FLEX FUNDS, 485BPOS, 2000-02-25

FLEX FUNDS
485BPOS, 2000-02-25

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As filed with the Securities and Exchange Commission on February 25, 2000.

COMMISSION FILE NO. 2-85378
COMMISSION FILE NO. 811-3462

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 43

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 43

THE FLEX-FUNDS
(Exact Name of Registrant as Specified in Charter)

P.O. BOX 7177, 6000 MEMORIAL DRIVE, DUBLIN, OHIO 43017
(Address of Principal Executive Offices-Zip Code)

Registrant's Telephone Number, including Area Code: (614)766-7000

WESLEY F. HOAG, VICE PRESIDENT - R. MEEDER & ASSOCIATES, INC.
P.O. BOX 7177, 6000 MEMORIAL DRIVE, DUBLIN, OHIO 43017
(Name and Address of Agent for Service)

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
It is proposed that this filing will become effective (check appropriate
box).

-----
/ XXX / immediately upon filing pursuant to paragraph (b) of Rule 485
-----
/ / on (date) pursuant to paragraph (b) of Rule 485.
-----
/ / 60 days after filing pursuant to paragraph (a)(1).
-----
/ / on (date) pursuant to paragraph (a)(1).
-----
/ / 75 days after filing pursuant to paragraph (a)(2).
-----
/ / on (date) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:

-----
/ / This post-effective amendment designates a new effective date for
----- a previously filed post-effective amendment.

The Growth Mutual Fund and Aggressive Growth Mutual Fund Portfolios have also
executed this Registration Statement.

<PAGE>

THE FLEX-FUNDS

THE DYNAMIC GROWTH FUND
THE AGGRESSIVE GROWTH FUND

PROSPECTUS

_______________, 2000

[LOGOS]

Each of The Dynamic Growth Fund and The Aggressive Growth Fund is a series
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 Dynamic Growth
Fund and The Aggressive Growth 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 or accuracy of this Prospectus. Any
representation to the contrary is a criminal offense.

The Flex-funds
6000 Memorial Drive
Dublin, OH 43017
1-800-325-FLEX or 614-760-2159
Internet: WWW.FLEXFUNDS.COM

<PAGE>

CONTENTS

THE FUND

A fund by fund look at investment The Dynamic Growth Fund _____
goals, strategies, risks, expenses The Aggressive Growth Fund _____
and performance

Information on who may want to invest Who May Want to Invest _____
and who may not want to invest

More information about the funds More Information about the Funds _____
you should know before investing Who Manages the Funds? _____
Distribution Fees _____
How is the Trust Organized? _____
How Does Taxation Affect the
Funds and Their Shareholders? _____

SHAREHOLDER MANUAL

Information about account How to Buy Shares _____
transactions and services How to Make Withdrawals
(Redemptions) _____
Transaction Policies _____
Other Shareholder Services _____

MORE ABOUT RISK

Risk and Investment Glossary _____

FOR MORE INFORMATION

Where to learn more about the funds Back Cover

<PAGE>

THE DYNAMIC GROWTH FUND

[ICON] 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.

[ICON] 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.

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

<PAGE>

[ICON] 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.

[ICON] 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.

<PAGE>

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>

THE AGGRESSIVE GROWTH FUND

[ICON] 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.

[ICON] 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 pursues its investment goal
by investing primarily in open-end or closed-end investment companies
(the "underlying funds"), although it may invest up to 100% of its
total assets in one underlying fund. 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 that such investments are consistent
with the investment objectives and policies of each portfolio.

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

<PAGE>

[ICON] 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.

[ICON] 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

<PAGE>

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>

WHO MAY WANT TO INVEST

THE DYNAMIC GROWTH FUND

The fund may be appropriate for investors who:

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 their portfolio

o are investing with a long-term horizon

The fund may not be appropriate for investors who:

o are investing to meet short-term financial goals

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

THE AGGRESSIVE GROWTH FUND

The fund may be appropriate for investors who:

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 their portfolio

o are investing with a long-term horizon

The fund may not be appropriate for investors who:

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>

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 Dynamic Growth Fund invests in the
Growth Mutual Fund Portfolio and the Aggressive Growth Fund invests in the
Aggressive Growth Mutual Fund 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.

HOW DO THE FUNDS PURSUE THEIR INVESTMENT GOALS?

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 will not invest
in other funds of the Flex-funds family of funds or the Flex-Partners 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.

<PAGE>

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 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.

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).

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 equity securities;

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

<PAGE>

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.

PAST PERFORMANCE OF PRIVATE ACCOUNTS

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.

<PAGE>

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.

PAST PERFORMANCE OF PRIVATE ACCOUNTS

R. MEEDER &
ASSOCIATES, INC. MORNINGSTAR'S
GROWTH ACCOUNTS AVERAGE
YEAR COMPOSITE S&P 500(1) GROWTH FUND(2)
- ---- --------------- --------- --------------
1995 25.88% 37.53% 31.37%
1996 13.90% 23.08% 19.92%
1997 20.75% 33.35% 24.91%
1998 28.20% 28.58% 19.93%
1999 57.56% 21.04% 29.92%

R. MEEDER &
ASSOCIATES, INC. MORNINGSTAR'S
AGGRESSIVE AVERAGE
GROWTH ACCOUNTS AGGRESSIVE
YEAR COMPOSITE S&P 500(1) GROWTH FUND(2)
- ---- --------------- ---------- --------------
1995 24.02% 37.53% 36.97%
1996 11.72% 23.08% 13.84%
1997 18.05% 33.35% 16.66%
1998 31.98% 28.58% 16.10%
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.

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 appears in the Statement of Additional
Information.

<PAGE>

INVESTMENT ADVISER. R. Meeder & Associates, Inc. ("RMA") serves as investment
adviser to the portfolios. RMA 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, RMA and its
affiliates managed approximately $2.2 billion in assets. RMA has its principal
offices at 6000 Memorial Drive, Dublin, OH 43017.

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

MANAGEMENT FEES. Each portfolio pays management fees totaling 0.75% of the
portfolio's first $200,000,000 in average daily net assets and 0.60% of the
portfolio's average daily net assets in excess of $200,000,000. For more
information about management fees, see "Investment Adviser" in the Statement of
Additional Information.

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 fund has a 12b-1 plan. Under the plan, each
fund pays an annual fee of up to 0.25% 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. 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 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 a 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 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 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 a portfolio to
reduce its, or its corresponding fund's, expenses.

<PAGE>

INVESTMENT GOALS

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

DIVERSIFICATION

The funds are diversified, which means a fund may not, with respect to at
least 75% of its assets, invest more than 5% of its assets in the securities of
one company. However, under certain circumstances, a 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. A 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.

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 a 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. Because the funds are actively managed and can realize taxable net
short-term capital gains by selling shares of an underlying fund with unrealized
portfolio appreciation, investing in a fund rather than directly in the
underlying funds may result in increased tax liability to the shareholder. 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 Dynamic Growth
Fund and The Aggressive Growth Fund pay dividends from their net investment
income on a quarterly basis. Both funds distributes capital gains, if any,
annually.

<PAGE>

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.

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
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.

<PAGE>

STATE TAXES. Ordinary dividends and capital gain distributions that you
receive from the funds, and gains arising from redemptions or exchanges of your
fund shares, will generally be 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 funds.

<PAGE>

SHAREHOLDER MANUAL

HOW TO BUY SHARES

Shares are offered continuously and sold without a sales charge. Shares of the
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. 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 a 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 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 R. MEEDER & ASSOCIATES, 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-FLEX, 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 BANK, 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)
The Dynamic Growth Fund - Account Number 821637675
The Aggressive Growth Fund - Account Number 821637683
ACCOUNT NAME (YOUR NAME)
YOUR FLEX-FUNDS ACCOUNT NUMBER

On new accounts, a completed application must be sent to The Flex-funds c/o R.
Meeder & Associates, 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.

SUBSEQUENT INVESTMENTS. You may make subsequent investments in an existing
account in a fund by mailing a check payable to the fund you specify. PLEASE
INCLUDE YOUR ACCOUNT NUMBER ON THE CHECK AND MAIL AS FOLLOWS:

<PAGE>

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

You may also make subsequent investments 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, 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 a fund are due within one business
day.

New Account Applications and subsequent purchase orders which are received by or
on behalf of a fund prior to 4:00 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 4:00 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 a fund through a
broker or financial institution, which 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 a fund. Payment is due no later than the fund's pricing on
the following business 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.

HOW TO MAKE WITHDRAWALS (REDEMPTIONS)

Shares are redeemed and funds withdrawn at net asset value per share, and there
are no redemption fees. (See "How Net Asset Value Is Determined.")

BY MAIL: You may redeem shares by mailing a written signature guaranteed
request to The Flex-funds, c/o R. Meeder & Associates, Inc., P.O. Box 7177,
Dublin, OH 43017. Signature guaranteed means that the request must be
signed by you and your signature must be guaranteed by an eligible

<PAGE>

guarantor institution (a bank, broker-dealer, credit union, securities
exchange and association, clearing agency and savings association). We do
not accept signatures guaranteed by a notary public. Additional
documentation may be required as to the authority of the person requesting
redemption of shares held of record in the name of corporations, executors,
administrators, trustees, guardians or other fiduciaries. We may waive
these requirements in certain instances.

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

BY TELEPHONE: You may redeem by telephone: 1-800-325-FLEX, 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
"How Net Asset Value Is Determined.")

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. 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.")

ACCOUNTS WITH LOW BALANCES. A fund may redeem shares in your account for
its 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. A 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).

<PAGE>

EXCHANGE PRIVILEGE

You may exchange shares of a 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.

BY MAIL: Exchange requests may also be made in writing and should be sent
to The Flex-funds, c/o R. Meeder & Associates, 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-FLEX, 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, a 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 a 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 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.

<PAGE>

A portfolio's assets consist primarily of underlying funds, which are
valued at their respective NAVs. A portfolio's other assets 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.

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 is open on those days when the New York
Stock Exchange 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, a fund may temporarily suspend the processing of
sell requests, or may postpone payment of proceeds for up to seven business
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 a fund of
$100 or more will be deducted from your checking or savings account and
invested in shares of the fund or funds 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.

<PAGE>

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
Trust 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 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 R. Meeder & Associates, Inc., P.O.
Box 7177, Dublin, Ohio 43017; or call 1-800-325-FLEX, or call (614)
760-2159.

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 summary under "Main Risk Factors" near
the beginning of this Prospectus.

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 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

<PAGE>

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

AGGRESSIVE GROWTH
GROWTH MUTUAL FUND MUTUAL FUND
PORTFOLIO PORTFOLIO
(THE DYNAMIC GROWTH (THE AGGRESSIVE
FUND) GROWTH FUND)

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

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

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

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

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

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

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

REPURCHASE AGREEMENTS. Credit risk. 20% 20%

SECTOR FOCUS. Market and liquidity risk. NL NL

SECURITIES LENDING. Credit Risk. 33 1/3% 33 1/3%

SHORT SALES - 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

<PAGE>

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

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

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

RISK AND INVESTMENT GLOSSARY

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

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 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.

DIVERSIFICATION means a diversified fund may not, with respect to at least
75% of its assets, invest more than 5% 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. The Dynamic Growth Fund and The Aggressive Growth Fund are
diversified funds. However, each of their corresponding portfolios may invest
more than 5% of its assets in one mutual fund and may invest up to 100% of its
total assets in one underlying fund. If this underlying mutual fund performs
poorly, this could negatively affect the 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>

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.

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.

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 a portfolio
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.

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.

<PAGE>

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. If a portfolio
invests 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.

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.

<PAGE>

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>

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
Telephone: 1-800-325-3539 or 614-760-2159
WWW.FLEXFUNDS.COM

Investment Company Act File No. 811-3462

<PAGE>

THE FLEX-FUNDS
6000 Memorial Drive
Dublin, Ohio 43017

STATEMENT OF ADDITIONAL INFORMATION DATED ______________, 2000

This Statement of Additional Information pertains to the following Funds of The
Flex-funds: The Dynamic Growth Fund and The Aggressive Growth Fund. This
Statement of Additional Information is not a prospectus. It should be read in
conjunction with the Prospectus of the Funds dated ___________, 2000. A copy of
the Prospectus may be obtained from The Flex-funds, at the above address, or by
calling: 1-800-325-FLEX, or (614) 760-2159. Capitalized terms used and not
otherwise defined herein have the same meanings as defined in the Prospectus.

TABLE OF CONTENTS

PAGE

Description of the Trust 2
Investment Policies and Related Matters 5
Investment Restrictions 20
Portfolio Turnover 22
Purchase and Sale of Portfolio Securities 22
Valuation of Portfolio Securities 24
Calculation of Total Return 24
Comparative Performance Information 25
Additional Purchase and Redemption Information 25
Investment Adviser and Manager 27
Officers and Trustees 29
Distribution Plans 33
Distributions and Taxes 35
Flex-funds Retirement Plans 36
Other Services 41
Financial Statements 42

INVESTMENT ADVISER TRANSFER AGENT
R. Meeder & Associates, Inc. Mutual Funds Service Co.

<PAGE>

DESCRIPTION OF THE TRUST

BACKGROUND. The Trust was organized as a Massachusetts business trust on
December 31, 1991 as the successor to a Pennsylvania business trust organized on
April 30, 1982. Each of its constituent funds is a diversified open-end
management investment company. The business and affairs of the Trust are under
the direction of its Board of Trustees.

The Trust has no investment adviser because the Trust seeks to achieve the
investment objective of each Fund by investing each Fund's assets in its
corresponding Portfolio. The Growth Fund invests all of its assets in the Growth
Mutual Fund Portfolio and The Aggressive Growth Fund invests all of its assets
in the Aggressive Growth Mutual Fund Portfolio. Each Portfolio has retained the
services of R. Meeder & Associates, Inc. as investment adviser.

INVESTMENT STRUCTURE. Unlike other mutual funds which directly acquire and
manage their own portfolio of securities, each Fund seeks to achieve its
investment objectives by investing all of its assets in a corresponding
Portfolio, a separate registered investment company with the same investment
objectives as the Fund. Therefore, an investor's interest in the Portfolio's
securities is indirect. In addition to selling a beneficial interest to the
Fund, the Portfolio may sell beneficial interests to other mutual funds or
investors. Such investors will invest in the Portfolio on the same terms and
conditions and will pay a proportionate share of the Portfolio's expenses.
However, the other investors investing in the Portfolio are not required to sell
their shares at the same public offering price as the Fund. Investors in a Fund
should be aware that these differences may result in differences in returns
experienced by investors in the different funds that invest in a Portfolio. Such
differences in returns are also present in other mutual fund structures.
Information concerning other holders of interests in a Portfolio is available by
contacting the Trust by calling: 1-800-325-FLEX, or (614) 760-2159.

Each Portfolio, in which all the assets of a corresponding Fund will be
invested, is organized as a trust under the laws of the State of New York. Each
Portfolio's Declaration of Trust provides that a Fund and other entities
investing in that Portfolio (e.g., other investment companies, insurance company
separate accounts, and common and commingled trust funds) will each be liable
for all obligations of that Portfolio. However, the risk of a Fund incurring
financial loss on account of such liability is limited to circumstances in which
both inadequate insurance existed and that Portfolio itself was unable to meet
its obligations. Accordingly, the Trustees of the Trust believe that neither a
Fund nor its shareholders will be adversely affected by reason of a Fund's
investing in the corresponding Portfolio. In addition, whenever the Trust is
requested to vote on matters pertaining to the fundamental policies of a
Portfolio, the Trust will hold a meeting of the corresponding Fund's
shareholders and will cast its vote as instructed by the Fund's shareholders.

<PAGE>

Smaller funds investing in a Portfolio may be materially affected by the
actions of larger funds investing in the Portfolio. For example, if a large fund
withdraws from the Portfolio, the remaining funds may experience higher pro rata
operating expenses, thereby producing lower returns. Additionally, the Portfolio
may become less diverse, resulting in increased portfolio risk. (However, this
possibility also exists for traditionally structured funds that have large or
institutional investors.) Also, funds with a greater pro rata ownership in a
Portfolio could have effective voting control of the operations of the
Portfolio. Whenever the Trust is requested to vote on matters pertaining to a
Portfolio, the Trust will hold a meeting of shareholders of the Fund and will
cast all of its votes in the same proportion as do the Fund's shareholders.
Certain changes in the Portfolio's investment objectives, policies or
restrictions may require the Trust to withdraw a Fund's interest in a Portfolio.
Any such withdrawal could result in a distribution in kind of portfolio
securities (as opposed to a cash distribution from the Portfolio). If such
securities are distributed, a Fund could incur brokerage, tax or other charges
in converting the securities to cash. In addition, the distribution in kind may
result in a less diversified portfolio of investments or adversely affect the
liquidity of a Fund.

The Trust may withdraw the investment of a Fund from its corresponding
Portfolio at any time, if the Board of Trustees of the Trust determines that it
is in the best interests of the Fund to do so. Upon any such withdrawal, the
Board of Trustees would consider what action might be taken, including the
investment of all the assets of the Fund in another pooled investment entity
having the same investment objectives as that Fund or the retaining of an
investment adviser to manage the Fund's assets in accordance with the investment
policies with respect to that Fund's corresponding Portfolio. The inability to
find an adequate investment pool or investment adviser could have a significant
impact on shareholders' investment in the Fund.

The assets of the Trust received for the issue or sale of the shares of the
Funds and all income, earnings, profits, and proceeds thereof, subject only to
the rights of creditors, are specially allocated to each Fund and constitute the
underlying assets of the Funds. The underlying assets of each Fund are
segregated on the books of account, and are to be charged with the liabilities
with respect to each Fund and with a share of the general expenses of the Trust.
Expenses with respect to the Trust are to be allocated in proportion to the
asset value of the respective funds except where allocations of direct expense
can otherwise be fairly made. The officers of the Trust, subject to the general
supervision of the Board of Trustees, have the power to determine which expenses
are allocable to a given fund, or which are general or allocable to all of the
funds. In the event of the dissolution or liquidation of the Trust, shareholders
of each fund are entitled to receive as a class the underlying assets of such
fund available for distribution.

As stated in "Investment Policies and Related Matters," except as otherwise
expressly provided herein, a Fund's investment objectives and policies are not
fundamental and may be changed by Trustees without shareholder approval.

<PAGE>

For descriptions of the investment objectives and policies of a Portfolio,
see "Investment Policies and Related Matters." For descriptions of the
management and expenses of the Portfolios, see "Investment Adviser and Manager"
and "Officers and Trustees."

SHARES OF BENEFICIAL INTEREST. The Trust's Declaration of Trust permits the
Trust to offer and sell an unlimited number of full and fractional shares of
beneficial interest in each of the Trust's existing Funds and to create
additional Funds. All shares have a par value of $.10 per share, are fully paid,
non-assessable and fully transferable when issued. All shares are issued as full
or fractional shares.

A fraction of a share has the same rights and privileges as a full share.
Each Fund of the Trust will issue its own series of shares of beneficial
interest. The shares of each Fund represent an interest only in that Fund's
assets (and profits or losses) and in the event of liquidation, each share of a
particular Fund would have the same rights to dividends and assets as every
other share of that Fund.

Each full or fractional share has a proportionate vote. On some issues,
such as the election of Trustees, all shares of the Trust vote together as one
series. On an issue affecting a particular Fund, only its shares vote as a
separate series. An example of such an issue would be a fundamental investment
restriction pertaining to only one Fund. In voting on a Distribution Plan,
approval of the Plan by the shareholders of a particular Fund would make the
Plan effective as to that Fund, whether or not it had been approved by the
shareholders of the other Funds.

When matters are submitted for shareholder vote, shareholders of each Fund
will have one vote for each full share held and proportionate, fractional votes
for fractional shares held. A separate vote of a Fund is required on any matter
affecting the Fund on which shareholders are entitled to vote. Shareholders of
one Fund are not entitled to vote on a matter that does not affect that Fund but
that does require a separate vote of any other Fund. There normally will be no
meetings of shareholders for the purpose of electing Trustees unless and until
such time as less than a majority of Trustees holding office have been elected
by shareholders, at which time the Trustees then in office will call a
shareholders' meeting for the election of Trustees. Any Trustee may be removed
from office upon the vote of shareholders holding at least two-thirds of the
Trust's outstanding shares at a meeting called for that purpose. The Trustees
are required to call such a meeting upon the written request of shareholders
holding at least 10% of the Trust's outstanding shares. Shareholders have under
certain circumstances (e.g., upon application and submission of certain
specified documents to the Trustees of a Fund by a specified number of
shareholders) the right to communicate with other shareholders in connection
with requesting a meeting of shareholders for the purpose of removing one or
more Trustees.

Shares are fully paid and nonassessable. Shares have no preemptive or
conversion rights. The Trust or any fund may be terminated upon the sale of its

<PAGE>

assets to another open-end management investment company, if approved by vote of
the holders of a majority of the Trust or the fund, as determined by the current
value of each shareholder's investment in the fund or Trust, or upon liquidation
and distribution of its assets, if approved by a majority of the Trustees of the
Trust. If not so terminated, the Trust and the funds will continue indefinitely.

TRUSTEE LIABILITY. The Declaration of Trust provides that the Trustees, if
they have exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of Trust protects Trustees against
any liability to which they would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of their office.

INVESTMENT POLICIES AND RELATED MATTERS

GENERAL. As described in the Prospectus and herein, the Trust seeks to
achieve the investment objective of each Fund by investing all of its investable
assets in a corresponding Portfolio having the same investment objective,
policies and restrictions as that Fund. Since the investment characteristics of
the Funds correspond directly to those of each Fund's respective Portfolio, the
following is a discussion of the various investments of and techniques employed
by the Portfolios.

The investment policies set forth below in this section represent the
Portfolios' policies as of the date of this Statement of Additional Information.
The investment policies are not fundamental and may be changed by the Trustees
of the Portfolios without shareholder approval.

The Manager selects underlying funds in which to invest based, in part, on
the industry classifications represented in their portfolios, their investment
objectives and policies, their investment advisor and portfolio manager, and on
analysis of their past performance (absolute, relative and risk-adjusted). The
Manager also considers other factors in the selection of underlying funds,
including, but not limited to, fund size, liquidity, expense ratio, general
composition of its investment portfolio, and current and expected portfolio
holdings.

The Manager typically selects underlying funds that invest in small,
medium, and large capitalization companies with strong growth potential across a
wide range of sectors. Although a Portfolio may have exposure to a large number
of sectors, the underlying funds in which it invests may include funds which
concentrate investments in a particular industry sector, or which leverage their
investments.

A Portfolio may invest its assets in underlying funds from different mutual
fund families, managed by different investment advisers, and utilizing a variety
of different investment objectives and styles. 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 Manager will determine that such

<PAGE>

investments are consistent with the investment objectives and policies of each
Portfolio. The underlying funds in which a Portfolio invests may, but need not,
have the same investment policies as the Portfolio.

The Portfolios will not invest in other funds of The Flex-Partners family
of funds or The Flex-funds family of funds, the corresponding portfolios of
which are also managed by the Manager.

Under normal circumstances, at least 65% of the value of a Portfolio's
total assets will be invested in mutual funds. A 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. "Index" funds may be purchased with a portion of a
Portfolio's assets at times when the Manager's selection process identifies the
characteristics of a particular index to be more favorable than those of other
mutual funds available for purchase. If, in the Manager's opinion, a Portfolio
should have exposure to certain stock indices and the Portfolio can efficiently
and effectively implement such a strategy by directly purchasing the common
stocks of a desired index for the Portfolio itself, it may invest up to 100% of
its assets to do so.

In purchasing shares of other mutual funds the Portfolios will agree to
vote the shares in the same proportion as the vote of all other holders of such
shares.

Each Portfolio has adopted certain investment restrictions that cannot be
changed except with the vote of a majority of the Portfolio's outstanding
shares. These restrictions are described elsewhere in this Statement of
Additional Information.

OPEN-END INVESTMENT COMPANIES. The Portfolios and their underlying funds
may invest their assets in open-end investment companies. Any investment in a
mutual fund involves risk, and although the Portfolios may invest in a number of
underlying funds, this practice does not eliminate investment risk. Moreover,
investing through the Portfolios in an underlying portfolio of mutual funds
involves certain additional expenses and certain tax results that would not be
present in a direct investment in the underlying funds. See "Distributions and
Taxes."

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

Absent an exemptive order, a Portfolio may only purchase up to 3% of the
total outstanding securities of any underlying mutual fund. The holdings of any
"affiliated persons" of the Trust and the Portfolios, as defined in the
Investment Company Act, must be included in the computation of the 3%
limitation. Accordingly, when "affiliated persons" hold shares of an underlying
mutual fund, a Portfolio will be limited in its ability to fully invest in that
mutual fund. The Manager may then, in some instances, select alternative
investments.

<PAGE>

The Investment Company Act also provides that an underlying mutual fund
whose shares are purchased by a Portfolio may be allowed to delay redemption of
its shares in an amount which exceeds 1% of its total outstanding securities
during any period of less than 30 days. Shares held by a Portfolio in excess of
1% of a mutual fund's outstanding securities therefore may not be considered
readily disposable securities.

Under certain circumstances, an underlying mutual fund may determine to
make payment of a redemption by a Portfolio wholly or partly by a distribution
in kind of securities from its portfolio, in lieu of cash, in conformity with
rules of the Securities and Exchange Commission. In such cases the Portfolio may
hold securities distributed by an underlying mutual fund until the Manager
determines that it is appropriate to dispose of such securities.

CLOSED-END INVESTMENT COMPANIES. The Portfolios or their underlying funds
may invest their assets in "closed-end" investment companies (or "closed-end
funds"), subject to the investment restrictions set forth below. The Portfolios,
together with any company or companies controlled by the Portfolios, and any
other investment companies having the Manager as an investment adviser, may
purchase in the aggregate only up to 3% of the total outstanding voting stock of
any closed-end fund. 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% or 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 to the issuer like the
shares of an open-end investment company (such as a Portfolio), investors seek
to buy and sell shares of closed-end funds in the secondary market.

A Portfolio generally will purchase shares of closed-end funds only in the
secondary market. A Portfolio will incur normal brokerage costs on such
purchases similar to the expenses a Portfolio would incur for the purchase of
securities of any other type of issuer in the secondary market. A Portfolio may,
however, also purchase securities of a closed-end fund in an initial public
offering when, in the opinion of the Manager, based on a consideration of the
nature of the closed-end fund's proposed investments, the prevailing market
conditions and the level of demand for such securities, they represent an
attractive opportunity for growth of capital. The initial offering price
typically will include a dealer spread, which may be higher than the applicable
brokerage cost if a Portfolio purchased such securities in the secondary market.

The shares of many closed-end funds, after their initial public offering,
frequently trade at a price per share which is less than the net asset value per
share, the difference representing the "market discount" of such shares. This
market discount may be due in part to the investment objective of long-term

<PAGE>

appreciation, which is sought by many closed-end funds, as well as to the fact
that the shares of closed-end funds are not redeemable by the holder upon demand
to the issuer at the next determined net asset value but rather are subject to
the principles of supply and demand in the secondary market. A relative lack of
secondary market purchasers of closed-end fund shares also may contribute to
such shares trading at a discount to their net asset value.

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 purchased by
a Portfolio will ever decrease. In fact, it is possible that this market
discount may increase and a Portfolio 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.

Closed-end funds may issue senior securities (including preferred stock and
debt obligations) for the purpose of leveraging the closed-end fund's common
shares in an attempt to enhance the current return to such closed-end fund's
common shareholders. A Portfolio's investment in the common shares of closed-end
funds that are financially leveraged may create an opportunity for greater total
return on its investment, but at the same time may be expected to exhibit more
volatility in market price and net asset value than an investment in shares of
investment companies without a leveraged capital structure.

COMMON STOCKS. A Portfolio may invest in common stocks based upon the
criteria described in its investment objectives. Generally, investments in
common stocks will not exceed 25% of a Portfolio's net assets.

INDEX-BASED INVESTMENTS. The Portfolios and their underlying funds may
invest their assets in index-based investments (IBIs), including, among others,
Standard & Poor's Depositary Receipts (SPDRs) and DIAMONDS. IBIs are shares of
publicly traded Unit Investment Trusts - investment vehicles registered with the
Securities and Exchange Commission under the Investment Company Act of 1940 -
which own the stocks in the relevant index.

SPDRs are units of beneficial interest in an investment trust sponsored by
a wholly-owned subsidiary of the American Stock Exchange, Inc. (the "Exchange")
that represent proportionate undivided interests in a portfolio of securities
consisting of substantially all of the common stocks of the S&P 500 Index. SPDRs
are listed on the Exchange and may be traded in the secondary market on a
per-SPDR basis. SPDRs are designed to provide investment results that generally
correspond to the price and yield performance of the component of common stocks
of the S&P 500 Index.

<PAGE>

DIAMONDS are units of beneficial interest in an investment trust
representing proportionate undivided interests in a portfolio of securities
consisting of all the component common stocks of the Dow Jones Industrial
Average. DIAMONDS are listed on the Exchange and may be traded in the secondary
market on a per-DIAMOND basis. DIAMONDS are designed to provide investment
results that generally correspond to the price and yield performance of the
component common stocks of the Dow Jones Industrial Average.

IBIs 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. A Portfolio's investment in an IBI may not exactly match the performance
of a direct investment in the respective index to which it is intended to
correspond. Additionally, an IBI may not fully replicate the performance of its
benchmark index due to the temporary unavailability of certain index securities
in the secondary market or due to other extraordinary circumstances, such as
discrepancies between the IBI and the index with respect to the weighting of
securities. IBIs 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.

MONEY MARKET INSTRUMENTS. A Portfolio or an underlying fund may invest in
money market instruments. When investing in money market instruments, a
Portfolio will limit its purchases, denominated in U.S. dollars, to the
following securities.

U.S. Government Securities and Securities of its Agencies and
Instrumentalities - obligations issued or guaranteed as to principal or interest
by the United States or its agencies (such as the Export Import Bank of the
United States, Federal Housing Administration, and Government National Mortgage
Association) or its instrumentalities (such as the Federal Home Loan Bank,
Federal Intermediate Credit Banks and Federal Land Bank), including Treasury
bills, notes and bonds.

Bank Obligations and Instruments Secured Thereby - obligations (including
certificates of deposit, time deposits and bankers' acceptances) of domestic
banks having total assets of $1,000,000,000 or more, instruments secured by such
obligations and obligations of foreign branches of such banks, if the domestic
parent bank is unconditionally liable to make payment on the instrument if the
foreign branch fails to make payment for any reason. A Portfolio may also invest
in obligations (including certificates of deposit and bankers' acceptances) of
domestic branches of foreign banks having assets of $1,000,000,000 or more, if
the domestic branch is subject to the same regulation as United States banks. A
Portfolio will not invest at time of purchase more than 25% of its assets in
obligations of banks, nor will a Portfolio invest more than 10% of its assets in
time deposits.

High Quality Commercial Paper - A Portfolio may invest in commercial paper
rated no lower than "A-2" by Standard & Poor's Corporation or "Prime-2" by

<PAGE>

Moody's Investors Services, Inc., or, if not rated, issued by a company having
an outstanding debt issue rated at least A by Standard & Poor's or Moody's.

Private Placement Commercial Paper - Private placement commercial paper
consists of unregistered securities which are traded in public markets to
qualified institutional investors, such as the Portfolios. A Portfolio's risk is
that the universe of potential buyers for the securities, should the Portfolio
desire to liquidate a position, is limited to qualified dealers and
institutions, and therefore such securities could have the effect of being
illiquid.

High Grade Corporate Obligations - obligations rated at least A by Standard
& Poor's or Moody's. See rating information below.

Repurchase Agreements - See "Repurchase Agreements" below.

The Manager exercises due care in the selection of money market
instruments. However, there is a risk that the issuers of the securities may not
be able to meet their obligations to pay interest or principal when due. There
is also a risk that some of a Portfolio's securities might have to be liquidated
prior to maturity at a price less than original amortized cost or value, face
amount or maturity value to meet larger than expected redemptions. Any of these
risks, if encountered, could cause a reduction in net income or in the net asset
value of a Portfolio.

RATINGS

1. Moody's Investors Services, Inc.'s Corporate Bond Rating:

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

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

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

<PAGE>

Baa - Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length or time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

2. Standard and Poor's Corporation's Corporate Bond Rating:

AAA - Bonds rated AAA are highest grade obligations. They possess the
ultimate degree of protection as to principal and interest. Marketwise they move
with interest rates, and hence provide the maximum safety on all counts.

AA - Bonds rated AA also qualify as high grade obligations, and in the
majority of instances differ from AAA issues only in small degree. Here, too,
prices move with the long-term money market.

A - Bonds rated A are regarded as upper medium grade. They have
considerable investment strength but are not entirely free from the adverse
effect of changes in economic and trade conditions. Interest and principal are
regarded as safe. They predominantly reflect money rates in their market
behavior but, to some extent, also economic conditions.

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

3. Commercial Paper Ratings:

Commercial paper rated A-1 by Standard & Poor's Corporation ("S&P") has the
following characteristics: Liquidity ratios are adequate to meet cash
requirements. Long term senior debt is rated "A" or better. The issuer has
access to at least two additional channels of borrowing. Basic earnings and cash
flow have an upward trend. Typically, the issuer's industry is well established
and the issuer has a strong position within the industry. The reliability and
quality of management are unquestioned. Relative strength or weakness of the
above factors determines whether the issuer's commercial paper is A-1, A-2, or
A-3.

The rating P-1 is the highest commercial paper rating assigned by Moody's
Investors Service, Inc. ("Moody's"). Among the factors considered by Moody's in
assigning ratings are the following: (1) evaluation of the management of the
issuer; (2) economic evaluation of the issuer's industry or industries and an
appraisal of speculative-type risks which may be inherent in certain areas; (3)

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evaluation of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend
of earnings over a period of ten years; (7) financial strength of a parent
company and the relationships which exist with the issuer; and (8) recognition
by the management of obligations which may be present or may arise as a result
of public interest questions and preparations to meet such obligations.

4. Description of Permitted Money Market Investments:

Commercial Paper - refers to promissory notes issued by corporations in
order to finance their short term credit needs.

U.S. Government Obligations - are bills, certificates of indebtedness notes
and bonds issued by the U.S. Treasury and agencies, authorities and
instrumentalities of the U.S. Government established under the authority of an
act of Congress. Some obligations of U.S. Government agencies, authorities and
instrumentalities are supported by the full faith and credit of the U.S.
Treasury, as for example, the Government National Mortgage Association; others
by the right of the issuer to borrow from the Treasury, as in the case of
Federal Farm Credit Banks and Federal National Mortgage Association; and others
only by the credit of the agency, authority or instrumentality; as for example,
Federal Home Loan Mortgage and Federal Home Loan Bank.

Repurchase Agreements - See "Repurchase Agreements" below.

Certificates of Deposit - are certificates issued against funds deposited
in a bank, are for a definite period of time, earn a specified or variable rate
of return and are normally negotiable.

Banker's Acceptances - are short-term credit instruments used to finance
the import, export, transfer or storage of goods. They are termed "accepted"
when a bank guarantees their payment at maturity.

Corporate Obligations - include bonds and notes issued by corporations in
order to finance longer term credit needs.

FOREIGN INVESTMENTS. The Portfolios may invest their assets in underlying
funds that hold foreign securities. Foreign investments can involve significant
risks in addition to the risks inherent in U.S. investments. The value of
securities denominated in or indexed to foreign currencies, and of dividends and
interest from such securities, can change significantly when foreign currencies
strengthen or weaken relative to the U.S. dollar. Foreign securities markets
generally have less trading volume and less liquidity than U.S. markets, and
prices on some foreign markets can be highly volatile.

Many foreign countries lack uniform accounting and disclosure standards
comparable to those applicable to U.S. companies, and it may be more difficult
to obtain reliable information regarding an issuer's financial condition and
operations.

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In addition, the costs of foreign investing, including withholding taxes,
brokerage commissions, and custodial costs, are generally higher than for U.S.
investments.

Foreign markets may offer less protection to investors than U.S. markets.
Foreign issuers, brokers, and securities markets may be subject to less
government supervision. Foreign security trading practices, including those
involving the release of assets in advance of payment, may involve increased
risks in the event of a failed trade or the insolvency of a broker-dealer, and
may involve substantial delays. It may also be difficult to enforce legal rights
in foreign countries.

Investing abroad also involves different political and economic risks.
Foreign investments may be affected by actions of foreign governments adverse to
the interests of U.S. investors, including the possibility of expropriation or
nationalization of assets, confiscatory taxation, restrictions on U.S.
investment or on the ability to repatriate assets or convert currency into U.S.
dollars, or other government intervention. There may be a greater possibility of
default by foreign governments or foreign government-sponsored enterprises.
Investments in foreign countries also involve a risk of local political,
economic, or social instability, military action or unrest, or adverse
diplomatic developments. There is no assurance that the Manager will be able to
anticipate or counter these potential events.

The considerations noted above generally are intensified for investments in
developing countries. Developing countries may have relatively unstable
governments, economies based on only a few industries, and securities markets
that trade a small number of securities.

The Portfolios may invest in foreign securities that impose restrictions on
transfer within the U.S. or to U.S. persons. Although securities subject to
transfer restrictions may be marketable abroad, they may be less liquid than
foreign securities of the same class that are not subject to such restrictions.

American Depositary Receipts and European Depositary Receipts (ADRs and
EDRs) are certificates evidencing ownership of shares of a foreign-based
corporation held in trust by a bank or similar financial institution. Designed
for use in U.S. and European securities markets, respectively, ADRs and EDRs are
alternatives to the purchase of the underlying securities in their national
markets and currencies.

ILLIQUID INVESTMENTS. The Portfolios and their underlying funds may invest
their assets in illiquid securities. Illiquid securities are investments that
cannot be sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued. Under the supervision of the
Board of Trustees, the Manager determines the liquidity of each Portfolio's
investments and, through reports from the Manager, the Board monitors
investments in illiquid instruments. In determining the liquidity of a
Portfolio's investments, the Manager may consider various factors, including (1)

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the frequency of trades and quotations, (2) the number of dealers and
prospective purchasers in the marketplace, (3) dealer undertakings to make a
market, (4) the nature of the security (including any demand or tender
features), and (5) the nature of the marketplace for trades (including the
ability to assign or offset the Portfolio's rights and obligations relating to
the investment). Investments currently considered by a Portfolio to be illiquid
include shares in excess of 1% of a mutual fund's outstanding securities,
repurchase agreements not entitling the holder to payment of principal and
interest within seven days, over-the-counter options, and non-government
stripped fixed-rate mortgage-backed securities. Also, the Manager may determine
some restricted securities to be illiquid. However, with respect to
over-the-counter options a Portfolio writes, all or a portion of the value of
the underlying instrument may be illiquid depending on the assets held to cover
the option and the nature and terms of any agreement the Portfolio may have to
close out the option before expiration. In the absence of market quotations,
illiquid investments are priced at fair value as determined in good faith by the
Board of Trustees. If through a change in values, net assets, or other
circumstances, a Portfolio were in a position where more than 15% of its net
assets were invested in illiquid securities, it would seek to take appropriate
steps to protect liquidity.

RESTRICTED SECURITIES. The Portfolios and their underlying funds may invest
their assets in restricted securities. Restricted securities generally can be
sold in privately negotiated transactions, pursuant to an exemption from
registration under the Securities Act of 1933, or in a registered public
offering. Where registration is required, a Portfolio may be obligated to pay
all or part of the registration expense and a considerable period may elapse
between the time it decides to seek registration and the time the Portfolio may
be permitted to sell a security under an effective registration statement. If,
during such a period, adverse market conditions were to develop, the Portfolio
might obtain a less favorable price than prevailed when it decided to seek
registration of the security.

REPURCHASE AGREEMENTS. The Portfolios and their underlying funds may invest
their assets in repurchase agreements. In a repurchase agreement, a Portfolio
purchases a security and simultaneously commits to resell that security to the
seller at an agreed upon price on an agreed upon date within a number of days
from the date of purchase. The resale price reflects the purchase price plus an
agreed upon incremental amount which is unrelated to the coupon rate or maturity
of the purchased security. A repurchase agreement involves the obligation of the
seller to pay the agreed upon price, which obligation is in effect secured by
the value (at least equal to the amount of the agreed upon resale price and
marked to market daily) of the underlying security. A Portfolio may engage in
repurchase agreements with respect to any security in which it is authorized to
invest.

While it does not presently appear possible to eliminate all risks from
these transactions (particularly the possibility of a decline in the market
value of the underlying securities, as well as delays and costs to a Portfolio
in connection with bankruptcy proceedings), it is each Portfolio's current

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policy to limit repurchase agreement transactions to parties whose
creditworthiness has been reviewed and found satisfactory by the Manager.

HEDGING STRATEGIES. Each Portfolio may engage in hedging transactions in
carrying out its investment policies. The Manager may conduct a hedging program
on behalf of a Portfolio for the following reasons: (1) to keep cash on hand to
meet shareholder redemptions or other needs while simulating full investment in
stocks; (2) to reduce the Fund's transaction costs or add value when these
instruments are favorably priced; (3) to forego taxes that would otherwise have
to be paid on gains from the sale of the Fund's securities; and (4) to attempt
to protect the value of certain securities owned or intended to be purchased by
the Fund while the manager is making a change in the Fund's investment position.

A hedging program involves entering into an "option" or "futures"
transaction in lieu of the actual purchase or sale of securities. At present,
many groups of common stocks (stock market indices) may be made the subject of
futures contracts, while government securities such as Treasury Bonds and Notes
are among debt securities currently covered by futures contracts.

Derivatives are financial instruments whose performance is derived, at
least in part, from the performance of an underlying asset, security or index.
Financial futures contracts or related options used by a Portfolio to implement
its hedging strategies are considered derivatives. The value of derivatives can
be affected significantly by even small market movements, sometimes in
unpredictable ways. They do not necessarily increase risk, and may in fact
reduce risk.

LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. For certain regulatory
purposes, the Commodity Futures Trading Commission ("CFTC") limits the types of
futures positions that can be taken in conjunction with the management of a
securities portfolio for mutual funds, such as the Funds. All futures
transactions for a Portfolio will consequently be subject to the restrictions on
the use of futures contracts established in CFTC rules, such as observation of
the CFTC's definition of "hedging." In addition, whenever a Portfolio
establishes a long futures position, it will set aside cash or cash equivalents
equal to the underlying commodity value of the long futures contracts held by
the Portfolio. Although all futures contracts involve leverage by virtue of the
margin system applicable to trading on futures exchanges, a Portfolio will not,
on a net basis, have leverage exposure on any long futures contracts that it
establishes because of the cash set aside requirement. All futures transactions
can produce a gain or a loss when they are closed, regardless of the purpose for
which they have been established. Unlike short futures contracts positions
established to protect against the risk of a decline in value of existing
securities holdings, the long futures positions established by a Portfolio to
protect against reinvestment risk are intended to protect the Portfolio against
the risks of reinvesting portfolio assets that arise during periods when the
assets are not fully invested in securities.

<PAGE>

A Portfolio may not purchase or sell financial futures or purchase related
options if immediately thereafter the sum of the amount of margin deposits on
the Portfolio's existing futures positions and premiums paid for related options
would exceed 5% of the market value of the Portfolio's total assets.

The above limitations on a Portfolio's investments in futures contracts and
options, and each Portfolio's policies regarding futures contracts and options
discussed elsewhere in this Statement of Additional Information, may be changed
as regulatory agencies permit.

FUTURES CONTRACTS. When a Portfolio purchases a futures contract, it agrees
to purchase a specified underlying instrument at a specified future date. When a
Portfolio sells a futures contract, it agrees to sell the underlying instrument
at a specified future date. The price at which the purchase and sale will take
place is fixed when the Portfolio enters into the contract.

Some currently available futures contracts are based on indices of
securities-prices, such as the Standard & Poor's 500 Composite Stock Price Index
(S&P 500). Futures can be held until their delivery dates, or can be closed out
before then if a liquid secondary market is available.

The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase a Portfolio's exposure to positive and negative
price fluctuations in the underlying instrument, much as if it had purchased the
underlying instrument directly. When a Portfolio sells a futures contract, by
contrast, the value of its futures position will tend to move in a direction
contrary to the market. Selling futures contracts, therefore, will tend to
offset both positive and negative market price changes, much as if the
underlying instrument had been sold.

FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the contract
is held until the delivery date. However, both the purchaser and seller are
required to deposit "initial margin" with a futures broker, known as a futures
commission merchant (FCM), when the contract is entered into. Initial margin
deposits are typically equal to a percentage of the contract's value.

If the value of either party's position declines, that party will be
required to make additional "variation margin" payments to settle the change in
value on a daily basis. The party that has a gain may be entitled to receive all
or a portion of this amount. Initial and variation margin payments do not
constitute purchasing securities on margin for purposes of each Portfolio's
investment limitations. In the event of the bankruptcy of an FCM that holds
margin on behalf of a Portfolio, the Portfolio may be entitled to return of
margin owed to it only in proportion to the amount received by the FCM's other
customers, potentially resulting in losses to the Portfolio.

<PAGE>

PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, a Portfolio
obtains the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the Portfolio pays
the current market price for the option (known as the option premium). Options
have various types of underlying instruments, including specific securities,
indices of securities prices and futures contracts. A Portfolio may terminate
its position in a put option it has purchased by allowing it to expire or by
exercising the option. If the option is allowed to expire, the Fund will lose
the entire premium it paid. If a Portfolio exercises the option, it completes
the sale of the underlying instrument at the strike price. A Portfolio may also
terminate a put option position by closing it out in the secondary market at its
current price, if a liquid secondary market exists.

The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price does
not fall enough to offset the cost of purchasing the option, a put buyer can
expect to suffer a loss (limited to the amount of the premium paid, plus related
transaction costs).

The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's strike
price.

A call buyer typically attempts to participate in potential price increases
of the underlying instrument with risk limited to the cost of the option if
security prices fall. At the same time, the buyer can expect to suffer a loss if
security prices do not rise sufficiently to offset the cost of the option.

WRITING PUT AND CALL OPTIONS. When a Portfolio writes a put option, it
takes the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium the Portfolio assumes the obligation to pay
the strike price for the option's underlying instrument if the other party to
the option chooses to exercise it. When writing an option on a futures contract
a Portfolio will be required to make margin payments to an FCM as described
above for futures contracts. A Portfolio may seek to terminate its position in a
put option it writes before exercise by closing out the option in the secondary
market at its current price. If the secondary market is not liquid for a put
option a Portfolio has written, however, the Portfolio must continue to be
prepared to pay the strike price while the option is outstanding, regardless of
price changes and must continue to set aside assets to cover its position.

When a Portfolio writes a put option, it takes the opposite side of the
transaction from the option's purchaser. In return for receipt of the premium,
the Portfolio assumes the obligation to pay the strike price for the option's
underlying instrument if the other party to the option chooses to exercise it.
When writing an option on a futures contract a Portfolio will be required to
make margin payments to an FCM as described above for futures contracts. A

<PAGE>

Portfolio may seek to terminate its position in a put option it writes before
exercise by closing out the option in the secondary market at its current price.
If the secondary market is not liquid for a put option a Portfolio has written,
however, the Portfolio must continue to be prepared to pay the strike price
while the option is outstanding, regardless of price changes, and must continue
to set aside assets to cover its position.

If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it received. If
security prices remain the same over time, it is likely that the writer will
also profit because it should be able to close out the option at a lower price.
If security prices fall, the put writer would expect to suffer a loss. This loss
should be less than the loss from purchasing the underlying instrument directly,
however, because the premium received for writing the option should mitigate the
effects of the decline.

Writing a call option obligates a Portfolio to sell or deliver the option's
underlying instrument in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the same
time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is greater,
a call writer gives up some ability to participate in security price increases.

A Portfolio may write only "covered" call options. An option written on a
security or currency is "covered" when, so long as the Portfolio is obligated
under the option, it owns the underlying security or currency. A Portfolio will
"cover" stock index options and options on futures contracts it writes by
maintaining in a segregated account either marketable securities, which in the
Subadviser's judgment correlate to the underlying index or futures contract or
an amount of cash, U.S. government securities or other liquid, high grade debt
securities equal in value to the amount the Portfolio would be required to pay
were the option exercised.

COMBINED POSITIONS. A Portfolio may purchase and write options in
combination with each other or in combination with futures or forward contracts,
to adjust the risk and return characteristics of the overall position. For
example, a Portfolio may purchase a put option and write a call option on the
same underlying instrument, in order to construct a combined position whose risk
and return characteristics are similar to selling a futures contract. Another
possible combined position would involve writing a call option at one strike
price and buying a call option at a lower price, in order to reduce the risk of
the written call option in the event of a substantial price increase. Because
combined options positions involve multiple trades, they result in higher
transaction costs and may be more difficult to open and close out.

CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange traded options and futures contracts, it is likely that the

<PAGE>

standardized contracts available will not match a Portfolio's current or
anticipated investments exactly. A Portfolio may invest in options and futures
contracts based on securities with different issuers, maturities, or other
characteristics from the securities in which it typically invests, which
involves a risk that the options or futures position will not track the
performance of the Portfolio's other investments.

Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a Portfolio's
investments well. Options and futures prices are affected by such factors as
current and anticipated short-term interest rates, changes in volatility of the
underlying instrument, and the time remaining until expiration of the contract,
which may not affect security prices the same way. Imperfect correlation may
also result from differing levels of demand in the options and futures markets
and the securities markets, from structural differences in how options and
futures and securities are traded, or from imposition of daily price fluctuation
limits or trading halts.

A Portfolio may purchase or sell options and futures contracts with a
greater or lesser value than the securities it wishes to hedge or intends to
purchase in order to attempt to compensate for differences in volatility between
the contract and the securities, although this may not be successful in all
cases. If price changes in a Portfolio's options or futures positions are poorly
correlated with its other investments, the positions may fail to produce
anticipated gains or result in losses that are not offset by gains in other
investments.

LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract at
any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying instrument's
current price. In addition, exchanges may establish daily price fluctuation
limits for options and futures contracts, and may halt trading if a contract's
price moves upward or downward more than the limit in a given day. On volatile
trading days when the price fluctuation limit is reached or a trading halt is
imposed, it may be impossible for a Portfolio to enter into new positions or
close out existing positions. If the secondary market for a contract is not
liquid because of price fluctuation limits or otherwise, it could prevent prompt
liquidation of unfavorable positions, and potentially could require a Portfolio
to continue to hold a position until delivery or expiration regardless of
changes in its value. As a result, a Portfolio's access to other assets held to
cover its options or futures positions could also be impaired.

ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The Portfolios will
comply with guidelines established by the SEC with respect to coverage of
options and futures strategies by mutual funds, and if the guidelines so
require, will set aside appropriate liquid assets in a segregated custodial
account in the amount prescribed. Securities held in a segregated account cannot
be sold while the futures or option strategy is outstanding, unless they are
replaced with other suitable assets. As a result, there is a possibility that
segregation of a large percentage of a Portfolio's assets could impede portfolio

<PAGE>

management or the Fund's ability to meet redemption requests or other current
obligations.

SHORT SALES. A Portfolio may enter into short sales "against the box" with
respect to equity securities it holds. For example, if the Adviser anticipates a
decline in the price of a stock the Portfolio holds, it may sell the stock short
"against the box." If the stock price subsequently declines, the proceeds of the
short sale could be expected to offset all or a portion of the stock's decline.
Each Portfolio currently intends to hedge no more than 25% of its total assets
with short sales "against the box" on equity securities under normal
circumstances.

When a Portfolio enters into a short sale "against the box", it will be
required to own, or have the right to obtain at no added cost, securities
identical to those sold short "against the box" and will be required to continue
to hold them while the short sale "against the box" is outstanding. The
Portfolio will incur transaction costs, including interest expense, in
connection with opening, maintaining, and closing short sales.

INVESTMENT RESTRICTIONS

The investment restrictions below have been adopted by the Trust with
respect to each of the Funds and by the Portfolios as fundamental policies.
Under the Investment Company Act of 1940 (the "Act"), a "fundamental" policy may
not be changed without the vote of a majority of the outstanding voting
securities of the Fund or Portfolio, respectively, to which it relates, which is
defined in the Act as the lesser of (a) 67 percent or more of the shares present
at a shareholder meeting if the holders of more than 50 percent of the
outstanding shares are present or represented by proxy, or (b) more than 50
percent of the outstanding shares ("Majority Voters). The percentage limitations
contained in the restrictions listed below apply at the time of the purchase of
the securities. Whenever a Fund is requested to vote on a change in the
investment restrictions of a Portfolio, the Trust will hold a meeting of Fund
shareholders and will cast its votes as instructed by the shareholders.

Provided that nothing in the following investment restrictions shall
prevent the Trust from investing all or part of a Fund's assets in an open-end
management investment company with the same investment objective or objectives
as such Fund, no Fund or Portfolio may:

(a) Issue senior securities;

(b) Act as underwriter of securities of other issuers;

<PAGE>

(d) Purchase or sell commodities or commodity contracts, except that it may
purchase or sell financial futures contracts involving U.S. Treasury Securities,
corporate securities, or financial indexes;

(e) Lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties; but this limitation
does not apply to purchases of debt securities or repurchase agreements;

(f) Purchase more than 10% of any class of securities, including voting
securities of any issuer, except that the purchase of U.S. Treasury debt
instruments and securities of other investment companies shall not be subject to
this limitation;

(g) Purchase any securities on margin, or participate in any joint or joint
and several trading account, provided, however, that it may open a margin
account to the extent necessary to engage in hedging transactions which are not
precluded by other particular restrictions;

(h) Make any so-called "short" sales of securities, except against an
identical portfolio position (i.e., a "short sale against the box"), but this
restriction shall not preclude a futures contract which sells short an index or
group of securities;

(i) Purchase or retain any securities of an issuer, any of whose officers
directors or security holders is an officer or director of the Trust or a
Portfolio, if such officer or director owns beneficially more than 1/2 of 1% of
the issuer's securities or together they own beneficially more than 5% of such
securities;

(j) Invest in securities of companies that have a record of less than three
years' continuous operation if, at the time of such purchase, more than 5% of
its assets (taken at value) would be so invested;

(k) Purchase participations or other direct interests in oil, gas or other
mineral exploration or development programs;

(l) Invest directly in warrants; provided, however, the purchase of the
shares of other investment companies that hold warrants is permitted; and

(m) Invest more than 15% of its net assets in restricted securities and
securities for which market quotations are not readily available and repurchase
agreements that mature in excess of seven days.

Each of the Trust's and the Portfolios' operating policy is not to: (a)
Notwithstanding (b) above, pledge assets having a value in excess of 10% of its
gross assets; (b) Invest in oil, gas or mineral Leases or programs; and (c)
Purchase real estate Limited partnerships.

<PAGE>

PORTFOLIO TURNOVER

The portfolio turnover rate is calculated by dividing the lesser of sales
or purchases of portfolio securities by the average monthly value of the
Portfolio's securities, excluding securities having a maturity at the date of
purchase of one year or less. High portfolio turnover may involve
correspondingly greater brokerage commissions and other transaction costs, which
will be borne directly by the Portfolio.

PURCHASE AND SALE OF PORTFOLIO SECURITIES

All orders for the purchase or sale of portfolio securities are placed on
behalf of each Portfolio by the Manager pursuant to authority contained in the
investment advisory agreement. The Manager is also responsible for the placement
of transaction orders for accounts for which it or its affiliates act as
investment adviser. In selecting broker-dealers, subject to applicable
limitations of the federal securities laws, the Manager considers various
relevant factors, including, but not limited to, the size and type of the
transaction; the nature and character of the markets for the security to be
purchased or sold; the execution efficiency, settlement capability, and
financial condition of the broker-dealer firm; the broker-dealer's execution
services rendered on a continuing basis; the reasonableness of any commissions,
and arrangements for payment of Portfolio or Fund expenses.

Each Portfolio may execute portfolio transactions with broker-dealers that
provide research and execution services to the Portfolio or other accounts over
which the Manager or its affiliates exercise investment discretion. Such
services may include advice concerning the value of securities; the advisability
of investing in, purchasing or selling securities; the availability of
securities or the purchasers or sellers of securities; furnishing analyses and
reports concerning issuers industries, securities, economic factors and trends,
portfolio strategy, and performance of accounts; and effecting securities
transactions and performing functions incidental thereto (such as clearance and
settlement). The selection of such broker-dealers generally is made by the
Manager (to the extent possible consistent with execution considerations) in
accordance with a ranking of broker-dealers determined periodically by the
Manager's investment staff based upon the quality of research and execution
services provided.

The receipt of research from broker-dealers that execute transactions on
behalf of a Portfolio may be useful to the Manager in rendering investment
management services to the Portfolio or its other clients, and conversely, such
research provided by broker-dealers that have executed transaction orders on
behalf of the Manager's other clients may be useful to the Manager in carrying
out its obligations to the Portfolio. The receipt of such research is not
expected to reduce the Manager's normal independent research activities;
however, it enables the Manager to avoid the additional expenses that could be
incurred if the Manager tried to develop comparable information through its own
efforts.

<PAGE>

Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause a
Portfolio to pay such higher commissions, the Manager must determine in good
faith that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers viewed
in terms of a particular transaction or the Manager's overall responsibilities
to the Portfolio and its other clients. In reaching this determination, the
Manager will not attempt to place a specific dollar value on the brokerage and
research services provided or to determine what portion of the compensation
should be related to those services.

The Manager is authorized to use research services provided by, and to
place portfolio transactions with, brokerage firms that have provided assistance
in the distribution of shares of the Funds or shares of other Flex-funds funds
or Flex-Partners funds to the extent permitted by law.

The Manager may allocate brokerage transactions to broker-dealers who have
entered into arrangements with the Manager under which the broker-dealer
allocates a portion of the commissions paid by a Portfolio toward payment of the
Portfolio or the Fund's expenses, such as transfer agent fees of Mutual Funds
Service Co. or custodian fees. The transaction quality must, however, be
comparable to those of other qualified broker-dealers.

The Trustees of each Portfolio periodically review the Manager's
performance of its responsibilities in connection with the placement of
portfolio transactions on behalf of the Portfolios and review the commissions
paid by each Portfolio over representative periods of time to determine if they
are reasonable in relation to the benefits to each Portfolio.

From time to time, the Trustees of each Portfolio will review whether the
recapture for the benefit of a Portfolio of some portion of the brokerage
commissions or similar fees paid by the Portfolio on portfolio transactions is
legally permissible and advisable.

Each Portfolio seeks to recapture soliciting broker-dealer fees on the
tender of portfolio securities, but at present no other recapture arrangements
are in effect. The Trustees of each Portfolio intend to continue to review
whether recapture opportunities are available and are legally permissible and,
if so, to determine in the exercise of their business judgment, whether it would
be advisable for the Portfolio to seek such recapture.

Although each Portfolio has substantially the same Trustees and officers,
investment decisions for each Portfolio are made independently from those of
other portfolios managed by the Manager or accounts managed by affiliates of the
Manager. It sometimes happens that the same security is held in the portfolio of

<PAGE>

more than one of these Portfolios or accounts. Simultaneous transactions are
inevitable when several Portfolios are managed by the same investment adviser,
particularly when the same security is suitable for the investment objective of
more than one Portfolio.

When two or more Portfolios are simultaneously engaged in the purchase or
sale of the same security, the prices and amounts are allocated in accordance
with a policy considered by the Portfolio Trustees to be equitable to each
portfolio. In some cases this system could have a detrimental effect on the
price or value of the security as far as one of the Portfolios is concerned. In
other cases, however, the ability of a Portfolio to participate in volume
transactions will produce better executions and prices for the Portfolio. It is
the current opinion of the Trustees of each Portfolio that the desirability of
retaining the Manager as investment adviser to each Portfolio outweighs any
disadvantages that may be said to exist from exposure to simultaneous
transactions.

VALUATION OF PORTFOLIO SECURITIES

Normally, the assets of each Fund consist primarily of underlying mutual
funds, which are valued at their respective net asset values under the 1940 Act.
The underlying funds value securities in their portfolios for which market
quotations are readily available at their current market value (generally the
last reported sale price) and all other securities and assets at fair value
pursuant to methods established in good faith by the board of directors of the
underlying mutual fund.

Securities owned by a Portfolio and listed or traded on any national
securities exchange are valued at each closing of the New York Stock Exchange on
the basis of the last published sale on such exchange each day that the exchange
is open for business. If there is no sale on that day, or if the security is not
listed, it is valued at its last bid quotation on the exchange or, in the case
of unlisted securities, as obtained from an established market maker. Futures
contracts are valued on the basis of the cost of closing out the liability i.e.
at the settlement price of a closing contract or at the asked quotation for such
a contract if there is no sale. Money market instruments (certificates of
deposit commercial paper, etc.) having maturities of 60 days or less are valued
at amortized cost if not materially different from market value. Portfolio
securities for which market quotations are not readily available are to be
valued by the Manager in good faith, at its own expense, under the direction of
the Trustees.

Other assets, which include cash, prepaid and accrued items, and amounts
receivable as income on investments and from the sale of portfolio securities,
are carried at book value, as are all liabilities. Liabilities include accrued
expenses, sums owed for securities purchased, and dividends payable.

CALCULATION OF TOTAL RETURN

From time to time The Growth Fund and The Aggressive Growth Fund may
advertise their period and average annual total returns for various periods of

<PAGE>

time. An annualized total return is a compounded total return which assumes that
the period total return is generated over a one-year period, and that all
dividends and capital gain distributions are reinvested. An annualized total
return will be slightly higher than a period total return, if the period is
shorter than one year, because of the assumed reinvestment.

Unlike some bank deposits or other investments which pay a fixed yield for
a stated period of time, the total return of each Fund will vary depending upon
interest rates, the current market value of the securities held by the Fund's
corresponding Portfolio, and changes in the Fund's expenses.

When applicable, depending on the Fund, the periods of time shown will be
for a one-year period, a five-year period, a ten-year period, and since
inception. The calculation assumes the reinvestment of all dividends and
distributions. Examples of the total return calculation for the Funds will
assume a hypothetical investment of $1,000 at the beginning of each period. It
is computed by finding the average annual compounded rates of return over the
length of the base periods that would equate the initial amount invested to the
ending redeemable value, according to the following formula:

P (1+T)n = ERV
P = initial investment of $1,000
T = average annual total return
n = Number of years
ERV = ending redeemable value at the end of the base period

Total return performance data represent past performance, and the
investment return and principal value of an investment will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost.

COMPARATIVE PERFORMANCE INFORMATION may be used from time to time in
advertising or marketing information relative to the Funds, including data from
Lipper Analytical Services, Inc., Morningstar Mutual Fund Report, other
publications, various indices, or results of the Consumer Price Index, other
mutual funds or investment or savings vehicles.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

Each Fund is open for business and its net asset value per share (NAV) is
calculated each day the NYSE is open for trading. The NYSE has designated the
following holiday closings for 2000: New Year's Day, Martin Luther King Day,
Washington's Birthday (observed), Good Friday, Memorial Day (observed),
Independence Day (observed), Labor Day, Thanksgiving Day, and Christmas Day

<PAGE>

(observed). Although the Manager expects the same holiday schedule to be
observed in the future, the NYSE may modify its holiday schedule at any time.

Each Fund's NAV is determined as of the close of the NYSE (normally 4:00
p.m. Eastern time). However, NAV may be calculated earlier if trading on the
NYSE is restricted or as permitted by the SEC. To the extent that portfolio
securities are traded in other markets on days when the NYSE is closed, a Fund's
NAV may be affected on days when investors do not have access to the Fund to
purchase or redeem shares.

Shareholders of each Fund will be able to exchange their shares for shares
of any mutual fund that is a series of The Flex-funds (each a "Flex-funds
Fund"). No fee or sales load will be imposed upon the exchange.

Additional details about the exchange privilege and prospectuses for each
of the Flex-funds Funds are available from the Funds' Transfer Agent. The
exchange privilege may be modified, terminated or suspended on 60 days' notice,
and each Fund has the right to reject any exchange application relating to such
Fund's shares. The 60 day notification requirement may be waived if (i) the only
effect of a modification would be to reduce or eliminate an administrative fee
redemption fee, or deferred sales charge ordinarily payable at the time of an
exchange, or (ii) the Fund suspends the redemption of the shares to be exchanged
as permitted under the 1940 Act or the rules and regulations thereunder, or the
fund to be acquired suspends the sale of its shares because it is unable to
invest amounts effectively in accordance with its investment objective and
policies.

In the Prospectus, each Fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by any
person or group if, in the Manager's judgment, the Fund would be unable to
invest effectively in accordance with its investment objective and policies, or
would otherwise potentially be adversely affected.

Any redemptions in kind made by a Fund will be of readily marketable
securities.

AUTOMATIC ACCOUNT BUILDER. An investor may arrange to have a fixed amount
of $100 or more automatically invested in shares of a Fund monthly by
authorizing his or her bank account to be debited to invest specified dollar
amounts in shares of the Fund. The investor's bank must be a member of the
Automatic Clearing House System.

Further information about these programs and an application form can be
obtained from the Funds' Transfer Agent.

SYSTEMATIC WITHDRAWAL PROGRAM. A systematic withdrawal plan is available
for shareholders having shares of a Fund with a minimum value of $10,000, based
upon the offering price. The plan provides for monthly, quarterly or annual
checks in any amount, but not less than $100 which amount is not necessarily
recommended).

<PAGE>

Dividends and/or distributions on shares held under this plan are invested
in additional full and fractional shares at net asset value. The Transfer Agent
acts as agent for the shareholder in redeeming sufficient full and fractional
shares to provide the amount of the periodic withdrawal payment. The plan may be
terminated at any time.

Withdrawal payments should not be considered as dividends, yield or income.
If periodic withdrawals continuously exceed reinvested dividends and
distributions, the shareholder's original investment will be correspondingly
reduced and ultimately exhausted.

Furthermore, each withdrawal constitutes a redemption of shares, and any
gain or loss realized must be recognized for federal income tax purposes. Each
shareholder should consult his or her own tax adviser with regard to the tax
consequences of the plan, particularly if used in connection with a retirement
plan.

INVESTMENT ADVISER AND MANAGER

R. Meeder & Associates, Inc. (the "Manager") is the investment adviser and
manager for, and has a separate Investment Advisory Contract with, each
Portfolio.

Pursuant to the terms of each Investment Advisory Contract, the Manager has
agreed to provide an investment program within the limitations of each
Portfolio's investment policies and restrictions, and to furnish all executive,
administrative, and clerical services required for the transaction of Portfolio
business, other than accounting services and services that are provided by each
Portfolio's custodian, transfer agent, independent accountants, and legal
counsel.

The Investment Advisory Contract for each Portfolio was separately approved
by a vote of a majority of the Trustees, including a majority of those Trustees
who are not "interested persons" (as defined in the Investment Company Act of
1940) of the Portfolio. Each of these contracts is to remain in force so long as
renewal thereof is specifically approved at least annually by a majority of the
Trustees or by vote of a majority of outstanding shares of each Portfolio, and
in either case by vote of a majority of the Trustees who are not "interested
persons" (as defined in the Investment Company Act of 1940) at a meeting called
for the purpose of voting on such renewals.

Each Investment Advisory Contract will terminate automatically if assigned
and may be terminated without penalty at any time upon 60 days' prior written
notice by Majority Vote of the Portfolio, by the Trustees of the Portfolio, or
by the Manager.

Costs, expenses and liabilities of the Trust attributable to a particular
Fund are allocated to that Fund. Costs, expenses and liabilities that are not
readily attributable to a particular Fund are allocated among all of the Trust's
Funds. Thus, each Fund pays its proportionate share of: the fees of the Trust's
independent auditors, legal counsel, custodian, transfer agent and accountants;

<PAGE>

insurance premiums; the fees and expenses of Trustees who do not receive
compensation from R. Meeder & Associates; association dues; the cost of printing
and mailing confirmations, prospectuses, proxies, proxy statements, notices and
reports to existing shareholders; state registration fees; distribution expenses
within the 0.25% limitation of each Fund's Distribution Plan, including the cost
of printing and mailing of prospectuses and other materials incident to
soliciting new accounts; and other miscellaneous expenses.

The respective expenses of each Portfolio include the compensation of its
respective Trustees who are not affiliated with the Manager; registration fees;
membership dues allocable to the Portfolio; fees and expenses of independent
accountants, of legal counsel and of any transfer agent, accountant, custodian
of the Portfolio; insurance premiums and other miscellaneous expenses.

Expenses of each Portfolio also include all fees under its Administrative
Service Agreement; the expenses connected with the execution, recording and
settlement of security transactions; fees and expenses of the Portfolio's
custodian for all services to the Portfolio, including safekeeping of funds and
securities and maintaining required books and accounts; expenses of preparing
and mailing reports to investors and to governmental offices and commissions;
expenses of meetings of investors and Trustees; the advisory fees payable to the
Manager under the Advisory Contract and other miscellaneous expense.

The Board of Trustees of the Trust believes that the aggregate per share
expenses of any Fund and its corresponding Portfolio will be less than or
approximately equal to the expenses which a Fund would incur if it retained the
services of an investment adviser and the assets of the Fund were invested
directly in the type of securities being held by the Portfolio.

The Manager earns an annual fee, payable in monthly installments as
follows. The fee for each Portfolio is based upon the average net assets of the
Portfolio and is at the rate of 0.75% of the first $200 million and 0.60% in
excess of $200 million of average net assets.

The Manager has agreed to waive its fees and/or absorb expenses to limit
the total annual operating expenses of each Fund to 1.25%. The Manager may
terminate this agreement after December 31, 2000.

R. Meeder & Associates, Inc. was incorporated in Ohio on February 1, 1974
and maintains its principal offices at 6000 Memorial Drive, Dublin, Ohio 43017.
The Manager is a wholly-owned subsidiary of Muirfield Investors, Inc. ("MII"), a
holding company which is controlled by Robert S. Meeder, Sr. through ownership
of common stock. MII conducts business only through its six subsidiaries, which
are the Manager; Mutual Funds Service Co., the Trust's transfer agent;
Opportunities Management Co., a venture capital investor; Meeder Advisory

<PAGE>

Services, Inc., a registered investment adviser; OMCO, Inc., a registered
commodity trading adviser and commodity pool operator; and Adviser Dealer
Services, Inc., a broker-dealer.

The Manager's officers and directors are as set forth as follows: Robert S.
Meeder, Sr., Chairman and Sole Director; Philip A. Voelker, Senior Vice
President and Chief Investment Officer; Donald F. Meeder, Secretary; Robert S.
Meeder, Jr., President; Thomas E. Line, Chief Operating Officer; Michael J.
Sullivan, Vice President of Sales and Marketing, and Wesley F. Hoag, Vice
President and General Counsel. Mr. Robert S. Meeder, Sr. is President and a
Trustee of the Trust and each Portfolio. Mr. Robert S. Meeder, Jr. and Philip A.
Voelker each are a Trustee and officer of the Trust and each Portfolio. Each of
Messrs. Donald F. Meeder, Wesley F. Hoag and Thomas E. Line is an officer of the
Trust and each Portfolio.

The Manager may use its resources to pay expenses associated with the sale
of each Fund's shares. This may include payments to third parties such as banks
or broker-dealers that provide shareholder support services or engage in the
sale of each Fund's shares. However, the Funds do not pay the Manager any
separate fee for this service.

OFFICERS AND TRUSTEES

The Board of Trustees oversees the management of the Trust and the
Portfolios and elects their officers. The officers are responsible for the
funds' day-to-day operations. The Trustees' and officers' names, positions and
principal occupations during the past five years are listed below. Except as
indicated, each individual has held the office shown or other offices in the
same company for the last five years. Except as otherwise shown, all persons
named as Trustees also serve in similar capacities for all other mutual funds
advised by the Manager, including The Flex-funds, The Flex-Partners and the
corresponding portfolios of the Flex-Partners and The Flex-funds (collectively,
the "Fund Complex"). Unless otherwise noted, the business address of each
Trustee and officer is 6000 Memorial Drive, Dublin, Ohio 43017, which is also
the address of the Manager. Those Trustees who are "interested persons" (as
defined in the Investment Company Act of 1940) by virtue of their affiliation
with the Fund Complex are indicated by an asterisk (*).

NAME, ADDRESS AND AGE POSITION HELD PRINCIPAL OCCUPATION

ROBERT S. MEEDER, SR.*+, 70 Trustee/President Chairman of R. Meeder &
Associates, Inc., an
investment adviser;
Chairman and Director of
Mutual Funds Service Co.,
the Funds' transfer agent.

<PAGE>

MILTON S. BARTHOLOMEW, 70 Trustee Retired; formerly a
1424 Clubview Boulevard, S. practicing attorney in
Worthington, OH 43235 Columbus, Ohio; member of
each Fund's Audit
Committee.

ROGER D. BLACKWELL, 59 Trustee Professor of Marketing and
Blackwell Associates, Inc. Consumer Behavior, The
3380 Tremont Road Ohio State University;
Columbus, OH 43221 President of Blackwell
Associates, Inc., a
strategic consulting firm.

ROBERT S. MEEDER, JR.*+, 38 Trustee and President of R. Meeder &
Vice President Associates, Inc.

WALTER L. OGLE, 62 Trustee Executive Vice President
400 Interstate North Parkway of Aon Consulting, an
Suite 1630 employee benefits
Atlanta, GA 30339 consulting group.

CHARLES A. DONABEDIAN, 56 Trustee President, Winston
Winston Financial, Inc. Financial, Inc., which
200 TechneCenter Drive provides a variety of
Suite 200 marketing and consulting
Milford, OH 45150 services to investment
management companies; CEO,
Winston Advisors, Inc., an
investment adviser.

JAMES W. DIDION, 68 Trustee Retired; formerly
8781 Dunsinane Drive Executive Vice President
Dublin, OH 43017 of Core Source, Inc., an
employee benefit and
Workers' Compensation
administration and
consulting firm
(1991-1997).

JACK W. NICKLAUS II, 38 Trustee Designer, Nicklaus Design,
11780 U.S. Highway #1 a golf course design firm
North Palm Beach, FL 33408 and division of Golden
Bear International, Inc.

PHILIP A. VOELKER*+, 45 Trustee and Vice Senior Vice President and
President Chief Investment Officer
of R. Meeder & Associates,
Inc.

<PAGE>

JAMES B. CRAVER*, 56 Assistant Secretary Assistant Secretary and
42 Miller Hill Road Assistant Treasurer of
Box 811 Adviser Dealer Services,
Dover, MA 02030 Inc.; Practicing Attorney;
Special Counsel to
Flex-Partners, Flex-funds
and their Portfolios;
Senior Vice President of
Signature Financial Group,
Inc. (January 1991 to
August 1995).

DONALD F. MEEDER*+, 60 Secretary Vice President of R.
Meeder & Associates, Inc.;
Secretary of Mutual Funds
Service Co., the Funds'
transfer agent.

WESLEY F. HOAG*+, 42 Vice President Vice President and General
Counsel of R. Meeder &
Associates, Inc. and
Mutual Funds Service Co.
(since July 1993);
Attorney, Porter, Wright,
Morris & Arthur, a law
firm (October 1984 to
June 1993).

THOMAS E. LINE*+, 32 Treasurer President, Mutual Funds
Service Co., the
Portfolio's transfer
agent, and Chief Operating
Officer, R. Meeder &
Associates, Inc., the
Portfolio's investment
adviser (since June 1998);
Vice President and
Treasurer, BISYS Fund
Services (December 1996 to
June 1998); Senior Manager
- Financial Services,
KPMG, LLP (September 1989
to December 1996).

BRUCE E. MCKIBBEN*+, 30 Assistant Treasurer Manager/Fund Accounting
and Financial Reporting,
Mutual Funds Service Co.,
the Funds' transfer agent
(since April 1997);
Assistant Treasurer and
Manager/Fund Accounting,
The Ohio Company, a
broker-dealer (April 1991
to April 1997).

<PAGE>

* Interested Person of the Trust (as defined in the Investment Company Act of
1940), The Flex-funds, Flex-Partners and each Portfolio.

+ P.O. Box 7177, 6000 Memorial Drive, Dublin, Ohio 43017.

Robert S. Meeder, Sr. is Robert S. Meeder, Jr.'s father and Donald F.
Meeder's uncle.

The following table shows the compensation paid by the Portfolios and the
Fund Complex as a whole to the Trustees of the Portfolios and the Fund Complex
during the fiscal year ended December 31, 1999.

COMPENSATION TABLE

Pension or Total
Retirement Compensation
Benefits from
Aggregate Accrued as Estimated Registrant and
Compensation Part of Annual Fund Complex
from the Portfolio Benefits Upon Paid TO
TRUSTEE PORTFOLIOS EXPENSE RETIREMENT TRUSTEE1, 2
- ------- ---------- ------- ------------- -----------

Robert S. Meeder, Sr. None None None None

Milton S. Bartholomew $0 None None $16,734

Robert S. Meeder, Jr. None None None None

Walter L. Ogle $0 None None $16,234

Philip A. Voelker None None None None

Roger D. Blackwell $0 None None $15,234

Charles A. Donabedian $0 None None $17,734

James Didion $0 None None $16,234

Jack W. Nicklaus II $0 None None $15,984

1 Compensation figures include cash and amounts deferred at the election of
certain non-interested Trustees. For the calendar year ended December 31, 1999,
participating non-interested Trustees accrued deferred compensation from the
funds as follows: Milton S. Bartholomew - $16,734, Roger D. Blackwell - $15,234,
Charles A. Donabedian - $17,734, Jack W. Nicklaus II - $15,984, and Walter L.
Ogle - $8,647.

2 The Fund Complex consists of 19 investment companies.

<PAGE>

Each Trustee who is not an "interested person" is paid a meeting fee of
$250 per regularly scheduled meeting of each Portfolio. In addition, each such
Trustee earns an annual fee, payable quarterly, based on the average net assets
in each Portfolio based on the following schedule: 0.00375% of the amount of
each Portfolio's average net assets exceeding $15 million. Each trustee who
attends a meeting called for special purposes is paid a meeting fee of $500.
Members of the Audit and Strategic Planning Committees for each of The
Flex-funds and The Flex-Partners Trusts, and the Portfolios are paid $500 for
each Committee meeting. All other officers and Trustees serve without
compensation from the Portfolios or the Trust.

The Trustees and officers of the Trust and the Portfolios own, in the
aggregate, less than 1% of the Trust's total outstanding shares.

The Trust, the Portfolios, and the Manager have each adopted a Code of
Ethics that permits personnel subject to the Code to invest in securities,
including, under certain circumstances and subject to certain restrictions,
securities that may be purchased or held by the Portfolios. However, each such
Code restricts personal investing practices by directors and officers of the
Manager and its affiliates, and employees of the Manager with access to
information about the purchase or sale of Portfolio securities. The Code of
Ethics for the Trust and the Portfolios also restricts personal investing
practices of trustees of the Trust and the Portfolios who have knowledge about
recent Portfolio trades. Among other provisions, each Code of Ethics requires
that such directors and officers and employees with access to information about
the purchase or sale of Portfolio securities obtain preclearance before
executing personal trades. Each Code of Ethics prohibits acquisition of
securities without preclearance in, among other events, an initial public
offering or a limited offering, as well as profits derived from the purchase and
sale of the same security within 60 calendar days. These provisions are designed
to put the interests of Fund shareholders before the interest of people who
manage the Portfolios in which the Funds invest.

DISTRIBUTION PLANS

Rule 12b-1 (the "Rule") under the Investment Company Act of 1940 (the
"Act") describes the circumstances under which an investment company such as the
Trust may, directly or indirectly, bear the expenses of distributing its shares.
The Rule defines such distribution expenses to include the cost of any activity
that is primarily intended to result in the sale of Trust shares.

The Trust has adopted a Distribution Plan for each of the Funds described
herein. These Plans permit, among other things, payment for distribution in the
form of commissions and fees, advertising, the services of public relations
consultants, and direct solicitation. Possible recipients include securities
brokers, attorneys, accountants, investment advisers, investment performance
consultants, pension actuaries, and service organizations. Another class of
recipients is banks. Currently, The Glass Steagall Act and other applicable
laws, among other things, prohibit banks from engaging in the business of

<PAGE>

underwriting, setting or distributing securities. Since the only function of
banks who may be engaged as participating organizations is to perform
administrative and shareholder servicing functions, the Trust believes that such
laws should not preclude banks from acting as participating organizations;
however, future changes in either federal or state statutes or regulations
relating to the permissible activities of banks and their subsidiaries or
affiliates, as well as judicial or administrative decisions or interpretations
of statutes or regulations, could prevent a bank from continuing to perform all
or a part of its shareholder service activities. If a bank were prohibited from
so acting, its shareholder customers would be permitted to remain Trust
shareholders and alternative means for continuing the servicing of such
shareholders would be sought. In such event, changes in the operation of the
Trust might occur and a shareholder being serviced by such bank might no longer
be able to avail himself, or itself, of any automatic investment or other
services then being provided by the bank. It is not expected that shareholders
would suffer any adverse financial consequences as a result of any of these
occurrences. In addition state securities laws on this issue may differ from the
interpretations of federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law.

The Trust may expend in each of the Funds described herein as much as, but
not more than, 0.25 of 1% of the Fund's average net assets annually pursuant to
the Plan. A report of the amounts so expended in each such Fund and the purpose
of the expenditures must be made to and reviewed by the Board of Trustees at
least quarterly. In addition, the Plan for each such Fund provides that it may
not be amended to increase materially the costs which the Fund may bear for
distribution pursuant to the Plan without shareholder approval of the Plan, and
that other material amendments of the Plan must be approved by the Board of
Trustees, and by the Trustees who are not "interested persons" of the Trust (as
defined in the Act) and who have no direct or indirect financial interest in the
operation of the Plan or in the related service agreements, by vote cast in
person at a meeting called for the purpose of voting on the Plan.

The Plan for each of the Trust's Funds is terminable at any time by vote of
a majority of the Trustees who are not "interested persons" and who have no
direct or indirect financial interest in the operation of the Plan or in any of
the related service agreements or by vote of a majority of the Trust's shares.
Any service agreement terminates upon assignment and is terminable without
penalty at any time by a vote of a majority of the Trustees who are not
"interested persons" and who have no direct or indirect financial interest in
the operation of any of the Plans or in any of the related service agreements
upon not more than 60 days' written notice to the service organization or by the
vote of the holders of a majority of the Trust's shares, or, upon 15 days'
notice, by a party to a service agreement.

Each Plan was approved by the Trust's Board of Trustees, which made a
determination that there is a reasonable likelihood the Plans will benefit the
Funds. The Plans were approved by shareholders, and they will continue in effect
only if approved at least annually by the Board of Trustees. Although the
objective of the Trust is to pay 12b-1 recipients for a portion of the expenses

<PAGE>

they incur, and to provide them with some incentive to be of assistance to the
Trust and its shareholders, no effort has been made to determine the actual
expenses incurred by 12b-1 recipients. If any 12b-1 recipient's expenses are in
excess of what the Trust pays, such excess will not be paid by the Trust.
Conversely, if the 12b-1 recipient's expenses are less than what the Trust pays,
the 12b-1 recipient is not obligated to refund the excess, and this excess could
represent a profit for the 12b-1 recipient.

The Trust has entered into an agreement with Walter L. Ogle whereby Mr.
Ogle is paid for his assistance in explaining and interpreting the Funds, their
investment objectives and policies, and the Trust's retirement plans to clients.
See "Compensation Table" for further explanation.

Total payments made by the Trust to parties with service agreements for the
year ended December 31, 1999 amounted to $257,155 ($204,080 in 1998; $193,209
in 1997). In addition, the Board of Trustees approved expenditures for the
printing and mailing of prospectuses, periodic reports and other sales materials
to prospective investors; advertising; the services of public relations and
marketing consultants; and the cost of special telephone service to encourage
the sale of Fund shares. These expenditures amounted to $171,612 for the year
ended December 31, 1999 ($149,941 in 1998; $177,376 in 1997).

Any agent or 12b-1 recipient that contemplates entering into an agreement
with the Trust for payment in connection with the distribution of Fund shares,
under any Fund's distribution plan, shall be responsible for complying with any
applicable securities or other laws which may be applicable to the rendering of
any such services. It would appear that any agent or 12b-1 recipient would need
to be registered as broker/dealer in the state of Texas if Texas residents are
their clients.

DISTRIBUTIONS & TAXES

DISTRIBUTIONS. Dividends and capital gains distributions are taxable to the
shareholder whether received in cash or reinvested in additional shares.
Shareholders not otherwise subject to tax on their income will not be required
to pay tax on amounts distributed to them. The Funds will send each shareholder
a notice in January describing the tax status of dividends and capital gain
distributions for the prior year.

If you request to have distributions mailed to you and the U.S. Postal
Service cannot deliver your checks, or if your checks remain uncashed for six
months, the Manager, may reinvest your distributions at the then-current NAV.
All subsequent distributions will then be reinvested until you provide the
Manager with alternate instructions.

CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by a Fund on the
sale of securities by the Portfolio and distributed to shareholders of the Fund
are federally taxable as long-term capital gains regardless of the length of

<PAGE>

time shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of a Fund and such shares are held six
months or less and are sold at a loss, the portion of the loss equal to the
amount of the long-term capital gain distribution will be considered a long-term
loss for tax purposes.

Short-term capital gains distributed by a Fund are taxable to shareholders
as dividends not as capital gains. Distributions from short-term capital gains
do not qualify for the dividends-received deduction.

TAX STATUS OF THE FUND. The Trust files federal income tax returns for the
Funds. Each Fund is treated as a separate entity from the other funds of The
Flex-funds Trust for federal income tax purposes.

Each Fund intends to qualify each year as a "regulated investment company"
for tax purposes so that it will not be liable for federal tax on income and
capital gains distributed to shareholders. In order to qualify as a "regulated
investment company" and avoid being subject to federal income or excise taxes at
the Fund level, each Fund intends to distribute substantially all of its net
investment income (consisting of the income it earns from its investment in the
Portfolio, less expenses) and net realized capital gains within each calendar
year, as well as on a fiscal year basis. Each Fund intends to comply with other
tax rules applicable to regulated investment companies. A Fund might deviate
from this policy, and incur a tax liability, if this were necessary to fully
protect shareholder values. The Trust qualified as a "regulated investment
company" for each of the last fifteen fiscal years.

OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting each Fund and its shareholders, and no
attempt has been made to discuss individual tax consequences. In addition to
federal income taxes, shareholders may be subject to state and local taxes on
Fund distributions.

Investors should consult their tax advisers to determine whether a Fund is
suitable to their particular tax situation.

FLEX-FUNDS RETIREMENT PLANS

The Trust offers retirement plans, which are described in the Prospectus.
Minimum purchase requirements for retirement plan accounts are subject to the
same requirements as regular accounts, except for an IRA, which has a $500
minimum purchase requirement. Information concerning contribution limitations
for IRA accounts and Roth IRA accounts are described below.

INDIVIDUAL RETIREMENT ACCOUNTS (IRA):

<PAGE>

DEDUCTIBLE CONTRIBUTIONS

All contributions (other than certain rollover contributions) must be made
in cash and are subject to the following limitations:

REGULAR. Contributions to an IRA (except for rollovers or employer
contributions under a simplified employee pension) may not exceed the amount of
compensation includible in gross income for the tax year or $2,000, whichever is
less. If neither you nor your spouse is an active participant in an employer
plan, you may make a contribution up to this limit and take a deduction for the
entire amount contributed. If you or your spouse is an active participant and
your adjusted gross income (AGI) is below a certain level you may also make a
contribution and take a deduction for the entire amount contributed. However, if
you or your spouse is an active participant and your AGI is above the specified
level, the dollar limit of the deductible contribution you make to your IRA may
be reduced or eliminated.

Regular contributions are not allowed for the year in which you attain age
70-1/2 or for any year thereafter. You do not have to file an itemized federal
tax return to take an IRA deduction. Deductions are not allowed for any
contribution in excess of the deduction limit. Contributions for a year may be
made during such year or by the tax return filing date for such year (not
including extensions), if irrevocably designated for such year, in writing, when
such contribution is made.

If you and your spouse each receive compensation during the year and are
otherwise eligible, each of you may establish your own IRA. The contribution
limits apply separately to the compensation of each of you, without regard to
the community property laws of your state, if any.

SPOUSAL. You may make spousal IRA contributions for a year, if: 1) your
spouse has "compensation" that is includible in gross income for such year; 2)
you have less compensation than your spouse for such year; 3) you do not reach
age 70-1/2 by the end of such year; and 4) you file a joint federal income tax
return for such year.

If you are the compensated (or higher compensated) spouse, your
contribution must be made in accordance with the regular contribution rules
above. If you are the noncompensated (or lower compensated) spouse, your
contribution may not exceed the lesser of $2,000 or 100% of the combined
compensation of you and your spouse, reduced by the amount of your spouse's IRA
contribution.

Contributions for your spouse must be made to a separate IRA established by
your spouse as the depositor or grantor of his or her own IRA and your spouse
becomes subject to all of the privileges, rules, and restrictions generally
applicable to IRAs. This includes conditions of eligibility for distribution;
penalties for premature distribution, excess accumulation (failure to take a
required distribution) and prohibited transaction; designation of beneficiaries

<PAGE>

and distribution in the event of your spouse's death; income and estate tax
treatment of withdrawals and distributions.

ADJUSTED GROSS INCOME (AGI). If you are an active participant or are
considered an active participant, the amount of your AGI for the year (if you
and your spouse file a joint tax return, your combined AGI) will be used to
determine if you can make a deductible IRA contribution. The instructions for
your tax return will show you how to calculate your AGI for this purpose. If you
are at or below a certain AGI level, called the Threshold Level, you can make a
deductible contribution under the same rules as a person who is not an active
participant. This AGI level may change each year. The instructions for your tax
return will show you the AGI level in effect for that year.

For example, if you are single, or treated as being single, your AGI
Threshold Level is $30,000 for 2000. If you are married and file a joint tax
return, your AGI Threshold Level is $50,000 for 2000. If you are not an active
participant, but you file a joint tax return with your spouse who is an active
participant, your AGI Threshold Level is $150,000. If you are married, file a
separate tax return, and live with your spouse for any part of the year, your
AGI Threshold Level is $0.

If your AGI is less than $10,000* above your AGI Threshold Level, you will
still be able to make a deductible contribution, but it will be limited in
amount. The amount by which your AGI exceeds your AGI Threshold Level (AGI minus
AGI Threshold Level) is called your Excess AGI. The Maximum Allowable Deduction
is $2,000 per individual. You may determine your Deduction Limit by using the
following formula:

($10,000* - EXCESS AGI ) Maximum Allowable = Deduction
--------------------- X Deduction Limit
$10,000*

Round the result up to the next higher multiple of $10 (the next higher
whole dollar amount that ends in zero). If the final result is below $200, but
above zero, your Deduction Limit is $200. Your Deduction Limit cannot exceed
100% of your compensation.

*For years after 2006, $20,000 if you are married, filing jointly.

NONDEDUCTIBLE CONTRIBUTIONS

Eligibility - Even if your deduction limit is less than $2,000, you may
still contribute using the rules in the "Deductible Contributions" section
above. The portion of your IRA contribution that is not deductible will be a
nondeductible contribution. You may choose to make a nondeductible IRA
contribution even if you could have deducted part or all of the contribution.
Generally, interest or other earnings on your IRA contribution, whether from
deductible or nondeductible contributions, will not be taxed until distributed
from your IRA.

<PAGE>

Rollover Contributions - Individuals who receive certain lump-sum
distributions from employer-sponsored retirement plans may make rollover
contributions to an IRA and by doing so defer taxes on the distribution and
shelter any investment earnings.

ROTH INDIVIDUAL RETIREMENT ACCOUNTS (ROTH IRA):

CONTRIBUTIONS:

All contributions must be made in cash and are subject to the following
limitations:

REGULAR. Contributions to a Roth IRA (except for rollovers) cannot exceed
the amount of compensation includible in gross income for the tax year or
$2,000, whichever is less. If our adjusted gross income (AGI) is below a certain
level, you may contribute the maximum amount. However, if your AGI is above a
specified level, the dollar limit of the contribution you make to your Roth IRA
may be reduced or eliminated.

If you are single, and your adjusted gross income (AGI) is $95,000 or less
($150,000 or less if married and filing jointly, or $0 or less if married and
filing separately) you are eligible to contribute the full amount to a Roth IRA.

Contributions to a Roth IRA are aggregated with Traditional IRA
contributions for the purpose of the annual contribution limit. Therefore, you
may contribute up to the lesser of $2,000 or 100% of earned income per year to a
Traditional IRA and a Roth IRA combined.

SPOUSAL. You may make spousal Roth IRA contributions for a year, if: 1)
your spouse has "compensation" that is includible in gross income for such year;
2) you have less compensation than your spouse for such year; and 3) you file a
joint federal income tax return for such year.

If you are the higher compensated spouse, your contribution must be made in
accordance with the regular contribution rules above. If you are the
noncompensated (or lower compensated) spouse, your contribution may not exceed
the lesser of $2,000 or 100% of the combined compensation of you and your
spouse, reduced by the amount of your spouse's Roth IRA contribution.

Contributions for your spouse must be made to a separate Roth IRA
established by your spouse as the depositor or grantor of his or her own Roth
IRA and your spouse becomes subject to all of the privileges, rules, and
restrictions generally applicable to Roth IRAs. This includes conditions of
eligibility for distribution; designation of beneficiaries and distribution in
the event of your spouse's death; tax treatment of withdrawals and
distributions. This form may be used to establish such Roth IRA.

<PAGE>

NO MAXIMUM AGE LIMIT. There is no maximum age limit for making a Roth IRA
contribution. Attainment of age 70 1/2 does not prevent you from contributing to
a Roth IRA.

APRIL 15 FUNDING DEADLINE. Contributions to a Roth IRA for the previous tax
year must be made by the tax-filing deadline (not including extensions) for
filing your federal income tax return. If you are a calendar-year taxpayer, your
deadline is usually April 15. If April 15 falls on a Saturday, Sunday, or legal
holiday, the deadline is the following business day.

LOWER CONTRIBUTION LIMITS. To determine the maximum contribution to a Roth
IRA if your AGI is between $95,000 and $110,000 (between $150,000 and $160,000
if married, filing jointly or between $0 and $10,000 if married, filing
separately), the following steps must be taken:

(a) Subtract your AGI from $110,000 ($160,000 if married, filing jointly;
$10,000 if married, filing separately).

(b) Multiply the result in Step `a' by .1333 (.20 if married).

(d) The result in Step `c' is your allowable contribution limit. If it is
more than $0, but less that $200, your allowable contribution limit is
$200.

INDIVIDUALS NOT ELIGIBLE TO MAKE CONTRIBUTIONS. If you are a single
taxpayer and your AGI is $110,000 or above ($160,000 or above if married and
filing jointly, or $10,000 or above if married and filing separately), you are
not permitted to make a Roth IRA contribution for the year. For this purpose, a
deductible Traditional IRA contribution is not allowed as a deduction in
computing AGI, and any amount of a rollover-conversion from a Traditional IRA to
a Roth IRA is not taken into account. Whether an individual, or his spouse, is
an active participant in an employer retirement plan is irrelevant for
determining whether he may make a Roth contribution.

EXCESS ROTH CONTRIBUTIONS. Excess contributions to a Roth IRA are subject
to a 6% penalty tax unless removed (along with attributable earnings) by your
tax-filing deadline (plus extensions). An excess contribution could occur for
many reasons including, for example, if you contribute more than $2,000 or 100%
of earned income, or if you are not permitted to make a Roth contribution
because your AGI is too high.

CONVERSION OF TRADITIONAL CONTRIBUTIONS TO ROTH CONTRIBUTIONS. Generally,
if you make a contribution to a Traditional IRA, you may transfer the
contribution plus attributable earnings to a Roth IRA by your tax-filing
deadline (not including extensions). The transferred contribution amount is not

<PAGE>

taxable if no deduction was allowed for the contribution. Such a contribution is
treated as a Roth IRA contribution.

ROLLING OVER/CONVERTING TRADITIONAL IRAS TO ROTH IRAS

You are allowed to roll over, transfer, or "convert" your Traditional IRAs
to Roth IRAs beginning in 1998. Regardless of whether a Traditional IRA is
rolled over/converted to a Roth IRA in 1998 or afterwards, the
rollover/conversion amount is subject to federal income taxation (but no 10%
penalty tax).

$100,000 AGI LIMIT FOR ROLLOVER. If you are a single taxpayer, or a married
individual who files jointly, you may roll over, transfer, or convert your
Traditional IRAs to Roth IRAs if your AGI is $100,000 or less. If you are a
single taxpayer (or a married individual who files jointly) with AGI of more
than $100,000 you may not roll over, transfer, or convert your Traditional IRAs
to Roth IRAs. Also, if you are a taxpayer who is married, but files separately,
you may not roll over, transfer, or convert your Traditional IRAs to Roth IRAs
regardless of AGI.

ROLLOVER/CONVERSION AFTER 1998. If you roll over a Traditional IRA
distribution received after 1998 to a Roth IRA, the taxable portion of the
Traditional IRA distribution is included in your income for the year in which
the Traditional IRA distribution is received, but the amount is not subject to
the IRS 10% early distribution penalty. No special tax treatments apply.

OTHER SERVICES

CUSTODIAN - Firstar Bank, N.A., Firstar Bank Center, 425 Walnut Street,
Cincinnati, Ohio 45202, is custodian of all of the Trust's assets.

AUDITORS - KPMG LLP, Two Nationwide Plaza, Columbus, Ohio, 43215, has been
retained as independent auditors for the Trust. The auditors audit financial
statements for the Fund Complex and provide other assurance, tax, and related
services.

STOCK TRANSFER AGENT - Mutual Funds Service Co., 6000 Memorial Drive,
Dublin, Ohio 43017, a wholly owned subsidiary of Muirfield Investors, Inc. and a
sister company of R. Meeder & Associates, Inc., provides to each Fund and
Portfolio accounting, administrative, stock transfer, dividend disbursing, and
shareholder services. The minimum annual fee for accounting services for each
Portfolio is $7,500. Subject to the applicable minimum fee, each Portfolio's
annual fee, payable monthly, is computed at the rate of 0.15% of the first $10
million, 0.10% of the next $20 million, 0.02% of the next $50 million and 0.01%
in excess of $80 million of each Portfolio's average net assets.

<PAGE>

Subject to a $4,000 annual minimum fee each Fund incurs the greater of $15
per shareholder account or 0.10% of the Fund's average net assets, payable
monthly, for stock transfer and dividend disbursing services.

Mutual Funds Service Co. also serves as Administrator to the Trust.
Services provided to the Trust include coordinating and monitoring any third
party services to the Trust; providing the necessary personnel to perform
administrative functions for the Trust, assisting in the preparation, filing and
distribution of proxy materials, periodic reports to Trustees and shareholders,
registration statements and other necessary documents. Each Fund incurs an
annual fee, payable monthly, of 0.05% of each Fund's average net assets. These
fees are reviewable annually by the respective Trustees of the Trust and the
Portfolio.

REPORTS TO SHAREHOLDERS - The Trust provides shareholders with quarterly
reports of investments and other information, semi-annual financial statements,
and annual reports.

FINANCIAL STATEMENTS

Not Applicable.

<PAGE>

PART C

OTHER INFORMATION

Item 23. Exhibits

(a) Declaration of Trust (effective December 30, 1991) -- filed as an
exhibit to Registrant's Post-Effective Amendment No. 18 on January 16,
1992, which exhibit is incorporated herein by reference.

(b) By-laws of the Trust -- filed as an exhibit to Registrant's
Post-Effective Amendment No. 18 on January 16, 1992, which exhibit is
incorporated herein by reference.

(d) (1) Investment Advisory Agreement between the Growth Mutual Fund
Portfolio and R. Meeder & Associates -- filed as an exhibit to the
Registrant's Post-Effective Amendment No. 42 on November 29, 1999,
which exhibit is incorporated herein by reference.

(2) Investment Advisory Agreement between the Aggressive Growth Mutual
Fund Portfolio and R. Meeder & Associates -- filed as an exhibit to
the Registrant's Post-Effective Amendment No. 42 on November 29, 1999,
which exhibit is incorporated herein by reference.

(e) Not applicable.

(f) Deferred Compensation Plan for Independent Trustees - filed as an
exhibit to Registrant's Post-Effective Amendment No. 41 on April 30,
1999, which exhibit is incorporated herein by reference.

(g) Custody Agreement between the Growth Mutual Fund and Aggressive Growth
Mutual Fund Portfolios and Firstar, N.A. is filed as Exhibit 23(g)
hereto.

(h) (1) Administrative Services Agreement between The Flex-funds Dynamic
Growth Fund and Mutual Funds Service Co. -- filed as an exhibit to
the Registrant's Post-Effective Amendment No. 42 on November 29, 1999,
which exhibit is incorporated herein by reference.

(2) Administrative Services Agreement between The Flex-funds
Aggressive Growth Fund and Mutual Funds Service Co. -- filed as an
exhibit to the Registrant's Post-Effective Amendment No. 42 on
November 29, 1999, which exhibit is incorporated herein by reference.

(i) Opinion and Consent of Counsel - filed as an exhibit to Registrant's
First Pre-effective Amendment to the Registration Statement on Form
N-1A filed with the Commission on July 20, 1982, which exhibit is
incorporated herein by reference.

(j) Not applicable.

(k) Not applicable.

(l) Agreements etc. for initial capital, etc. -- reference is made to Part
II, Item 1(b)(13) of Registrant's First Pre-effective Amendment to the
Registration Statement on Form N-1 filed with the Commission on or
about July 20, 1982, and is incorporated herein by reference.

<PAGE>

(m) (1) Distribution Plan for the Sale of Shares of The Flex-funds Dynamic
Growth Fund -- filed as an exhibit to the Registrant's Post-Effective
Amendment No. 42 on November 29, 1999, which exhibit is incorporated
herein by reference.

(2) Distribution Plan for the Sale of Shares of The Flex-funds
Aggressive Growth Fund -- filed as an exhibit to the Registrant's
Post-Effective Amendment No. 42 on November 29, 1999, which exhibit is
incorporated herein by reference.

(n) Not applicable.

(o) Not applicable.

(p) (1) Code of Ethics of the Growth Mutual Fund Portfolio, Aggressive
Growth Mutual Fund Portfolio and the Registrant is filed as Exhibit
23(p)(1) hereto.

(2) Code of Ethics of Muirfield Investors, Inc. and R. Meeder &
Associates, Inc. is filed as Exhibit 23(p)(2) hereto.

(q) Powers of Attorney of Trustees of Registrant and each Portfolio --
filed as an exhibit to the Registrant's Post-Effective Amendment
No. 42 on November 29, 1999, which exhibit is incorporated herein by
reference.

Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.

None.

Item 25. INDEMNIFICATION

Reference is made to Section 5.3 of the Declaration of Trust filed as
an original exhibit to Registrant's Post-Effective Amendment No. 18 on
January 16, 1992. As provided therein, the Trust is required to
indemnify its officers and trustees against claims and liability
arising in connection with the affairs of the Trust, except liability
arising from breach of trust, bad faith, willful misfeasance, gross
negligence or reckless disregard of duties. The Trust is obligated to
undertake the defense of any action brought against any officer,
trustee or shareholder, and to pay the expenses thereof if he acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interest of the Trust, and with respect to any
criminal action had no reasonable cause to believe his conduct was
unlawful. Other conditions are applicable to the right of
indemnification as set forth in the Declaration of Trust. In applying
these provisions, the Trust will comply with the provisions of the
Investment Company Act.

Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.

Not applicable.

Item 27. PRINCIPAL UNDERWRITERS.

Not applicable.

<PAGE>

Item 28. LOCATION OF ACCOUNTS AND RECORDS.

Registrant's Declaration of Trust, By-laws, and Minutes of Trustees'
and Shareholders' Meetings, and contracts and like documents are in
the physical possession of Mutual Funds Service Co., or R. Meeder &
Associates, Inc., at 6000 Memorial Drive, Dublin, Ohio 43017. Certain
custodial records are in the custody of Firstar, N.A., the Trust's
custodian, at 425 Walnut Street, Cincinnati, Ohio 45202. All other
records are kept in the custody of R. Meeder & Associates, Inc. and
Mutual Funds Service Co., 6000 Memorial Drive, Dublin, OH 43017.

Item 29. MANAGEMENT SERVICES.

None

Item 30. UNDERTAKINGS.

Registrant undertakes to call a meeting of shareholders for the
purpose of voting upon the question of removal of one or more
directors, if requested to do so by the holders of at least 10% of the
Registrant's outstanding shares, and will assist communications among
shareholders as set forth within Section 16(c) of the 1940 Act.

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

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that this Amendment to
its Registration Statement meets all of the requirements for effectiveness of
this Amendment to its Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to its Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dublin, and the State of Ohio on the 25th day of
February, 2000.

THE FLEX-FUNDS

BY: /S/ WESLEY F. HOAG
------------------------------
Wesley F. Hoag, Vice President

This Post-Effective Amendment to the Registration Statement on Form N-1A of
The Flex-funds (File No. 2-85378) has been signed below by the following persons
in the capacities with respect to The Flex-funds indicated on February 25, 2000.

SIGNATURE TITLE
--------- -----

ROBERT S. MEEDER, SR.* President and Trustee
- --------------------------
Robert S. Meeder, Sr.

MILTON S. BARTHOLOMEW* Trustee
- --------------------------
Milton S. Bartholomew

ROGER D. BLACKWELL* Trustee
- --------------------------
Roger D. Blackwell

JAMES W DIDION* Trustee
- --------------------------
James W. Didion

CHARLES A. DONABEDIAN* Trustee
- --------------------------
Charles A. Donabedian

THOMAS E. LINE Principal Financial Officer and
- -------------------------- Principal Accounting Officer
Thomas E. Line

DONALD F. MEEDER Secretary
- --------------------------
Donald F. Meeder

ROBERT S. MEEDER, JR.* Vice President and Trustee
- --------------------------
Robert S. Meeder, Jr.

JACK W. NICKLAUS II* Trustee
- --------------------------
Jack W. Nicklaus II

WALTER L. OGLE* Trustee
- --------------------------
Walter L. Ogle

PHILIP A. VOELKER* Vice President and Trustee
- --------------------------
Philip A. Voelker

*By:/S/ WESLEY F. HOAG
---------------------------
Wesley F. Hoag

Executed by Wesley F. Hoag on behalf
of those indicated pursuant to Powers of Attorney

<PAGE>

SIGNATURES

The Growth Mutual Fund Portfolio (the "Portfolio") has duly caused this
Post-Effective Amendment to the Registration on Form N-1A of The Flex-funds
(File No. 2-85378) to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Dublin and State of Ohio on the 25th day of February,
2000.

THE GROWTH MUTUAL FUND PORTFOLIO

By: /S/ WESLEY F. HOAG
--------------------------
Wesley F. Hoag