MUNICIPAL FUND FOR CALIFORNIA INVESTORS INC, 485B24E, 1997-05-30

MUNICIPAL FUND FOR CALIFORNIA INVESTORS INC
485B24E, 1997-05-30

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<PAGE> 1

As filed with the Securities and Exchange Commission on May 30, 1997
Registration Nos. 2-79510 and 811-3574

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /x/

POST-EFFECTIVE AMENDMENT NO. 18 /x/

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /x/

AMENDMENT NO. 19 /x/

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

MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC.
(California Money Fund Portfolio)
(Exact Name of Registrant As Specified In Charter)

Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, Delaware 19809
(Address of Principal Executive Offices)
Registrant's Telephone Number: (302) 792-2555

EDWARD J. ROACH
Bellevue Park Corporate Center
400 Bellevue Parkway, Suite 100
Wilmington, Delaware 19809
(Name and Address of Agent for Service)

Copies to:

MORGAN R. JONES
Drinker Biddle & Reath LLP
1345 Chestnut Street, Suite 1100
Philadelphia, Pennsylvania 19107

It is proposed that this filing will become effective (check appropriate
box)

[x] immediately upon filing pursuant to paragraph (b)

[ ] on (date) pursuant to paragraph (b)

[ ] 60 days after filing pursuant to paragraph (a)(i)

[ ] on (date) pursuant to paragraph (a)(i) [ ] 75 days after filing pursuant
to (a)(ii)

[ ] on (date) pursuant to paragraph (a)(ii) 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.

-------------------------
<PAGE> 2
CALCULATION OF REGISTRATION FEE
UNDER THE SECURITIES ACT OF 1933(1)

<TABLE>
<CAPTION>
=========================================================================================================

Proposed Proposed
Maximum Maximum Amount of
TITLE OF SECURITIES BEING Amount Being Offering Price Offering Registration
REGISTERED Registered (2) Per Unit (2) Price (3) Fee
- ------------------------- -------------- -------------- --------- ---
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares of common stock
interest in Municipal Fund
for California Investors,
Inc. 679,204,611 $1.00 679,204,611 $-0-
=========================================================================================================
</TABLE>

(1) Registrant has registered an indefinite number of its shares of its Class
A and Class B Common Stock under the Securities Act of 1933 pursuant to
Rule 24f-2 under the Investment Company Act of 1940 (the "1940 Act").
Registrant's Rule 24f-2 Notice for its fiscal year ended January 31, 1997
for Registration No. 2-79510 was filed on March 26, 1997.

(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 24e-2 under the Investment Company Act of 1940 and rule
457(d) under the Securities Act of 1933, based on an offering price of
$1.00 with respect to its Portfolio shares in Municipal Fund for
California Investors, Inc. on May 30, 1997.

(3) The maximum offering price for Registrant's Class A and Class B Common
Stock is calculated pursuant to Rule 24e-2 under the 1940 Act. During the
fiscal year ended January 31, 1997, Registrant redeemed a total of
1,792,867,498 shares of its Class A Common Stock and 539,018 shares of its
Class B Common Stock. Of these redeemed shares, 1,114,198,590 Class A
shares and 3,315 Class B Shares were used for reductions pursuant to
paragraph (c) of Rule 24f-2 in Registrant's Rule 24f-2 Notice dated March
26, 1997 for the year ended January 31, 1997, and none of the redeemed
shares were used for reductions pursuant to Rule 24e-2 in previous
post-effective amendments. As a result, 678,668,908 redeemed shares of
Class A Common Stock and 535,703 shares of Class B Common Stock are being
used to reduce, pursuant to paragraph (a) of Rule 24e-2, the number of
shares for which the registration fee is payable with respect to this
Post-Effective Amendment.

<PAGE> 3
CALIFORNIA MONEY FUND
An Investment Portfolio Offered by
Municipal Fund for California Investors, Inc.

CROSS REFERENCE SHEET

<TABLE>
<CAPTION>
Form N-1A Item Prospectus Caption
- -------------- ------------------
<S> <C>
1. Cover Page.................................... Cover Page

2. Synopsis...................................... Background and
Expense Information

3. Condensed Financial Information............... Financial Highlights

4. General Description of
Registrant.................................. Financial
Highlights;
Investment Objective
and Policies

5. Management of the Fund........................ Management of the
Fund

6. Capital Stock and Other
Securities.................................. Cover Page;
Financial
Highlights;
Dividends; Taxes;
Description of
Shares and
Miscellaneous; Yield

7. Purchase of Securities Being
Offered..................................... Management of the
Fund; Purchase of
Shares; Redemption
of Shares

8. Redemption or Repurchase...................... Redemption of Shares

9. Legal Proceedings............................. Inapplicable
</TABLE>
<PAGE> 4

CALIFORNIA MONEY FUND
An Investment Portfolio Offered by
Municipal Fund for California Investors, Inc.

<TABLE>
<S> <C>
Bellevue Park Corporate Center For purchase and redemption orders call:
400 Bellevue Parkway 800-441-7450 (in Delaware: 302-791-5350).
Suite 100 For current yield information call:
Wilmington, Delaware 19809 800-821-6006.
(Code: California Money-52; California Money
Dollar-57; California Money Plus-58).
For other information call: 800-821-7432.
</TABLE>

Municipal Fund for California Investors, Inc. (the "Company") is a no-load,
open-end investment company currently offering shares in the California Money
Fund (the "Fund"). The Fund is a non-diversified investment company that is
designed primarily to provide California institutional investors and their
customers with as high a level of current interest income that is exempt from
Federal income tax and, to the extent possible, from California state personal
income tax as is consistent with the preservation of capital and relative
stability of principal. Portfolio securities held by the Fund will generally
have remaining maturities of 13 months or less and will be determined by the
investment adviser to have minimal credit risk. The Fund has a distribution and
service plan applicable to one class of its shares and a service plan applicable
to another class of its shares under which certain service organizations are
entitled to receive a fee at the rate of .25% per annum for their provision of
distribution and/or support services to the beneficial owners of such shares.

PFPC Inc. ("PFPC") and Provident Distributors, Inc. ("PDI") serve as the
Fund's administrators. PNC Institutional Management Corporation ("PIMC") and PNC
Bank, National Association ("PNC Bank") serve as the Fund's investment adviser
and sub-adviser, respectively. PDI also serves as the Fund's distributor. Shares
may not be purchased by individuals directly but, as indicated above,
institutional investors, such as banks and broker-dealers, may purchase shares
for accounts maintained by individuals.

THE FUND MAY INVEST A SIGNIFICANT PERCENTAGE OF ITS ASSETS IN A SINGLE
ISSUER. THEREFORE, INVESTMENT IN THE FUND MAY BE RISKIER THAN INVESTMENT IN
OTHER TYPES OF MONEY MARKET FUNDS.

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED, OR
ENDORSED BY PNC BANK, NATIONAL ASSOCIATION OR ANY OTHER BANK AND SHARES OF THE
FUND ARE NOT FEDERALLY INSURED BY, GUARANTEED BY, OBLIGATIONS OF OR OTHERWISE
SUPPORTED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENTAL AGENCY. INVESTMENTS IN SHARES OF
THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL
AMOUNT INVESTED. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

This Prospectus briefly sets forth certain information about the Fund that
investors should know before investing. Investors are advised to read this
Prospectus and retain it for future reference. Additional information about the
Fund, contained in a Statement of Additional Information currently dated May 31,
1997, has been filed with the Securities and Exchange Commission, and is
available to investors without charge by calling the Fund at 800-821-7432. The
Statement of Additional Information, as amended from time to time, is
incorporated by reference in its entirety into this Prospectus.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------

May 31, 1997

<PAGE> 5

BACKGROUND AND EXPENSE INFORMATION

The Company was organized as a Maryland corporation on September 20, 1982
and currently offers three separate classes of shares in the Fund--California
Money ("Money"), California Money Dollar ("Dollar") and California Money Plus
("Plus"). The public offering of Money shares commenced on February 28, 1983,
the public offering of Plus shares commenced on September 30, 1985 and the
public offering of Dollar shares commenced on January 9, 1991. Shares of each
class represent equal pro rata interests in a single portfolio of high quality,
short-term, tax-exempt obligations maintained by the Fund (see "Investment
Objective and Policies"), except that Dollar and Plus shares bear service fees
payable by the Fund (at the rate of .25% per annum) to institutional investors
("Service Organizations") for distribution and/or support services they provide
to the beneficial owners of such shares. (See "Management of the Fund--Service
Organizations.") Because of the service fees borne by the Dollar and Plus
shares, the net yield on such shares can be expected, at any given time, to be
approximately .25% lower than the net yield on Money shares.

EXPENSE SUMMARY

<TABLE>
<CAPTION>
MONEY DOLLAR PLUS
SHARES SHARES SHARES
---------- ---------- ----------
(ESTIMATED)
<S> <C> <C> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees (net of waivers)................................. .06% .06% .06%
12b-1 Fees....................................................... -- -- .25%
Other Expenses................................................... .14% .39% .14%
Administration Fees (net of waivers)........................... .06% .06% .06%
Non-12b-1 Fees................................................. -- .25% --
Other.......................................................... .08% .08% .08%
===== ===== =====
Total Fund Operating Expenses (net of waivers)................... .20% .45% .45%
</TABLE>

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

EXAMPLE

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment, assuming (1) an hypothetical 5% annual
return and (2) redemption at the end of each time period
with respect to the following shares:
Money Shares.......................................... $ 2 $ 6 $ 11 $ 26
Dollar Shares......................................... $ 5 $ 14 $ 25 $ 57
Plus Shares (estimated)............................... $ 5 $ 14 $ 25 $ 57
</TABLE>

The foregoing Expense Summary and Example are intended to assist investors
in understanding the various costs and expenses that an investor in the Fund
will bear directly or indirectly. In addition, institutional investors may
charge their customers fees for providing services in connection with
investments in the Fund's Dollar and Plus shares. (For more complete
descriptions of the various costs and expenses, see "Management of the Fund" in
the Prospectus and "Management of the Company" in the Statement of Additional
Information and the Financial Statements and related notes incorporated by
reference into the Statement of Additional Information.) Absent fee waivers for
the year ended January 31, 1997, "Total Fund Operating Expenses" for the Fund's
Money, Dollar and Plus shares would have been .48%, .73%, and .73% (estimated),
respectively, of the Fund's average daily net assets. During the year ended
January 31, 1997, no Plus shares had been sold. The investment adviser and
administrators may from time to time waive the advisory and administration fees
otherwise payable to them and may reimburse the Fund for its operating expenses.
The foregoing table has not been audited by the Fund's independent accountants.

THE EXAMPLE SHOWN ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RETURN OR OPERATING EXPENSES. ACTUAL INVESTMENT RETURN AND
OPERATING EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN.

2
<PAGE> 6

FINANCIAL HIGHLIGHTS

The tables of "Financial Highlights" below are derived from the Fund's
financial statements incorporated by reference in the Statement of Additional
Information, and set forth certain information concerning the historic
investment results for Money, Dollar and Plus shares. The financial highlights
for the fiscal years ended January 31, 1997, 1996, 1995, 1994 and 1993 have been
audited by Coopers & Lybrand L.L.P., the Fund's independent accountants whose
report thereon is incorporated by reference into the Statement of Additional
Information along with the financial statements. This information should be read
in conjunction with the financial statements and notes incorporated by reference
into the Statement of Additional Information. The Fund's financial statements
and more information about the performance of the Fund is also contained in the
Annual Report to Shareholders, which may be obtained without charge by calling
800-821-7432.

FINANCIAL HIGHLIGHTS

(For a Fund share outstanding throughout each period)

<TABLE>
<CAPTION>
MONEY SHARES
----------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
01/31/97 01/31/96 01/31/95 01/31/94 01/31/93 01/31/92
-------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year.............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
-------- -------- -------- -------- -------- ----------
Income from Investment Operations:
Net Investment Income........................ 0.0316 0.0356 0.0281 0.0223 0.0251 0.0375
-------- -------- -------- -------- -------- ----------
Less Distributions:
Dividends to Shareholders From Net
Investment Income............................ (0.0316) (0.0356) (0.0281) (0.0223) (0.0251) (0.0375)
-------- -------- -------- -------- -------- ----------
Net Asset Value, End of Year.................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
========== ========== ========== ========== ========== ===========
Total Return.................................... 3.21% 3.62% 2.84% 2.25% 2.54% 3.82%
Ratios/Supplemental Data:
Net Assets, End of Year $(000)................. 326,521 389,883 385,824 356,501 359,193 490,141
Ratio of Expenses to Average Net Assets(1)..... .20% .20% .20% .20% .30% .30%
Ratio of Net Investment Income to Average
Net Assets................................... 3.15% 3.55% 2.79% 2.23% 2.52% 3.75%

<CAPTION>
MONEY SHARES
----------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
01/31/91 01/31/90 01/31/89 01/31/88
---------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year.............. $1.00 $1.00 $1.00 $1.00
---------- -------- -------- --------
Income from Investment Operations:
Net Investment Income........................ 0.0509 0.0578 0.0500 0.0440
---------- -------- -------- --------
Less Distributions:
Dividends to Shareholders From Net
Investment Income............................ (0.0509) (0.0578) (0.0500) (0.0440)
---------- -------- -------- --------
Net Asset Value, End of Year.................... $1.00 $1.00 $1.00 $1.00
=========== ========== ========== ==========
Total Return.................................... 5.21% 5.93% 5.12% 4.51%
Ratios/Supplemental Data:
Net Assets, End of Year $(000)................. 629,001 1,046,590 1,105,956 828,103
Ratio of Expenses to Average Net Assets(1)..... .29% .30% .30% .30%
Ratio of Net Investment Income to Average
Net Assets................................... 5.10% 5.78% 5.01% 4.47%
</TABLE>

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

(1) Annualized operating expense ratios before waivers of Investment Adviser and
Administrator fees for Money shares for the years ended January 31, 1997,
1996, 1995, 1994, 1993, 1992, 1991, 1990, 1989 and 1988 were .48%, .48%,
.48%, .49%, .48%, .48%, .46%, .47%, .47% and .48%, respectively.

3
<PAGE> 7

FINANCIAL HIGHLIGHTS

(For a Fund share outstanding throughout each period)

<TABLE>
<CAPTION>
DOLLAR SHARES
--------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR 01/09/91(1)
ENDED ENDED ENDED ENDED ENDED ENDED TO
01/31/97 01/31/96 01/31/95 01/31/94 01/31/93 01/31/92 01/31/91
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
-------- -------- -------- -------- -------- -------- --------
Income From Investment Operations:
Net Investment Income.......................... 0.0291 0.0331 0.0256 0.0198 0.0226 0.0350 0.0024
-------- -------- -------- -------- -------- -------- --------
Less Distributions:
Dividends to Shareholders from Net Investment
Income......................................... (0.0291) (0.0331) (0.0256) (0.0198) (0.0226) (0.0350) (0.0024)
-------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of Period..................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======== ======== ======== ======== ======== ======== ========
Total Return....................................... 2.96% 3.37% 2.59% 2.00% 2.29% 3.57% 3.87%(2)
Ratios/Supplemental Data:
Net Assets, End of Period $(000)................. 126,321 31,163 11,026 19,098 11,750 6,599 1,126
Ratio of Expenses to Average Net Assets(3)....... .45% .45% .45% .45% .55% .55% .54%(2)
Ratio of Net Investment Income to Average Net
Assets......................................... 2.90 3.30% 2.54% 1.98% 2.27% 3.50% 3.85%(2)
</TABLE>

- ---------------
(1) Commencement of operations.
(2) Annualized.

(3) Annualized operating expense ratios before waivers of Investment Adviser and
Administrator fees for Dollar shares for the years ended January 31, 1997,
1996, 1995, 1994, 1993 and 1992 were .73%, .73%, .73%, .74%, .73% and .73%,
respectively, and for the period ended January 31, 1991 was .71%.

<TABLE>
<CAPTION>
PLUS SHARES
-----------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
01/31/97(1) 01/31/96(1) 01/31/95(1) 01/31/94(1) 01/31/93(1) 01/31/92(1) 01/31/91 01/31/90 01/31/89 01/31/88
----------- ----------- ----------- ----------- ----------- ----------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Year............ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Income from
Investment
Operations:
Net Investment
Income...... -- -- -- -- 0.0191 0.0350 0.0484 0.0553 0.0475 0.0415
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Less Distributions:
Dividends to
Shareholders
from Net
Investment
Income........ -- -- -- (--) (0.0191) (0.0350) (0.0484) 0.0553) (0.0475) (0.0415)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value,
End of Year..... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Total Return...... -- -- -- -- 1.93% 3.57% 4.96% 5.68% 4.87% 4.26%
Ratios/Supplemental
Data:
Net Assets, End
of Year
$(000)........ -- -- -- -- -- 27,656 19,872 26,769 15,961 8,181
Ratio of Expenses
to Average Net
Assets(2)..... -- -- -- -- .55% .55% .54% .55% .55% .55%
Ratio of Net
Investment
Income to
Average Net
Assets........ -- -- -- -- 2.27% 3.50% 4.85% 5.53% 4.76% 4.22%
</TABLE>

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

(1) Only 100 Plus shares were outstanding during the period from December 1,
1992 to July 12, 1995. Since July 13, 1995, no Plus shares were outstanding.

(2) Annualized operating expense ratios before waivers of Investment Adviser and
Administrator fees for Plus shares for the year ended January 31, 1993,
1992, 1991, 1990, 1989 and 1988 were .64%, .73%, .71%, .72%, .72%, and .73%
respectively.

4
<PAGE> 8

INVESTMENT OBJECTIVE AND POLICIES

IN GENERAL

The Fund is a no-load, open-end, non-diversified investment company which
has an investment objective to provide investors with as high a level of current
interest income that is exempt from Federal income tax and, to the extent
possible, from California state personal income tax as is consistent with the
preservation of capital and relative stability of principal. There can be, of
course, no assurance that the Fund will achieve its investment objective. The
Fund has a distribution plan applicable to one class of its shares and a service
plan applicable to another class of its shares. See "Service Organizations."

Substantially all of the Fund's assets are invested in debt obligations
issued by or on behalf of the State of California and other states, territories
and possessions of the United States, the District of Columbia and their
respective authorities, agencies, instrumentalities and political sub-divisions
and tax-exempt derivatives such as tender option bonds, participations,
beneficial interests in trusts and partnership interests ("Municipal
Obligations"). Dividends paid by the Fund that are derived from interest on
bonds that is exempt from taxation under the Constitution or statutes of
California ("California Municipal Obligations") are exempt from regular Federal
income tax and California state personal income tax. California Municipal
Obligations include municipal securities issued by the State of California and
its political sub-divisions, as well as certain other governmental issuers such
as the Commonwealth of Puerto Rico. Dividends derived from interest on municipal
obligations other than California Municipal Obligations are exempt from regular
Federal income tax but may be subject to California state personal income tax.
(See, however, "Taxes" below concerning treatment of exempt-interest dividends
paid by the Fund for purposes of the Federal alternative minimum tax applicable
to particular classes of investors.) The Fund expects that, except during
temporary defensive periods or when acceptable securities are unavailable for
investment by the Fund, the Fund's assets will be invested primarily in
California Municipal Obligations. At least 50% of the Fund's assets must be
invested in obligations which, when held by an individual, the interest
therefrom is exempt from California personal income taxation (i.e., California
Municipal Obligations and certain U.S. Government obligations) at the close of
each quarter of its taxable year so as to permit the Fund to pay dividends that
are exempt from California state personal income tax. Dividends, regardless of
their source, may be subject to local taxes.

The Fund will not knowingly purchase securities the interest on which is
subject to regular Federal income tax; however, the Fund may hold uninvested
cash reserves pending investment during temporary defensive periods or, if in
the opinion of the Fund's investment adviser, suitable tax-exempt obligations
are unavailable. Uninvested cash reserves will not earn income.

The Fund invests in Municipal Obligations that are determined by the Fund's
investment adviser to present minimal credit risks pursuant to guidelines
approved by the Company's Board of Directors pursuant to Rule 2a-7 under the
Investment Company Act of 1940, as amended (the "1940 Act"). Pursuant to these
guidelines, the Fund is authorized to purchase instruments that are considered
"Eligible Securities" under that Rule. Eligible Securities consist of the
following types of securities: (i) instruments rated at the time of purchase in
one of the top two rating categories by two unaffiliated nationally recognized
statistical rating organizations ("NRSROs"), (ii) instruments rated at the time
of purchase in one of the top two rating categories by one such NRSRO (if only
one such organization rates the instrument), (iii) instruments issued by issuers
with short-term debt having such ratings, and (iv) instruments without such
ratings that have been determined by the investment adviser, pursuant

5
<PAGE> 9

to procedures approved by the Board of Directors, to be of comparable quality.
The Appendix to the Statement of Additional Information includes a description
of applicable NRSRO ratings.

The Fund intends to use its best efforts to maintain its net asset value at
$1.00 per share, and computes its net asset value using the amortized cost
method. In connection with its use of this valuation method, the Fund limits the
dollar-weighted average maturity of its portfolio to not more than 90 days and
the remaining maturity of each portfolio security to not more than 13 months
(with certain exceptions).

The Fund's investment objective and the policies described herein may be
changed by its Board of Directors without the affirmative vote of the holders of
a majority of the Fund's outstanding shares, except that the Fund may not change
the following investment limitations without such a vote of shareholders. Other
investment limitations that cannot be changed without a vote of shareholders are
contained in the Statement of Additional Information under "Investment
Objectives and Policies."

THE FUND MAY NOT:

1. Invest less than 80% of its assets in securities the interest on
which is exempt from Federal income taxes, except during defensive periods.

2. Purchase the securities of any issuer if as a result more than 5%
of the value of the Fund's assets would be invested in the securities of
such issuer, except that (a) up to 50% of the value of the Fund's assets
may be invested without regard to this 5% limitation; provided that no more
than 25% of the value of the Fund's assets are invested in the securities
of any one issuer and (b) this 5% limitation does not apply to securities
issued or guaranteed by the U.S. Government, or its agencies or
instrumentalities. For purposes of this limitation, a security is
considered to be issued by the governmental entity (or entities) whose
assets and revenues back the security, or, with respect to a private
activity bond that is backed only by the assets and revenues of a non-
governmental user, by such non-governmental user. In certain circumstances,
the guarantor of a guaranteed security may also be considered to be an
issuer in connection with such guarantee.

3. Borrow money except from banks for temporary purposes and then in
amounts not in excess of 10% of the value of the Fund's assets at the time
of such borrowing; or mortgage, pledge or hypothecate any assets except in
connection with any such borrowing and in amounts not in excess of the
lesser of the dollar amounts borrowed or 10% of the value of the Fund's
assets at the time of such borrowing. (This borrowing provision is not
intended for investment leverage, but solely to facilitate management of
the Fund's portfolio by enabling the Fund to meet redemption requests when
the liquidation of portfolio securities is deemed to be disadvantageous or
inconvenient, and hence the Fund may not purchase any portfolio securities
while its borrowings are outstanding.)

4. Invest more than 10% of the value of the Fund's total assets in
illiquid securities (including illiquid variable rate demand notes) which
may be illiquid due to legal or contractual restrictions on resale or the
absence of readily available market quotations.

5. Purchase any securities which would cause more than 25% of the
value of the Fund's total assets at the time of purchase to be invested in
the securities of issuers conducting their principal business activities in
the same industry; provided that this limitation shall not apply to
Municipal Obligations or governmental guarantees of Municipal Obligations;
and provided, further, that for the purpose of this limitation only,
industrial development bonds that are considered to be issued

6
<PAGE> 10

by non-governmental users (see the second investment limitation above)
shall not be deemed to be Municipal Obligations.

Opinions relating to the validity of Municipal Obligations and to the
exemption of interest thereon from Federal income tax (and, with respect to
California Municipal Obligations, to the exemption of interest thereon from
California state personal income tax) are rendered by bond counsel to the
respective issuers at the time of issuance, and opinions relating to the
validity of and the tax-exempt status of payments received by the Fund from
tax-exempt derivatives are rendered by counsel to the respective sponsors of
such derivatives. Neither the Fund nor its investment adviser will review the
proceedings relating to the issuance of Municipal Obligations, the creation of
any tax-exempt derivatives, or the bases for such opinions.

TYPES OF MUNICIPAL OBLIGATIONS

The two principal classifications of Municipal Obligations which may be
held by the Fund are "general obligation" securities and "revenue" securities.
General obligation securities are secured by the issuer's pledge of its full
faith, credit and taxing power for the payment of principal and interest.
Revenue securities are payable only from the revenues derived from a particular
facility or class of facilities or, in some cases, from the proceeds of a
special excise tax or other specific revenue source such as the user of the
facility being financed. Revenue securities may include private activity bonds.
Such bonds may be issued by or on behalf of public authorities to finance
various privately operated facilities, and are not payable from the unrestricted
revenues of the issuer. As a result, the credit quality of private activity
bonds is frequently related directly to the credit standing of private
corporations or other entities.

The Fund's portfolio may also include "moral obligation" securities, which
are normally issued by special purpose public authorities. If the issuer of
moral obligation securities is unable to meet its debt service obligations from
current revenues, it may draw on a reserve fund, the restoration of which is a
moral commitment but not a legal obligation of the state or municipality which
created the issuer.

OTHER INVESTMENT PRACTICES

Municipal Obligations purchased by the Fund may include variable and
floating rate instruments, which provide for adjustments in the interest rate on
certain reset dates or whenever a specified interest rate index changes,
respectively. Variable and floating rate instruments are subject to the credit
quality standards described above. In some cases the Fund may require that the
obligation to pay the principal of the instrument be backed by a letter or line
of credit or guarantee. Adverse developments affecting the banking industry
generally or a particular bank or financial institution that has provided its
credit or guarantee with respect to a Municipal Obligation held by the Fund,
including a change in the credit quality of any such bank or financial
institution, could result in a loss to the Fund and adversely affect the value
of its shares. Such instruments may carry stated maturities in excess of 397
days provided that the maturity-shortening provisions stated in Rule 2a-7 are
satisfied. Although a particular variable or floating rate demand instrument may
not be actively traded in a secondary market, in some cases, the Fund may be
entitled to principal on demand and may be able to resell such instruments in
the dealer market.

7
<PAGE> 11

are received. Securities purchased on a when-issued basis are recorded as an
asset and are subject to changes in value based upon changes in the general
level of interest rates. The Fund expects that commitments to purchase
when-issued securities will not exceed 25% of the value of its total assets
absent unusual market conditions, and that a commitment by the Fund to purchase
when-issued securities will not exceed 45 days. The Fund does not intend to
purchase when-issued securities for speculative purposes but only in furtherance
of its investment objective.

In addition, the Fund may acquire "stand-by commitments" with respect to
Municipal Obligations held in its portfolio. Under a stand-by commitment, a
dealer agrees to purchase at the Fund's option specified Municipal Obligations
at a price equal to their amortized cost value plus accrued interest. The Fund
will acquire stand-by commitments solely to facilitate portfolio liquidity and
does not intend to exercise its rights thereunder for trading purposes.

RISK FACTORS

The Fund is concentrated in securities issued by the State of California or
entities within the State of California and therefore, investments in the Fund
may be riskier than an investment in other types of money market funds.

The Fund intends to follow the diversification standards set forth in the
1940 Act except to the extent, in the investment adviser's judgment, that
non-diversification is appropriate in order to maximize the percentage of the
Fund's assets that are California Municipal Obligations. The investment return
on a non-diversified portfolio typically is dependent upon the performance of a
smaller number of issuers relative to the number of issuers held in a
diversified portfolio. In the event of changes in the financial condition or in
the market's assessment of certain issuers, the Fund's maintenance of large
positions in the obligations of a small number of issuers may affect the value
of the Fund's portfolio to a greater extent than that of a diversified
portfolio.

Although the Fund does not presently intend to do so on a regular basis, it
may invest more than 25% of its assets in Municipal Obligations the interest on
which is paid solely from revenues on similar projects if such investment is
deemed necessary or appropriate by the Fund's investment adviser. To the extent
that the Fund's assets are concentrated in Municipal Obligations payable from
revenues on similar projects, the Fund will be subject to the particular risks
presented by such projects to a greater extent than it would be if the Fund's
assets were not so concentrated.

The Fund's ability to achieve its investment objective is dependent upon
various factors, including the ability of the issuers of California Municipal
Obligations to timely meet their continuing payment obligations with respect to
the municipal obligations. Any reductions in the creditworthiness of issuers of
California Municipal Obligations could adversely affect the market values and
marketability of California Municipal Obligations, and, consequently, the net
asset value of the Fund's portfolio.

On July 15, 1994 and July 6, 1994, respectively, Standard & Poor's Ratings
Services and Moody's Investors Service, Inc., citing the State of California's
deteriorating financial position, lowered their ratings of the State's general
obligation bonds from A+ and Aa, respectively, to A and A1, respectively. On
July 30, 1996, Standard & Poor's Ratings Services upgraded California's general
obligation bonds to A+.

8
<PAGE> 12

Municipal Obligations. Significant financial and other considerations relating
to the Fund's investments in California Municipal Obligations are summarized in
the Statement of Additional Information.

PURCHASE OF SHARES

The Fund's shares are sold to institutional investors at the net asset
value per share next determined after acceptance of a purchase order by PFPC,
the Fund's transfer agent.

Purchase orders for shares will be accepted by the Fund only on a day on
which both the New York Stock Exchange and the Federal Reserve Bank of
Philadelphia are open for business (a "Business Day"), and must be transmitted
to PFPC by telephone at 800-441-7450 (in Delaware call 302-791-5350) or through
the Fund's computer access program. Orders accepted by PFPC by Noon, Eastern
time (9:00 A.M., Pacific time) will be executed the same day if PNC Bank, the
Fund's custodian, has received payment by 4:00 P.M., Eastern time (1:00 P.M.,
Pacific time) that day. Orders received at other times, and orders for which
payment has not been received by 4:00 P.M., Eastern time (1:00 P.M., Pacific
time), will not be accepted and notice thereof will be given to the institution
placing the order. Payment for orders which are not received or accepted will be
returned after prompt inquiry by PNC Bank to the sending institution.

Payment for shares may be made only in Federal funds or other funds
immediately available to PNC Bank. The minimum initial investment is $5,000;
however, broker-dealers and other institutional investors may set a higher
minimum for their customers. There is no minimum subsequent investment. The Fund
may in its discretion reject any purchase order for shares.

Conflict of interest restrictions may apply to an institution's receipt of
compensation paid by the Fund in connection with the investment of fiduciary
funds in Dollar or Plus shares. Institutions, including banks regulated by the
Comptroller of the Currency and investment advisers and other money managers
subject to the jurisdiction of the Securities and Exchange Commission, the
Department of Labor or state securities commissions, should consult legal
counsel before investing in Dollar or Plus shares. (See also "Management of the
Fund--Banking Laws.")

REDEMPTION OF SHARES

REDEMPTION PROCEDURES

Redemption orders must be transmitted to PFPC by telephone in the manner
described under "Purchase of Shares." Shares are redeemed at the net asset value
per share next determined after receipt of the redemption order by PFPC. While
the Fund intends to use its best efforts to maintain its net asset value per
share of each of its series at $1.00, the proceeds paid upon redemption may be
more or less than the amount invested depending upon a share's net asset value
at the time of redemption.

Payment for redeemed shares for which a redemption order is accepted by
PFPC prior to Noon, Eastern time (9:00 A.M., Pacific time) on a Business Day is
normally made in Federal funds wired to the redeeming shareholder on the same
Business Day. Payment for redeemed shares for which a redemption order is
accepted by PFPC after Noon, Eastern time (9:00 A.M., Pacific time) on such a
Business Day or on a day that PNC Bank is closed is normally made in Federal
funds wired to the redeeming shareholder on the next Business Day that PNC Bank
is open. The Fund reserves the right to wire redemption proceeds within 7 days
after accepting the redemption order if, in the judgment of the Fund's
administrator, an earlier payment could adversely affect the Fund.

9
<PAGE> 13

The Fund may suspend the right of redemption or postpone the date of
payment upon redemption (as well as suspend or postpone the recordation of the
transfer of its shares) for such periods as are permitted under the 1940 Act.
The Fund reserves the right to redeem the shares of the Fund owned by a
shareholder at their net asset value if the value of such shares is less than
$500. Any such shareholder will be notified in writing that its shares have a
value of less than $500 and will be allowed 60 days to make an additional
investment before the redemption is processed by the Fund. The Fund may also
redeem shares involuntarily (and restrict the transfer of its shares) under
certain special circumstances described in the Statement of Additional
Information under "Additional Purchase and Redemption Information."

OTHER MATTERS

The Fund's net asset value per share for purposes of pricing purchase and
redemption orders is determined by PIMC as of Noon and 4:00 P.M., Eastern time
(9:00 A.M. and 1:00 P.M., Pacific time) on each Business Day (excluding those
holidays on which either the New York Stock Exchange or the Federal Reserve Bank
of Philadelphia is closed). Currently, the holidays which the New York Stock
Exchange or the Federal Reserve Bank of Philadelphia observes are New Year's
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Columbus Day, Veterans' Day, Thanksgiving Day and
Christmas Day. The net asset value per share of each of the Fund's classes is
the same and is calculated by adding the value of all of the Fund's portfolio
securities and other assets, subtracting liabilities and dividing the results by
the number of the Fund's outstanding shares (irrespective of class). Portfolio
securities are valued on the basis of amortized cost. Under this method, the
Fund values a portfolio security at cost on the date of purchase and thereafter
assumes a constant amortization of any discount or premium until maturity of the
security. As a result, the value of the security for purposes of determining net
asset value normally does not change in response to fluctuating interest rates.
While the amortized cost method seems to provide certainty in portfolio
valuation, it may result in periods during which values, as determined by
amortized cost, are higher or lower than the amount the Fund would receive if it
sold the securities.

Shares of the Fund are sold and redeemed without charge by the Fund,
although Service Organizations (see below) and other institutional investors
purchasing or holding Fund shares for their customers' accounts may charge
customers for cash management and other services provided in connection with
their accounts including, for example, account maintenance fees, compensating
balance requirements or fees based upon account transactions, assets or income.
Such charges will reduce the yield of the Fund to such customers. A customer
should therefore read this Prospectus in light of the terms governing its
account with a Service Organization (or other institution) before purchasing
Fund shares. An institution purchasing or redeeming Fund shares on behalf of its
customers is responsible for transmitting orders to the Fund in accordance with
its agreements with its customers.

10
<PAGE> 14

MANAGEMENT OF THE FUND

BOARD OF DIRECTORS

The business and affairs of the Fund are managed under the direction of the
Company's Board of Directors. The directors of the Company are as follows:

G. Willing Pepper, Chairman of the Board and President of the Company,
is a former President of Scott Paper Company.

Rodney D. Johnson is President of Fairmount Capital Advisors, Inc.

William R. Howell is a former Vice Chairman, Union Bank, Los Angeles.

Rudolph A. Peterson is Honorary Director, President and Chief
Executive Officer (Ret.) of BankAmerica Corporation.

Anthony M. Santomero is the Richard K. Mellon Professor of Finance at
The Wharton School, University of Pennsylvania.

INVESTMENT ADVISER AND SUB-ADVISER

PIMC, a wholly-owned subsidiary of PNC Bank, serves as the Fund's
investment adviser. PIMC is one of the largest bank managers of mutual funds,
with assets currently under management in excess of $30 billion. PIMC was
organized in 1977 by PNC Bank to perform advisory services for investment
companies and has its principal offices at, 400 Bellevue Parkway, Wilmington,
Delaware 19809. PNC Bank serves as the Fund's sub-adviser. PNC Bank is one of
the largest bank managers of investments for individuals in the United States,
and together with its predecessors has been in the business of managing the
investments of fiduciary and other accounts since 1847. PNC Bank is a
wholly-owned, indirect subsidiary of PNC Bank Corp. and has its principal
offices at 1600 Market Street, Philadelphia, Pennsylvania 19103. In 1973,
Provident National Bank (predecessor to PNC Bank) commenced advising the first
institutional money market mutual fund -- a U.S. dollar denominated constant net
asset value fund -- offered in the United States.

PNC Bank Corp., a multi-bank holding company headquartered in Pittsburgh,
Pennsylvania, is one of the largest financial services organizations in the
United States, with banking subsidiaries in Pennsylvania, New Jersey, Delaware,
Ohio, Kentucky, Indiana, Massachusetts and Florida. Its major businesses include
corporate banking, consumer banking, real estate banking, mortgage banking and
asset management.

As investment adviser, PIMC manages the Fund's portfolio and is responsible
for all purchases and sales of the Fund's portfolio securities. PIMC also
maintains certain of the Fund's financial accounts and records and computes the
Fund's net asset value and net income. For the investment advisory services
provided and expenses assumed by it, PIMC is entitled to receive a fee, computed
daily and payable monthly based on the Fund's average net assets. PIMC and the
administrators may from time to time reduce the investment advisory and
administration fees otherwise payable to them or may reimburse the Fund for its
operating expenses. For the fiscal year ended January 31, 1997, the Fund paid
advisory fees to PIMC (after fee waivers) of .06% of the Fund's average daily
net assets.

11
<PAGE> 15

circumstances). The sub-advisory fees paid by PIMC to PNC Bank have no effect on
the investment advisory fees payable by the Fund to PIMC. PNC Bank also serves
as the Fund's custodian. The services provided by PNC Bank and PIMC and the fees
payable by the Fund for these services are described further in the Statement of
Additional Information under "Management of the Company."

ADMINISTRATORS

PFPC, whose principal business address is 400 Bellevue Parkway, Wilmington,
Delaware 19809 and PDI, whose principal business address is Four Falls Corporate
Center, 6th Floor, West Conshohocken, Pennsylvania 19428, serve as
administrators. PFPC is an indirect wholly-owned subsidiary of PNC Bank Corp.
All of the outstanding stock of PDI is owned by Monroe Haegele, PDI's chief
executive officer. The administrative services provided by the administrators,
which are described more fully in the Statement of Additional Information,
include providing and supervising the operation of an automated data processing
system to process purchase and redemption orders; assisting in maintaining the
Fund's Wilmington, Delaware office; performing administrative services in
connection with the Fund's computer access program maintained to facilitate
shareholder access to the Fund; accumulating information for and coordinating
the preparation of reports to the Fund's shareholders and the SEC; and
maintaining the registration or qualification of the Fund's shares for sale
under state securities laws. PFPC and PDI are each responsible for carrying out
the duties undertaken pursuant to the Administration Agreement with the Fund.

For their administrative services, the administrators are entitled jointly
to receive a fee computed daily and payable monthly. (For information regarding
the administrators' waivers, see "Investment Adviser and Sub-Adviser" above.)
The Fund also reimburses each administrator for its reasonable out-of-pocket
expenses incurred in connection with the Fund's computer access program. For the
fiscal year ended January 31, 1997, the Fund paid PFPC and PDI administrative
fees (after fee waivers) aggregating .06% of its average daily net assets.

PFPC also serves as transfer agent, registrar and dividend disbursing
agent. PFPC's address is P.O. Box 8950, Wilmington, Delaware 19885-9628. The
services provided by PFPC and PDI and the fees payable by the Fund for these
services are described further in the Statement of Additional Information under
"Management of the Company."

DISTRIBUTOR

PDI whose principal business is set forth above under "administrators,"
also serves as distributor of the Fund's shares. Fund shares are sold on a
continuous basis by the distributor as agent. The distributor pays the cost of
printing and distributing prospectuses to persons who are not shareholders of
the Fund (excluding preparation and printing expenses necessary for the
continued registration of the Fund's shares) and of printing and distributing
all sales literature. No compensation is payable by the Fund to the distributor
for its distribution services.

SERVICE ORGANIZATIONS

As stated above, Service Organizations may purchase Dollar or Plus shares
offered by the Fund. Dollar shares are sold to institutions other than
broker/dealers, and Plus shares are sold to broker/ dealers, which, in each
case, enter into servicing agreements with the Fund requiring them to provide
support services to their customers who are the beneficial owners of such shares
in consideration for

12
<PAGE> 16

.25% (on an annualized basis) of the average daily net asset value of the Dollar
or Plus shares held by the Service Organizations for the benefit of their
customers. Such services, which are described more fully in the Statement of
Additional Information under "Management of the Company--Service Organizations,"
include aggregating and processing purchase and redemption requests from
customers and placing net purchase and redemption orders with PFPC; processing
dividend payments from the Fund on behalf of customers; providing information
periodically to customers showing their positions in Dollar or Plus shares; and
providing sub-accounting not provided by the transfer agent with respect to
shares beneficially owned by customers or the information necessary for
sub-accounting. In addition, broker/dealers purchasing Plus shares may be
requested to provide from time to time assistance (such as the forwarding of
sales literature and advertising to their customers) in connection with the
distribution of Plus shares. Under the terms of the agreements, Service
Organizations are required to provide to their customers a schedule of any fees
that they may charge to their customers relating to the investment of their
customers' assets in Dollar or Plus shares. Money shares offered by the Fund may
be purchased by any type of institutional investor (including banks and
broker/dealers) which does not wish to enter into such servicing agreements with
the Fund in connection with its investments.

EXPENSES

Except as noted above and in the Statement of Additional Information, the
Fund's service contractors bear all expenses in connection with the performance
of their services. Similarly, the Fund bears the expenses incurred in its
operations. The ratios of the Fund's expenses to its average daily net assets
for the fiscal year ended January 31, 1997 for the Fund's Money, Dollar and Plus
shares were .20%, .45% and .45% (estimated).

BANKING LAWS

Banking laws and regulations currently prohibit a bank holding company
registered under the Federal Bank Holding Company Act of 1956 or any bank or
non-bank affiliate thereof from sponsoring, organizing or controlling a
registered, open-end investment company engaged continuously in the issuance of
its shares, and prohibit banks generally from issuing, underwriting, selling or
distributing securities such as Fund shares. Such banking laws and regulations
do not prohibit such a holding company or affiliate or banks generally from
acting as investment adviser, transfer agent or custodian to such an investment
company, or from purchasing shares of such a company for or upon the order of
customers. PNC Bank, PIMC and PFPC, as well as certain Service Organizations,
are subject to such banking laws and regulations, but believe they may perform
the services for the Fund contemplated by their respective agreements, this
Prospectus and Statement of Additional Information without violating applicable
banking laws or regulations.

Should future legislative, judicial or administrative action prohibit or
restrict the activities of bank Service Organizations in connection with the
provision of support services to their customers, the Fund might be required to
alter or discontinue its arrangements with Service Organizations and change its
method of operations. It is not anticipated, however, that any change in the
Fund's method of operations would affect its net asset value per share or result
in a financial loss to any customer.

13
<PAGE> 17

DIVIDENDS

The Fund's net income is declared daily as a dividend to the holders of
record of each of the Fund's classes of shares at the close of business on the
day of declaration. Dividends for each class are equal to the net income
available for the particular class involved and are determined in the same
manner across classes. Net income available for dividends on the Dollar shares
is after deduction of all the expense of fees paid to Service Organizations for
their services with respect to Dollar shares, and for the Plus shares is after
deduction of all the expense of fees paid to Service Organizations with respect
to Plus shares. (See "Management of the Fund--Service Organizations.") Shares of
each class begin accruing dividends on the day the purchase order for the shares
is executed and continue to accrue dividends through, and including, the day
before the redemption order for the shares is executed. Dividends are paid
monthly by check, or by wire transfer if requested in writing by the
shareholder, within 5 business days after the end of the month or within 5
business days of the redemption of all of a shareholder's shares of a particular
class. The Fund does not expect to realize net long-term capital gains.

Institutional shareholders may elect to have their dividends reinvested in
additional full and fractional shares of the same class with respect to which
dividends are declared valued at their net asset value on the payment date.
Reinvested dividends receive the same tax treatment as dividends paid in cash.
Such election, or any revocation thereof, must be made in writing to PFPC, and
will become effective with respect to dividends paid after its receipt by PFPC.

TAXES

It is intended that the Fund will separately qualify as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code"). Such qualification generally relieves the Fund of liability for Federal
income and California franchise and income taxes to the extent the Fund's
earnings are distributed in accordance with the Code.

The Fund's policy is to pay its shareholders with respect to each taxable
year dividends equal to at least the sum of 90% of its exempt-interest income
(net of certain deductions) and 90% of its investment company taxable income (if
any) for such year. Dividends derived from exempt-interest income (known as
"exempt-interest dividends") may be treated by the Fund's shareholders as items
of interest excludable from their gross income under Section 103(a) of the Code,
unless under the circumstances applicable to the particular shareholder
exclusion would be disallowed. (See Statement of Additional Information under
"Additional Information Concerning Taxes.")

If the Fund should hold certain private activity bonds issued after August
7, 1986, shareholders must include, as an item of tax preference, the portion of
dividends paid by the Fund that is attributable to interest on such bonds in
their Federal alternative minimum taxable income for purposes of determining
liability (if any) for the 26-28% alternative minimum tax applicable to
individuals and the 20% alternative minimum tax applicable to corporations.
Corporate shareholders also must take all exempt-interest dividends into account
in determining certain adjustments for alternative minimum tax purposes.
Shareholders receiving Social Security benefits or Railroad Retirement Act
benefits should note that all exempt-interest dividends will be taken into
account in determining the taxability of such benefits.

Dividends that are paid by the Fund to non-corporate shareholders and are
derived from interest on California Municipal Obligations or certain U.S.
Government obligations are also exempt from

14
<PAGE> 18

California state personal income tax. However, dividends paid to corporate
shareholders subject to California state franchise tax or California state
corporate income tax will be taxed as ordinary income to such shareholders,
notwithstanding that all or a portion of such dividends is exempt from
California state personal income tax. Moreover, to the extent that the Fund's
dividends are derived from interest on debt obligations other than California
Municipal Obligations or certain U.S. Government obligations such dividends will
be subject to California state personal income tax, even though such dividends
may be exempt for Federal income tax purposes.

Exempt-interest dividends derived from U.S. Government obligations
generally will be exempt from state and local tax as well. However, except as
noted with respect to California state personal income tax, in some situations
distributions of net investment income may be taxable to investors under state
or local law as dividend income even though all or a portion of such
distributions may be derived from interest on tax-exempt obligations which, if
realized directly, would be exempt from such income taxes. To the extent, if
any, that dividends paid to shareholders are derived from taxable interest or
from long-term or short-term capital gains, such dividends will not be exempt
from Federal income tax or California state personal income tax.

Fund shareholders will be advised at least annually as to the Federal and
California state personal income tax consequences of distributions made each
year.

The foregoing is only a brief summary of some of the important tax
considerations generally affecting the Fund and its shareholders. No attempt is
made to present a detailed explanation of the Federal, state or local income tax
treatment of the Fund or its shareholders, and this discussion is not intended
as a substitute for careful tax planning. Accordingly, potential investors in
the Fund should consult their tax advisers with specific reference to their own
tax situations.

DESCRIPTION OF SHARES AND MISCELLANEOUS

The Company's Charter authorizes the Board of Directors to issue up to
three billion full and fractional shares of capital stock, $.001 par value per
share, and to classify or reclassify any unissued shares of the Fund into one or
more classes or series by setting or changing in any one or more respects their
respective preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption. Pursuant to such authority, the Board of Directors has classified
2.3 billion of its shares as California Money shares (Class A Common Stock), 300
million of its shares as California Money Dollar shares (Class A Common
Stock-Special Series 1) and 300 million of its shares as California Money Plus
shares (Class A Common Stock-Special Series 2). The 1940 Act states that the
beneficial owner of more than 25% of the voting securities of a company is
presumed to control the company. Under this definition, as of May 19, 1997, no
entity is deemed to be a controlling person of the Company as no entity controls
more than 25% of the voting securities of the Company.

THIS PROSPECTUS RELATES PRIMARILY TO THE FUND AND DESCRIBES ONLY THE
INVESTMENT OBJECTIVE AND POLICIES, OPERATIONS, CONTRACTS AND OTHER MATTERS
RELATING TO THE FUND.

Each Money, Dollar and Plus share represents an equal proportionate
interest in the assets of the Fund. Shareholders of each class are entitled to
participate equally in any dividend or distribution declared by the Company's
Board of Directors (except as provided under "Dividends") and in the net
distributable assets of the Fund on liquidation. Fund shares have no pre-emptive
rights and only such

15
<PAGE> 19

conversion and exchange rights as the Board may grant in its discretion. When
issued for payment as described in this Prospectus, the Fund's shares will be
fully paid and non-assessable. Further, shareholders of each class are entitled
to one vote for each full share held and proportionate fractional votes for
fractional shares held, and will vote in the aggregate and not by class, except
where otherwise required by law and except that only Dollar shares will be
entitled to vote on matters submitted to a vote of shareholders pertaining to
the Fund's arrangements with Service Organizations with respect to Dollar
shares, and Plus shares will enjoy similar voting rights on matters pertaining
to the Fund's arrangements with Service Organizations with respect to Plus
shares. (See "Management of the Fund--Service Organizations.") Shares of the
Company have non-cumulative voting rights and, accordingly, the holders of more
than 50% of the Company's outstanding shares (irrespective of class or series)
may elect all of the directors.

For information concerning the redemption of Fund shares and possible
restrictions on their transferability, see "Redemption of Shares."

YIELD

From time to time the Fund may advertise the "yields," "effective yields"
and "tax-equivalent yields" of its Money, Dollar and Plus shares. Yield
quotations are computed separately for each separate class of shares. Yield
figures are based on historical earnings and are not intended to indicate future
performance. The "yield" for each class of Fund shares refers to the income
generated by an investment in the shares of such class over a seven-day period
(which period will be stated in the advertisement). This income is then
"annualized." That is, the amount of income generated by the investment during
that week is assumed to be generated each week over a 52-week period and is
shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in a class of
Fund shares is assumed to be reinvested in shares of that class. The "effective
yield" will be slightly higher than the "yield" because of the compounding
effect of this assumed reinvestment. The "tax-equivalent yield" shows the level
of taxable yield necessary to produce an after-tax yield equivalent to the
Fund's tax-free yield. It is calculated by increasing the Fund's yield
(calculated as above) by the amount necessary to reflect the payment of Federal
and California income taxes at a stated tax rate. The "tax-equivalent yield"
will always be higher than the "yield."

The yield of any investment is generally a function of portfolio quality
and maturity, type of investment and operating expenses. The yield on Money, as
well as Dollar and Plus, shares will fluctuate and is not necessarily
representative of future results. Any fees charged by broker-dealers, banks or
others directly to their customers in connection with investments in the Fund
are not reflected in the yields on the Fund's shares, and such fees, if charged,
will reduce the actual return received by customers on their investments.
Investors may call 800-821-6006 to obtain the current yields on each series of
the Fund's shares.

16
<PAGE> 20

[THIS PAGE INTENTIONALLY LEFT BLANK.]
<PAGE> 21

NO PERSON HAS BEEN AUTHORIZED
TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS NOT
CONTAINED IN THIS PROSPECTUS,
OR THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION
INCORPORATED HEREIN BY
REFERENCE, IN CONNECTION WITH
THE OFFERING MADE BY THIS
PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE FUND OR ITS
DISTRIBUTOR. THIS PROSPECTUS
DOES NOT CONSTITUTE AN
OFFERING BY THE FUND OR BY
THE DISTRIBUTOR IN ANY
JURISDICTION IN WHICH SUCH
OFFERING MAY NOT LAWFULLY BE
MADE.

-----------------
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Background and Expense
Information.................. 2
Financial Highlights........... 3
Investment Objective and
Policies..................... 5
Purchase of Shares............. 9
Redemption of Shares........... 9
Management of the Fund......... 11
Dividends...................... 14
Taxes.......................... 14
Description of Shares and
Miscellaneous................ 15
Yield.......................... 16
</TABLE>

CALIFORNIA
MONEY FUND

AN INVESTMENT PORTFOLIO
OFFERED BY
MUNICIPAL FUND FOR
CALIFORNIA INVESTORS, INC.

[PROVIDENT INSTITUTIONAL FUNDS LOGO]

Prospectus

May 31, 1997

PIF-P-011
<PAGE> 22
CALIFORNIA MONEY FUND
(Dollar Shares)
An Investment Portfolio Offered by
Municipal Fund for California Investors, Inc.