998 1997 1996 1995

<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $21.23 $18.55 $16.41 $15.34 $13.08

Income from Investment Operations
Net Investment Income (0.01) 0.06 0.06 0.31 0.50
Net Gains or Losses from Securities
(both realized and unrealized) 4.37 4.32 4.73 1.07 2.68
Total From Investment Operations 4.36 4.38 4.79 1.38 3.18

Less Distributions
Dividends (from net investment income) --- (0.06) (0.06) (0.31) (0.50)
Distributions (from capital gains) (3.22) (1.64) (2.59) -- (0.42)
Total Distributions (3.22) (1.70) (2.65) (0.31) (0.92)

Net Asset Value, End of Period $22.37 $21.23 $18.55 $16.41 $15.34

Total Return 21.16% 23.67% 29.28% 9.08% 24.61%

Ratios/Supplemental Data
Net Assets, End of Period ($000) $53,087 $43,908 $33,752 $24,204 $24,631
Ratio of Expenses to Average Net Assets 1.56% 1.69% 1.87% 1.65% 1.64%
Ratio of Net Investment Income to
Average Net Assets -0.04% 0.31% 0.30% 1.92% 3.38%
Ratio of Expenses to Average Net Assets
before waiver of fees(1) 1.57% 1.70% 1.87% 1.65% 1.64%
Ratio of Net Investment Income to Average
Net Assets(1) -0.05% 0.30% 0.30% 1.92% 3.38%

Portfolio Turnover Rate(2) 51.22% 79.98% 129.79% 81.66% 337.57%

<FN>
(1) Ratio includes fees waived and/or directed brokerage payments received in
corresponding portfolio
(2) Represents turnover rate of corresponding portfolio
</FN>
</TABLE>

Financial Statements and Notes pertaining thereto appear in the Statement of
Additional Information.

Page 55

<PAGE>

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
THE U.S. GOVERNMENT BOND FUND

Years Ended December 31,
-------------------------------------------------------------
1999 1998 1997 1996 1995

<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $22.14 $21.19 $20.64 $21.58 $19.25
Income from Investment Operations
Net Investment Income 0.88 0.97 0.99 0.96 1.11
Net Gains or Losses from Securities
(both realized and unrealized) (0.81) 1.02 0.55 (0.94) 2.33
Total From Investment Operations 0.07 1.99 1.54 0.02 3.44

Less Distributions and Dividends
From net investment income (0.88) (0.97) (0.99) (0.96) (1.11)
From net realized gains --- (0.07) -- -- --
Total Distributions (0.88) (1.04) (0.99) (0.96) (1.11)

Net Asset Value, End of Period $21.33 $22.14 $21.19 $20.64 $21.58

Total Return 0.35% 9.62% 7.70% 0.15% 18.32%

Ratios/Supplemental Data
Net Assets, End of Period ($000) $12,422 $11,294 $16,973 $17,783 $16,048
Ratio of Expenses to Average Net Assets 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of Net Investment Income to
Average Net Assets 4.10% 4.52% 4.85% 4.61% 5.41%
Ratio of Expenses to Average Net Assets,
before waiver of fees(1) 1.18% 1.16% 1.14% 1.06% 1.14%
Ratio of Net Investment Income to Average
Net Assets, before waiver of fees(1) 3.92% 4.36% 4.71% 4.55% 5.27%
Portfolio Turnover Rate(2) 352.23% 225.11% 375.64% 778.59% 232.34%

<FN>
(1) See "Annual Fund Operating Expenses" for explanation of adviser's waiver of
fees.
(2) Represents turnover rate of corresponding portfolio
</FN>
</TABLE>

Financial Statements and Notes pertaining thereto appear in the Statement of
Additional Information.

Page 56

<PAGE>

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
MONEY MARKET FUND

Years Ended December 31,
--------------------------------------------------------------
1999 1998 1997 1996 1995

<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00
Income from Investment Operations
Net Investment Income 0.049 0.052 0.053 0.05 0.06
Total From Investment Operations 0.049 0.052 0.053 0.05 0.06

Less Distributions
Dividends (from net investment income) (0.049) (0.052) (0.053) (0.05) (0.06)
Total Distributions (0.049) (0.052) (0.053) (0.05) (0.06)
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00

Total Return 4.96% 5.31% 5.38% 5.27% 5.85%

Ratios/Supplemental Data
Net Assets, End of Period ($000) $232,023 $154,255 $169,335 $119,947 $141,087
Ratio of Expenses to Average Net Assets 0.41% 0.40% 0.40% 0.40% 0.40%
Ratio of Net Investment Income to
Average Net Assets 4.88% 5.19% 5.26% 5.15% 5.70%
Ratio of Expenses to Average Net Assets,
before waiver of fees(1) 0.54% 0.59% 0.59% 0.58% 0.64%
Ratio of Net Investment Income to Average
Net Assets, before waiver of fees(1) 4.75% 5.00% 5.07% 4.97% 5.46%

<FN>
(1) See "Annual Fund Operating Expenses" for explanation of adviser's waiver of
fees.
</FN>
</TABLE>

Financial Statements and Notes pertaining thereto appear in the Statement of
Additional Information.

Page 57

<PAGE>

SHAREHOLDER MANUAL

HOW TO BUY SHARES

Shares are offered continuously and sold without a sales charge. Shares of The
Muirfield(R), Total Return Utilities, Highlands Growth, Dynamic Growth and
Aggressive Growth Funds are purchased at net asset value per share next
determined after receipt of the purchase order by Mutual Funds Service Co., the
funds' transfer agent, or an authorized agent of the funds. Shares of The U.S.
Government Bond Fund are sold at net asset value per share next determined after
receipt of both a purchase order and payment by the fund's transfer agent or the
fund's authorized agent. Shares of The Money Market Fund are sold at the net
asset value per share next determined after receipt of both a purchase order and
payment in federal funds. Investments made by check are entered and credited at
the net asset value determined on the next business day following receipt.

MINIMUM INVESTMENT. The minimum investment to open an account in each fund is
$2,500 except an Individual Retirement Account (IRA) which has a $500 minimum.
Subsequent investments in any account may be made in amounts of at least $100.

OPENING AN ACCOUNT. You may open an account by mail or bank wire as follows:

BY MAIL: To purchase shares, fill out the New Account Application
accompanying this Prospectus. BE SURE TO SPECIFY THE NAME OF THE FUND IN
WHICH YOU ARE INVESTING. A check payable to each fund you specify must
accompany the New Account Application. The funds do not accept third party
checks. Payments may be made by check or Federal Reserve Draft payable to
the particular fund(s) specified on the application and should be mailed to
the following address: THE FLEX-FUNDS, C/O MEEDER ASSET MANAGEMENT, INC.,
P.O. BOX 7177, DUBLIN, OHIO 43017.

BY BANK WIRE: If the wire order is for a new account, or to open an account
in a different fund, YOU MUST TELEPHONE THE FUND PRIOR TO MAKING YOUR
INITIAL INVESTMENT. Call 1-800-325-3539, or (614) 760-2159. Advise the fund
of the amount you wish to invest and obtain an account number and
instructions. Money sent by a single wire can only be invested in one fund.
Have your bank wire federal funds to:

FIRSTAR, N.A. CINTI/TRUST
ABA #: 042-00001-3
ATTENTION: THE FLEX-FUNDS
(AND NAME OF FUND--SEE BELOW)
Credit Account Number (account number for fund as follows):
Muirfield Fund(R) -- Account Number 9305731
Total Return Utilities Fund -- Account Number 483608915
Highlands Growth Fund -- Account Number 9304932
Dynamic Growth Fund -- Account Number 821637675
Aggressive Growth Fund -- Account Number 821637683
U.S. Government Bond Fund -- Account Number 9305152
Money Market Fund -- Account Number 9305533
Account Name (your name)
Your Flex-funds account number

On new accounts, a completed application must be sent to The Flex-funds c/o
Meeder Asset Management, Inc., P.O. Box 7177, Dublin, OH 43017 on the same day
your wire is sent. A fund will not permit a redemption until it receives the New
Account Application in good order.

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<PAGE>

SUBSEQUENT INVESTMENTS. Subsequent investments in an existing account in any
fund may be made by mailing a check payable to: Muirfield Fund(R), Total Return
Utilities Fund, Highlands Growth Fund, Dynamic Growth Fund, Aggressive Growth
Fund, U.S. Government Bond Fund, or Money Market Fund, as the case may be.
PLEASE INCLUDE YOUR ACCOUNT NUMBER ON THE CHECK AND MAIL AS FOLLOWS:

THE FLEX-FUNDS
LOCATION NUMBER: 00215
CINCINNATI, OH 45264-0215

Subsequent investments may also be made by bank wire as described above. IT IS
NECESSARY TO NOTIFY THE FUND PRIOR TO EACH WIRE PURCHASE. Wires sent without
notifying the fund will result in a delay of the effective date of your
purchase.

WHEN PURCHASES ARE EFFECTIVE. New Account Applications for The Muirfield(R),
Total Return Utilities, Highlands Growth, Dynamic Growth, Aggressive Growth and
U.S. Government Bond, when accompanied by payment, are accepted immediately and
the shares are priced at the next determined net asset value per share.
Subsequent purchase orders are handled the same way, except on purchases made by
telephone. For purchases made by telephone, payment for shares purchased in The
Highlands Growth Fund is due within three business days, whereas payment for
shares purchased in The Muirfield(R), Total Return Utilities, Aggressive Growth
and Dynamic Growth Funds is due within one business day. Shares of The U.S.
Government Bond Fund are sold at net asset value per share next determined after
receipt of both a purchase order and payment. Income dividends in The U.S.
Government Bond Fund begin as of the first business day following the day of
purchase.

New Account Applications and subsequent purchase orders for The Money Market
Fund which are received by or on behalf of the fund prior to 3:00 p.m., Eastern
time on a business day, begin earning dividends that day, provided payment in
federal funds (bank wire) is received by the bank that day. New Account
Applications and subsequent purchase orders which are received after 3:00 p.m.,
or for which wire payment is not received, are accepted as a purchase the
following day. Investments made by check are credited to shareholder accounts,
and begin to earn dividends, on the next business day following receipt.

If a shareholder's check is dishonored, the purchase and any dividends paid
thereon will be reversed. If shares are purchased with federal funds, they may
be redeemed at any time thereafter and the shareholder may secure his funds as
explained below. (See "How to Make Withdrawals (Redemptions).")

Financial Institutions: You may buy shares or sell shares of the funds through a
broker or financial institution who may charge you a fee for this service. If
you are purchasing shares of a fund through a program of services offered or
administered by a securities dealer or financial institution, you should read
the program materials in conjunction with this Prospectus.

Certain financial institutions that have entered into sales agreements with the
funds may enter confirmed purchase orders on behalf of customers by telephone to
purchase shares of The Muirfield(R), Total Return Utilities, Dynamic Growth,

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<PAGE>

Aggressive Growth and U.S. Government Bond Funds. Payment is due no later than
the fund's pricing on the following business day. In The Highlands Growth Fund,
payment for confirmed purchase orders is due within three business days.
Purchase orders for The Money Market Fund which are received prior to 3:00 p.m.,
Eastern time, begin earning dividends that day, provided Firstar Bank, N.A., the
Custodian for the fund, receives federal funds by 4:00 p.m., Eastern time, that
same day. If payment for the purchase of shares is not received in a timely
manner, the financial institution could be held liable for any loss incurred by
a fund.

DISTRIBUTION FEES

Rule 12b-1 of the Investment Company Act permits mutual funds that adopt a
written plan to pay out of fund assets certain expenses relating to the sale and
distribution of their shares. Each of the funds has a 12b-1 plan. Under a plan,
each fund, except for The Total Return Utilities Fund, Aggressive Growth Fund
and Dynamic Growth Fund, pays an annual fee of up to 0.20% of fund assets for
distribution services. The Total Return Utilities Fund, Aggressive Growth Fund
and Dynamic Growth Fund pay an annual fee of up to 0.25% of fund assets for
distribution services. Payments under each plan are made for distribution in the
form of commissions and fees, advertising, sales literature, services of public
relations consultants, direct solicitation and expenses of printing prospectuses
and reports used for sales purposes. Persons who receive payments under the
plans include securities brokers, attorneys, accountants, investment advisers,
investment performance consultants, pension actuaries, banks, and service
organizations. Because these fees are paid out of the funds' assets on an
ongoing basis, over time these fees will increase the cost of your investment
and may cost you more than paying out other types of sales charges.

HOW TO MAKE WITHDRAWALS (REDEMPTIONS)

Shares are redeemed and funds withdrawn at net asset value per share, and there
are no redemption fees. (See "Valuation of Shares.")

BY MAIL: You may redeem shares by mailing a written request to The
Flex-funds, c/o Meeder Asset Management, Inc., P.O. Box 7177, Dublin, OH
43017. Certain requests by mail must include a signature guarantee. It is
designed to protect you and the fund from fraud. Your request must be made
in writing and include a signature guarantee if any of the following
situations apply:

* Your account registration has changed within the last 30 days;

* The check is being mailed to a different address than the one on
your account (record address);

* The check is being made payable to someone other than the account
owner; or

* The redemptions proceeds are being transferred to a fund account
with a different registration.

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<PAGE>

You should be able to obtain a signature guarantee from a bank, broker,
dealer, credit union (if authorized under state law), securities exchange
or association, clearing agency, or savings association. A notary public
cannot provide a signature guarantee.

We may require further documentation if you are requesting redemption of
shares held of record in the name of corporations or trustees, and other
fiduciaries.

Amounts withdrawn are mailed without charge to the address printed on your
account statement.

BY TELEPHONE: You may redeem by telephone: 1-800-325-3539, or call (614)
760-2159. If you who wish to use this procedure, you must select this
feature on the New Account Application. Amounts withdrawn from an account
by telephone are mailed without charge to the address printed on your
account statement.

As a special service, you may arrange to have amounts in excess of $1,000
wired in federal funds to a designated commercial bank account. To use this
procedure please designate on the New Account Application a bank and bank
account number to receive the proceeds of wire withdrawals. There is no
charge for this service.

You may change the bank account designated to receive redemptions. This may
be done at any time upon written request to the fund. In this case, your
signature must be guaranteed. Additional documentation may be required from
corporations, executors, administrators, trustees, guardians, or other
fiduciaries.

WHEN REDEMPTIONS ARE EFFECTIVE. Redemptions are made at the net asset value
per share next determined after receipt of a redemption request in good
order. (See "Valuation of Shares.")

WHEN PAYMENTS ARE MADE. Amounts withdrawn by telephone are normally mailed
or wired on the next Columbus, Ohio bank business day following the date of
the order for withdrawal. In The Money Market Fund, if a request for a wire
redemption is received prior to 3:00 p.m., Eastern time, on a bank business
day, funds will be wired on the same day. Amounts withdrawn by mail are
normally sent by mail within one business day after the request is
received, and must be mailed within seven days with the following
exception. If shares are purchased by check, the funds' transfer agent will
not pay a redemption until reasonably satisfied the check used to purchase
shares has been collected. The fund will forward proceeds promptly once the
check has cleared. (See "How to Buy Shares.")

CHECK-WRITING REDEMPTION PROCEDURE--MONEY MARKET FUND ONLY: The Money
Market Fund will provide a supply of drafts to any shareholder when
requested. Drafts are mailed to your address of record normally within two
weeks following the date of the initial investment. These drafts may be
used to draw against your Money Market Fund account. Drafts may be written
in any amount greater than $100. To use this privilege you must complete
the check-writing redemption feature on the New Account Application form
and complete the signature card, or notify the fund after making an initial
investment.

A commercial check package consisting of 300 drafts is available for a
nominal charge. If you are interested in a commercial check package, you
should contact the funds for additional information.

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<PAGE>

requirement that redemptions be priced at the next computed net asset
value, the Bank will only accept drafts for payment which are presented
through normal bank clearing channels. If shares are purchased by check,
the funds' transfer agent will return drafts drawn on funds from purchases
made by check(s), or any portion thereof, until the check(s) used to
purchase shares has cleared. If you anticipate draft redemptions soon after
you purchase shares, you are advised to wire funds to avoid the return of
any draft(s). If the amount of the draft is greater than the value of the
shares held in your account, the draft will be returned and your account
will be charged a fee of $15. To avoid the possibility that a draft may not
be accepted due to insufficient share balances, you should not attempt to
withdraw the full amount of an account or to close out an account by using
this procedure. The Money Market Fund, the transfer agent and the Bank will
not be liable for any loss or expenses associated with returned drafts. Use
of this procedure will be subject to the Bank's rules and regulations
governing checking accounts.

You may request a stop payment on any draft and the transfer agent will
attempt to carry out your request. The transfer agent cannot guarantee that
such efforts will be successful. As the Bank charges the fund for this
service, your account will be charged a $27.50 fee for any such request
that becomes effective. No fee, other than those specified above, will be
charged to you for participation in the check-writing redemption procedure
or for the clearance of any drafts.

ACCOUNTS WITH LOW BALANCES. Any fund may redeem shares in your account for
their then current net asset value and pay the proceeds to you if at any
time your account has shares valued at less than $1,000 ($500 for an IRA)
as a result of redemptions you have made. Any fund may redeem the shares in
your account if you have opened your account for less than the minimum
purchase amount and you do not purchase additional shares to meet the
minimum. Before any shares are redeemed for these purposes, you will be
notified in writing 30 days before any such redemption to bring the value
of shares in the account to $1,000 ($500 for an IRA).

EXCHANGE PRIVILEGE

You may exchange shares of any fund for shares of any other Flex-funds'
fund that are available for sale in your state at their respective net
asset values. Exchanges are subject to applicable minimum initial and
subsequent investment requirements. It will be necessary to complete a
separate New Account Application if:

o you wish to register a new account in a different name;

o you wish to add telephone redemption to an account; or

o you wish to have check-writing redemption privileges in a Money Market
Fund account.

Exchange requests may be directed to the fund by telephone or written
request. If your request is in valid form, and is accepted before the close
of the fund's business day, shares will be exchanged that day. Exchange
requests from The Money Market Fund to another fund must be received prior
to 3:00 p.m., Eastern time, to be exchanged that day. Otherwise, they will
be exchanged the next business day.

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<PAGE>

BY MAIL: Exchange requests may also be made in writing and should be sent
to The Flex-funds, c/o Meeder Asset Management, Inc., P.O. Box 7177,
Dublin, Ohio 43017. The letter must be signed exactly as your name appears
on the fund's account records.

BY TELEPHONE: Exchange requests may be made by telephone: call
1-800-325-3539, or call (614) 760-2159. You may make exchanges by telephone
if you have telephone redemption privileges for your current account. The
registration of additional accounts must be identical.

Any exchange involves a redemption of all or a portion of the shares in one
fund and an investment of the redemption proceeds in shares of one of the
other funds. The exchange will be based on the respective net asset values
of the shares involved, ordinarily at the value next determined after the
request is received. An exchange may be delayed briefly if redemption
proceeds will not be available immediately for purchase of newly acquired
shares. The exchange privilege may be modified or terminated at any time.
In addition, each fund may reject any exchange request and limit your use
of the exchange privilege.

The exchange of shares of one fund for shares of another fund is treated
for federal income tax purposes as a sale of the shares given in exchange.
You may realize a taxable gain or loss on an exchange, and you should
consult your tax adviser for further information concerning the tax
consequences of an exchange.

TRANSACTION POLICIES

VALUATION OF SHARES. The net asset value per share (NAV) for each fund,
except the U.S. Government Bond Fund and the Money Market Fund, is
determined each business day at the close of regular trading on the New
York Stock Exchange (typically 4:00 p.m. Eastern Time) by dividing the
fund's net assets by the number of its shares outstanding. The NAV for the
U.S. Government Bond Fund and the Money Market Fund are determined each
business day that the Federal Reserve System is open. The NAV for the U.S.
Government Bond Fund and the Money Market Fund are calculated on each such
business day at 3:00 p.m., Eastern time. The NAV is not calculated on days
when the New York Stock Exchange is closed. For a list of holidays when the
New York Stock Exchange is closed, please see "Additional Purchases and
Redemption Information" in the Statement of Additional Information.

The assets of each Portfolio, except the Money Market Portfolio, are
generally valued on the basis of market quotations or, where market
quotations are not readily available, on the basis of fair value as
determined by the adviser under procedures adopted by the Board of
Trustees. The assets of the Money Market Portfolio (and short-term money
market instruments held by other portfolios) are valued on the basis of
amortized cost.

BUY AND SELL PRICES. When you buy shares, you pay the NAV. When you sell
shares, you receive the NAV.

EXECUTION OF REQUESTS. Each fund, except the U.S. Government Bond Fund and
The Money Market Fund, is open on those days when the New York Stock
Exchange is open, typically Monday through Friday. The U.S. Government Bond
Fund and The Money Market Fund are open on those days when the Federal
Reserve System is open, typically Monday through Friday. Buy and sell

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<PAGE>

requests are executed at the next NAV to be calculated after your request
is received by the transfer agent.

At times of peak activity, it may be difficult to place requests by phone.
During these times, consider sending your request in writing.

In unusual circumstances, any fund may temporarily suspend the processing
of sell requests, or may postpone payment of proceeds for up to seven days,
as allowed by federal securities laws.

TELEPHONE TRANSACTIONS. For your protection, telephone requests may be
recorded in order to verify their accuracy. In addition, the transfer agent
will take measures to verify the identity of the caller, such as asking for
name, account number, Social Security or other taxpayer ID number and other
relevant information. If appropriate measures are taken, the transfer agent
is not responsible for any losses that may occur to any account due to an
unauthorized telephone call. Proceeds from telephone transactions can only
be mailed to the address of record.

SALES IN ADVANCE OF PURCHASE PAYMENTS. When you place a request to sell
shares for which the purchase money has not yet been collected, the request

will be executed in a timely fashion, but the fund will not release the
proceeds to you until your purchase payment clears. This may take up to
fifteen days after the purchase.

OTHER SHAREHOLDER SERVICES

AUTOMATIC ACCOUNT BUILDER:

This program offers you a convenient way to invest in a fund by
automatically transferring money from your checking or savings account each
month to buy shares. Under the program, regular investments in any fund of
$100 or more will be deducted from your checking or savings account and
invested in shares of the fund(s) selected. Your bank must be a member of
the Automated Clearing House (ACH). If you wish to add to your investment
account, you must complete the Automatic Account Builder section of the New
Account Application. There is no charge for this service.

DIRECT DEPOSIT:

Investments of $100 or more may be directly deposited into your account. If
you wish to have a financial institution electronically transfer funds into
your account, you should contact the fund for information on this service.
There is no charge for this service.

SYSTEMATIC WITHDRAWAL PROGRAM:

This program allows you to automatically sell your shares and receive
regular distributions of $100 or more from your account. You must either
own or purchase shares having a value of at least $10,000 and advise the
fund in writing of the amount to be distributed and the desired frequency,
i.e., monthly, quarterly or annually. This option may be exercised by
completing the appropriate section of the New Account Application. You
should realize that if withdrawals exceed income dividends, the invested
principal may be depleted. You may make additional investments and may
change or stop the program at any time. There is no charge for this
program.

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RETIREMENT PLANS

The funds offer retirement plans which include a prototype Profit Sharing
Plan, a Money Purchase Pension Plan, a Salary Savings Plan - 401(k), an
Individual Retirement Account (IRA), a Roth IRA, an Education IRA, a Simple
IRA and a Simplified Employee Pension (SEP) Plan. Plan Adoption Agreements
and other information required to establish a Flex-funds Retirement Plan
are available from The Flex-funds, c/o Meeder Asset Management, Inc., P.O.
Box 7177, Dublin, Ohio 43017; or call 1-800-325-3539, or call (614)
760-2159.

SUB-ACCOUNTING FOR INSTITUTIONAL INVESTORS:

A fund's optional sub-accounting system offers a separate shareholder
account for each participant and a master account record for the
institution. Share activity is thus recorded and statements prepared for
both individual sub-accounts and for the master account. For more complete
information concerning this program contact the fund.

DISTRIBUTOR:

Shares of the funds are sold in those states where their shares have been
registered for sale or a valid exemption exists. States where registration
or an exemption exists can be obtained by calling 1-800-325-3539 or (614)
760-2159.

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MORE ABOUT RISK

A fund's risk profile is largely defined by the fund's principal securities
and investment practices. You may find the most concise description of each
fund's risk profile in the fund-by-fund information.

The funds are permitted to use - within limits established by the trustees
- certain other securities and investment practices that have higher risks and
opportunities associated with them. To the extent that a fund utilizes these
securities or practices, its overall performance may be affected, either
positively or negatively. On the following pages are brief descriptions of these
securities and investment practices, along with the risks associated with them.
The funds follow certain policies that may reduce these risks.

As with any mutual fund, there is no guarantee that a Flex-funds' fund will
earn income or show a positive total return over any period of time - days,
months or years.

INVESTMENT PRACTICES, SECURITIES AND RELATED RISKS

This table shows each portfolio's investment limitations as a percentage of
portfolio assets, if a percentage applies. In each case the principal types of
risk are listed (see following pages for definitions). Numbers in this table
show allowable usage only; for actual usage, consult the portfolios and funds'
annual/semiannual reports.

NL -- No policy limitation on usage; portfolio may be using currently
P -- Permitted, but has not typically been used
NP -- Not permitted

<TABLE>
<CAPTION>
AGGRESSIVE
UTILITIES GROWTH GROWTH
GROWTH STOCK MONEY MUTUAL MUTUAL
STOCK PORTFOLIO MUTUAL BOND MARKET FUND FUND
PORTFOLIO (TOTAL FUND PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
(HIGHLANDS RETURN PORTFOLIO (U.S. (MONEY (AGGRESSIVE (DYNAMIC
GROWTH UTILITIES (MUIRFIELD GOVERNMENT MARKET GROWTH GROWTH
FUND) FUND) FUND(R)) BOND FUND) FUND) FUND) FUND)

<S> <C> <C> <C> <C> <C> <C> <C>
BORROWING; REVERSE REPURCHASE 5% 33-1/3% 5% 5% 5% 33-1/3% 33-1/3%
AGREEMENTS. Leverage and credit
risk.

COMPANIES WITH LIMITED OPERATING P P P NP P NL NL
HISTORIES. Market, liquidity and
information risk.

CONVERTIBLE SECURITIES. Market, P P P NP NP P P
interest rate, prepayment and
credit risk.

CURRENCY CONTRACTS. Currency NP P NP NP NP NP NP
leverage, credit, correlation,
liquidity and opportunity risks.

Page 66

<PAGE>

DEFENSIVE MEASURES. Opportunity 20% 100% 100% 100% 100% NP NP
risk.

FOREIGN SECURITIES. Market, NP 25% P NP NP P P
currency, transaction, liquidity,
information and political risk.

HEDGING STRATEGIES; FINANCIAL 100% 100% 100% 100% NP 100% 100%
FUTURES AND OPTIONS; SECURITIES
AND INDEX OPTIONS. Hedging,
correlation, opportunity,
leverage, interest rate, market,
and liquidity risks.

ILLIQUID AND RESTRICTED 10% 10% 10% 10% 10% 15%* 15%*
SECURITIES. Market, liquidity
and transaction risk.

INVESTMENT GRADE BONDS. Interest P P P NP P P P
rate, prepayment, market and
credit risk.

LONG/SHORT FUNDS. Market, hedged NP NP P NP NP NL NL
leverage, speculative leverage,
correlation, liquidity, and
opportunity risks.

REPURCHASE AGREEMENTS. Credit 20% 100% 100% 100% 100% 20% 20%
risk.

SECTOR FOCUS. Market and NP NL P NP NP NL NL
liquidity risk.

SECURITIES LENDING. Credit risk. NP 30% NP NP NP 33-1/3% 33-1/3%

SHORT SALES - 15% 15% NP NP NP P P
HEDGED. hedged leverage,
market correlation, liquidity,
and opportunity risks.

SPECULATIVE. Speculative
leverage, market, and liquidity
risks.

SHORT-TERM TRADING. Market risk. NL NL NL NL NL NL NL

SMALL AND MID-SIZED COMPANY P P NL NP NP NL NL
SECURITIES. Market, liquidity
and information risk.

WHEN-ISSUED SECURITIES AND NP NP P NP NP P P
FORWARD COMMITMENTS. Market,
opportunity and leverage risks.

<FN>
*15% of the Portfolio's assets.
</FN>
</TABLE>

Page 67

<PAGE>

RISK AND INVESTMENT GLOSSARY

BORROWING refers to a loan of money from a bank or other financial
institution undertaken by a portfolio.

COMMON STOCK is a share of ownership (equity) interest in a company.

COMPANIES WITH LIMITED OPERATING HISTORIES are securities issued by
companies that have been in continuous operation for less than three years.
Sometimes called "unseasoned" issuers.

CONVERTIBLE SECURITIES are debt or equity securities which may be converted
on specified terms into stock of the issuer.

CORRELATION RISK occurs when a portfolio "hedges" - uses one investment to
offset the fund's position in another. If the two investments do not behave in
relation to one another the way portfolio managers expect them to, then
unexpected results may occur.

CREDIT RISK means that the issuer of a security or the counterparty to an
investment contract may default or become unable to pay its obligations when
due.

CURRENCY CONTRACTS involve the right or obligation to buy or sell a given
amount of foreign currency at a specified price and future date.

CURRENCY RISK happens when a portfolio buys or sells a security denominated
in foreign currency. Foreign currencies "float" in value against the U.S.
dollar. Adverse changes in foreign currency value can cause investment losses
when a portfolio's investments are converted to U.S. dollars.

DEFENSIVE MEASURES may be taken when a portfolio's adviser believes they
are warranted due to market conditions. When this happens, the portfolio may
increase its investment in government securities and other short-term securities
without regard to the portfolio's investment restrictions, policies or normal
investment emphasis. As a result, the portfolio could be unable to achieve its
investment objective.

DIVERSIFICATION means a diversified fund may not, with respect to at least
75% of its assets (in the case of the Money Market Fund, 100% of its assets),
invest more than 5% of its assets in the securities of one company. A
non-diversified fund may be more volatile than a diversified fund because it
invests more of its assets in a smaller number of companies and the gains or
losses on a single stock will therefore have a greater impact on the fund's
share price. All of the Flex-funds are diversified funds. However, each of the
Mutual Fund Portfolio (the corresponding Portfolio of The Muirfield Fund(R)),
the Growth Mutual Fund Portfolio (the corresponding Portfolio of The Dynamic
Growth Fund), and the Aggressive Growth Mutual Fund Portfolio (the corresponding
Portfolio of the Aggressive Growth Fund) may invest more than 5% of its assets
in one mutual fund. If this underlying mutual fund performs poorly, this could
negatively affect each of The Muirfield Fund(R)'s, The Dynamic Growth Fund's,
and The Aggressive Growth Fund's share price.

FINANCIAL FUTURES are exchange-traded contracts on securities, securities
indexes or foreign currencies that obligate the holder to take or make future
delivery of a specified quantity of those underlying securities or currencies on
a predetermined future date.

Page 68

<PAGE>

FOREIGN SECURITIES are issued by companies located outside of the United
States. A fund considers a company to be located outside the United States if
the principal securities trading market for its equity securities is located
outside the U.S. or it is organized under the laws of, and has its principal
office in, a country other than the U.S.

FORWARD FOREIGN CURRENCY CONTRACTS are privately negotiated contracts
committing the holder to purchase or sell a specified quantity of a foreign
currency on a predetermined future date.

HEDGING RISK comes into play when a portfolio uses a security whose value
is based on an underlying security or index to "offset" the portfolio's position
in another security or currency. The objective of hedging is to offset potential
losses in one security with gains in the hedge. But a hedge can eliminate or
reduce gains as well as offset losses. (Also see "Correlation Risk.")

ILLIQUID AND RESTRICTED SECURITIES are securities which, by rules of their
issue or by their nature, cannot be sold readily. These include illiquid Rule
144A securities.

INFORMATION RISK means that information about a security or issuer may not
be available, complete, accurate or comparable.

INTEREST RATE RISK is the risk that changes in interest rates will
adversely affect the value of an investor's securities. When interest rates
rise, the value of fixed-income securities will generally fall. Conversely, a
drop in interest rates will generally cause an increase in the value of
fixed-income securities. Longer-term securities are subject to greater interest
rate risk.

INVESTMENT GRADE BONDS are rated BBB (Standard & Poor's) or Baa (Moody's)
or above. Bonds rated below investment grade are subject to greater credit risk
than investment grade bonds.

LEVERAGE RISK occurs in some securities or techniques that tend to magnify
the effect of small changes in an index or a market. This can result in a loss
that exceeds the account that was invested in the contract. Also, if the Mutual
Fund Portfolio (the corresponding Portfolio of The Muirfield Fund(R)), the
Growth Mutual Fund Portfolio (the corresponding Portfolio of The Dynamic Growth
Fund), or the Aggressive Growth Mutual Fund Portfolio (the corresponding
Portfolio of the Aggressive Growth Fund) invests in mutual funds that use
leverage, it will have the risks arising from the use of leverage.

LIQUIDITY RISK occurs when investments cannot be sold readily. A fund may
have to accept a less-than-desirable price to complete the sale of an illiquid
security or may not be able to sell it at all.

LONG/SHORT FUNDS are mutual funds or closed end investment companies that
can take long and/or short positions in equity and/or debt securities of U.S.
and foreign companies. Long/Short funds buy equity and/or debt securities "long"
that they believe will perform better than their peers. Long/Short funds sell
equity and/or debt securities "short" that they believe will underperform their
peers. A long position is when the Long/Short Fund purchases equity and/or debt
securities outright. A short position is when the Long/Short Fund sells an
equity and/or debt security that it has borrowed with the expectation that the
market price will drop and that the security will be able to be bought back at a
lower price at a later date.

Page 69

<PAGE>

MARKET CAPITALIZATION is the total current market value of a company's
outstanding common stock.

MARKET RISK exists in all mutual funds and means the risk that the prices
of securities in a market, a sector, or an industry will fluctuate, and that
such movements might reduce an investment's value.

OPPORTUNITY RISK means missing out on an investment opportunity because the
assets necessary to take advantage of it are committed to less advantageous
investments or strategies.

OPTIONS are contracts giving the holder the right but not the obligation to
purchase or sell a security on or before a predetermined future date for a fixed
price. Options on securities indexes are similar, but settle in cash.

POLITICAL RISK comes into play with investments, particularly foreign
investments, which may be adversely affected by nationalization, taxation, war,
government instability or other economic or political actions or factors.

PREPAYMENT RISK is the risk that, as interest rates fall, borrowers are
more likely to refinance their debts. As a result, the principal on certain
fixed income securities may be paid earlier than expected, which could cause
investment losses and cause prepaid amounts to have to be reinvested at a
relatively lower interest rate.

REPURCHASE AGREEMENTS means the purchase of a security that must later be
sold back to the issuer at the same price plus interest.

SECTOR FOCUS occurs when a significant portion of a portfolio's assets are
invested in a relatively small number of related industries. None of The
Flex-funds, except the Total Return Utilities Fund, will concentrate more than
25% of their total assets in any one industry. However, if the Mutual Fund
Portfolio (the corresponding Portfolio of The Muirfield Fund(R)), the Growth
Mutual Fund Portfolio (the corresponding Portfolio of The Dynamic Growth Fund)
or Aggressive Growth Mutual Fund Portfolio (the corresponding Portfolio of The
Aggressive Growth Fund) invest in mutual funds that concentrate investments in
one or a small number of related industries, they will have the risks arising
from sector focus. Sector focus may increase both market and liquidity risk.

SECURITIES LENDING means the lending of securities to financial
institutions, which provide cash or government securities as collateral.

SHORT SALES means the selling of securities which have been borrowed on the
expectation that the market price will drop and that the securities will be able
to be bought back at a lower price at a later date.

SHORT-TERM TRADING means selling a security soon after purchase. A
portfolio engaging in short-term trading will have higher turnover and
transaction expenses. Short-term trading may also result in short-term capital
gains. Upon the distribution to you of any net short-term capital gains from a
fund, you will be taxed at ordinary tax rates. Because the adviser or subadviser
may take defensive measures with regard to 100% of the assets in the
corresponding portfolios of The Total Return Utilities Fund, The Muirfield
Fund(R), The Money Market Fund and The U.S. Government Bond Fund, the risks and
expenses of short-term trading may be higher in these portfolios.

Page 70

<PAGE>

SMALL AND MID-SIZED COMPANY SECURITIES are securities issued by small or
mid-sized companies, as measured by their market capitalization. Historically,
smaller company securities have been more volatile in price than larger company
securities, especially over the short-term. Among the reasons for the greater
price volatility are the less certain growth prospects of smaller companies, the
lower degree of liquidity in the markets for such securities, and the greater
sensitivity of smaller companies to changing economic conditions. In general,
the smaller the company, the greater its risks.

TRANSACTION RISK means that a portfolio may be delayed or unable to settle
a transaction or that commissions and settlement expenses may be higher than
usual.

WHEN ISSUED SECURITIES AND FORWARD COMMITMENTS involve the purchase and
sale of securities for delivery at a future date, market value may change before
delivery.

Page 71

<PAGE>

FOR MORE INFORMATION:

STATEMENT OF ADDITIONAL INFORMATION (SAI)

The SAI provides more detailed information about the funds. The SAI has
been filed with the Securities and Exchange Commission and is incorporated
by reference in this Prospectus (is legally a part of this Prospectus).

ANNUAL AND SEMIANNUAL REPORTS

These reports include portfolio holdings, financial statements, performance
information, the auditor's report (in the case of the annual report), and a
discussion of the market conditions and investment strategies that
significantly affected the fund's performance during their last fiscal
year.

Information about the funds (including the SAIs) can be reviewed and copied
at the Commission's Public Reference Room in Washington, D.C., and
information on the operation of the Public Reference Room may be obtained
by calling the Commission at 1-202-942-8090. Reports and other information
about the funds are available on the EDGAR Database on the Commission's
Internet site at http://www.sec.gov, and copies of this information may be
obtained, after paying a duplicating fee, by electronic request at the
following E-mail address: [email protected], or by writing the
Commission's Public Reference Section, Washington, D.C. 20549-0102.

To request a free copy of the current annual/semi-annual report or SAI,
request other information about the funds, or make shareholder inquiries,
please write, call or E-mail us at:

The Flex-funds
6000 Memorial Drive
Dublin, OH 43017
614-760-2159
Toll Free 800-325-3539
Fax: 614-766-6669
[email protected]
www.flexfunds.com

Investment Company Act File No. 811-3462

<PAGE>

THE FLEX-FUNDS
THE MONEY MARKET FUND

PROSPECTUS - APRIL 30, 2000

The Money Market Fund is a part of The Flex-funds, a family of funds that
includes seven no-load mutual funds covering a variety of investment
opportunities.

This Prospectus gives you important information about The Money Market Fund
that you should know before you invest. Please read this Prospectus carefully
and keep it handy for future reference.

The Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.

The Flex-funds
6000 Memorial Drive
Dublin, OH 43017
614-760-2159
Toll Free 800-325-3539
Fax: 614-766-6669
[email protected]
www.flexfunds.com

<PAGE>

TABLE OF CONTENTS

THE MONEY MARKET FUND

FUND OVERVIEW 2
--------------------------------------------------------------------------------
A look at investment goals, strategies, risks, performance and expenses

WHO MAY WANT TO INVEST 5
--------------------------------------------------------------------------------
Information on who may want to invest and who may not want to invest

MORE INFORMATION ABOUT THE FUND 6
--------------------------------------------------------------------------------
More information about the fund you should know before investing
Who Manages the Fund? 7
How is the Trust Organized? 7
How Does Taxation Affect the Fund and Its Shareholders? 8
How to Read the Financial Highlights Table 10

SHAREHOLDER MANUAL 12
--------------------------------------------------------------------------------
Information about account transactions and services
How to Buy Shares 12
Distribution Fees 13
How to Make Withdrawals (Redemptions) 13
Transaction Policies 16
Other Shareholder Services 17

MORE ABOUT RISK 18
--------------------------------------------------------------------------------
Investment Practices and Related Risks 18
Securities and Related Risks 18
Risk Glossary 19

FOR MORE INFORMATION Back Cover
--------------------------------------------------------------------------------
Where to learn more about the fund

<PAGE>

THE MONEY MARKET FUND (FFMXX)

INVESTMENT GOAL

MAIN STRATEGIES

The fund invests all of its assets in The Money Market Portfolio, a master
fund having the same investment goal as the fund. See "The Fund's
Investment in a Portfolio" under "More Information about the Fund." The
Portfolio, like all money funds, follows SEC guidelines on the quality,
maturity and diversification of its investments. These guidelines are
designed to help reduce a money fund's risks so that it is more likely to
keep its share price at $1.00.

o The Portfolio only buys securities that the adviser determines present
minimal credit risks and that are rated in one of the top two
short-term rating categories or that are comparable unrated securities
in the adviser's opinion.

o The Portfolio only buys securities with remaining maturities of 397
calendar days or less and maintains a dollar-weighted average
portfolio maturity of 90 days or less.

o Generally, the Portfolio may not invest more than 5% of its total
assets in the securities of a single issuer, other than in U.S.
government securities.

o Generally, the adviser will attempt to purchase securities with longer
maturities when it believes interest rates are falling and will
attempt to purchase securities with shorter maturities when it
believes interest rates are rising.

None of the fund's investment goals are fundamental and may be changed
without shareholder approval.

For more information, see "How Does the Fund Pursue Its Investment Goal?"
under "More Information About the Fund."

MAIN RISK FACTORS

The fund is subject to income risk, which is the possibility that the
fund's dividends or income will decline because of falling interest rates.
The fund is subject, to a limited extent, to credit risk, which is the
possibility that the issuer of a security owned by the fund will be unable
to repay interest and principal in a timely manner.

Page 2

<PAGE>

PERFORMANCE

The bar chart shown on the left below provides some indication of the risks
of investing in the Money Market Fund by showing changes in the fund's
performance from year to year over a 10-year period. The table compares the
fund's performance with the returns of an index of funds with similar
investment objectives. How the fund has performed in the past is not
necessarily an indication of how the fund will perform in the future.

[Plot points for Edgar format]:

YEAR ANNUAL TOTAL RETURN
---- -------------------
1990 8.21%
1991 6.12%
1992 3.70%
1993 2.98%
1994 4.10%
1995 5.85%
1996 5.27%
1997 5.38%
1998 5.31%
1999 4.96%

During the 10-year period shown in the bar chart, the highest return for a
quarter was 2.02% (quarter ended June 30, 1990) and the lowest return for a
quarter was 0.71% (quarter ended June 30, 1993).

Average Annual Total Returns
(for the periods ended Past Past Past
DECEMBER 31, 1999) ONE YEAR FIVE YEARS TEN YEARS
------------------ -------- ---------- ---------
The Money Market Fund 4.96% 5.36% 5.18%
Lipper's Average General
Purpose Money Market Fund 4.49% 4.95% 4.79%

Page 3

<PAGE>

FEES AND EXPENSES OF THE FUND

The following table describes the fees and expenses that you may pay if you
buy and hold shares of the fund.

There are no sales loads, fees or other charges

o to buy fund shares directly from the fund
o to reinvest dividends in additional shares
o to exchange into shares of other funds in the Flex-funds
family of funds
o or to redeem your shares.

ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND
ASSETS)1

Management Fees 0.26%
Distribution (12b-1) Fees2 0.08%
Other Expenses3 0.20%
-----
Total Annual Fund Operating Expenses 0.54%
Fee Waiver and Expense Reimbursement4 -0.13%
-----
Net Expenses 0.41%

1 This table and the Example below reflect the expenses of the fund and its
proportionate share of expenses from its corresponding Portfolio. See "The
Fund's Investment in a Portfolio" under "More Information About the Fund."

2 "Distribution (12b-1) Fees" are based upon expenses actually incurred by
the fund for the year ended December 31, 1999; however, the Fund may incur
up to 0.20% in distribution (12b-1) fees.

3 "Other Expenses" are based on expenses actually incurred by the fund for
the year ended December 31, 1999.

EXAMPLE

The example in the table below is intended to help you compare the cost of
investing in the fund with the cost of investing in other mutual funds.

Assuming you

o invest $10,000 in the fund
o redeem your shares at the end of the periods shown below
o earn a 5% return each year and
o incur the same fund operating expenses shown above,

your cost of investing in the fund would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
$42 $160 $289 $665

Of course, your actual costs may be higher or lower.

Page 4

<PAGE>

[ICON] WHO MAY WANT TO INVEST

The fund may be appropriate if you:

o like to earn income at current money market rates while
preserving the value of your investment

o are looking for a short-term component of an asset
allocation program

o characterize your investment outlook as "very conservative"

o want to be able to move your money into stock or bond
investments quickly and without penalty

The fund may not be appropriate if you:

o are investing for maximum return over a long-term horizon

Page 5

<PAGE>

MORE INFORMATION ABOUT THE FUND

THE FUND'S INVESTMENT IN A PORTFOLIO

The fund seeks to achieve its investment goal by investing all of its
assets in the Money Market Portfolio, its corresponding portfolio.

The portfolio has the same investment goal as the fund. The fund's
investment policies are also substantially similar to the portfolio's,
except the fund may pursue its policies by investing in an open-end
management investment company with the same investment goal and
substantially similar policies and restrictions as the fund. The fund buys
shares of the portfolio at net asset value. An investment in the fund is an
indirect investment in the portfolio.

It is possible that the fund may withdraw its investment in the portfolio
and subsequently invest in another open-end management investment company
with the same investment goal and substantially similar policies. This
could happen if the portfolio changes its investment goal or if the board
of trustees, at any time, considers it in the fund's best interest.

The fund's structure, where it invests all of its assets in its
corresponding portfolio, is sometimes called a "master/feeder" structure.
You will find more detailed information about this structure and the
potential risks associated with it in the Statement of Additional
Information.

HOW DOES THE FUND PURSUE ITS INVESTMENT GOAL?

The manager seeks to achieve its goal by investing in high-quality money
market instruments which mature in 397 days or less. Also, the portfolio
will seek to minimize changes in the value of its assets due to market
factors by maintaining a dollar-weighted average portfolio maturity of 90
days or less.

The portfolio may change its average portfolio maturity or level of quality
to protect its net asset value when it is perceived that changes in the
liquidity of major financial institutions may adversely affect the money
markets. Consequently, for temporary defensive purposes, the portfolio may
shorten the average maturity of its investments and/or invest only in the
highest quality debt instruments, including, for example, U.S. government
or agency obligations.

Page 6

<PAGE>

WHO MANAGES THE FUND?

THE BOARD. The board of trustees oversees the management of the fund and
the portfolio, and elects their officers. The officers are responsible for
the fund and the portfolio's day-to-day operations. Information concerning
the trustees and officers of the fund and the portfolio appears in the
Statement of Additional Information.

INVESTMENT ADVISER. Meeder Asset Management, Inc. ("Meeder"), formerly
known as R. Meeder & Associates, Inc., manages the portfolio's assets and
makes investment decisions for the portfolio. Meeder has been an investment
adviser to individuals, pension and profit sharing plans, trusts,
charitable organizations, corporations and other institutions since 1974.
As of December 31, 1999, Meeder and its affiliates managed approximately
$2.2 billion in assets. Meeder has its principal offices at 6000 Memorial
Drive, Dublin, OH 43017.

PORTFOLIO MANAGER

The portfolio manager responsible for the portfolio's investments is Philip
A. Voelker, Senior Vice President and Chief Investment Officer of Meeder.
Mr. Voelker joined Meeder in 1975 and has managed the portfolio since 1985.

MANAGEMENT FEES. During the calendar year ended December 31, 1999, the
portfolio paid management fees totaling 0.26% of the portfolio's average
daily net assets.

HOW IS THE TRUST ORGANIZED?

The fund is a no-load, open-end management investment company that is a
series of The Flex-funds trust (the "Trust").

The Trust is supervised by a board of trustees, an independent body that
has ultimate responsibility for the fund's activities. The board retains
various companies to carry out the fund's operations, including the
investment adviser, custodian, transfer agent and others. The board has the
right, and the obligation, to terminate the fund's relationship with any of
these companies and to retain a different company if the board believes it
is in the shareholders' best interests. At a mutual fund's inception, the
initial shareholder (typically the adviser) appoints the fund's board.
Thereafter, the board and the shareholders determine the board's
membership. The board of the Trust may include individuals who are
affiliated with the investment adviser.

The fund does not hold annual shareholder meetings, but may hold special
meetings for such purposes as electing or removing board members, changing
fundamental policies, approving a management contract or approving a 12b-1
plan (12b-1 fees are explained in "Distribution Fees").

PORTFOLIO TRADES

As long as the adviser believes a brokerage firm can provide a combination
of quality execution (i.e., timeliness and completeness) and favorable
price, it may consider research and related services when choosing a
brokerage firm. Brokerage firms may use a portion of the commissions paid
by the portfolio to reduce it, or the fund's, expenses.

DIVERSIFICATION

The fund is diversified, which means the fund may not invest more than 5%
of its assets in the securities of one company.

Page 7

<PAGE>

HOW DOES TAXATION AFFECT THE FUNDS AND THEIR SHAREHOLDERS?

HOW DOES THE PORTFOLIO EARN INCOME AND GAINS?

The portfolio may earn dividends and interest (the portfolio's "income") on
its investments. When the portfolio sells a security for a price that is
higher than it paid, it has a gain. When the portfolio sells a security for
a price that is lower than it paid, it has a loss. If the portfolio has
held the security for more than one year, the gain or loss will be a
long-term capital gain or loss. If the portfolio has held the security for
one year or less, the gain or loss will be a short-term capital gain or
loss. The portfolio's gains and losses are netted together, and, if the
portfolio has a net gain (the portfolio's "gain"), that gain will generally
be distributed to you.

TAXATION OF THE PORTFOLIO'S INVESTMENTS

The portfolio invests your money in the securities that are described in
the sections "Main Strategies" and "How Does the Fund Pursue Its Investment
Goal?" Special tax rules may apply in determining the income and gains that
the portfolio earns on its investments. These rules may, in turn, affect
the amount of distributions that the fund pays to you. These special tax
rules are discussed in the Statement of Additional Information.

TAXATION OF THE FUND. As a regulated investment company, the fund generally
pays no federal income tax on the income and gains that it distributes to
you.

TAXATION OF SHAREHOLDERS

WHAT IS A DISTRIBUTION?

As a shareholder, you will receive your share of the fund's income and
gains on the portfolio's investments in money market securities. The fund's
income and short-term capital gains are paid to you as ordinary dividends.
The fund's long-term capital gains are paid to you as capital gain
distributions. If the fund pays you an amount in excess of its income and
gains, this excess will generally be treated as a non-taxable return of
capital. These amounts, taken together, are what we call the fund's
distributions to you. The fund pays dividends from its net investment
income on a monthly basis. The fund distributes capital gains, if any,
annually.

DISTRIBUTIONS. Distributions from the fund, whether you receive them in
cash or in additional shares, are generally subject to income tax. The fund
will send you a statement in January of the current year that reflects the
amount of ordinary dividends, capital gain distributions and non-taxable
distributions you received from the fund in the prior year. This statement
will include distributions declared in December and paid to you in January
of the current year, but which are taxable as if paid on December 31 of the
prior year. The Internal Revenue Service requires you to report these
amounts on your income tax return for the prior year.

DISTRIBUTIONS TO RETIREMENT PLANS. Fund distributions received by your
qualified retirement plan, such as a 401(k) plan or IRA, are generally
tax-deferred; this means that you are not required to report fund
distributions on your income tax return when paid to your plan, but,
rather, when your plan makes payments to you. Special rules apply to
payouts from Roth and Education IRAs.

Page 8

<PAGE>

DIVIDENDS-RECEIVED DEDUCTION. Corporate investors may be entitled to a
dividends-received deduction on a portion of the ordinary dividends they
receive from the fund.

BUYING A DIVIDEND. Purchasing fund shares in a taxable account shortly
before a distribution is known as "buying a dividend." In taxable accounts,
you must pay income taxes on the distribution whether you take the
distribution in cash or reinvest it. In addition, you will have to pay
taxes on the distribution whether the value of your investment decreased,
increased or remained the same after you bought the fund shares. The risk
in buying a dividend is that the portfolio may build up taxable gains
throughout the period covered by a distribution, as securities are sold at
a profit. We distribute those gains to you, after subtracting any losses,
even if you did not own the shares when the gains occurred.

DIVIDEND REINVESTMENTS. Most investors have their dividends reinvested in
additional shares of the fund. If you choose this option, or if you do not
indicate any choice, your dividends will be reinvested on the dividend
payable date. Alternatively, you can choose to have a check for your
dividends mailed to you. However, if the check is not deliverable, your
dividends will be reinvested.

REDEMPTIONS AND EXCHANGES

WHAT IS A REDEMPTION?

A redemption is a sale by you to the fund of some or all of your shares in
the fund. The price per share you receive when you redeem fund shares may
be more or less than the price at which you purchased those shares. An
exchange of shares in the fund for shares of a Flex-funds' fund is treated
as a redemption of fund shares and then a purchase of shares of the
Flex-funds' fund. When you redeem or exchange your shares, you will
generally have a gain or loss, depending upon whether the amount you
receive for your shares is more or less than your cost or other basis in
the shares, which the IRS requires you to report on your income tax return.

U.S. GOVERNMENT INTEREST. Many states grant tax-free status to dividends
paid from interest earned on direct obligations of the U.S. Government,
subject to certain restrictions. The fund will provide you with information
at the end of each calendar year on the amount of any such dividends that
may qualify for exemption from reporting on your individual income tax
returns.

NON-U.S. INVESTORS. Ordinary dividends generally will be subject to U.S.
income tax withholding. Your home country may also tax ordinary dividends,
capital gain distributions and gains arising from redemptions or exchanges
of your fund shares. Fund shares held by the estate of a non-U.S. investor
may be subject to U.S. estate tax. You may wish to contact your tax adviser
to determine the U.S. and non-U.S. tax consequences of your investment in
the fund.

STATE TAXES. Ordinary dividends and capital gain distributions that you
receive from the fund, and gains arising from redemptions or exchanges of
your fund shares will generally by subject to state and local income tax.
The holding of fund shares may also be subject to state and local
intangibles taxes. You may wish to contact your tax adviser to determine
the state and local tax consequences of your investment in the fund.

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HOW TO READ THE FINANCIAL HIGHLIGHTS TABLE

The fund began calendar year 1999 with a net asset value (price) of $1.00
per share. During the year, the fund earned $0.049 per share from
investment income (interest and dividends less operating expenses) and
$0.00 per share from investments that had appreciated in value or that were
sold for higher prices than the fund paid for them.

Shareholders received $0.049 per share in the form of dividend and capital
gains distributions. A portion of each year's distributions may come from
the prior year's income or capital gains.

The earnings ($0.049 per share) minus the distributions ($0.049 per share)
resulted in a share price of $1.00 at the end of the year. This was an
increase of $0.00 per share (from $1.00 at the beginning of the year to
$1.00 at the end of the year). For a shareholder who reinvested the
distributions in the purchase of more shares, the total return from the
fund was 4.96% for the year.

As of December 31, 1999, the fund had $232,023,233 in net assets. For the
year, its expense ratio was 0.41% ($4.10 per $1,000 of net assets); and its
net investment income amounted to 4.75% of its average net assets.

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<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the
fund's financial performance for the past 5 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 KPMG LLP, independent
auditors, whose report, along with the fund's financial statements, is
included in the annual report, which is available upon request.

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
MONEY MARKET FUND

Years Ended December 31,
--------------------------------------------------------------
1999 1998 1997 1996 1995

Total Return 4.96% 5.31% 5.38% 5.27% 5.85%

<FN>
(1) See "Annual Fund Operating Expenses" for explanation of adviser's waiver of
fees.
</FN>
</TABLE>

Financial Statements and Notes pertaining thereto appear in the Statement of
Additional Information.

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SHAREHOLDER MANUAL

HOW TO BUY SHARES

Shares of The Money Market Fund are offered continuously and sold without a
sales charge. Shares are sold at the net asset value per share next
determined after receipt of both a purchase order and payment in federal
funds. Investments made by check are entered and credited at the net asset
value determined on the next business day following receipt.

MINIMUM INVESTMENT. The minimum investment to open an account in the fund
is $2,500 except an Individual Retirement Account (IRA) which has a $500
minimum. Subsequent investments in any account may be made in amounts of at
least $100.

OPENING AN ACCOUNT. You may open an account by mail or bank wire as
follows:

BY MAIL: To purchase shares, fill out the New Account Application
accompanying this Prospectus. A check payable to The Money Market Fund must
accompany the New Account Application. The fund does not accept third party
checks. Payments may be made by check or Federal Reserve Draft payable to
the fund and should be mailed to the following address: THE FLEX-FUNDS, C/O
MEEDER ASSET MANAGEMENT, INC., P.O. BOX 7177, DUBLIN, OHIO 43017.

BY BANK WIRE: If the wire order is for a new account, YOU MUST TELEPHONE
THE FUND PRIOR TO MAKING YOUR INITIAL INVESTMENT. Call 1-800-325-3539, or
(614) 760-2159. Advise the fund of the amount you wish to invest and obtain
an account number and instructions. Have your bank wire federal funds to:

FIRSTAR, N.A. CINTI/TRUST
ABA #: 042-00001-3
ATTENTION: THE MONEY MARKET FUND
Credit Account Number 9305533
Account Name (your name)
Your Money Market Fund account number

On new accounts, a completed application must be sent to The Flex-funds c/o
Meeder Asset Management, Inc., P.O. Box 7177, Dublin, OH 43017 on the same
day your wire is sent. The fund will not permit a redemption until it
receives the New Account Application in good order.

SUBSEQUENT INVESTMENTS. Subsequent investments in an existing account in
the fund may be made by mailing a check payable to The Money Market Fund.
PLEASE INCLUDE YOUR ACCOUNT NUMBER ON THE CHECK AND MAIL AS FOLLOWS:

THE FLEX-FUNDS
LOCATION NUMBER: 00215
CINCINNATI, OH 45264-0215

Subsequent investments may also be made by bank wire as described above. IT
IS NECESSARY TO NOTIFY THE FUND PRIOR TO EACH WIRE PURCHASE. Wires sent
without notifying the fund will result in a delay of the effective date of
your purchase.

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<PAGE>

WHEN PURCHASES ARE EFFECTIVE. New Account Applications and subsequent
purchase orders for The Money Market Fund which are received by or on
behalf of the fund prior to 3:00 p.m., Eastern time on a business day,
begin earning dividends that day, provided payment in federal funds (bank
wire) is received by the bank that day. New Account Applications and
subsequent purchase orders which are received after 3:00 p.m., or for which
wire payment is not received, are accepted as a purchase the following day.
Investments made by check are credited to shareholder accounts, and begin
to earn dividends, on the next business day following receipt.

If your check is dishonored, the purchase and any dividends paid thereon
will be reversed. If shares are purchased with federal funds, they may be
redeemed at any time thereafter, and you may secure your funds as explained
below. (See "How to Make Withdrawals (Redemptions).")

Financial Institutions: You may buy shares or sell shares of the fund
through a broker or financial institution, which may charge you a fee for
this service. If you are purchasing shares of the fund through a program of
services offered or administered by a brokerage firm or financial
institution, you should read the program materials in conjunction with this
Prospectus.

Purchase orders for the fund which are received prior to 3:00 p.m., Eastern
time, begin earning dividends that day, provided Firstar, N.A., the
Custodian for the fund, receives federal funds by 4:00 p.m., Eastern time,
that same day. If payment for the purchase of shares is not received in a
timely manner, the financial institution could be held liable for any loss
incurred by the fund.

DISTRIBUTION FEES

Rule 12b-1 of the Investment Company Act permits mutual funds that adopt a
written plan to pay out of fund assets certain expenses relating to the
sale and distribution of their shares. The fund has a 12b-1 plan. Under the
plan the fund pays an annual fee of up to 0.20% of fund assets for
distribution services. Payments under the plan are made for distribution in
the form of commissions and fees, advertising, sales literature, services
of public relations consultants, direct solicitation and expenses of
printing prospectuses and reports used for sales purposes. Persons who
receive payments under the plan include securities brokers, attorneys,
accountants, investment advisers, investment performance consultants,
pension actuaries, banks, and service organizations.

HOW TO MAKE WITHDRAWALS (REDEMPTIONS)

Shares are redeemed and funds withdrawn at net asset value per share, and
there are no redemption fees. (See "Valuation of Shares.")

Your request must be made in writing and include a signature guarantee if
any of the following situations apply:

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<PAGE>

* Your account registration has changed within the last 30 days;

* The check is being mailed to a different address than the one on your
account (record address);

* The check is being made payable to someone other than the account
owner; or

* The redemptions proceeds are being transferred to a fund account with
a different registration.

We may require further documentation if you are requesting redemption of
shares held of record in the name of corporations or trustees, and other
fiduciaries.

Amounts withdrawn are mailed without charge to the address printed on your
account statement.

BY TELEPHONE: You may redeem by telephone: 1-800-325-3539, or call (614)
760-2159. If you wish to use this procedure, you must select this feature
on the New Account Application. Amounts withdrawn from an account by
telephone are mailed without charge to the address printed on your account
statement.

As a special service, you may arrange to have amounts in excess of $1,000
wired in federal funds to a designated commercial bank account. To use this
procedure, please designate on the New Account Application a bank and bank
account number to receive the proceeds of wire withdrawals. There is no
charge for this service.

WHEN REDEMPTIONS ARE EFFECTIVE. Redemptions are made at the net asset value
per share next determined after receipt of a redemption request in good
order. (See "Valuation of Shares.")

WHEN PAYMENTS ARE MADE. Amounts withdrawn by telephone are normally mailed
or wired on the next Columbus, Ohio bank business day following the date of
the order for withdrawal. If a request for a wire redemption is received
prior to 3:00 p.m., Eastern time, on a bank business day, funds will be
wired on the same day. Amounts withdrawn by mail are normally sent by mail
within one business day after the request is received, and must be mailed
within seven days, with the following exception. If shares are purchased by
check, the funds' transfer agent will not pay a redemption until reasonably
satisfied the check used to purchase shares has been collected. The fund
will forward proceeds promptly once the check has cleared. (See "How to Buy
Shares.")

CHECK-WRITING REDEMPTION PROCEDURE: The fund will provide a supply of
drafts to you when requested. Drafts are mailed to your address of record
normally within two weeks following the date of the initial investment.
These drafts may be used to draw against your Money Market Fund account.
Drafts may be written in any amount greater than $100. To use this
privilege you must complete the check-writing redemption feature on the New
Account Application form and complete the signature card, or notify the
fund after making an initial investment.

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<PAGE>

A commercial check package consisting of 300 drafts is available for a
nominal charge. If you are interested in a commercial check package, you
should contact the fund for additional information.

When a draft is presented to the Bank for payment, the Bank (as your agent)
will cause the fund to redeem sufficient shares to cover the amount of the
draft. Shares continue earning dividends until the day on which the draft
is presented to the Bank for payment. Due to the delay caused by the
requirement that redemptions be priced at the next computed net asset
value, the Bank will only accept drafts for payment which are presented
through normal bank clearing channels. If shares are purchased by check,
the fund's transfer agent will return drafts drawn on funds from purchases
made by check(s), or any portion thereof, until the check(s) used to
purchase shares has cleared. If you anticipate draft redemptions soon after
you purchase shares, you are advised to wire funds to avoid the return of
any draft(s). If the amount of the draft is greater than the value of the
shares held in your account, the draft will be returned and your account
will be charged a fee of $15. To avoid the possibility that a draft may not
be accepted due to insufficient share balances, you should not attempt to
withdraw the full amount of an account or to close out an account by using
this procedure. The fund, the transfer agent and the Bank will not be
liable for any loss or expenses associated with returned drafts. Use of
this procedure will be subject to the Bank's rules and regulations
governing checking accounts.

ACCOUNTS WITH LOW BALANCES. The fund may redeem shares in your account for
their then current net asset value and pay the proceeds to you if at any
time your account has shares valued at less than $1,000 ($500 for an IRA)
as a result of redemptions you have made. The fund may redeem the shares in
your account if you have opened your account for less than the minimum
purchase amount and you do not purchase additional shares to meet the
minimum. Before any shares are redeemed for these purposes, you will be
notified in writing 30 days before any such redemption to bring the value
of shares in the account to $1,000 ($500 for an IRA).

EXCHANGE PRIVILEGE

You may exchange shares of the fund for shares of any other Flex-funds'
fund that are available for sale in your state at their respective net
asset values. Exchanges are subject to applicable minimum initial and
subsequent investment requirements. It will be necessary to complete a
separate New Account Application if:

o you wish to register a new account in a different name

o you wish to add telephone redemption to an account or

o you wish to have check-writing redemption privileges in an account.

Exchange requests may be directed to the fund by telephone or written
request. If your request is in valid form, and is received prior to 3:00
p.m., Eastern time, shares will be exchanged that day. Otherwise, they will
be exchanged the next business day.

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<PAGE>

Any exchange involves a redemption of all or a portion of the shares in one
fund and an investment of the redemption proceeds in shares of one of the
other funds. The exchange will be based on the respective net asset values
of the shares involved, ordinarily at the value next determined after the
request is received. An exchange may be delayed briefly if redemption
proceeds will not be available immediately for purchase of newly acquired
shares. The exchange privilege may be modified or terminated at any time.
In addition, the fund may reject any exchange request and limit your use of
the exchange privilege.

TRANSACTION POLICIES

VALUATION OF SHARES. The net asset value per share (NAV) for the fund is
determined each business day that the Federal Reserve System is open. The
NAV is calculated on each such business day at 3:00 p.m. Eastern Time by
dividing the fund's net assets by the number of its shares outstanding. The
assets of the portfolio are valued on the basis of amortized cost.

BUY AND SELL PRICES. When you buy shares, you pay the NAV. When you sell
shares, you receive the NAV.

EXECUTION OF REQUESTS. The fund is open on those days when the Federal
Reserve System is open, typically Monday through Friday. Buy and sell
requests are executed at the next NAV to be calculated after your request
is received by the transfer agent.

At times of peak activity, it may be difficult to place requests by phone.
During these times, consider sending your request in writing.

In unusual circumstances, the fund may temporarily suspend the processing
of sell requests, or may postpone payment of proceeds for up to seven
days, as allowed by federal securities laws.

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<PAGE>

SALES IN ADVANCE OF PURCHASE PAYMENTS. When you place a request to sell
shares for which the purchase money has not yet been collected, the request
will be executed in a timely fashion, but the fund will not release the
proceeds to you until your purchase payment clears. This may take up to
fifteen days after the purchase.

OTHER SHAREHOLDER SERVICES

AUTOMATIC ACCOUNT BUILDER:

Regular investments in the fund of $100 or more will be deducted from your
checking or savings account and invested in shares of the fund. Your bank
must be a member of the Automated Clearing House (ACH). If you wish to add
to your investment account, you must complete the Automatic Account Builder
section of the New Account Application. There is no charge for this
service.

DIRECT DEPOSIT:

SYSTEMATIC WITHDRAWAL PROGRAM:

A Systematic Withdrawal Program is offered if you wish to receive regular
distributions from your account. You must either own or purchase shares
having a value of at least $10,000 and advise the fund in writing of the
amount to be distributed and the desired frequency, i.e., monthly,
quarterly or annually. This option may be exercised by completing the
appropriate section of the New Account Application. You should realize that
if withdrawals exceed income dividends, the invested principal may be
depleted. You may make additional investments and may change or stop the
program at any time. There is no charge for this program.

RETIREMENT PLANS

The fund offers retirement plans, which include a prototype Profit Sharing
Plan, a Money Purchase Pension Plan, a Salary Savings Plan - 401(k), an
Individual Retirement Account (IRA), a Roth IRA, an Education IRA, a Simple
IRA and a Simplified Employee Pension (SEP) Plan. Plan Adoption Agreements
and other information required to establish a Flex-funds Retirement Plan
are available from The Flex-funds, c/o Meeder Asset Management, Inc., P.O.
Box 7177, Dublin, Ohio 43017; or call 1-800-325-3539, or call (614)
760-2159.

SUB-ACCOUNTING FOR INSTITUTIONAL INVESTORS:

The fund's optional sub-accounting system offers a separate shareholder
account for each participant and a master account record for the
institution. Share activity is thus recorded and statements prepared for
both individual sub-accounts and for the master account. For more complete
information concerning this program contact the fund.

DISTRIBUTOR:

Shares of the fund are sold in those states where its shares have been
registered for sale or a valid exemption exists. States where registration
or an exemption exists can be obtained by calling 1-800-325-3539 or (614)
760-2159.

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<PAGE>

MORE ABOUT RISK

The fund's risk profile is largely defined by the fund's principal
securities and investment practices. You may find the most concise
description of the fund's risk profile in "Main Risk Factors."

The fund is permitted to use - within limits established by the trustees -
certain other securities and investment practices that have higher risks
and opportunities associated with them. To the extent that the portfolio
utilizes these securities or practices, its overall performance may be
affected, either positively or negatively. On the following pages are brief
descriptions of these securities and investment practices, along with the
risks associated with them. The fund follows certain policies that may
reduce these risks.

As with any mutual fund, there is no guarantee that the fund will earn
income or show a positive total return over any period of time - days,
months or years.

INVESTMENT PRACTICES AND RELATED RISKS

BORROWING. A loan of money from a bank or other financial institution
undertaken by the portfolio. The portfolio may borrow up to 5% of its
assets. LEVERAGE AND CREDIT RISKS are the principal risks.

DEFENSIVE MEASURES. Shortening the average maturity of the portfolio's
investments and/or investing only in the highest quality debt instruments.
The adviser may invest 100% of its assets defensively if it believes market
conditions warrant defensive measures. OPPORTUNITY RISK is the principal
risk.

REPURCHASE AGREEMENTS. The purchase of a security that must later be sold
back to the issuer at the same price plus interest. The portfolio may
invest up to 100% of its assets in repurchase agreements. CREDIT RISK is
the principal risk.

SHORT-TERM TRADING. Selling a security soon after purchase. If the
portfolio engages in short-term trading, it will have higher turnover and
transaction expenses. Short-term trading may also result in short-term
capital gains. Upon the distribution to you of any net short-term capital
gains from the fund, you will be taxed at ordinary tax rates. There is no
limitation on the portfolio's ability to engage in short-term trading.
MARKET RISK is the principal risk.

SECURITIES AND RELATED RISKS

INVESTMENT GRADE BONDS. Bonds rated BBB (Standard & Poor's) or Baa
(Moody's) or above. INTEREST RATE, PREPAYMENT, MARKET AND CREDIT RISKS are
the principal risks.

ILLIQUID AND RESTRICTED SECURITIES. Securities which, by rules of their
issue or by their nature, cannot be sold readily. These include illiquid
Rule 144A securities. The portfolio is permitted to invest 10% of its
assets in illiquid and restricted securities. MARKET, LIQUIDITY AND
TRANSACTION RISKS are the principal risks.

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RISK GLOSSARY

CREDIT RISK means that the issuer of a security or the counterparty to an
investment contract may default or become unable to pay its obligations
when due.

INTEREST RATE RISK is the risk that changes in interest rates will
adversely affect the value of an investor's securities. When interest rates
rise, the value of fixed-income securities will generally fall. Conversely,
a drop in interest rates will generally cause an increase in the value of
fixed-income securities. Longer-term securities are subject to greater
interest rate risk.

LEVERAGE RISK occurs in some securities or techniques that tend to magnify
the effect of small changes in an index or a market. This can result in a
loss that exceeds the amount that was invested in the contract.

LIQUIDITY RISK occurs when investments cannot be sold readily. The
portfolio may have to accept a less-than-desirable price to complete the
sale of an illiquid security or may not be able to sell it at all.

MARKET RISK exists in all mutual funds and means the risk that the prices
of securities in a market, a sector, or an industry will fluctuate, and
that such movements might reduce an investment's value.

OPPORTUNITY RISK means missing out on an investment opportunity because the
assets necessary to take advantage of it are committed to less advantageous
investments or strategies.

PREPAYMENT RISK is the risk that, as interest rates fall, borrowers are
more likely to refinance their debts. As a result, the principal on certain
fixed income securities may be paid earlier than expected, which could
cause investment losses and cause prepaid amounts to have to be reinvested
at a relatively lower interest rate.

TRANSACTION RISK means that the portfolio may be delayed or unable to
settle a transaction or that commissions and settlement expenses may be
higher than usual.

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FOR MORE INFORMATION:

STATEMENT OF ADDITIONAL INFORMATION (SAI)

The SAI provides more detailed information about the fund. The SAI has been
filed with the Securities and Exchange Commission and is incorporated by
reference in this Prospectus (is legally a part of this Prospectus).

ANNUAL AND SEMIANNUAL REPORTS

Information about the fund (including the SAI) can be reviewed and copied
at the Commission's Public Reference Room in Washington, D.C., and
information on the operation of the Public Reference Room may be obtained
by calling the Commission at 1-202-942-8090. Reports and other information
about the fund are available on the EDGAR Database on the Commission's
Internet site at http://www.sec.gov, and copies of this information may be
obtained, after paying a duplicating fee, by electronic request at the
following E-mail address: [email protected], or by writing the
Commission's Public Reference Section, Washington, D.C. 20549-0102.

To request a free copy of the current annual/semi-annual report or SAI,
request other information about the fund, or make shareholder inquiries,
please write, call or E-mail us at:

The Flex-funds
6000 Memorial Drive
Dublin, OH 43017
614-760-2159
Toll Free 800-325-3539
Fax: 614-766-6669
[email protected]
www.flexfunds.com

Investment Company Act File No. 811-3462