COREFUNDS INC, 485APOS, 1996-01-02

COREFUNDS INC
485APOS, 1996-01-02

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<PAGE>
As filed with the Securities and Exchange Commission on January 2, 1996
Registration No. 2-93214
================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 [ ]

POST-EFFECTIVE AMENDMENT NO. 24 [X]

and

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY [ ]
ACT OF 1940

AMENDMENT NO. 25 [X]

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

COREFUNDS, INC.
(Exact Name of Registrant as Specified in Charter)

680 East Swedesford Road
Wayne, PA 19087
(Address of Principal Executive Offices)
Registrant's Telephone Number: 1-(800)355-CORE

JAMES W. JENNINGS, ESQUIRE
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103
(Name and Address of Agent for Service)

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

It is proposed that this filing will become effective seventy-five days after
filing pursuant to paragraph (a) of Rule 485.

The Registrant has registered an indefinite number of its Common Shares under
the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company
Act of 1940. The Registrant filed a Rule 24f-2 notice covering the fiscal year
ended June 30, 1995 on August 25, 1995.

<PAGE>
CROSS REFERENCE SHEET

January 2, 1996

Prospectus
Form N-1A Item No. Caption
- ------------------ ----------
PART A - Class Y: Growth Equity Fund, Equity
Fund, Special Equity Fund, Equity Index Fund,
International Growth Fund, Balanced Fund,
Short Intermediate Bond Fund, Bond Fund,
Short-Term Income Fund, Government Income Fund,
Intermediate Municipal Bond Fund,
Pennsylvania Municipal Bond Fund, New Jersey
Municipal Bond Fund, Global Bond Fund, Cash Reserve,
Treasury Reserve and Tax-Free Reserve Portfolios

Item 1. Cover Page . . . . . . . . . . . . . Cover Page
Item 2. Synopsis . . . . . . . . . . . . . . Transaction and
Operating Expense
Tables
Item 3. Condensed Financial Information . . . Financial Highlights
Item 4. General Description of Registrant . . Cover Page; Highlights;
Investment Objectives;
Investment Restrictions;
General Information
Item 5. Management of the Fund. . . . . . . . Cover Page; Management; General
Information;Back Cover
Item 5A. Management Discussions
of Fund Performance . . . . . . . . . Disclosure in Annual Report
Item 6. Capital Stock and Other Securities. . Cover Page;
Distributions; Taxes;
Description of Shares;
General Information; How
to Purchase and Redeem
Shares
Item 7. Purchase of Securities Being Offered Valuation of Shares; How
to Purchase and Redeem
Shares
Item 8. Redemption or Repurchase . . . . . . How to Purchase and Redeem Shares
Item 9. Pending Legal Proceedings . . . . . . *

PART A - Classes A and C: Growth Equity Fund,
Equity Fund, Special Equity Fund, International
Growth Fund, Balanced Fund, Short Intermediate Bond
Fund, Bond Fund, Short-Term Income Fund, Government
Income Fund, Intermediate Municipal Bond Fund,
Pennsylvania Municipal Bond Fund, New Jersey
Municipal Bond Fund, Global Bond Fund, Cash
Reserve, Treasury Reserve and Tax-Free Reserve
Portfolios

<PAGE>
Item 1. Cover Page . . . . . . . . . . . . . Cover Page
Item 2. Synopsis . . . . . . . . . . . . . . Transaction and
Operating Expense
Tables
Item 3. Condensed Financial Information . . . Financial Highlights
Item 4. General Description of Registrant . . Cover Page; Highlights;
Investment Objectives;
Investment Restrictions;
General Information
Item 5. Management of the Fund. . . . . . . . Cover Page; Management; General
Information; Back Cover
Item 5A. Management Discussions
of Fund Performance . . . . . . . . . Disclosure in Annual Report
Item 6. Capital Stock and Other Securities. . Cover Page;
Distributions; Taxes;
Description of Shares;
General Information;
Opening an Account and
Purchasing Shares;
Selling Shares
Item 7. Purchase of Securities Being Offered Valuation of Shares;
Opening an Account and
Purchasing Shares;
Exchanging Shares
Item 8. Redemption or Repurchase . . . . . . Selling Shares; Redeeming Shares
Item 9. Pending Legal Proceedings . . . . . . *

PART A - Class A: Equity Index Fund

Item 1. Cover Page . . . . . . . . . . . . . Cover Page
Item 2. Synopsis . . . . . . . . . . . . . . Transaction and
Operating Expense
Tables
Item 3. Condensed Financial Information . . . Financial Highlights
Item 4. General Description of Registrant . . Cover Page; Highlights;
Investment Objectives;
Investment Restrictions;
General Information
Item 5. Management of the Fund. . . . . . . . Cover Page; Management; General
Information; Back Cover
Item 5A. Management Discussions
of Fund Performance . . . . . . . . . Disclosure in Annual
Report
Item 6. Capital Stock and Other Securities. . Cover Page;
Distributions; Taxes;
Description of Shares;
General Information;
Opening an Account and
Purchasing Shares;
Selling Shares
<PAGE>
Item 7. Purchase of Securities Being Offered Valuation of Shares;
Opening an Account and
Purchasing Shares;
Exchanging Shares
Item 8. Redemption or Repurchase . . . . . . Selling Shares; Redeeming Shares
Item 9. Pending Legal Proceedings . . . . . . *

PART A - CoreFund Elite Cash Reserve, CoreFund
Elite Government Reserve and CoreFund Elite
Treasury Reserve Portfolios

Item 1. Cover Page . . . . . . . . . . . . . Cover Page
Item 2. Synopsis . . . . . . . . . . . . . . Transaction and
Operating Expense
Tables
Item 3. Condensed Financial Information . . . Financial Highlights
Item 4. General Description of Registrant . . Cover Page; Highlights;
Investment Objectives;
Investment Restrictions;
General Information
Item 5. Management of the Fund. . . . . . . . Cover Page; Management; General
Information;Back Cover
Item 5A. Management Discussions
of Fund Performance . . . . . . . . . Disclosure in Annual
Report
Item 6. Capital Stock and Other Securities. . Cover Page;
Distributions; Taxes;
Description of Shares;
General Information;
Opening an Account and
Purchasing Shares;
Selling Shares
Item 7. Purchase of Securities Being Offered Valuation of Shares;
Opening an Account and
Purchasing Shares;
Exchanging Shares
Item 8. Redemption or Repurchase . . . . . . Selling Shares; Redeeming Shares
Item 9. Pending Legal Proceedings . . . . . . *

PART A - Fiduciary Reserve Portfolio

Item 1. Cover Page . . . . . . . . . . . . . Cover Page
Item 2. Synopsis . . . . . . . . . . . . . . Fund Expenses
Item 3. Condensed Financial Information . . . Financial Highlights
Item 4. General Description of Registrant . . Cover Page;
Introduction; Investment
Objective and Policies;
Investment Restrictions;
General Information
<PAGE>
Item 5. Management of the Fund. . . . . . . . Cover Page; Management of the
Fund; General Information
Item 5A. Management Discussions
of Fund Performance . . . . . . . . . Disclosure in Annual
Report
Item 6. Capital Stock and Other Securities. . Cover Page; Dividends
and Taxes; Description
of Shares; General
Information; How to
Purchase and Redeem
Shares
Item 7. Purchase of Securities Being Offered Valuation of Shares; How
to Purchase and Redeem
Shares
Item 8. Redemption or Repurchase . . . . . . How to Purchase and Redeem Shares
Item 9. Pending Legal Proceedings . . . . . . *

PART A - Fiduciary Treasury Portfolio

Item 1. Cover Page . . . . . . . . . . . . . Cover Page
Item 2. Synopsis . . . . . . . . . . . . . . Fund Expenses

<PAGE>
Item 3. Condensed Financial Information . . . Financial Highlights
Item 4. General Description of Registrant . . Cover Page;
Introduction; Investment
Objective and Policies;
Investment Restrictions;
General Information
Item 5. Management of the Fund. . . . . . . . Cover Page; Management of the
Fund; General Information
Item 5A. Management Discussions
of Fund Performance . . . . . . . . . Disclosure in Annual
Report
Item 6. Capital Stock and Other Securities. . Cover Page; Dividends
and Taxes; Description
of Shares; General
Information; How to
Purchase and Redeem
Shares
Item 7. Purchase of Securities Being Offered Valuation of Shares; How
to Purchase and Redeem
Shares
Item 8. Redemption or Repurchase . . . . . . How to Purchase and Redeem Shares
Item 9. Pending Legal Proceedings . . . . . . *

PART A - Fiduciary Tax-Free Portfolio

Item 1. Cover Page . . . . . . . . . . . . . Cover Page
Item 2. Synopsis . . . . . . . . . . . . . . Fund Expenses
Item 3. Condensed Financial Information . . . Financial Highlights
Item 4. General Description of Registrant . . Cover Page;
Introduction; Investment
Objective and Policies;
Investment Restrictions;
General Information
Item 5. Management of the Fund. . . . . . . . Cover Page; Management of the
Fund; General Information
Item 5A. Management Discussions
of Fund Performance . . . . . . . . . Disclosure in Annual
Report
Item 6. Capital Stock and Other Securities. . Cover Page; Dividends
and Taxes; Description
of Shares; General
Information; How to
Purchase and Redeem
Shares
Item 7. Purchase of Securities Being Offered Valuation of Shares; How
to Purchase and Redeem
Shares
Item 8. Redemption or Repurchase . . . . . . How to Purchase and Redeem Shares
Item 9. Pending Legal Proceedings . . . . . . *

Part B

Item 10. Cover Page . . . . . . . . . . . . Cover Page
Item 11. Table of Contents. . . . . . . . . Table of Contents
Item 12. General Information and History. . The Fund
Item 13. Investment Objectives and Investment
Policies . . . . . . . . . . . . . Objective and
Policies
Item 14. Management of the Registrant . . . Directors
and Officers; the
Investment Adviser,
Manager and Distributor
Item 15. Control Persons and Principal
Holders of Securities. . . . . . . Principal Holders of Securities
Item 16. Investment Advisory and Other
Services . . . . . . . . . . . . . The Investment Adviser,
Administrator and Distributor
Item 17. Brokerage Allocation and Other
Practices. . . . . . . . . . . . . Portfolio Transactions
Item 18. Capital Stock and Other
Securities . . . . . . . . . . . . Description of Shares
Item 19. Purchase, Redemption and Pricing
of Securities Being Offered. . . . Included in Part A
Item 20. Tax Status . . . . . . . . . . . . Included in Part A
Item 21. Underwriters . . . . . . . . . . . *
Item 22. Calculation of Performance Data. . Yield

<PAGE>
Item 23. Financial Statements . . . . . . . Financial Statements

Part C

Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C of this Registration Statement.

- -------------
* Omitted since the answer is negative or the Item is inapplicable.

<PAGE>

<PAGE>
/x/
COREFUND
FAMILY OF
MUTUAL FUNDS

PROSPECTUS
COREFUNDS, INC.

MARCH 18, 1996
CLASS Y SHARES-INSTITUTIONAL

CoreFunds, Inc. is an open-end management investment company presently
offering shares in twenty-three diversified and non-diversified portfolios
that offer a variety of investment opportunities. These portfolios are managed
by CoreStates Investment Advisers, Inc. This Prospectus relates to Class Y
Shares in seventeen portfolios, including equity, fixed income, and money
market portfolios (the "Funds").

This Prospectus gives you information about the Funds that you should
be aware of before investing. Additional information about the Funds,
contained in a Statement of Additional Information dated March 18, 1996,
has been filed with the Securities and Exchange Commission. It is
incorporated in this Prospectus by reference. To obtain a copy without
charge, call or write:

CoreFunds, Inc.
680 East Swedesford Road
Wayne, PA 19087
1-800-355-CORE

Keep this Prospectus for future reference.

SHARES IN THE FUNDS ARE NOT OBLIGATIONS, DEPOSITS, OR ACCOUNTS OF, OR
GUARANTEED OR ENDORSED BY, CORESTATES BANK, N.A., THE PARENT CORPORATION OF
EACH FUND'S INVESTMENT ADVISER, OR ANY OF ITS AFFILIATES. SUCH SHARES ARE NOT
FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. INVESTMENT IN THE SHARES INVOLVES RISK,
INCLUDING POSSIBLE LOSS OF PRINCIPAL.

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.

<PAGE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS /X/ COREFUND

<TABLE>
<S> <C>
Transaction and Operating
Expense Tables...................................... 3
Financial Highlights.................................. 7
Highlights............................................ 10
</TABLE>

_____________________ FUNDAMENTALS OF MUTUAL FUND INVESTING ____________________

<TABLE>
<S> <C>
Types of investment vehicles.......................... 13
How to invest in stocks, bonds, and money market
instruments......................................... 15
Developing your investment strategy................... 20
</TABLE>

___________________________ INFORMATION ON THE FUNDS ___________________________

<TABLE>
<S> <C>
Investment Objectives of the Funds.................... 24
Equity Funds..................................... 24
Fixed Income Funds............................... 24
Money Market Funds............................... 25
Investment Policies................................... 25
Equity Funds..................................... 25
Fixed Income Funds............................... 30
Money Market Funds............................... 34
Other Investment Practices
of the Funds.................................. 35
Types of Securities in Which the Funds Invest......... 40
Equity Funds..................................... 40
Taxable Fixed Income Funds....................... 40
Taxable Money Market Funds....................... 43
Tax-Free Fixed Income and Money
Market Funds.................................. 44
Temporary Investments............................ 46
Investment Restrictions............................... 47
Investor Considerations............................... 49
Investment Suitability........................... 49
Investment Risks................................. 51
Distributions......................................... 54
Taxes................................................. 55
Valuation of Shares................................... 58
Net Asset Value.................................. 58
Portfolio Pricing................................ 59
Management............................................ 60
Investment Adviser, Sub-Advisers................. 60
Fund Managers.................................... 62
Administrator.................................... 65
Distributor...................................... 65
Performance Information............................... 66
Total Return and Yield........................... 66
In General....................................... 67
How to Purchase and Redeem Shares..................... 67
Purchase of Shares............................... 67
Redemption of Shares............................. 68
Description of Shares................................. 69
General Information................................... 70
Description of Ratings................................ 70
Description of Municipal and Corporate
Bond Ratings.................................. 70
Description of Municipal
Note Ratings.................................. 72
</TABLE>

- ----
2 Table of Contents

No person is authorized by CoreFunds, Inc. to give any information or make any
representation other than those contained in this Prospectus or in other
printed or written material issued by CoreFunds, Inc., and you should not rely
on any other information or representation.

<PAGE>
- --------------------------------------------------------------------------------
TRANSACTION AND OPERATING EXPENSE TABLES /X/ COREFUND

The purpose of the following tables is to help you understand the various costs
and expenses that you, as a shareholder, will bear directly or indirectly in
connection with an investment in Class Y Shares of the Funds.

The information contained in the tables should not be considered a
representation of past or future expenses. Actual expenses may be more or less
than those shown.

<TABLE>
<CAPTION>
------- -------- ------- -------- -------------- ---------
GROWTH SPECIAL EQUITY INTERNATIONAL
Equity Funds EQUITY EQUITY(6) EQUITY INDEX GROWTH BALANCED
- ------------ ------- -------- ------- -------- -------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Class Y Shares
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on
Purchases none none none none none none
Maximum Sales Load Imposed on
Reinvested Dividends none none none none none none
Deferred Sales Load none none none none none none
Redemption Fee none none none none none none
Exchange Fee none none none none none none

ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets):
Investment Advisory Fees After Fee
Waivers(1) .72% .75% .10% .12% .80% .67%
12b-1 Fees none none none none none none
Administrative Fees After Fee Waivers(2) .16% .16% .16% .16% .16% .16%
Other Expenses(3) .08% .08% .05% .09% .25% .10%
Net Annual Fund Operating Expenses(4) .96% .99% .31% .37% 1.21% .93%
</TABLE>

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
EXAMPLE
You would pay the following
expenses on a $1,000
investment, 1 year $ 10 $ 10 $ 3 $ 4 $ 12 $ 9
assuming (1) a 5% annual
return 3 years 31 32 10 12 38 30
and (2) redemption at the end 5 years 53 55 17 21 66 51
of each time period.(5) 10 years 118 121 39 47 147 114
</TABLE>

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

(1) Absent voluntary waivers, the Adviser's investment advisory fees are
calculated at the annual rate of .75%, .75%, 1.50%, .40%, .80%, and .70% of
the average net assets of Growth Equity Fund, Equity Fund, Special Equity
Fund, Equity Index Fund, International Growth Fund, and Balanced Fund,
respectively.

(2) Absent voluntary waivers, the Administrator's fee is calculated at the
annual rate of .25% of each Fund's average net assets.
(3) Includes (among others) custodial, legal and auditing fees.

(4) The Adviser and the Administrator have voluntarily waived a portion of their
fees in order to assist the Funds in maintaining a competitive expense
ratio. The expense ratios noted herein are net of investment advisory and
administrative fee waivers expected to be in effect during the fiscal period
ending June 30, 1996. Absent any fee waivers, such expense ratios would have
been 1.08%, 1.08%, 1.80%, 0.74%, 1.30% and 1.05% for Growth Equity Fund,
Equity Fund, Special Equity Fund, Equity Index Fund, International Growth
Fund and Balanced Fund, respectively. The service providers of all the Funds
have been voluntarily waiving a portion of their fees since inception.
However, during this year, these providers may change this waiver so that a
Fund's expense ratio will approach the contractually mandated ratio.

(5) Absent the voluntary waiver of fees by the Adviser and Administrator, the
amounts for this example, for one year, three years, five years and ten
years, would be $11, $34, $60 and $132 for Growth Equity Fund; $11, $34, $60
and $132 for Equity Fund; $18, $57, $97, and $212 for Special Equity Fund;
$8, $24, $41 and $92 for Equity Index Fund; $13, $41, $71 and $157 for
International Growth Fund; and $11, $33, $58 and $128 for Balanced Fund.

(6) Prior to the date of this Prospectus, this Fund's name was Value Equity
Fund.

Transaction and Operating Expense Tables ----
3

<PAGE>
- --------------------------------------------------------------------------------
TRANSACTION AND OPERATING EXPENSE TABLES (CONTINUED)

<TABLE>
<CAPTION>
------------ ---- ---------- ---------- ------------
SHORT INTERMEDIATE
INTERMEDIATE SHORT-TERM GOVERNMENT MUNICIPAL
Fixed Income Funds BOND(6) BOND INCOME INCOME BOND
- ---------------------------------------- ------------ ---- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>

Class Y Shares
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on
Purchases none none none none none
Maximum Sales Load Imposed on
Reinvested Dividends none none none none none
Deferred Sales Load none none none none none
Redemption Fee none none none none none
Exchange Fee none none none none none

ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets):
Investment Advisory Fees After Fee
Waivers(1) .37% .35 % .25% .37% .37%
12b-1 Fees none none none none none
Administrative Fees After Fee
Waivers(2) .16% .16 % .16% .16% .16%
Other Expenses(3) .07% .05 % .05% .21% .06%
Net Annual Fund Operating Expenses(4) .60% .56 % .46% .74% .59%

EXAMPLE
You would pay the following
expenses on a $1,000 investment, 1 year $ 6 $ 6 $ 5 $ 8 $ 6
assuming (1) a 5% annual return 3 years 19 18 15 24 19
and (2) redemption at the end 5 years 33 31 26 41 33
of each time period.(5) 10 years 75 70 58 92 74
</TABLE>

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

(1) Absent voluntary waivers, the Adviser's investment advisory fees are
calculated at the annual rate of .50%, .74%, .74%, .50% and .50% of the
average net assets of Short Intermediate Bond Fund, Government Income Fund
and Intermediate Municipal Bond Fund, respectively.

(2) Absent voluntary waivers, the Administrator's fee is calculated at the
annual rate of .25% of each Fund's average net assets.
(3) Includes (among others) legal, auditing and printing fees.

(4) The Adviser and the Administrator have voluntarily waived a portion of their
fees in order to assist the Funds in maintaining a competitive expense
ratio. The expense ratios noted herein are net of investment advisory and
administrative fee waivers expected to be in effect during the fiscal period
ending June 30, 1996. Absent fee waivers, such expense ratios would have
been 0.82%, 1.04%, 1.04%, 0.96% and 0.81% for Short Intermediate Bond Fund,
Bond Fund, Short-Term Income Fund, Government Income Fund and Intermediate
Municipal Bond Fund, respectively. The service providers of all the Funds
have been waiving all or a portion of their fees since inception. However,
during this year, these providers may change the waiver so that a Fund's
expense ratio will approach the contractually mandated ratio.

(5) Absent the voluntary waiver of fees by the Adviser and the Administrator,
the amounts in this Example, for one year, three years, five years and ten
years, would be $8, $26, $46 and $101 for Short Intermediate Bond Fund; $11,
$33, $57 and $127 for Bond Fund; $11, $33, $57 and $127 for Short-Term
Income Fund; $10, $31, $53 and $118 for Government Income Fund; and $8, $26,
$45 and $100 for Intermediate Municipal Bond Fund.

(6) Prior to the date of this Prospectus, this Fund's name was Intermediate Bond
Fund.

- -----
4 Transaction and Operating Expense Tables

<PAGE>
- --------------------------------------------------------------------------------
/X/ COREFUND

<TABLE>
<CAPTION>
PENNSYLVANIA NEW JERSEY
MUNICIPAL MUNICIPAL GLOBAL
Fixed Income Funds BOND BOND BOND
- -------------------------------------------------------------------- ------------ ---------- ------
<S> <C> <C> <C> <C>

Class Y Shares
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases none none none
Maximum Sales Load Imposed on Reinvested Dividends none none none
Deferred Sales Load none none none
Redemption Fee none none none
Exchange Fee none none none

ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets):
Investment Advisory Fees After Fee Waivers(1) 0% 0% .52%
12b-1 Fees none none none
Administrative Fees After Fee Waivers(2) 0% 0% .16%
Other Expenses(3) .37% .40% .21%
Net Annual Fund Operating Expenses(4) .37% .40% .89%

EXAMPLE
You would pay the following
expenses on a $1,000 investment, 1 year $ 4 $ 4 $ 9
assuming (1) a 5% annual return 3 years 12 13 28
and (2) redemption at the end 5 years 21 22 49
of each time period.(5) 10 years 47 51 110
</TABLE>

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

(1) Absent voluntary waivers, the Adviser's investment advisory fees are
calculated at the annual rate of .50%, .50% and .60% of the average net
assets of Pennsylvania Municipal Bond Fund, New Jersey Municipal Bond Fund
and Global Bond Fund, respectively.
(2) Absent voluntary waivers, the Administrator's fee is calculated at the
annual rate of .25% of each Fund's average net assets.
(3) Includes (among others) legal, auditing and printing fees.
(4) The Adviser and the Administrator have voluntarily waived a portion of their
fees in order to assist the Funds in maintaining a competitive expense
ratio. The expense ratios noted herein are net of investment advisory and
administrative fee waivers expected to be in effect during the fiscal period
ending June 30, 1996. Absent fee waivers, such expense ratios would have
been 0.96%, 0.99% and 1.06% for Pennsylvania Municipal Bond Fund, New Jersey
Municipal Bond Fund and Global Bond Fund, respectively. The service
providers of all the Funds have been waiving all or a portion of their fees
since inception. However, during this year, these providers may change the
waiver so that a Fund's expense ratio will approach the contractually
mandated ratio.
(5) Absent the voluntary fee waiver of the Adviser and the Administrator, the
amounts in this Example, for one year, three years, five years and ten
years, would be $10, $31, $53, and $118 for Pennsylvania Municipal Bond
Fund; $10, $32, $55, and $121 for New Jersey Municipal Bond Fund; and $11,
$34, $58, and $129 for Global Bond Fund.

Transaction and Operating Expense Tables ----
5

<PAGE>
- --------------------------------------------------------------------------------
TRANSACTION AND OPERATING EXPENSE TABLES (CONTINUED) /X/ COREFUND

<TABLE>
<CAPTION>
------- -------- --------
CASH TREASURY TAX-FREE
Money Market Funds RESERVE RESERVE RESERVE
- ------------------------------------------------- ------- -------- --------
<S> <C> <C> <C> <C>

Class Y Shares
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases none none none
Maximum Sales Load Imposed on Reinvested
Dividends none none none
Deferred Sales Load none none none
Redemption Fee none none none
Exchange Fee none none none

ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets):
Investment Advisory Fees After Fee Waivers(1) .29% .29% .29%
12b-1 Fees none none none
Administrative Fees After Fee Waivers(2) .16% .16% .16%
Other Expenses(3) .08% .08% .08%
Net Annual Fund Operating Expenses(4) .53% .53% .53%

EXAMPLE
You would pay the following
expenses on a $1,000 investment, 1 year $ 5 $ 5 $ 5
assuming (1) a 5% annual return 3 years 17 17 17
and (2) redemption at the end 5 years 30 30 30
of each time period.(5) 10 years 66 66 66
</TABLE>

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

(1) Absent voluntary waivers, the Adviser's investment advisory fees are
calculated at the annual rate of .50%, .50%, and .50% of the average net
assets of Cash Reserve, Treasury Reserve, and Tax-Free Reserve,
respectively.
(2) Absent voluntary waivers, the Administrator's fee is calculated at the
annual rate of .25% of each Fund's average net assets.
(3) Includes (among others) legal, auditing, and printing fees.
(4) The Adviser and the Administrator have voluntarily waived a portion of their
fees in order to assist the Funds in maintaining a competitive expense
ratio. The expense ratios noted herein are net of investment advisory and
administrative fee waivers expected to be in effect during the fiscal period
ended June 30, 1996. Absent any fee waivers, such expense ratios would have
been 0.83%, 0.83% and 0.83%, for Cash Reserve, Treasury Reserve, and
Tax-Free Reserve, respectively. The service providers of all the Funds have
been waiving all or a portion of their fees since inception. However, during
this year, these providers may change the waiver so that a Fund's expense
ratio will approach the contractually mandated ratio.
(5) Absent the voluntary fee waiver of the Adviser and the Administrator, the
amounts in this Example, for one year, three years, five years and ten
years, would be $8, $28, $46 and $103 for Cash Reserve; $8, $28, $46 and
$103 for Treasury Reserve; and $8, $28, $46 and $103 for Tax-Free Reserve.

- -----
6 Transaction and Operating Expense Tables

<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS /X/ COREFUND
The tables that follow present information about the investment results of
the shares of the Funds. The financial highlights for each of the periods
presented have been audited by Ernst & Young LLP, independent certified public
accountants, whose report thereon appears in CoreFunds' annual report which
accompanies the Statement of Additional Information.

FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD ENDED JUNE 30,

Equity Funds
______________

<TABLE>
<CAPTION>
Net
Realized and Assets,
Net Asset Unrealized Dividends End of
Value, Net Net Gains or from Net Distribution Net Asset Period
Beginning Investment (Losses) on Investment from Capital Value End Total (000
of Period Income Securities Income Gains of Period Return omitted)
--------- ---------- ------------ ---------- ------------ --------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------
GROWTH EQUITY
- -----------------
CLASS Y
1995 $ 9.11 $ 0.08 $ 2.07 $(0.08) $ -- $ 11.18 23.71% $ 91,345
1994 9.95 0.05 (0.84) (0.05) -- 9.11 (8.01) 64,877
1993 8.74 0.08 1.21 (0.08) -- 9.95 14.76 63,777
1992(1) 10.00 0.05 (1.26) (0.05) -- 8.74 (12.05)+ 33,418
CLASS A
1995 $ 9.10 $ 0.06 $ 2.07 $(0.06) $ -- $ 11.17 23.44% $ 2,043
1994 9.95 0.04 (0.85) (0.04) -- 9.10 (8.13) 1,730
1993* 9.80 0.03 0.15 (0.03) -- 9.95 1.80+ 5,224
- -------
EQUITY
- -------
CLASS Y
1995 $ 12.58 $ 0.15 $ 1.97 $(0.15) $(0.28) $ 14.27 17.29% $ 31,003
1994 13.11 0.09 (0.27) (0.09) (0.26) 12.58 (1.51) 25,448
1993 11.22 0.16 1.89 (0.16) -- 13.11 18.31 15,397
1992 10.33 0.15 0.89 (0.15) -- 11.22 9.98 10,882
1991 10.31 0.15 0.18 (0.15) (0.16) 10.33 3.37 5,182
1990(2) 10.00 0.10 0.31 (0.10) -- 10.31 4.10+ 5,154
CLASS A
1995 $ 12.60 $ 0.13 $ 1.96 $(0.12) $(0.28) $ 14.29 16.96% $ 3,708
1994 13.12 0.06 (0.26) (0.06) (0.26) 12.60 (1.69) 4,737
1993* 12.49 0.05 0.67 (0.09) -- 13.12 5.77+ 714

- -----------------
SPECIAL EQUITY
- -----------------

- ---------------
EQUITY INDEX
- ---------------
CLASS Y
1995 $ 20.54 $ 0.52 $ 4.24 $(0.52) $(0.99) $ 23.79 24.45% $ 112,553
1994 20.97 0.55 (0.43) (0.55) -- 20.54 0.55 72,552
1993 19.22 0.52 1.84 (0.52) (0.09) 20.97 12.39 50,551
1992 18.46 0.52 1.80 (0.48) (1.08) 19.22 12.59 20,166
1991(3) 19.48 0.03 (0.94) (0.02) (0.09) 18.46 (4.64)+ 12,117
- -------------------------
INTERNATIONAL GROWTH
- -------------------------
CLASS Y
1995 $ 13.18 $ 0.12 $(0.17) $(0.04) $(0.80) $ 12.29 (0.21)% $ 110,838
1994 11.71 0.12 1.78 (0.12) (0.31) 13.18 16.28 108,911
1993 10.52 0.10 1.16 (0.07) -- 11.71 12.06 61,655
1992 10.10 0.17 0.31 -- (0.06) 10.52 4.90 42,594
1991 10.75 0.19 (0.44) (0.27) (0.13) 10.10 (2.71) 20,582
1990(4) 10.00 0.11 0.86 (0.09) (0.13) 10.75 9.74+ 13,513
CLASS A
1995 $ 13.17 $ 0.09 $(0.17) $(0.02) $(0.80) $ 12.27 (0.48)% $ 1,943
1994 11.71 0.06 1.82 (0.11) (0.31) 13.17 16.08 2,019
1993* 10.07 0.05 1.59 -- -- 11.71 16.29+ 344
- ----------
BALANCED
- ----------
CLASS Y
1995 $ 9.88 $ 0.35 $ 1.21 $(0.35) $(0.03) $ 11.06 16.21% $ 61,092
1994 10.39 0.35 (0.51) (0.35) -- 9.88 (1.62) 42,429
1993(5) 10.00 0.16 0.39 (0.16) -- 10.39 5.52+ 29,434
CLASS A
1995 $ 9.89 $ 0.34 $ 1.19 $(0.33) $(0.03) $ 11.06 15.84% $ 2,344
1994 10.38 0.31 (0.49) (0.31) -- 9.89 (1.86) 2,222
1993* 10.00 0.16 0.38 (0.16) -- 10.38 2.50+ 701

<CAPTION>
Ratio of Ratio of
Expenses to Net Income
Ratio of Ratio of Average Net to Average
Expenses to Net Income Assets Net Assets Portfolio
Average Net to Average (Excluding (Excluding Turnover
Assets Net Assets Waivers) Waivers) Rate
----------- ---------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C>
- -----------------
GROWTH EQUITY
- -----------------
CLASS Y
1995 0.76% 0.84% 1.10% 0.50% 113%
1994 0.69 0.48 1.11 0.06 127
1993 0.43 0.85 1.11 0.17 103
1992(1) 0.14 1.38 1.12 0.40 66
CLASS A
1995 1.01% 0.59% 1.35% 0.25% 113%
1994 0.94 0.23 1.36 (0.19) 127
1993* 0.80 0.39 1.48 (0.29) 103
- -------
EQUITY
- -------
CLASS Y
1995 0.86% 1.12% 1.10% 0.88% 108%
1994 0.80 0.73 1.09 0.44 78
1993 0.71 1.29 1.18 0.82 97
1992 0.99 1.36 1.63 0.72 117
1991 1.74 1.53 2.39 0.88 96
1990(2) 1.76 2.35 2.43 1.68 20
CLASS A
1995 1.11% 0.89% 1.35% 0.65% 108%
1994 1.05 0.48 1.34 0.19 78
1993* 0.85 0.97 1.32 0.50 97
- -----------------
SPECIAL EQUITY
- -----------------
- ---------------
EQUITY INDEX
- ---------------
CLASS Y
1995 0.37% 2.48% 0.76% 2.09% 27%
1994 0.35 2.63 0.75 2.23 13
1993 0.49 2.82 0.88 2.43 4
1992 0.57 2.66 1.06 2.17 27
1991(3) 0.97 1.79 1.20 1.56 --
- ------------------------
INTERNATIONAL GROWTH
- ------------------------
CLASS Y
1995 1.05% 0.98% 1.19% 0.84% 59%
1994 0.99 0.23 1.18 0.04 67
1993 0.99 1.22 1.28 0.93 59
1992 0.96 1.67 1.40 1.23 87
1991 0.99 1.80 1.56 1.23 49
1990(4) 1.22 2.57 1.99 1.80 20
CLASS A
1995 1.30% 0.73% 1.44% 0.59% 59%
1994 1.24 0.05 1.43 (0.14) 67
1993* 1.15 1.51 1.44 1.22 59
- ----------
BALANCED
- ----------
CLASS Y
1995 0.73% 3.51% 1.07% 3.17% 46%
1994 0.62 3.46 1.08 3.00 56
1993(5) 0.45 3.38 1.39 2.45 21
CLASS A
1995 0.98% 3.27% 1.32% 2.93% 46%
1994 0.87 3.21 1.33 2.75 56
1993* 0.55 5.76 1.48 4.83 21
</TABLE>

(2) Equity commenced operations on February 6, 1990. All ratios for the period
have been annualized.

(3) Equity Index commenced operations on June 1, 1991. All ratios for the period
have been annualized.
(4) International Growth commenced operations on February 12, 1990. All the
ratios for the period have been annualized.
(5) Balanced commenced operations on January 4, 1993. All ratios for the period
have been annualized.

Financial Highlights ----
7

<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)

FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD ENDED JUNE 30,

Fixed Income Funds
- ----------------------
<TABLE>
<CAPTION>
Realized and
Net Asset Unrealized Dividends
Value, Net Net Gains or from Net Distributions Net Asset
Beginning Investment (Losses) on Investment from Capital Value, End Total
of Period Income Securities Income Gains of Period Return
--------- ---------- ------------- ---------- ------------- ----------- ------
- -----------------
GOVERNMENT INCOME
- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
1995 $ 9.52 $ 0.62 $ 0.31 $(0.62) $ ___ $ 9.83 10.26%
1994 10.18 0.50 (0.62) (0.50) (0.04) 9.52 (1.34)
1993(1) 10.00 0.13 0.18 (0.13) -- 10.18 3.12+
CLASS A
1995 $ 9.51 $ 0.61 $ 0.33 $(0.61) $ ___ $ 9.84 10.23%
1994 10.17 0.47 (0.62) (0.47) (0.04) 9.51 (1.57)
1993* 10.00 0.07 0.17 (0.07) -- 10.17 1.71+

<CAPTION>
- -----------------------
SHORT INTERMEDIATE BOND
- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
1995 $ 9.63 $ 0.53 $ 0.21 $(0.53) $ ___ $ 9.84 8.22%
1994 10.18 0.43 (0.53) (0.43) (0.02) 9.63 (0.32)
1993 10.01 0.47 0.31 (0.47) (0.14) 10.18 7.90
1992(2) 10.00 0.23 0.01 (0.23) -- 10.01 2.49+
CLASS A
1995 $ 9.63 $ 0.54 $ 0.20 $(0.53) $ ___ $ 9.84 7.95%
1994 10.18 0.41 (0.53) (0.41) (0.02) 9.63 (0.56)
1993* 10.01 0.20 0.17 (0.20) -- 10.18 3.95+

<CAPTION>
____
BOND
- ----
- -----------------
SHORT-TERM INCOME
- -----------------
- ---------------------------
INTERMEDIATE MUNICIPAL BOND
- ---------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
1995 $ 9.68 $ 0.38 $ 0.15 $(0.38) $ -- $ 9.83 5.58%
1994 10.09 0.39 (0.41) (0.39) -- 9.68 (0.27)
1993(3) 10.00 0.04 0.09 (0.04) -- 10.09 1.33+
CLASS A
1995 $ 9.67 $ 0.35 $ 0.16 $(0.35) $ -- $ 9.83 5.42%
1994 10.08 0.37 (0.41) (0.37) -- 9.67 (0.52)
1993* 10.00 0.03 0.08 (0.03) -- 10.08 1.19+

<CAPTION>
- -----------
GLOBAL BOND
- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
1995 $ 9.06 $ 0.62 $ 0.24 $(0.30) $ -- $ 9.62 9.70%
1994(4) 10.00 0.25 (1.15) (0.04) -- 9.06 (9.00)+
CLASS A
1995 $ 9.04 $ 0.61 $ 0.24 $(0.28) $ -- $ 9.61 9.57%
1994(4) 10.00 0.19 (1.11) (0.04) -- 9.04 (9.22)+

<CAPTION>
- ---------------------------
PENNSYLVANIA MUNICIPAL BOND
- ---------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
1995 $ 9.95 $ 0.51 $ 0.21 $(0.51) $ -- $ 10.16 7.50%
1994(5) 10.00 0.06 (0.05) (0.06) -- 9.95 0.14+
CLASS A
1995 $ 9.95 $ 0.49 $ 0.21 $(0.49) $ -- $ 10.16 7.25%
1994(5) 10.00 0.06 (0.05) (0.06) -- 9.95 0.09+

<CAPTION>
- -------------------------
NEW JERSEY MUNICIPAL BOND
- -------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
1995 $ 9.94 $ 0.52 $ 0.18 $(0.52) $ -- $ 10.12 7.25%
1994(5) 10.00 0.06 (0.06) (0.06) -- 9.94 0.01+
CLASS A
1995 $ 9.95 $ 0.49 $ 0.17 $(0.49) $ -- $ 10.12 6.84%
1994(5) 10.00 0.06 (0.05) (0.06) -- 9.95 0.08+

<CAPTION>
Net Ratio of Ratio of
Assets, Expenses to Net Income
End of Ratio of Ratio of Average Net to Average
- ---------- Period Expenses to Net Income Assets Net Assets Portfolio
GOVERNMENT (000 Average Net to Average (Excluding (Excluding Turnover
INCOME omitted) Assets Net Assets Waivers) Waivers) Rate
- ---------- --------- ----------- ---------- ----------- ---------- --------
CLASS Y
<S> <C> <C> <C> <C> <C> <C>
1995 $11,305 0.59% 6.53% 0.98% 6.14% 368%
1994 9,089 0.50 4.93 1.00 4.43 157
1993(1) 6,323 0.44 5.41 1.10 4.75 93
CLASS A
1995 $ 1,374 0.85% 6.25% 1.24% 5.86% 368%
1994 1,536 0.75 4.68 1.25 4.18 157
1993* 201 0.63 5.35 1.29 4.69 93

<CAPTION>
- -----------------------
SHORT INTERMEDIATE BOND
- -----------------------
CLASS Y
<S> <C> <C> <C> <C> <C> <C>
1995 $55,128 0.60% 5.76% 0.84% 5.52% 405%
1994 48,379 0.58 4.30 0.86 4.02 299
1993 44,692 0.42 4.62 0.86 4.18 188
1992(2) 22,623 0.11 5.73 0.84 5.00 51
CLASS A
1995 $ 1,961 0.85% 5.27% 1.09% 5.03% 405%
1994 9,365 0.83 4.05 1.11 3.77 299
1993* 5,752 0.75 3.78 1.19 3.34 188

<CAPTION>
- ----
BOND
- ----
- -----------------
SHORT-TERM INCOME
- -----------------
- ----------------------------
INTERMEDIATE MUNICIPAL BOND
- ----------------------------
CLASS Y
<S> <C> <C> <C> <C> <C> <C>
1995 $ 365 0.82% 3.91% 1.26% 3.47% 9%
1994 1,088 0.63 3.91 1.17 3.37 43
1993(3) 2,009 0.58 2.74 1.45 1.87 10
CLASS A
1995 $ 1,027 1.08% 3.65% 1.52% 3.21% 9%
1994 1,311 0.88 3.66 1.42 3.12 43
1993* 166 0.81 2.51 1.68 1.64 10

<CAPTION>
- -----------
GLOBAL BOND
- -----------
CLASS Y
<S> <C> <C> <C> <C> <C> <C>
1995 $26,898 0.64% 6.84% 1.03% 6.45% 133%
1994(4) 24,957 0.73 5.04 1.12 4.65 161
CLASS A
1995 $ 170 0.89% 6.59% 1.28% 6.20% 133%
1994(4) 167 0.98 4.79 1.37 4.40 161

<CAPTION>
- ---------------------------
PENNSYLVANIA MUNICIPAL BOND
- ---------------------------
CLASS Y
<S> <C> <C> <C> <C> <C> <C>
1995 $ 2,272 0.39% 5.26% 1.14% 4.51% 18%
1994(5) 434 0.42 5.09 1.17 4.34 3
CLASS A
1995 $ 317 0.64% 4.95% 1.39% 4.20% 18%
1994(5) 163 0.67 4.84 1.42 4.09 3

- -------------------------
NEW JERSEY MUNICIPAL BOND
- -------------------------
CLASS Y
<S> <C> <C> <C> <C> <C> <C>
1995 $ 1,550 0.42% 5.21% 1.17% 4.46% 32%
1994(5) 1,432 0.43 5.07 1.35 4.15 13
CLASS A
1995 $ 24 0.68% 4.97% 1.44% 4.21% 32%
1994(5) 2 0.68 4.82 1.60 3.90 13
</TABLE>

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

+ Returns are for the period indicated and have not been annualized.
* Series B has been offered since January 4, 1993. Government Income and
Intermediate Municipal Bond Funds have offered Series B since May 3, 1993.
Ratios for this period have been annualized.
(1) Government Income commenced operations on April 1, 1993. Ratios for this
period have been annualized.
(2) Intermediate Bond commenced operations on February 3, 1992. Ratios for this
period have been annualized.
(3) Intermediate Municipal Bond commenced operations on May 3, 1993. Ratios for
this period have been annualized.
(4) Global Bond Fund commenced operations on December 15, 1993. Ratios for this
period have been annualized.
(5) Pennsylvania Municipal Bond and New Jersey Municipal Bond Funds commenced
operations on May 16, 1994. Ratios for this period have been annualized.

- -----
8 Financial Highlights

<PAGE>
- --------------------------------------------------------------------------------
/X/ COREFUND

FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD ENDED JUNE 30,

Money Market Funds
- -----------------------

<TABLE>
<CAPTION>
Net
Net Asset Dividends Net Assets Ratio of Ratio of
Value Net from Net Asset Value End of Expenses to Net Income
Beginning Investment Investment End of Total Period Average Net to Average
of Period Income Income Period Return (000) Assets Net Assets
--------- ---------- ---------- ----------- ------ --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------
CASH RESERVE
- ------------
CLASS Y
1995 $1.00 $ 0.05 $(0.05) $1.00 5.15% $ 510,341 0.48% 5.04%
1994 1.00 0.03 (0.03) 1.00 3.00 505,273 0.47 2.95
1993 1.00 0.03 (0.03) 1.00 2.99 460,832 0.46 2.97
1992 1.00 0.05 (0.05) 1.00 4.83 568,672 0.38 4.68
1991 1.00 0.07 (0.07) 1.00 7.28 473,187 0.37 6.94
1990 1.00 0.08 (0.08) 1.00 8.65 316,290 0.34 8.28
1989 1.00 0.09 (0.09) 1.00 8.87 186,151 0.37 8.62
1988 1.00 0.07 (0.07) 1.00 6.70 82,399 0.55 6.54
1987 1.00 0.06 (0.06) 1.00 5.85 35,054 0.54 5.60
1986(1) 1.00 0.06 (0.06) 1.00 3.36+ 56,416 0.59 6.93

CLASS C
1995 $1.00 $ 0.05 $(0.05) $1.00 4.89% $ 17,583 0.73% 4.86%
1994 1.00 0.03 (0.03) 1.00 2.74+ 11,451 0.72 2.70
1993* 1.00 0.01 (0.01) 1.00 1.23+ 15,330 0.76 2.52
- ----------------
TREASURY RESERVE
- ----------------
CLASS Y
1995 $1.00 $ 0.05 $(0.05) $1.00 4.98% $ 479,206 0.48% 4.91%
1994 1.00 0.03 (0.03) 1.00 2.91 484,974 0.48 2.87
1993 1.00 0.03 (0.03) 1.00 2.96 446,788 0.46 2.89
1992 1.00 0.05 (0.05) 1.00 4.73 444,388 0.38 4.58
1991 1.00 0.07 (0.07) 1.00 7.11 427,439 0.37 6.80
1990 1.00 0.08 (0.08) 1.00 8.38 270,524 0.37 8.03
1989(2) 1.00 0.06 (0.06) 1.00 4.66+ 220,479 0.20 9.26

CLASS C
1995 $1.00 $ 0.05 $(0.05) $1.00 4.72% $ 21,612 0.73% 4.81%
1994 1.00 0.03 (0.03) 1.00 2.65 7,573 0.73 2.62
1993* 1.00 0.01 (0.01) 1.00 1.21+ 7,672 0.75 2.46
- ----------------
TAX-FREE RESERVE
- ----------------
CLASS Y
1995 $1.00 $ 0.03 $(0.03) $1.00 3.12% $ 62,756 0.48% 3.09%
1994 1.00 0.02 (0.02) 1.00 2.03 79,384 0.49 2.00
1993 1.00 0.02 (0.02) 1.00 2.23 72,255 0.51 2.20
1992 1.00 0.03 (0.03) 1.00 3.56 80,147 0.37 3.39
1991(3) 1.00 0.01 (0.01) 1.00 1.07+ 42,573 0.06 4.20

CLASS C
1995 $1.00 $ 0.03 $(0.03) $1.00 2.86% $ 1,524 0.73% 2.80%
1994 1.00 0.02 (0.02) 1.00 1.78 2,708 0.74 1.75
1993* 1.00 0.01 (0.01) 1.00 0.85+ 1,795 0.76 1.71

<CAPTION>
Ratio of Ratio of
Expenses to Net Income
Average Net to Average
Assets Net Assets
(Excluding (Excluding
Waivers) Waivers)
----------- ----------
<S> <C> <C>
- ------------
CASH RESERVE
- ------------
CLASS Y
1995 0.85% 4.67%
1994 0.85 2.57
1993 0.85 2.58
1992 0.82 4.24
1991 0.82 6.49
1990 0.80 7.82
1989 0.90 8.05
1988 1.14 5.96
1987 1.01 5.13
1986(1) 1.21 6.31
CLASS C
1995 1.10% 4.49%
1994 1.10 2.32
1993* 1.15 2.13
- ----------------
TREASURY RESERVE
- ----------------
CLASS Y
1995 0.85% 4.54%
1994 0.86 2.49
1993 0.85 2.50
1992 0.82 4.14
1991 0.82 6.35
1990 0.84 7.56
1989(2) 0.84 8.62
CLASS C
1995 1.10% 4.44%
1994 1.11 2.24
1993* 1.14 2.07
- ----------------
TAX-FREE RESERVE
- ----------------
CLASS Y
1995 0.85% 2.72%
1994 0.87 1.62
1993 0.89 1.82
1992 0.88 2.88
1991(3) 0.81 3.45
CLASS C
1995 1.10% 2.43%
1994 1.12 1.37
1993* 1.14 1.33
</TABLE>

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

+ Returns are for the period indicated and have not been annualized.
* Series B has been offered since January 4, 1993. Ratios for this period have
been annualized.
(1) Cash Reserve commenced operations on August 16, 1985. Ratios for this period
have been annualized.
(2) Treasury Reserve commenced operations on November 21, 1988. Ratios for this
period have been annualized.
(3) Tax-Free Reserve commenced operations on April 16, 1991. Ratios for this
period have been annualized.

Financial Highlights ----
9

<PAGE>
- --------------------------------------------------------------------------------
HIGHLIGHTS

<TABLE>
<S> <C>
COREFUNDS CoreFunds, Inc. ('CoreFunds') is an open-end management investment company presently offering shares
in seventeen diversified and non-diversified portfolios. This Prospectus offers Class Y Shares of
seventeen portfolios. Class Y Shares are primarily offered to various types of institutional
investors, which may include CoreStates Bank and its affiliate and corresponding banks, for the
investment of their own funds or for funds for which they serve in a fiduciary, agency or custodial
capacity. The shares offered in this Prospectus are not subject to a sales load or 12b-1 charges.
Materials relating to Class A and Class C Shares of the Funds may be obtained by calling
1-800-355-CORE or by writing to CoreFunds, Inc., 680 E. Swedesford Road, Wayne PA 19087. Prior to the
date of this Prospectus, all Class A Shares were known as Series B -- Individual for all portfolios
other than Money Market Funds; Class C Shares were known as Series B -- Individual for the Money
Market Funds; and Class Y Shares were known as Series A -- Institutional. CoreFunds has changed their
designation to conform to the standard designations suggested by the Investment Company Institute.
- --------------------------------------------------------------------------------------------------------------------------------
FUNDAMENTALS OF MUTUAL This section will assist you in appreciating investments generally. It describes the three basic types
FUND INVESTING of investments--stocks, bonds, and money market investments-- as well as mutual funds which employ one
or more of these instruments. The various types of mutual funds available and the advantages of mutual
fund investing are also discussed.
PAGE 13
- --------------------------------------------------------------------------------------------------------------------------------
MULTIPLE PORTFOLIOS Investors may choose to invest in any of the seventeen funds of CoreFunds offered in this Prospectus.
EQUITY FUNDS FIXED INCOME FUNDS MONEY MARKET FUNDS
Growth Equity Fund Short Intermediate Bond Cash Reserve
Equity Fund Fund Treasury Reserve
Special Equity Fund Bond Fund Tax-Free Reserve
Equity Index Fund Short-Term Income Fund
International Growth Fund Government Income Fund
Balanced Fund Intermediate Municipal
Bond Fund
Pennsylvania Municipal
Bond Fund
New Jersey Municipal Bond Fund
Global Bond Fund
PAGE 24
- --------------------------------------------------------------------------------------------------------------------------------
RISK CHARACTERISTICS Investment in the Funds involves a number of risks, including possible loss of principal. The Funds
differ significantly in terms of specific risks. Certain risk factors applicable to the Funds are
described below.
EQUITY FUNDS
The Equity Funds are subject to market risk and fund risk. Market risk is the possibility that stock
prices in general will decline over short or even extended periods of time. Stock markets tend to be
cyclical, with periods when stock prices generally rise and periods when stock prices generally
decline. Fund risk is the
</TABLE>

- -----
10 Highlights

<PAGE>
- ------------------------------------------------------------------------------
/X/ COREFUND
possibility that a Fund's performance during a specific
period may not meet or exceed that of the stock market as a
whole. Therefore, investors should consider their holdings
in equity mutual funds to be long-term investments.
In addition to market and fund risks, International
Growth Fund is also subject to foreign market and currency
risk. Investments in foreign stock markets can be as
volatile, if not more volatile, than investments in U.S.
markets. Currency risk is the risk that changes in foreign
exchange rates will affect, favorably or unfavorably, the
value of foreign securities held by the Fund.

FIXED INCOME FUNDS
Securities held by the Fixed Income Funds may be subject to
several types of investment risk, including market risk,
credit risk, and call risk. With respect to these Funds,
market risk (or interest rate risk) is the potential for a
decline in the price of fixed income securities due to
rising interest rates. Credit risk is the possibility that a
bond issuer will be unable to make timely payments of either
principal or interest. Call risk (or income risk) relates to
corporate bonds during periods of falling interest rates,
and involves the possibility that securities with high
interest rates will be prepaid (or 'called') by the issuer
prior to maturity. Such an event would require a Fund to
invest the resulting proceeds elsewhere, at generally lower
interest rates, which would cause fluctuations in the Fund's
net income.

An investment in either the Pennsylvania Municipal
Bond Fund or the New Jersey Municipal Bond Fund involves
special risk considerations. The concentration of
investments in Pennsylvania municipal securities by the
Pennsylvania Municipal Bond Fund and the concentration of
investments in New Jersey municipal securities by the New
Jersey Municipal Bond Fund raises certain investment
considerations, including the possibility that changes in
the economic condition and governmental policies of either
state or its municipalities could adversely affect the value
of the corresponding Fund and the portfolio securities held
by it.
Global Bond Fund is also subject to foreign market and
currency risks, as discussed above.

MONEY MARKET FUNDS
Securities held by Cash Reserve and Treasury Reserve may be
subject, on a limited basis, to credit risk. The credit risk
of a money market investment portfolio is similar to that of
a fixed income portfolio.
Securities held by Tax-Free Reserve may be subject, on
a limited basis, to several types of investment risk,
including market risk (or interest rate risk), credit risk
and call risk (or income risk).
PAGE 48
- ------------------------------------------------------------------------------

Highlights ----
11

<PAGE>
- --------------------------------------------------------------------------------
HIGHLIGHTS (CONTINUED) /X/ COREFUND

<TABLE>
<S> <C>
INVESTMENT CoreStates Investment Advisers, Inc. ('CoreStates Advisers') serves as the investment adviser for
ADVISER each Fund. Equity Fund, International Growth Fund and Global Bond Fund also retain sub-advisers.
CoreStates Advisers has extensive experience in the management of money market, tax-free, fixed
income, equity, and international investments. It currently manages discretionary and non-
discretionary client security portfolios with a total aggregate market value exceeding $29 billion,
for individuals, corporations, institutions and municipalities.
PAGE 57
- ------------------------------------------------------------------------------------------------------------------------------
DIVIDEND Shareholders of a Fund are entitled to dividends and distributions arising from the net investment
POLICY income and capital gains, if any, earned on investments held by the Fund.
PAGE 51
- ------------------------------------------------------------------------------------------------------------------------------
TAXES The sale or redemption of shares of a mutual fund is a taxable event to the selling or redeeming
shareholder. In addition, any receipt of dividends which represent capital gain distributions will
be subject to federal and state income taxes. However, receipt of other dividends will generally not
be subject to federal income taxes. Ordinary dividends also will be subject to state income taxes,
except as to Pennsylvania residents for the Pennsylvania Municipal Bond Fund and New Jersey
residents for the New Jersey Municipal Bond Fund.
PAGE 52
- ------------------------------------------------------------------------------------------------------------------------------
PURCHASING Institutional investors may acquire Class Y Shares of the Funds for their own account or as a record
SHARES holder on behalf of fiduciary, agency or custody accounts by placing orders with the Funds'
distributor. The minimum initial investment is $1,000,000 for each Fund which amount may be waived
at the discretion of the distributor. However, the minimum initial investment amount for retail
investors investing in Equity Index Fund (primarily through IRAs) is $500. There is no minimum for
subsequent investments.
PAGE 63
- ------------------------------------------------------------------------------------------------------------------------------
SELLING With respect to shares held by institutional investors on behalf of their customer accounts, all or
SHARES part of the shares beneficially owned by a customer may be redeemed in accordance with instructions
and limitations pertaining to their account at the institution. The share price of each Fund except
for the Money Market Funds is expected to fluctuate and may at redemption be more or less than at
the time of initial purchase, resulting in a gain or loss.
PAGE 64
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

- -----
12 Highlights

<PAGE>
- --------------------------------------------------------------------------------
FUNDAMENTALS OF MUTUAL FUND INVESTING /X/ COREFUND

AN INTRODUCTORY GUIDE FOR INVESTORS

This section is devoted to those who are unfamiliar or uncomfortable with the
concepts of mutual fund investing, as well as those who are interested in
developing a coordinated strategy which can help them reach their financial
goals.

It describes the three basic types of investment vehicles -- stocks, bonds,
and money market instruments -- as well as mutual funds which employ one or more
of these investments.

Of course, no guide alone can help you determine how or when to invest.
That's why we recommend that you work closely with an investment representative
to develop a solid program which is designed specifically for your goals and
risk tolerance.
/x/
PART I:
TYPES OF INVESTMENT VEHICLES

FOR DETAILS ON HOW EACH OF THESE INSTRUMENTS IS USED IN MUTUAL FUNDS, PLEASE
SEE THE SECTION ENTITLED, "WHAT TYPES OF MUTUAL FUNDS ARE AVAILABLE?"

The three most popular types of investments are stocks, bonds, and money
market instruments. The following is an introduction to what they are and how
they work.

WHAT IS A STOCK?

Also known as equities, stocks represent an ownership position in a business
entity, such as a company or corporation. Each share of stock represents a
proportionate "share" of ownership in the business entity. As a result,
stocks offer individual investors the opportunity to take part in the
economic future of business.

Stocks are bought and sold on the open market, through a variety of stock
exchanges in the U.S. and around the world. This system allows any individual
to purchase and sell shares through stock brokers, who are licensed to
participate in the exchange.

The price for a share of stock is established by an "auction" system, in
which the broker for the buyer negotiates with the broker for the seller.
When the demand for a stock is low, its price will most likely fall; when
demand is high, the stock's price will most likely rise.

Because each share of stock represents a share in the company's earnings,
one of the most common factors affecting the price of the stock is the
direction of the company's earnings. In theory, the more a company earns, or
is expected to earn, the higher the price of its shares.

However, a number of other factors can cause a stock's price to go up or
down, including events which will positively or negatively affect the company's
future, changes in the overall economy, changes in the mood of the market, and
the market's perceptions of the company or its stock.

ALSO SEE: "EQUITY MUTUAL FUNDS" AND "WHAT ARE BALANCED FUNDS?"

-----
Fundamentals 13

<PAGE>
- --------------------------------------------------------------------------------

FUNDAMENTALS OF MUTUAL FUND INVESTING (CONTINUED)
FOR DEFINITIONS OF INVESTMENT TERMS, PLEASE SEE THE
GLOSSARY FOLLOWING THIS SECTION.

WHAT IS A BOND?

When a corporation, government or government agency needs money for a
certain project, it often borrows money by issuing bonds to investors. So, in
the simplest terms, a bond is an IOU. The investor who purchases a bond is
acting as the lender.

Rather than offering an ownership share in business, as stocks do,
bonds are simply an agreement to repay the investor the amount loaned, also
known as principal, on a certain date. In addition, the issuer commits to
making periodic fixed interest payments to the lender until the loan is repaid.

When the bond is issued by a state or municipality, the interest paid to
investors is generally free of federal income taxes.

Like stocks, bonds are also traded in the open market. The value of a bond
can fluctuate due to changing market conditions. For example, when interest
rates in the market fall, the prices of bonds tend to rise. On the other hand,
when interest rates rise, the value of bonds falls.

Generally, the longer the maturity of a bond, the higher its yield and the
greater its price volatility. The shorter the maturity, the lower the yield and
the greater its price stability.

ALSO SEE: "FIXED INCOME MUTUAL FUNDS"

Price of the
same bond if
Price of a 7% the yield
coupon bond increases to 8%
Years to now trading to to keep pace with Percent change
maturity yield 7% rising interest rates in price
<S> <C> <C> <C>
1 year $100.00 $99.06 -0.94%
3 years 100.00 97.38 -2.62%
10 years 100.00 93.20 -6.80%
30 years 100.00 88.69 -11.31%
</TABLE>

DURING TIMES WHEN OVERALL INTEREST RATES ARE FALLING, FIXED-INCOME INVESTORS
GENERALLY ENJOY HIGHER PRICES FOR THEIR BONDS. CONVERSELY, RISING INTEREST
RATES TEND TO REDUCE THE VALUE OF BONDS. LONGER MATURITY BONDS EXPERIENCE A
GREATER CHANGE IN PRICE, AS SHOWN ABOVE.

WHAT IS A MONEY MARKET INSTRUMENT?

Simply put, money market instruments are short-term bonds, with maturities
typically ranging from overnight to 13 months. They pay investors a rate of
interest which is generally lower than that of longer-term bonds.

Money market securities are issued by a number of sources, including the
U.S. Government, its agencies and large, reputable banks and corporations.

Money market instruments are generally quite stable, due to their short
maturities. Therefore, they are chosen by investors who wish to maintain the
safety of their investment.

ALSO SEE: "MONEY MARKET MUTUAL FUNDS"
- -----
14 Fundamentals

<PAGE>
- --------------------------------------------------------------------------------
/X/ COREFUND
/x/
PART II:
HOW TO INVEST IN STOCKS, BONDS, AND MONEY
MARKET INSTRUMENTS

Now that you've reviewed the basic types of investment vehicles available,
here's a discussion of how mutual funds can help you invest in stocks, bonds,
and money market securities.

WHAT IS A MUTUAL FUND?

Simply defined, a mutual fund pools the money of many investors and invests
it toward a specific goal, such as stability of principal, regular income, or
long-term growth. The fund's professional managers choose investments that,
in their judgment, will help the fund achieve its goal. As an investor, you
share in the fund's gains, losses, income, and expenses on a proportional
basis.

An equity fund pools its money to purchase stocks, a fixed-income fund
purchases bonds, and a money market fund purchases short-term debt instruments.

ADVANTAGES OF MUTUAL FUND INVESTING.

While many investors enjoy excellent results by purchasing individual stocks
or bonds, most investors find that mutual funds offer a more viable
alternative, for the following reasons:

PROFESSIONAL MANAGEMENT: With individual securities, you or your
broker must do the extensive research necessary to choose from among the
thousands of securities available. With mutual funds, you enjoy having a
professional money manager uncover opportunities and research them to make sure
the investment is appropriate for the needs of the fund.

LOW COSTS: With mutual funds, trading costs are modest because they are
shared by all investors in the fund.

DIVERSIFICATION: When investing, it's important to not put all your eggs in
one basket, so that you will be protected against an excessive loss in any one
investment. But only the wealthiest investors can afford to purchase the wide
range of individual securities to achieve true diversification. With mutual
funds, however, you can enjoy immediate diversification with even a very
limited amount of money, because investment risk is spread over many different
securities for greater stability and safety of your investment.

LIQUIDITY: With individual securities, it can sometimes be difficult to
redeem your investment due to market conditions and other factors. Mutual fund
shares, however, are easily redeemed at their current market value.

WHAT TYPES OF MUTUAL FUNDS ARE AVAILABLE?

The three basic categories of mutual funds are as follows:

EQUITY (STOCK) MUTUAL FUNDS A stock fund consists of selected
securities traded on the stock market. The fund changes in value as the prices
of the stocks in the fund change. Although these funds tend to rise or fall in
price more than other types of mutual funds, they have traditionally rewarded
investors with higher returns over the long run.

-----
Fundamentals 15

<PAGE>
- --------------------------------------------------------------------------------
FUNDAMENTALS OF MUTUAL FUND INVESTING (CONTINUED)

FIXED INCOME (BOND) MUTUAL FUNDS A fixed income fund is a mutual fund
which invests in a pool of bonds. Bonds generally pay a fixed rate of interest.
While fixed income mutual funds buy bonds, it's important to note that the
income paid by a bond fund will fluctuate as individual securities are added to
or subtracted from the pool.

In addition, fixed income funds are subject to changes in net asset value
due to changing market conditions. Like individual bonds, fixed income funds
will tend to increase in value during times of decreasing interest rates, and
will generally decrease in value when interest rates rise.

There are a wide range of fixed-income funds to choose from, each with its
own investment objectives. These objectives range from stability of principal,
to maximum yield, to tax-free income.

MONEY MARKET FUNDS Of the basic mutual fund categories, money market funds
are managed to maintain the greatest stability of principal. They are managed
to maintain a value of $1 per share.

Money market funds invest in short-term money market securities, such as
U.S. Treasury Bills, certificates of deposit from large banks, and commercial
paper. Because the interest rates paid on these securities fluctuate with
market conditions, the yield for money market funds will also change.

WHAT ARE TAX-FREE FUNDS?

Tax-free funds, which include both fixed income (bond) and money market
funds, invest in securities which are issued by state, county, and local
governments and their agencies. The proceeds from these securities are used
to finance a variety of public-works projects, such as the building of roads,
schools, and sewers.

Under current tax laws, the interest paid to investors in these securities
is generally exempt from Federal income taxes. Therefore, they are frequently
purchased by investors who wish to shelter their investment income from taxes.
However, Congress from time to time reviews this aspect of the tax code and may
at any time repeal the exemption on any or all of these securities. If this
were to occur, it would have a negative impact on any affected securities, as
well as the mutual funds in which they were held.

It's Easy to Compare Tax-Free and Taxable Yields:
Tax-Free Yield = Taxable Yield
--------------
1 - Tax Rate
- -----
16 Fundamentals

<PAGE>

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

WHAT ARE BALANCED FUNDS? /x/ COREFUND

In addition to the types of mutual funds already described, there are also
funds which blend investments in stock, bond, and money market securities.
These are commonly known as balanced funds.

The returns for balanced funds are typically greater than those of bond and
money market funds, but lower than those of pure stock funds. Investing in all
three types of securities means the value of your principal should fluctuate
less than it would in a stock or bond fund alone.

Typically, the fund's professional manager has the flexibility to change
the investment mix based on current economic conditions.

COMPARING THE PERFORMANCE OF STOCK, BOND, AND MONEY MARKET INVESTMENTS

In order to balance risks and rewards, it's helpful to see how stocks, bonds,
and money market investments have performed over time.

Mutual fund performance is stated in terms of total return. The
total return of a mutual fund or any other investment consists of the
combination of capital appreciation (or loss) and investment income.

Capital appreciation (or loss) is a change in the market value. Income is
made up of dividends earned on stocks, and interest paid on bonds or money
market investments. In general, stocks have the highest total return, because
over long periods of time they have achieved the greatest capital appreciation.

Bonds have provided the greatest income or interest, but because their
prices are more stable they have less potential than stocks for capital
appreciation. Therefore, they have a lower total return potential over time
than stocks.

Of course, past returns are no guarantee of future results. But historical
data tells a story which surprises many investors.

As the chart on the following page shows, for the forty-year period between
January 1955 and December 1994, stocks have averaged annual returns of 10.7%,
while long-term bonds have averaged 5.6%, intermediate-term bonds have averaged
6.6%, and money market instruments have averaged 5.6%. During this same period,
inflation averaged 4.4%. Therefore, bonds and money market investments actually
delivered very little growth in excess of inflation.

Stocks, on the other hand, averaged more than double the rate of inflation.
What about the price fluctuations? Well, it's true that stocks do fluctuate --
and probably always will. But as the accompanying chart shows, stocks have
consistently rewarded long-term investors.

Since money market funds are managed to have a constant $1 share price,
their total return consists only of the interest earned on their investments.

- -----
17 Fundamentals

<PAGE>
- --------------------------------------------------------------------------------
FUNDAMENTALS OF MUTUAL FUND INVESTING (CONTINUED)

GROWTH OF $1,000 (HISTORICAL PERFORMANCE OF STOCKS, BONDS AND CASH)
Dollars in Thousands

Large Long-Term Intermediate-Term
Year Stock TBills Inflation Gov't Bonds Gov't Bonds
<S> <C> <C> <C> <C> <C>

1955 1.32 1.02 1.00 0.99 0.99
1956 1.40 1.04 1.03 0.93 0.99
1957 1.25 1.07 1.06 1.00 1.07
1958 1.79 1.09 1.08 0.94 1.05
1959 2.01 1.12 1.1 0.92 1.05
1960 2.02 1.15 1.12 1.05 1.17
1961 2.56 1.18 1.12 1.06 1.19
1962 2.34 1.21 1.14 1.13 1.26
1963 2.87 1.25 1.16 1.14 1.28
1964 3.35 1.29 1.17 1.18 1.33
1965 3.77 1.34 1.19 1.19 1.35
1966 3.39 1.40 1.23 1.23 1.41
1967 4.20 1.46 1.27 1.12 1.42
1968 4.66 1.54 1.33 1.12 1.49
1969 4.27 1.64 1.41 1.06 1.48
1970 4.44 1.75 1.49 1.19 1.73
1971 5.07 1.82 1.54 1.35 1.88
1972 6.04 1.89 1.59 1.42 1.97
1973 5.15 2.02 1.73 1.41 2.07
1974 3.79 2.19 1.94 1.47 2.18
1975 5.19 2.31 2.08 1.60 2.35
1976 6.43 2.43 2.18 1.87 2.66
1977 5.97 2.56 2.32 1.86 2.69
1978 6.36 2.74 2.53 1.84 2.79
1979 7.53 3.02 2.87 1.82 2.90
1980 9.97 3.36 3.23 1.74 3.02
1981 9.48 3.86 3.51 1.78 3.30
1982 11.51 4.26 3.65 2.49 4.26
1983 14.10 4.64 3.79 2.51 4.58
1984 14.99 5.09 3.94 2.90 5.22
1985 19.82 5.48 4.09 3.80 6.28
1986 23.48 5.82 4.14 4.73 7.23
1987 24.70 6.14 4.32 4.60 7.44
1988 28.85 6.53 4.51 5.04 7.89
1989 37.94 7.08 4.72 5.96 8.94
1990 36.73 7.63 5.00 6.33 9.81
1991 47.93 8.06 5.16 7.55 11.33
1992 51.62 8.34 5.31 8.15 12.14
1993 56.78 8.58 5.45 9.64 13.51
1994 57.52 8.92 5.60 8.89 12.81

</TABLE>

THIS CHART SHOWS HOW THE MAJOR TYPES OF INVESTMENTS HAVE PERFORMED OVER THE
PAST 40 YEARS. MORE STABLE MONEY MARKET INVESTMENTS HAVE PRODUCED THE LOWEST
ANNUAL RETURNS, WHILE STOCKS HAVE PRODUCED THE GREATEST GROWTH EVEN THOUGH
THEIR VALUE FLUCTUATES MORE.

HISTORICAL ANNUALIZED RETURN
(JANUARY 1955-DECEMBER 1994)

<TABLE>
<S> <C>
Stocks 10.7%
Long-Term Government Bonds 5.6
Intermediate-Term Government Bonds 6.6
Cash 5.6
Inflation 4.4

</TABLE>

ASSUMPTIONS FOR THE TABLE AND CHARTS SHOWN ON THIS PAGE: RETURNS BASED ON
HISTORICAL PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE RESULTS. STOCK RETURNS
REPRESENT TOTAL RETURN OF THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
(THE "S&P 500 INDEX"). FIXED INCOME, OR BONDS, IS COMPOSED OF INTERMEDIATE- AND
LONG-TERM GOVERNMENT BONDS. CASH REPRESENTS 30-DAY TREASURY BILLS. SOURCE: SEI
FINANCIAL SERVICES COMPANY.

RANGE OF STOCK RATES OF RETURN FOR ONE-
AND FIVE-YEAR ROLLING PERIODS
(1955-1994)

Percent
<TABLE>
<CAPTION>

Five-Year
Annual Returns Rolling Periods
<S> <C> <C>
95th Percentile 37.2% 20.0%
5th Percentile -10.8% 1.6%
</TABLE>

MANY INDIVIDUALS ARE CONCERNED ABOUT THE RISKS ASSOCIATED WITH INVESTING IN
STOCKS. MANY DO NOT REALIZE, HOWEVER, THAT DESPITE THE FLUCTUATION OF ANNUAL
RETURNS, INVESTORS WHO HELD STOCKS FOR A FULL FIVE YEARS HISTORICALLY EARNED
A POSITIVE RETURN IN MORE THAN NINETY FIVE PERCENT OF THE CASES. BEST AND WORST
CASE SCENARIOS PRESENTED IN THIS ILLUSTRATION REPRESENT THE FIFTH AND
NINETY-FIFTH PERCENTILE OF THE HISTORICAL RETURN DISTRIBUTION. SOURCE: SEI
FINANCIAL SERVICES COMPANY.

- -----
18 Fundamentals

<PAGE>
- --------------------------------------------------------------------------------
WHAT ARE INTERNATIONAL FUNDS? /x/ COREFUND

International funds invest primarily in stock, bond and money market
securities issued by corporations, governments and banks worldwide.

International equity funds invest in the equity (stock) securities
of companies based outside the United States. Today, international markets
account for over 60% of the world's equity capitalization, as measured by the
Morgan Stanley World Index in February, 1995. This indicates that many
investment opportunities now exist globally. Likewise, international bond
funds may invest in government and corporate debt obligations from around the
world with the aim of providing income and the potential for capital
appreciation. Investing in international equity (stock) and fixed income
(bond) funds provides investors with a way to participate in a diversified
portfolio of many international securities of many countries.

GROWTH OF $1,000
(PERFORMANCE OF INTERNATIONAL AND DOMESTIC STOCKS)
Dollars in Thousands

Year MSCI EAFE S&P 500
<S> <C> <C>

1975 1.371 1.372
1976 1.4223 1.6985
1977 1.6986 1.5762
1978 2.2812 1.6803
1979 2.4222 1.9894
1980 3.014 2.634
1981 2.9829 2.505
1982 2.9573 3.041
1983 3.6851 3.7252
1984 3.9749 3.9599
1985 6.2296 5.235
1986 10.586 6.2035
1987 13.226 6.5261
1988 17.007 7.6225
1989 18.843 10.024
1990 14.473 9.7028
1991 16.281 12.662
1992 14.352 13.637
1993 19.08 15.001
1994 20.618 15.196

</TABLE>

GROWTH OF $1,000 IN INTERNATIONAL AND DOMESTIC STOCKS. MSCI EAFE (THE MORGAN
STANLEY CAPITAL INTERNATIONAL EUROPE AUSTRALIA AND FAR EAST INDEX) REPRESENTS
THE GROWTH OF AN INVESTMENT IN INTERNATIONAL STOCKS, AND THE S&P 500 INDEX
INDICATES AN INVESTMENT IN DOMESTIC STOCKS.

A COMPARISON OF FOREIGN GOV'T BOND
RETURN PERFORMANCE 1994
Total Return

<TABLE>

<S> <C>
Japan 8.88%
U.K. -1.54%
Australia 6.88%
France 4.37%
Canada -9.86%
U.S. -3.36%
Germany 9.98%

</TABLE>

SOURCE: SEI FINANCIAL SERVICES COMPANY

Although investing internationally can reward investors (see graphs
above), there is an added dimension to the risks involved in investing in
domestic securities. Currency fluctuations in the countries in which
international stock and bond securities are issued can negatively impact the
value of these securities, as well as the mutual funds in which they are
held.

- -----
19 Fundamentals

<PAGE>
- --------------------------------------------------------------------------------
FUNDAMENTALS OF MUTUAL FUND INVESTING (CONTINUED)

/x/
PART III:
DEVELOPING YOUR INVESTMENT STRATEGY

Now that you have a basic understanding of the investments available to you,
let's look at how these investments can be used to help you achieve your
goals.

Everyone, whatever their income level, has financial goals. Perhaps yours
include a comfortable retirement, education for your children or grandchildren,
a new home, or simply the accumulation of wealth.

Whatever your personal goals, the best way to achieve them is to take
control of your financial future. And one of the best ways to do that is
through a coordinated program of saving and investing.

Saving money provides the foundation for reaching your goals, while
investing builds on that foundation by using the money you save to make even
more money.

Mutual funds provide one of the most convenient and rewarding means of
saving and investing.

Mutual funds are particularly well-suited to long-term goals such as
education and retirement, because they offer a convenient way to invest
regularly in a diversified portfolio of securities.

Once you've decided to use mutual funds to help reach your goals, here are
some very simple steps to follow:

STEP 1:

SET WELL-DEFINED GOALS.
Whether you're investing for retirement, education, wealth accumulation, or
regular income, start by determining how much you will need to satisfy your
goals. When making this assessment, you may want to seek the guidance of an
investment professional. Also take into account the effects of inflation, which
historically has reduced purchasing power by an average of 4.4% per year.

Short-term goals will require a greater initial investment and a more
conservative investment approach. Longer-term goals will require a smaller
initial investment and a more aggressive approach, including investments in
stock and bond funds which are expected to yield higher returns over the long
run.

Once you determine your primary and secondary goals, you'll then need to
calculate how soon you will need your money.

STEP 2:

ESTABLISH YOUR TIME HORIZON.
For each of your goals, determine how soon you will need the money you're
investing. If it's a shorter-term goal, such as a new home in a few years,
you'll want investments that offer fairly predictable results in a short time.
If it is a longer-term goal, such as education for young children, you can plan
for longer-term results. Accordingly, the type of investments you choose for
retirement will depend on whether your retirement is a few years away, or a few
decades.

- -----
20 Fundamentals

<PAGE>
- --------------------------------------------------------------------------------
/x/ COREFUND
STEP 3:

UNDERSTAND THE REAL RISKS.
Most people think of an investment as "risky" or "safe" based only on how
much the value of their principal can fluctuate. But in the long run, there
is more to risk than whether your principal goes up or down. It's just as
important to consider the following risks:

THE RISK OF INFLATION. To achieve any real increase in your wealth, your
investment return must outstrip inflation, or you may end up actually losing
purchasing power in the long run. To beat inflation, consider investing some of
your money where values and return are not fixed, but grow with the economy.
Experience shows that stock-based investments such as equity mutual funds offer
this type of performance potential.

THE RISK OF NOT REACHING YOUR GOAL. Another potential risk that many
investors tend to overlook is the risk that an investment strategy will not
enable them to reach their goal. To properly assess this risk, you first need
to define your goals, and then strike a balance between the risk of principal
volatility and the risk of failing to reach your goals.

For example, statistics show that at age 70 you can expect to live another
20 years. To achieve the many years of comfortable retirement you want, you
must have the discipline to set aside enough money during your working years
and invest it wisely.

STEP 4:

DECIDE ON AN INVESTMENT MIX.
When you are selecting specific investments, choose those which offer the
greatest potential for reaching your short-term and long-term goals, and
which are within your risk tolerance.

Many investors find that they are most comfortable with a mix of
investments, including stocks, bonds, and money market funds. This approach
offers the advantage of not putting all your eggs in one basket, and also
allows you to enjoy the distinct advantages of each type of investment.

If you use this approach, known as "asset allocation", the key is deciding
how much to allocate to each type of investment. To make this decision easier,
you can select a balanced fund, which combines stock, bond, and money market
investments under the guidance of professional investment managers.

As this chart below suggests, bonds and money markets fluctuate less in the
short term, and there is less chance of experiencing a loss. History has shown,
however, that the longer you stay invested, the more stocks have provided a
higher return, with a decreasing potential for loss.

-----
Fundamentals 21

<PAGE>
- --------------------------------------------------------------------------------
FUNDAMENTALS OF MUTUAL FUND INVESTING (CONTINUED)

REDUCTION OF RISK OVER TIME
Average Annual Return

<TABLE>

1 Year Stocks 43.40 -26.50
Long-Term Bonds 40.36 -9.18
Intermediate-Term Bonds 29.10 -5.14
Cash 14.70 1.50
Inflation 13.30 0.40

5 Year Stocks 20.40 -2.36
Long-Term Bonds 21.62 -2.14
Intermediate-Term Bonds 16.98 0.96
Cash 11.12 2.33
Inflation 10.06 1.24

10 Year Stocks 17.59 1.24
Long-Term Bonds 15.56 1.13
Intermediate-Term Bonds 13.13 2.92
Cash 9.17 2.58
Inflation 7.34 1.57

20 Year Stocks 14.58 6.53
Long-Term Bonds 10.10 1.94
Intermediate-Term Bonds 9.85 3.98
Cash 7.72 4.00
Inflation 6.36 3.37

</TABLE>

THE LONGER YOU HOLD ANY PARTICULAR ASSET CLASS (STOCKS, BONDS, MONEY MARKET
INSTRUMENTS), THE LESS THE VARIATION IN RETURN. WHILE STOCKS HAVE FLUCTUATED
IN VALUE MUCH MORE THAN OTHER INVESTMENTS, THEY HAVE ALSO DELIVERED HIGHER
RETURNS OVER THE LONG RUN. IN ADDITION, THE LONGER AN INVESTOR REMAINS
INVESTED IN STOCKS, THE LESS THE CHANCE THERE IS FOR A CAPITAL LOSS. THE
BEST- AND WORST-CASE SCENARIOS PRESENTED IN THIS ILLUSTRATION REPRESENT THE
ABSOLUTE HIGHEST AND LOWEST RETURNS FROM JANUARY 1955 TO 1994. SOURCE: BASED
ON HISTORICAL DATA ON THE S&P 500 INDEX, INTERMEDIATE-AND LONG-TERM
GOVERNMENT BONDS, AND 30-DAY TREASURY BILLS FOR ROLLING ONE-, FIVE-, 10-, AND
20-YEAR PERIODS BETWEEN 1955 AND 1994. PAST RESULTS DO NOT GUARANTEE FUTURE
PERFORMANCE.

STEP 5:

GET STARTED.
Don't make the mistake of waiting until tomorrow. With mutual funds, you
don't need a large investment to start your program. All it takes is a small
amount of money, and a strong desire to reach your goals.

For full details on how the principles of mutual fund investing can
work for you, please contact your investment representative.

STEP 6:

BE DISCIPLINED.
Once you have a good strategy, stay with it. Avoid sudden changes in reaction
to temporary market trends. Remember, you're interested in long-term
performance.

In mutual fund investing, particularly with equity funds, one of
the surest ways to maximize the value of your investment is through a regular
program of monthly contributions. By adding to your account each month,
you'll be purchasing shares during both "up" markets and "down" markets. This
technique, known as "dollar cost averaging", has been shown to yield optimum
results over the long run.
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22 Fundamentals

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GLOSSARY OF KEY INVESTMENT TERMS /x/ COREFUND

CAPITAL GAIN: The profit made from the sale of securities due to an increase in
share value.

CURRENT YIELD: The income paid annually on mutual fund shares, expressed as a
percentage of the current price per share.

DISTRIBUTION: Payment of capital gains to shareholders of a mutual fund. For tax
purposes, distributions are separate from interest income or dividends.

DOLLAR COST AVERAGING: Investing a fixed dollar amount at regular intervals
over a long period of time to reduce the average cost per share of a
mutual fund.

INCOME DIVIDENDS: Regular payments from mutual funds to their shareholders,
made up of dividends, interest, and short-term capital gains earned from the
fund's portfolio of securities. May be distributed annually, bi-annually,
quarterly, or monthly, with operating expenses deducted.

MATURITY: The date on which the issuer is scheduled to return the amount
borrowed to the lender, or investor.

MUNICIPAL BOND: A debt obligation issued by a city, state, or municipality.
Interest from these bonds is generally exempt from federal income tax.

NET ASSET VALUE: The dollar value of one share of a mutual fund. This value
is generally calculated at least once each day, and is the price at which the
fund will redeem its shares from investors.

PRINCIPAL, OR PAR VALUE: Also known as face value, this is the amount loaned
to the issuer of a bond.

PROSPECTUS: A booklet distributed by the issuer of a security or mutual fund,
in compliance with SEC regulations. A mutual fund prospectus must include the
fund's investment objectives, all expenses and fees including management and
sales fees, a description of shareholder services offered, and information on
how to buy shares.

REDEMPTION PRICE: Also known as "bid price", this is the price at which
mutual funds buy back their shares. It is usually the net asset price of the
fund.

TOTAL RETURN: The combined return of capital appreciation and income
(interest and dividends) that an investment earns. (See page 62).
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Investment Policies 23

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INFORMATION ON THE FUNDS

/X/
INVESTMENT
OBJECTIVES
OF THE FUNDS

As investment adviser of each Fund, CoreStates Advisers manages each
Fund's portfolio of investments in a manner which it believes will best
accomplish the Fund's stated objective. However, there can be no assurance that
a Fund will meet its objective.

EQUITY FUNDS___________________________________________________________________

GROWTH EQUITY FUND Growth Equity Fund's investment objective is to provide
growth of capital and an increasing flow of dividends from the diversified
portfolio of common stocks comprising the Fund.

EQUITY FUND Equity Fund's investment objective is to provide maximum total
return, including capital appreciation and investment income, in excess of stock
market indices such as the S&P 500 Index, as measured over a period of time.

SPECIAL EQUITY FUND Special Equity Fund's investment objective is to seek
capital growth by investing principally in a diversified portfolio of common
stocks.

EQUITY INDEX FUND Equity Index Fund's investment objective is to provide its
shareholders with investment results that achieve price and yield performance
similar to the S&P 500 Index, thereby tracking with reasonable accuracy the
performance of the stock market as a whole.

INTERNATIONAL GROWTH FUND International Growth Fund's investment objective is to
provide its shareholders with long-term capital appreciation, consistent with
reasonable risk, by investing primarily in a diversified portfolio of
appreciation-oriented equity securities of companies located outside the United
States.

BALANCED FUND Balanced Fund's investment objective is to provide total return
while preserving capital. This Fund pursues its objective by investing in a
combination of common stocks and fixed income securities. Under normal
conditions, Balanced Fund will invest a minimum of 25% of its assets in senior
fixed income securities and between 30% and 70% of its assets in common stocks.

FIXED INCOME FUNDS_____________________________________________________________

SHORT INTERMEDIATE BOND FUND Short Intermediate Bond Fund's investment objective
is to provide a moderate level of current income consistent with conservation of
capital, by investing substantially all of its assets in a diversified portfolio
of intermediate-term, fixed income obligations which will have an expected
average weighted maturity of three to ten years.

BOND FUND Bond Fund's investment objective is to seek to maximize long-term
total return by investing principally in a diversified portfolio of debt
securities.

SHORT-TERM INCOME FUND Short-Term Income Fund's investment objective is to seek
consistent current income with relative stability of principal by investing
principally in a diversified portfolio of investment grade debt securities.

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24 Investment Objectives

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/X/ COREFUND

GOVERNMENT INCOME FUND Government Income Fund's investment objective is to
provide current income while preserving principal value and maintaining
liquidity.

INTERMEDIATE MUNICIPAL BOND FUND Intermediate Municipal Bond Fund's investment
objective is to seek the highest level of income exempt from federal income
taxes that can be obtained, consistent with the preservation of capital, from a
diversified portfolio of high quality, intermediate-term municipal securities.
This Fund has a fundamental policy to invest, under normal circumstances, at
least 80% of its assets in municipal securities the interest of which is exempt
from federal income taxes, based on opinions from bond counsel for the issuers.

PENNSYLVANIA MUNICIPAL BOND FUND Pennsylvania Municipal Bond Fund seeks current
income exempt from federal and Pennsylvania income taxation with preservation of
capital by investing primarily in a non-diversified portfolio of municipal
securities.

NEW JERSEY MUNICIPAL BOND FUND New Jersey Municipal Bond Fund seeks current
income exempt from federal and New Jersey income taxation with preservation of
capital by investing primarily in a non-diversified portfolio of municipal
securities.

GLOBAL BOND FUND Global Bond Fund's investment objective is to provide capital
appreciation and current income through investment primarily in fixed income
securities of United States and foreign issuers denominated in United States
dollars and in other currencies.

MONEY MARKET FUNDS_____________________________________________________________

CASH RESERVE Cash Reserve's investment objective is to provide as high a level
of current income as is consistent with liquidity and relative stability of
principal.

TREASURY RESERVE Treasury Reserve's investment objective is to provide current
interest income, liquidity and safety of principal.

TAX-FREE RESERVE Tax-Free Reserve's investment objective is to provide as high a
level of current interest income that is exempt from federal income taxes as is
consistent with liquidity and relative stability of principal. This Fund
intends, under normal market conditions, to invest at least 80% of its assets in
tax-free securities.

/X/
INVESTMENT
POLICIES

The policies which the Funds follow to achieve their investment objectives are
described below. These are non-fundamental policies which may be changed
without a shareholder vote.

Descriptions of the securities in which the Funds invest are contained
below in 'Types of Securities in Which the Funds Invest.'

EQUITY FUNDS___________________________________________________________________

The CoreFund Equity Funds cover a range of investment styles. CoreStates
Advisers, specialists in the management of growth portfolios, manages the Growth
Equity, Equity Index and Balanced Funds. CoreStates Advisers has selected
Cashman, Farrell and Associates and Martin Currie, Inc. to manage the Equity and
International Growth Funds, respectively. These firms are specialists in their
respective investment styles.

GROWTH EQUITY FUND Growth Equity Fund strives to provide a return in excess of
stock market indices such as the S&P Barra Growth Index and S&P 500 Index.
Growth Equity Fund pursues its investment objective by investing primarily in
common

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Investment Policies 25

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INFORMATION ON THE FUNDS (CONTINUED)

stocks, preferred stocks, convertible securities, and other equity securities of
companies which CoreStates Advisers believes to show the potential for growth of
earnings over time. Stock selection is guided by a bottom-up approach that
places heavy emphasis on fundamental research to uncover companies with proven
earnings growth records, high reinvestment rates, high returns on equity, and
strong balance sheets showing low debt to total capital. The adviser makes
qualitative judgments on such elements as the company's competitive position,
the quality of its management and the potential for future growth.

This Fund intends, under normal market conditions, to hold at least 75% of
its total assets in the equity securities described above. Over the long term,
continued earnings growth tends to lead to both higher dividends and capital
appreciation.

EQUITY FUND The Equity Fund pursues its investment objective by investing
principally in a diversified portfolio of common stocks of companies with large,
medium or small capitalizations. The Equity Fund will normally invest at least
80% of the value of its total assets in common stocks. The Fund may also invest
up to 20% of the value of its total assets in securities convertible into common
stocks, preferred stocks, corporate bonds, notes, warrants, and short-term
obligations (with maturities of 18 months or less) such as commercial paper
(including variable amount master demand notes), banker's acceptances,
certificates of deposit, repurchase agreements, obligations issued or guaranteed
by the U.S. Government or its agencies or instrumentalities, and demand and time
deposits of domestic and foreign banks and savings and loan associations. During
temporary defensive periods, the Fund has the ability to hold up to 100% of its
total assets in short-term obligations including domestic bank certificates of
deposit, banker's acceptances and repurchase agreements secured by U.S.
Government securities.

Stocks held by the Equity Fund may be listed on a national securities
exchange or may be unlisted securities with an established over-the-counter
market. CoreStates Advisers has developed a quantitative process which evaluates
stocks in a number of ways, including the ratios of market price to book value,
recent changes in market price, return on equity, price to earnings ratios,
dividend paying abilities, and liquidity. CoreStates Advisers believe that its
quantitative approach reduces subjectivity in the stock selection process.

Equity securities such as those in which the Equity Fund may invest are
more volatile and carry more risk than some other forms of investment. Depending
upon the performance of the Fund's investments, the net asset value per Share of
the Fund may decrease instead of increase.

SPECIAL EQUITY FUND The investment objective of the Special Equity Fund is to
seek capital growth by investing principally in a diversified portfolio of
common stocks. The Special Equity Fund will normally invest in common stocks of
domestic companies that CoreStates Advisers expect will experience growth in
earnings and price. The Fund may invest up to 35% of its total assets in foreign
securities. The Fund may also purchase securities convertible into common
stocks, preferred stocks, notes, warrants, and, for daily case management
purposes, short-term obligations (with maturities of 18 months or less) such as
commercial paper (including variable amount master demand notes), banker's
acceptances, certificates of deposit, repurchase agreements, obligations issued
or

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26 Investment Policies

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/X/ COREFUND

guaranteed by the U.S. Government or its agencies or instrumentalities, and
demand and time deposits of domestic and foreign banks and savings and loan
associations. During temporary defensive periods, the Fund has the ability to
hold up to 100% of its total assets in short-term obligations, including
domestic bank certificates of deposit, banker's acceptances and repurchase
agreements secured by U.S. Government securities. CoreStates Advisers'
quantitative process described above under 'The Conestoga Core Equity Fund' will
be utilized for the Special Equity Fund.

Many of the companies in which the Special Equity Fund invests will be
small and medium capitalized companies. Small capitalized companies are those
organizations with 'stock market capitalizations' between $100 million and $1
billion and medium capitalized companies are those organizations with stock
market capitalizations between $1 billion and $5 billion. 'Stock market
capitalizations' means the total number of common shares outstanding multiplied
by the market price per share.

The Special Equity Fund will normally purchase the securities of small and
medium capitalized companies across a wide range of industry sectors. These
securities may be traded over-the-counter or listed on an exchange and may or
may not pay dividends. Small and medium capitalized companies may be more
vulnerable than larger, more established organizations to adverse business or
economic developments. In particular, small capitalized companies may have
limited product lines, markets and financial resources and may be dependent upon
a relatively small management group. Accordingly, equity securities such as
those in which the Fund may invest are more volatile and carry more risk than
some other forms of investment. Depending upon the performance of the Fund's
investments, the net asset value per Share of the Fund may decrease instead of
increase.

EQUITY INDEX FUND Equity Index Fund intends, under normal market conditions, to
hold at least 90% of its total assets in equity securities that as a group
reflect a composite of those represented in the S&P 500 Index. To mirror and
confine the holdings to relatively large, well-known companies within the S&P
500 Index, CoreStates Advisers utilizes a computer model that closely monitors
industry weightings of the S&P 500 Index. While common stocks represented in the
S&P 500 Index are the primary securities utilized to achieve Equity Index Fund's
objective, CoreStates Advisers may also invest in other types of securities,
consistent with the objective and policies described herein. Equity Index Fund
is not sponsored by nor affiliated with Standard & Poor's Corporation ('S&P').

The S&P 500 Index consists of 500 common stocks, most of which are listed
on the New York Stock Exchange. In choosing the 500 stocks which are included in
the S&P 500 Index, S&P considers market values and industry diversification.
Most of the stocks in the S&P 500 Index are issued by companies which are among
the largest, in terms of the aggregate market value of their outstanding stock,
measured by the market price per share multiplied by the number of shares
outstanding. Stocks that are not among the five hundred largest are included in
the S&P 500 Index for diversification purposes.

Traditional methods of mutual fund investment management typically involve

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Investment Policies 27

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INFORMATION ON THE FUNDS (CONTINUED)

frequent changes in a portfolio of securities on the basis of economic,
financial, and market analyses. Index funds such as Equity Index Fund are not
managed in this manner, however. Instead, CoreStates Advisers only purchases and
sells securities with respect to the Fund in an attempt to duplicate the total
return of the S&P 500 Index, taking into account redemptions, sales of
additional Fund shares, and other adjustments as described below.

Generally, Equity Index Fund only trades securities to reflect changes in
the S&P 500 Index, to carry out appropriate rebalancing for diversification
purposes, or to more closely track the return of the S&P 500 Index. This Fund
invests in equity securities that, as a group, reflect the composite performance
of the S&P 500 Index based on a computer-based financial model that tracks the
performance of the various stocks in the S&P 500 Index. As the Fund grows in
total assets, its portfolio may eventually include all 500 stocks in the S&P 500
Index. This decision would be made by CoreStates Advisers, based on its
financial model.

Although CoreStates Advisers does not screen securities for investment by
this Fund by traditional methods of financial and market analyses, it monitors
the Fund's investments with a view toward removing stocks of companies which
exhibit extreme financial distress or which may impair for any reason the Fund's
ability to achieve its investment objective. Therefore, an investor
participating in the Fund bears the risk of such adverse market conditions. The
Fund expects that its return will match the S&P 500 Index, prior to the
deduction of brokerage and other transaction costs, other Fund expenses, and
tracking errors.

Common stocks purchased by the Fund are initially selected in accordance
with their market capitalizations. Market capitalization is calculated by
multiplying the market price of an issuer's stock by the number of outstanding
shares of its common stock. The issues selected for this Fund are then ranked
and weighted according to their respective market capitalizations. The weighted
market capitalization of each issuer selected is determined by dividing the
issuer's market capitalization by the total market capitalizations of all
issuers listed.

The industry sector diversification of the issuers selected for inclusion
in Equity Index Fund according to their weighted market capitalizations is then
compared with the industry sector diversification of the issuers of all common
stocks publicly traded in the United States.

CoreStates Advisers will include in the Fund certain 'balancing
securities,' which are common stocks of companies with smaller market
capitalizations which are added to complete the portfolio to provide broad

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28 Investment Policies

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/X/ COREFUND

industry representation. As indicated, 'balancing securities' are issued by
issuers whose market capitalizations are such that they would not otherwise be
eligible for inclusion in the Fund, and replace the securities of issuers in
over-represented sectors in the fund.

International Growth Fund offers increased diversification through
investment in foreign markets. This Fund's advisers believe that both the
selection of individual securities and the allocation of International Growth
Fund's assets across foreign markets are important in managing an international
equity fund. Most foreign equity securities are purchased in over-the-counter
markets or on stock exchanges located in the countries in which the respective
principal offices of the issuers of the various securities are located. Under
normal market conditions, International Growth Fund will invest an aggregate of
at least 65% of its total assets in the equity securities of at least three
different countries.

In determining the distribution of International Growth Fund's investments
among various countries and geographic regions, the advisers consider many
factors, such as: prospects for relative economic growth between countries;
government policies affecting business conditions; outlook for local currency;
and the range of available, attractive investment opportunities. For the
selection of securities, the advisers' criteria includes: earnings growth;
return on capital; quality of management; cash flow; and strength of balance
sheet.

While foreign stocks are the primary securities utilized to achieve
International Growth Fund's objective, the advisers may also invest in other
types of foreign equity securities, consistent with the objective and policies
described herein.

The net asset value of this Fund will fluctuate, and investments are
expected to yield little, if any, current income.

The fixed income strategy values bonds using historical yield
differentials. U.S. Government securities and corporate bonds are used
exclusively to implement Balanced Fund's fixed income strategy. The asset

----
Investment Policies 29

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INFORMATION ON THE FUNDS (CONTINUED)

allocation strategy shifts the stock-fixed income-money market instrument mix
based on the investment adviser's judgment of the relative attractiveness of
these markets and securities given its view of economic conditions, the level of
interest rates, and the outlook for corporate profits. The strategy uses present
and historical economic and market data to reach these conclusions.

Balanced Fund seeks strong total return in all market conditions, with a
special emphasis on minimizing interim declines during falling equity markets.
Long-term growth is pursued through equity holdings, and current income through
fixed income securities and common stock dividends.

The strategy focuses on controlling downside risk, both through holdings
in relatively high-dividend-yielding stocks and convertible securities, and
through diversification between stocks and bonds. To employ this strategy, the
Fund's adviser uses present and historical economic and market data.

This Fund will, under normal conditions, invest between 30% and 70% of
total assets in common stocks, depending on the investment adviser's assessment
of market conditions. When CoreStates Advisers believes that equity markets are
overvalued, the common stock exposure will be at the low end of this range.
CoreStates Advisers expects that equity exposure will average 60% over time.
Balanced Fund may also invest in U.S. dollar denominated securities of foreign
issuers (including American Depositary Receipts that are traded on registered
exchanges or listed on NASDAQ).

FIXED INCOME FUNDS _____________________________________________________________

CoreFund Fixed Income Funds employ an investment process that attempts to manage
large swings in interest rates within the maturity parameters of each Fund to
reduce an investor's risk of principal. Significant effort is put forth to
identify value along the yield curve, taking into account the economic outlook,
fiscal and monetary policies, and the inflation trend. Developments that can
significantly impact the supply and demand of securities within the various
sectors of the bond market are also carefully considered. By identifying these
opportunities, and acting upon them in a timely manner, the Funds' advisers seek
to enhance overall value.

SHORT INTERMEDIATE BOND FUND This Fund pursues its investment objective by
investing primarily in corporate debt securities such as bonds and commercial
paper, as well as securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. The Fund intends, under normal market conditions,
to invest at least 65% of its total assets in bonds and 35% or less in other
fixed income securities.

Short Intermediate Bond Fund maintains a maximum average maturity of no
more than five years, pursuant to a non-fundamental investment policy which can
be changed without shareholder approval. By maintaining an average maturity of
not more than five years, CoreStates Advisers expects the Fund's net asset value
to be relatively stable while providing higher income than money market funds.
Subject to shareholder approval, the Board of Directors approved a change in the
Short Intermediate Bond Fund's fundamental investment policy to provide that it
will maintain an average weighted maturity of one to five years.

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30 Investment Policies

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/X/ COREFUND

security in question. Securities that are unrated at the time of purchase may
only be purchased by the Fund if they are determined by CoreStates Advisers to
be of comparable quality to securities meeting the rating criteria set forth in
'Types of Securities in Which the Funds Invest.' See the 'Appendix' to the
Statement of Additional Information for a description of applicable ratings.

BOND FUND The investment objective of the Bond Fund is to seek to maximize long-
term total return by investing principally in a diversified portfolio of debt
securities. The Bond Fund will normally invest at least 80% of the value of its
total assets in debt securities of all types. Debt securities include domestic
and foreign bonds, debentures, notes, equipment lease and trust certificates,
asset-backed and mortgage-backed securities, and obligations issued or
guaranteed by the U.S. Government or its agencies or instrumentalities. In
addition, a portion of the Fund may from time to time be invested in first
mortgage loans and participation certificates in pools of mortgages issued or
guaranteed by the U.S. Government, its agencies or instrumentalities, in
preferred stocks, and in debt securities which are convertible into, or
exchangeable for, common stocks, common stock obtained upon the conversion or
exchange of such securities, and short-term money market instruments and Money
Market Funds. Some of the securities in which the Fund invests may have warrants
or options attached.

SHORT-TERM INCOME FUND The investment objective of the Short-Term Income Fund is
to seek consistent current income with relative stability of principal by
investing principally in a diversified portfolio of investment grade debt
securities. Under normal conditions, the Fund's portfolio securities will have
maximum expected or remaining maturities of three years or less. The Fund will
normally have an average dollar weighted Portfolio maturity of approximately one
year.

The Fund will invest principally in debt securities, including bonds,
debentures, notes, equipment lease and trust certificates, asset-backed and
mortgage-backed securities, and obligations issued or guaranteed by the U.S.
Government or its agencies or instrumentalities. The Fund may invest up to 35%
of its total assets in U.S. dollar denominated international debt securities for
which the primary trading market is in the United States ('Yankee Bonds').

GOVERNMENT INCOME FUND Government Income Fund invests exclusively in obligations
issued or guaranteed as to principal and interest by the agencies and
instrumentalities of the U.S. Government and repurchase agreements involving any
of such obligations. Although there are no restrictions on maturity, Government
Income Fund generally strives to maintain an average maturity of about seven
years. This Fund intends to invest at least 65% of its total assets in
instruments issued or guaranteed as to principal and interest by the agencies
and instrumentalities of the U.S. Government and mortgage-backed securities.

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Investment Policies 31

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INFORMATION ON THE FUNDS (CONTINUED)

District of Columbia and their political subdivisions, agencies,
instrumentalities and authorities, the interest on which, in the opinion of
counsel to the issuer, is exempt from federal income tax. The municipal
securities in which this Fund invests are described in 'Types of Securities in
Which the Funds Invest.'

Although CoreStates Advisers has no present intention of doing so, up to
20% of all assets in this Fund can be invested in taxable debt securities for
defensive purposes or when sufficient tax-exempt securities considered
appropriate by CoreStates Advisers are not available for purchase.

Intermediate Municipal Bond Fund will maintain an average weighted
maturity of three to ten years. However, when the investment adviser determines
that market conditions so warrant, the Fund can maintain an average weighted
maturity of less than three years. CoreStates Advisers may, at times, elect to
adjust the average maturity upwards, between seven and ten years, in order to
pick up incremental yield, while avoiding the risks associated with long-term
bonds.

This Fund will primarily purchase (i) municipal bonds rated in one of the
three highest rating categories; (ii) municipal notes rated in one of the two
highest rating categories; (iii) commercial paper rated in one of the two
highest short-term categories; or (iv) any of the foregoing determined by
CoreStates Advisers to be of comparable quality at the time of investment.
However, CoreStates Advisers has discretion to invest up to 20% of the Fund's
assets in municipal bonds rated BBB by Standard & Poor's Corporation ('S&P') or
Baa by Moody's Investors Service, Inc. ('Moody's'). See 'Description of
Ratings.'

Pennsylvania Municipal Bond Fund will invest more than 25% of its net
assets in municipal securities whose issuers are located in Pennsylvania. This
Fund may also invest up to 20% of its assets in Taxable Obligations. Taxable
Obligations may include obligations issued or guaranteed by the U.S. Government
or its agencies or instrumentalities, certificates of deposit and demand and
time deposits of domestic banks and savings and loan associations, bankers'
acceptances issued by domestic banks, commercial paper issued by U.S.
corporations (including variable amount master demand notes) meeting the Fund's
quality standards, and securities subject to Federal Alternative Minimum Tax.

Pennsylvania Municipal Bond Fund may also hold a portion of its assets in
cash. Under normal market conditions, such holdings will not exceed 1% of the
Fund's net assets. To the extent that the Fund's assets are invested in cash,
they will not be invested so as to meet such Fund's investment objective. There
are no restrictions on the average maturity of Pennsylvania Municipal Bond Fund
or the maturity of a single instrument.

Pennsylvania Municipal Bond Fund is a non-diversified investment portfolio
which means that more than 5% of its assets may be invested in each of one or
more issuers. Since a relatively high percentage of assets of the Fund may be
invested in the obligations of a limited number of issuers, the value of the
shares of the Fund may be more susceptible to any single economic, political or
regulatory

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32 Investment Policies

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/X/ COREFUND

occurrence than the shares of a diversified investment portfolio would be. The
Fund intends to satisfy the diversification requirements necessary to comply
with Subchapter M of the Internal Revenue Code of 1986, as amended (the 'Code').
In part, Subchapter M requires that, at the close of each quarter of the taxable
year, those issues which represent more than 5% of the Fund's assets be limited
in aggregate to 50% of the Fund and that no one issue exceed 25% of the Fund's
total assets.

This Fund will primarily purchase (i) municipal bonds rated in one of the
three highest rating categories; (ii) municipal notes rated in one of the two
highest rating categories; (iii) commercial paper rated in one of the two
highest short-term categories; or (iv) any of the foregoing determined by
CoreStates Advisers to be of comparable quality at the time of investment.
However, CoreStates Advisers has discretion to invest up to 20% of the Fund's
assets in municipal bonds rated BBB or better by S&P or Baa or better by
Moody's. See 'Description of Ratings.'

New Jersey Municipal Bond Fund will invest more than 25% of its net assets
in municipal securities whose issuers are located in New Jersey. This Fund may
also invest up to 20% of its assets in Taxable Obligations, as described above.

New Jersey Municipal Bond Fund may also hold a portion of its assets in
cash. Under normal market conditions, such holdings will not exceed 1% of the
Fund's net assets. To the extent that the Fund's assets are invested in cash,
they will not be invested so as to meet such Fund's investment objective. There
are no restrictions on the average maturity of New Jersey Municipal Bond Fund or
the maturity of a single instrument.

New Jersey Municipal Bond Fund is a non-diversified investment portfolio,
as described above. The Fund intends to satisfy the diversification requirements
necessary to comply with Subchapter M of the Code.

GLOBAL BOND FUND Global Bond Fund will invest, under normal circumstances, at
least 65% of its total assets in high quality fixed income securities or debt
obligations of foreign or domestic government entities, corporations or
supranational agencies. The Fund will invest in at least three supranational
agencies or countries. Supranational agencies will include, but not be limited
to, the International Bank of Reconstruction and Development, the InterAmerican
Development Bank, and the Asian Development Bank. Countries will include, but
not be limited to, Austria, Australia, Belgium, Canada, Denmark, Finland,
France, Germany, Ireland, Italy, Japan, Luxembourg, The Netherlands, New
Zealand, Norway, Spain, Sweden, Switzerland, the United Kingdom, and the United
States. Although this Fund will concentrate its investments in the developed
countries listed above, it may invest up to 5% of its assets in similar
securities or debt obligations that are denominated in the currencies of
developing countries and that are of comparable quality to such securities and
debt obligations at the time of purchase as determined by CoreStates Advisers
and

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Investment Policies 33

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INFORMATION ON THE FUNDS (CONTINUED)

the sub-adviser, Alpha Global Fixed Income Managers, Inc.

Subject to approval by shareholders, the Board of Directors has proposed
that the Global Bond Fund be classified as a 'non-diversified' investment
company so that greater than 5% of such Fund's assets may be invested in the
securities of a single issuer. As a result of foreign government securities
being subject to this diversification requirement, the Board believes that the
change to a 'non-diversified' investment company will benefit the Fund and
shareholders. Global Bond Fund will continue to be subject to the
diversification requirements of Subchapter M of the Internal Revenue Code of
1986, as amended.

Global Bond Fund will strive to take maximum advantage of financial and
economic developments and currency fluctuations. All of its investments will be
in quality securities denominated in various currencies, including the European
Currency Unit, and will be rated in one of the highest four rating categories by
a nationally recognized statistical rating agency or of comparable quality at
the time of purchase as determined by the advisers.

There are no restrictions on the average maturity of Global Bond Fund or
the maturity of any single instrument. Maturities may vary widely depending on
the advisers' assessment of interest rate trends and other economic and market
factors. In the event a security owned by Global Bond Fund is downgraded below
rating categories discussed above, the advisers will review the situation and
take appropriate action with regard to the security.

MONEY MARKET FUNDS _____________________________________________________________

Investments by money market funds such as Cash Reserve, Treasury Reserve and
Tax-Free Reserve are subject to limitations imposed under regulations adopted by
the Securities and Exchange Commission (the 'SEC'). These regulations generally
require money market funds to acquire only U.S. dollar denominated obligations
maturing in 397 days or less, although securities subject to repurchase
agreements, securities with optional and mandatory tender provisions, variable
rate demand obligations and certain other securities may bear longer maturities.
Money market funds also must maintain a dollar-weighted average portfolio
maturity of 90 days or less.

In addition, money market funds may acquire only obligations that
represent minimal credit risks and that are 'eligible securities' which means
they are (i) rated, at the time of investment, by at least two nationally
recognized statistical rating organizations (one if it is the only organization
rating such obligation) in the highest short-term rating category or, if
unrated, determined to be of comparable quality (a 'first tier security'), or
(ii) rated according to the foregoing criteria in the second highest short-term
rating category, or, if unrated, determined to be of comparable quality (a
'second tier security'). A security is not considered to be unrated if its
issuer has outstanding obligations of comparable priority and security that have
a short-term rating. CoreStates Advisers will determine that an obligation
presents minimal credit risks or that unrated instruments are of comparable
quality in accordance with guidelines established by CoreFunds' Board of
Directors. The Directors must also approve or ratify the acquisition of unrated
securities or securities rated by only one rating organization. Investments in
second tier securities are subject to the further constraints that (i) no more
than 5% of a Fund's assets may be invested in such securities in the aggregate,
and (ii) any

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investment in such securities of one issuer is limited to the greater of 1% of
the Fund's total assets or $1 million. In addition, a Fund may only invest up to
25% of its total assets in the first tier securities of a single issuer for
three business days.

CASH RESERVE Cash Reserve intends to achieve its objective by investing in a
diversified portfolio of money market instruments of the highest quality,
including a broad range of U.S. dollar-denominated government, bank, and
commercial paper obligations. By investing only in high quality money market
instruments with remaining maturities of 13 months or less, Cash Reserve strives
to capture the highest yield possible within safety, compliance, and liquidity
parameters.

TREASURY RESERVE Treasury Reserve intends to invest in direct obligations of the
U.S. Treasury, such as bills, bonds, and notes and separately traded interest
and principal component parts of such obligations that are transferable through
the Federal book-entry system known as Separately Traded Registered Investment
and Principal Securities ('STRIPS') and in repurchase agreements relating to
direct U.S. Treasury obligations.

TAX-FREE RESERVE Tax-Free Reserve invests substantially all of its assets in a
diversified portfolio consisting of short-term obligations issued by or on
behalf of states, territories and possessions of the United States, the District
of Columbia and their political subdivisions, agencies, instrumentalities and
authorities, the interest on which, in the opinion of counsel to the issuer, is
exempt from federal income tax. The municipal securities in which this Fund
invests are described in 'Types of Securities in Which the Funds Invest.' In
managing Tax-Free Reserve, the investment adviser uses a strategy that aims to
take advantage of key seasonal supply and demand factors that govern short-term
rates.

OTHER INVESTMENT PRACTICES OF THE FUNDS ________________________________________

In addition to the investments described above, the Funds may engage in a number
of additional investment practices, as discussed below:

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Investment Policies 35

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100% of the repurchase price, and securities subject to repurchase agreements
are held by CoreFunds' custodian in the Federal Reserve book-entry system.
Default by the seller could, however, expose a Fund to loss in the event of
adverse market action or delay in connection with the disposition of the
underlying securities. Repurchase agreements are considered to be loans by a
Fund under the Investment Company Act of 1940 (the 'Investment Company Act').

REVERSE REPURCHASE AGREEMENTS--All Funds
Each of the Funds may borrow funds for temporary purposes by entering into
reverse repurchase agreements. Pursuant to such agreements, a Fund would sell
portfolio securities to financial institutions such as banks and broker-dealers,
and agree to repurchase them at a mutually agreed-upon date and price. A Fund
enters into reverse repurchase agreements only to avoid otherwise selling
securities during unfavorable market conditions to meet redemptions. At the time
the Fund enters into a reverse repurchase agreement, it places in a segregated
custodial account liquid assets such as U.S. Government securities or other
liquid high-grade debt securities having a value equal to the repurchase price
(including accrued interest), and will subsequently monitor the account to
ensure that such equivalent value is maintained. Reverse repurchase agreements
involve the risk that the market value of the securities sold by a Fund may
decline below the price at which it is obligated to repurchase the securities.
Reverse repurchase agreements are considered to be borrowings by a Fund under
the Investment Company Act.

OTHER INVESTMENT COMPANIES-- All Funds
The Funds may invest in the securities of other investment companies. Such
shares will be purchased by the Funds within the limits prescribed by the
Investment Company Act. Such investments will be limited to amounts not in
excess of 5% of a Fund's total assets at the time of purchase.

PUT TRANSACTIONS--Intermediate Municipal Bond Fund, Short Intermediate Bond
Fund, Pennsylvania Municipal Bond Fund, New Jersey Municipal Bond Fund, Global
Bond Fund, Tax-Free Reserve
These Funds may purchase securities subject to a put. A 'put' feature permits a
Fund to sell a security at a fixed price prior to maturity. The underlying
municipal securities subject to a put may be sold at any time at the market
rates. However, unless the put was an integral part of the security as
originally issued, it may not be marketable or assignable; therefore, the put
would only have value to the Fund. In certain cases a premium may be paid for
put features. A premium paid will have the effect of reducing the yield
otherwise payable on the underlying security. The purpose of engaging in
transactions involving puts is to maintain flexibility and liquidity to permit
the Fund to meet redemption requests and remain as fully invested as possible in
municipal securities. These Funds will limit their put transactions to
institutions which their advisers believe present minimal credit risk.

There is no limit to the percentage of portfolio securities that each Fund
may purchase subject to a put, but the amount paid directly or indirectly for
puts which are not integral parts of the security as originally issued held in
the Fund will not exceed 1/2 of 1% of the value of the total assets of the Fund

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calculated immediately after any such put is acquired.

These Funds may purchase securities on a 'when-issued' basis. When-issued
securities are subject to settlement on a future date. The interest rate
realized on these securities is fixed as of the purchase date and no interest
accrues to the Fund before settlement. These securities are subject to market
fluctuation due to changes in market interest rates and will have the effect of
leveraging a Fund's assets. Each Fund will establish one or more segregated
accounts with the custodian and will maintain liquid assets in such accounts in
an amount at least equal to the value of its commitments to purchase when-issued
securities.

MUNICIPAL LEASE OBLIGATIONS--Intermediate Municipal Bond Fund, Pennsylvania
Municipal Bond Fund, New Jersey Municipal Bond Fund, Tax-Free Reserve
Municipal lease obligations are issued by a state or local government or
authority to acquire land and a wide variety of equipment and facilities. These
obligations typically are not fully backed by the municipality's credit, and
their interest may become taxable if the lease is assigned. If funds are not
appropriated for the following year's lease payments, the lease may terminate,
with the possibility of default on the lease obligation and significant loss to
a Fund. Certificates of participation in municipal lease obligations or
installment sales contracts entitle the holder to a proportionate interest in
the lease-purchase payments made.

FORWARD CURRENCY CONTRACTS--International Growth Fund, Global Bond Fund
International Growth Fund and Global Bond Fund may enter into forward foreign
currency exchange contracts in order to protect against uncertainty in the level
of future foreign exchange rates in the purchase and sale of investment
securities. These Funds will not enter into such contracts for speculative
purposes.
A forward foreign currency exchange contract is an obligation to purchase
or sell a specific currency at a future date, which may be any fixed number of
days from the date of the contract agreed upon by the parties, at a price set at
the time of the contract. In addition, International Growth Fund and Global Bond
Fund may be required to segregate certain assets when entering into such
contracts, in order to complete the settlement transactions in the future. The
contracts may be bought or sold in amounts up to 100% of exposure to protect a
Fund to a limited extent against adverse changes in exchange rates between
foreign currencies and the U.S. dollar. Such contracts, which protect the value
of a Fund's investment securities against a decline in the value of currency, do
not eliminate fluctuations in the underlying prices of the securities. They
simply establish an exchange rate at a future date. Also, although such
contracts tend to minimize the risk of loss due to a decline in the value of a
hedged currency, at the same time they tend to limit any potential gain

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Investment Policies 37

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INFORMATION ON THE FUNDS (CONTINUED)

that might be realized should the value of such foreign currency increase.

FUTURES CONTRACTS OR OPTIONS TRANSACTIONS--Equity, Special Equity,
International Growth Fund, Global Bond Fund
International Growth Fund and Global Bond Fund may purchase futures contracts
and may purchase, sell, and write options on securities (including puts and
calls) to a limited extent. Specifically, these Funds may purchase futures
contracts provided that not more than 5% of its total assets are acquired as a
futures contract; in addition, such Funds may purchase futures contracts or
enter into options transactions only to the extent that obligations under such
contracts or transactions represent not more than 20% of its total assets.
International Growth Fund and Global Bond Fund do not intend to use options on
futures contracts.

The Equity Fund and Special Equity Fund may also purchase put and call
options on securities for the purpose of hedging against market risks related to
its portfolio securities. These Funds may also engage in writing covered call
options as deemed appropriate by CoreStates Advisers. Each Fund may purchase put
and call options in an amount not exceeding 5% of its net assets. Under normal
conditions, it is not expected that the underlying value of portfolio securities
subject to options transactions would exceed 50% of the net assets of a Fund.

Futures contracts or options transactions may be used for several reasons:
to maintain cash reserves while remaining fully invested; to facilitate trading;
to reduce transactions costs; or to seek higher investment returns when a
futures contract is priced more attractively than the underlying equity security
or index. The Funds may not use futures contracts or options transactions to
leverage their net assets, or for speculative purposes.

For example, in order to remain fully invested in stocks while maintaining
liquidity to meet potential shareholder redemptions, the Funds may invest a
portion of their assets in futures contracts or options transactions as
applicable. Because futures contracts only require a small marginal deposit and
options contracts a small premium payment, these Funds would then be able to
maintain a cash reserve for potential redemptions, while at the same time
remaining fully exposed to markets. Also, because transaction costs of futures
and options may be lower than the costs of investing in securities directly, it
is expected that the use of futures contracts and options transactions may
reduce the total transaction costs of such Funds.

The primary risks associated with the use of futures and options are (i)
imperfect correlation between the changes in market value of the securities held
by a Fund and the prices of futures and options and (ii) possible lack of a
liquid secondary market for a futures contract and the resulting inability to
close a futures position prior to its maturity date. The risk of imperfect
correlation will be minimized by investing only in those contracts whose
behavior is expected to resemble that of a Fund's underlying securities. The
risk that these Funds will be unable to close out an outstanding futures and/or
options position will be minimized by entering into such transactions on a
national exchange with an active and liquid secondary market. In addition,
although these Funds will not use futures and/or options contracts for
speculative purposes, there is the risk that the advisers of these Funds could
be incorrect in their assessment of the direction of stock prices.

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38 Investment Policies

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ILLIQUID SECURITIES--All Funds
The Funds may invest up to 10% of their assets in illiquid securities except for
the Equity Fund, Special Equity Fund, Balanced Fund, Bond Fund, Short-Term
Income Fund, Government Income Fund, Intermediate Municipal Bond Fund,
Pennsylvania Municipal Bond Fund, New Jersey Municipal Bond Fund and Global Bond
Fund which may invest up to 15% of their assets in illiquid securities. Under
the supervision of CoreFunds' Board of Directors, each Fund's advisers determine
the liquidity of the Fund's investments. The absence of a trading market can
make it difficult to ascertain a market value for illiquid investments.
Disposing of illiquid investments may involve time-consuming negotiations and
legal expenses, and it may be difficult or impossible for a Fund to sell them
promptly at an acceptable price.

LENDING OF SECURITIES--Equity Fund, Special Equity Fund, International Growth
Fund, Bond Fund, Short-Term Income Fund, Global Bond Fund
Each of these Funds may lend their portfolio securities to qualified brokers,
dealers, banks, and other financial institutions for the purpose of realizing
additional net investment income through the receipt of interest on the loan.
Each Fund may lend portfolio securities with a value of up to 50% of its total
assets. Such loans may be terminated at any time. These Funds will receive cash,
government or government agency securities as collateral in an amount equal to
at least 100% of the current market value of the loaned securities plus accrued
interest. Cash collateral received by the Funds will be invested in short-term
debt securities.

These Funds will retain most rights of beneficial ownership including
dividends, interest or other distributions on the loaned securities. Voting
rights pass with the lending. The Funds will call loans to vote proxies if a
material issue affecting the investment is to be voted upon. Loans will be made
only to borrowers deemed by CoreStates Advisers to be of good standing.
Such loans would involve risk of delay in receiving additional collateral
in the event the value of the collateral decreased below the value of the
securities loaned, or risk of delay in recovering the securities loaned or even
loss of rights in the collateral should the borrower of the securities fail
financially.

ASSET-BACKED SECURITIES--Bond Fund, Short-Term Income Fund
These Funds will invest only in privately-issued asset-backed securities, which
are readily marketable and rated at the time of purchase in the two highest
rating categories assigned by a Rating Organization. For a description of rating
symbols see the Appendix to the Statement of Additional Information.

MORTGAGE-BACKED SECURITIES--Bond Fund, Short-Term Income Fund
These Funds will invest only in privately-issued mortgage-backed securities
which are readily marketable and rated at the time of purchase in the two
highest rating categories assigned by a Rating Organization. For a description
of rating symbols see the Appendix to the Statement of Additional Information.

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Investment Policies 39

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INFORMATION ON THE FUNDS (CONTINUED)

principal amount,' in return for payments equal to a fixed rate times the same
amount, for a specific period of time. If a swap agreement provides for payment
in different currencies, the parties might agree to exchange the notional
principal amount as well. Swaps may also depend on other prices or rates, such
as the value of an index or mortgage prepayment rates. In a typical cap or floor
agreement, one party agrees to make payments only under specified circumstances,
usually in return for payment of a fee by the other party. For example, the
buyer of an interest rate cap obtains the right to receive payments to the
extent that a specific interest rate exceeds an agreed-upon level, while the
seller of an interest rate floor is obligated to make payments to the extent
that a specified interest rate falls below an agreed-upon level. An interest
rate collar combines elements of buying a cap and selling a floor.
Swap agreements will tend to shift the Global Bond Fund's investment
exposure from one type of investment to another. For example, if this Fund
agrees to exchange payments in U.S. dollars for receipts in foreign currency,
the swap agreement would tend to increase the Fund's exposure to foreign
currency and interest rates. Caps and floors have an effect similar to buying or
writing options. Depending on how they are used, swap agreements may increase or
decrease the overall volatility of the Global Bond Fund's investments and its
share price and yield.
Swap agreements are sophisticated hedging instruments that typically
involve a small investment of cash relative to the magnitude of risks assumed.
As a result, swaps can be highly volatile and have a considerable impact on a
Fund's performance. Swap agreements are subject to risks related to the
counterparty's ability to perform, and may decline in value if the
counterparty's creditworthiness deteriorates. A Fund may also suffer losses if
it is unable to terminate outstanding swap agreements or reduce their exposure
through offsetting transactions. Any obligation Global Bond Fund may have under
these types of arrangements will be covered by setting aside high quality liquid
securities in a segregated account. Global Bond Fund will enter into swaps only
with counterparties deemed creditworthy by its advisers.

/X/
TYPES OF
SECURITIES IN
WHICH THE
FUNDS
INVEST

The various types of securities in which the Funds invest are described below.

EQUITY FUNDS ___________________________________________________________________

GROWTH EQUITY FUND
EQUITY FUND
SPECIAL EQUITY FUND
EQUITY INDEX FUND
INTERNATIONAL GROWTH FUND
The types of equity securities in which these Funds invest generally include
common stocks, preferred stocks and convertible securities.

BALANCED FUND In addition to equity securities, Balanced Fund may invest in
fixed income securities. The fixed income securities in which this Fund will
invest consist of bonds, debentures, notes and similar obligations or
instruments which constitute a security and evidence indebtedness, including
U.S. Government obligations, mortgage-backed securities and bank obligations (as
described below). Balanced Fund may also invest in corporate bonds which are
rated, at time of purchase, A or higher by S&P or Moody's.

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40 Types of Securities

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TAXABLE FIXED INCOME FUNDS _____________________________________________________

SHORT INTERMEDIATE BOND FUND
BOND FUND
SHORT-TERM INCOME FUND
The various types of securities which may be purchased by these Funds include
the following:

Zero Coupon Obligations--

The Bond Fund and Short-Term Income Fund may invest in zero coupon obligations,
which have greater price volatility than coupon obligations and which will not
result in the payment of interest until maturity, provided that immediately
after any purchase not more than 5% of the value of the net assets of the
respective Fund would be invested in such obligations.

Bank Obligations--

1. Certificates of Deposit-negotiable certificates representing a
commercial bank's obligation to repay funds deposited with it, earning specified
rates of interest over given periods.

2. Bankers' Acceptances-negotiable drafts or bills of exchange, normally
drawn by an importer or exporter to pay for specific merchandise, which are
'accepted' by a bank; meaning, in effect, that the bank unconditionally agrees
to pay the face value of the instrument upon maturity.

Each of Short Intermediate Bond Fund and Intermediate Municipal Bond Fund,
as well as Balanced Fund, will limit its purchases of bank obligations to those
of domestic branches of U.S. banks having total assets at the time of purchase
of $1 billion or more as shown on their last published financial statements at
the time of investment.

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Types of Securities 41

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INFORMATION ON THE FUNDS (CONTINUED)

of amounts due on these GNMA certificates. Each GNMA certificate evidences an
interest in a specific pool of mortgage loans insured by the Federal Housing
Administration or the Farmers Home Administration or guaranteed by the Veterans
Administration. FNMA, a federally chartered and stockholder-owned corporation,
issues pass-through certificates which are guaranteed as to principal and
interest by FNMA. FHLMC, a corporate instrumentality of the United States,
issues participation certificates which represent an interest in mortgages held
in FHLMC's portfolio. FHLMC guarantees the timely payment of interest and the
ultimate collection of principal. Securities issued or guaranteed by FNMA and
FHLMC are not backed by the full faith and credit of the United States. There
can be no assurance that the United States Government would provide financial
support to FNMA or FHLMC if necessary in the future.
Mortgage-backed securities also include collateralized mortgage
obligations ('CMOs') or real estate mortgage investment conduits ('REMICs'), a
type of CMO. CMOs or REMICs are mortgage pass-throughs issued in multiple
classes. In a CMO, a series of bonds or certificates are usually issued in
multiple classes. Each class of CMOs is issued with a specific fixed or floating
coupon rate and has a stated maturity or final distribution date. Principal
prepayments on the underlying mortgage assets may cause the CMOs to be retired
substantially earlier than their stated maturities or final distribution dates,
resulting in a loss of all or part of any premium paid. Interest typically is
paid or accrues on all classes of the CMOs on a monthly, quarterly or semiannual
basis. The principal of and interest on the underlying mortgage assets may be
allocated among the several classes of a series of a CMO in a variety of ways.
In a common structure, payments of principal, including any principal payments,
on the underlying mortgage assets are applied to the classes of the series of a
CMO in the order of their respective stated maturities or final distribution
dates, so that no payment of principal will be made on any class of CMOs until
all other classes having an earlier stated maturity or final distribution date
have been paid in full.

Asset-backed Securities--
Asset-backed securities consist of securities secured by company receivables,
truck and auto loans, leases and credit card receivables. These issues are
normally traded over-the-counter and typically have a short-intermediate
maturity structure depending on the paydown characteristics of the underlying
financial assets which are passed through to the security holder.

Corporate Securities--
Corporate securities include corporate bonds, convertible and non-convertible
debt securities, and preferred stocks, as well as commercial paper. Corporate
securities in which these Funds may invest must satisfy certain minimum ratings
at the time of purchase by Moody's or S&P. Corporate bonds must be rated A or
better by S&P or Moody's.

GOVERNMENT INCOME FUND Government Income Fund may invest in U.S. Government
obligations, mortgage-backed securities, and asset-backed securities, as defined
above.

GLOBAL BOND FUND Global Bond Fund may invest in fixed income or debt obligations
issued or guaranteed by the U.S. Government or a foreign government, or by one
of its agencies, authorities, instrumentalities or political subdivisions; fixed
income or debt obligations issued or guaranteed by

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supranational entities; and corporate securities and bank obligations, as
described above.

TAXABLE MONEY MARKET FUNDS _____________________________________________________

CASH RESERVE The various types of securities invested in by Cash Reserve include
U.S. Government obligations, bank obligations, and asset-backed securities, as
described above.
With respect to U.S. Government obligations, in addition to bills, notes
and bonds issued by U.S. government agencies, Cash Reserve may invest in STRIPS
as defined above in 'Investment Policies-Treasury Reserve.' STRIPS may be sold
as zero coupon securities, which means that they are sold at a substantial
discount and redeemed at face value at their maturity date without interim cash
payments of interest or principal. This discount is amortized over the life of
the security, and such amortization will constitute the income earned on the
security for both accounting and tax purposes. See also 'Taxes.'
With respect to bank obligations, in addition to certificates of deposit
and bankers' acceptances, Cash Reserve may invest in foreign securities and time
deposits. Time deposits are non-negotiable deposits in a banking institution
earning a specified interest rate over a given period of time. Such deposits
cannot be withdrawn before the date specified at the time of deposit.
With respect to asset-backed securities, the asset-backed securities in
which Cash Reserve invests must have final maturities of 13 months or less.
Cash Reserve may also invest in the following types of securities:

Commercial Paper--
Commercial paper are short-term promissory notes issued by corporations,
including variable amount master demand notes, having short-term ratings at the
time of purchase of 'Prime-1' by Moody's and/or 'A-1' or better by S&P.
Variable amount master demand notes in which Cash Reserve may invest are
unsecured demand notes that permit the indebtedness thereunder to vary and
provide for periodic adjustments in the interest rate according to the terms of
the instrument. The rate of interest on such notes is generally based upon the
interest rates for commercial paper issued by the master demand note issuer. The
rate will be adjusted automatically at periodic intervals which normally will
not exceed 31 days but may extend longer. Because master demand notes are direct
lending arrangements between such Fund and the issuer, they are not normally
traded. Although there is no secondary market in the notes, the Fund may demand
payment of principal and accrued interest at any time. While the notes are not
typically rated by credit rating agencies, issuers of variable amount master
demand notes (which are normally manufacturing, retail, financial, and other
business concerns) must satisfy the same criteria as set forth above for issuers
of commercial paper. CoreStates Advisers will consider the earning power, cash
flow, and other liquidity ratios of the issuers of such notes and will
continuously monitor their financial status to meet payment on demand.

Receipts--
Receipts are interests in separately traded interest and principal component
parts of U.S. Treasury obligations that are issued by

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Types of Securities 43

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INFORMATION ON THE FUNDS (CONTINUED)

banks or brokerage firms and are created by depositing U.S. Treasury obligations
into a special account at a custodian bank. The custodian holds the interest and
principal payments for the benefit of the registered owners of the certificates
or receipts. The custodian arranges for the issuance of the certificates or
receipts evidencing ownership and maintains the register. Receipts include
'Treasury Receipts' ('TR'S'), 'Treasury Investment Growth Receipts' ('TIGR'S'),
and 'Certificates of Accrual on Treasury Securities' ('CATS').

TREASURY RESERVE Treasury Reserve may invest in U.S. Treasury obligations, such
as bills, notes, and bonds, and separately traded interest and principal
component parts of such obligations, such as STRIPS. Treasury Reserve may also
invest in repurchase agreements fully collateralized by U.S. Treasury
obligations.

TAX-FREE FIXED INCOME AND MONEY MARKET FUNDS ___________________________________

INTERMEDIATE MUNICIPAL BOND FUND
PENNSYLVANIA MUNICIPAL BOND FUND
NEW JERSEY MUNICIPAL BOND FUND
TAX-FREE RESERVE These Funds will invest in municipal securities. The two
principal classifications of municipal securities which may be held by these
Funds are 'general obligation' securities and 'revenue' securities. These are
discussed below, along with other municipal securities in which these Funds may
invest.

1. General Obligation 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.

2. Revenue Securities
'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 another specific revenue source such as the user of
the facility being financed. Industrial development and pollution control bonds
held by these Funds are in most cases revenue securities and are not payable
from the unrestricted revenues of the issuer. Consequently, the credit quality
of such revenue bonds is usually directly related to the credit standing of the
corporate user of the facility involved.

3. Moral Obligation Bonds
The portfolios of these Funds may also include 'moral obligation' bonds, which
are normally issued by special-purpose public authorities. If the issuer of
moral obligation bonds 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.

4. Variable Rate Demand Obligations
Municipal securities purchased by these Funds may include 'variable rate demand
obligations,' which are tax-exempt obligations upon which interest is payable at
a floating or variable rate. While there may be no active secondary market with
respect to a particular variable rate demand obligation purchased by such Funds,
they normally may demand payment of the principal of and accrued interest on the
obligation upon not more than seven days' notice and may resell the obligation
at any time to a third party. The absence of any active secondary market,
however, could make it difficult for such Funds to dispose of a variable rate
demand obligation if the issuer defaulted on its

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44 Types of Securities

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payment obligation, and it could, for this or other reasons, suffer a loss to
the extent of the default.

5. When-Issued Securities
These Funds may purchase municipal securities on a 'when-issued' basis, as
described in 'Other Investment Practices of the Funds.' Each 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 does not intend to
purchase when-issued securities for speculative purposes, but only in
furtherance of its investment objective. Because each Fund will set aside cash
or liquid assets to satisfy its purchase commitments in the manner described,
its liquidity and ability to manage its portfolio might be affected in the event
its commitments to purchase when-issued securities should ever exceed 25% of the
value of its total assets.

PENNSYLVANIA MUNICIPAL SECURITIES
In managing the portfolios of Intermediate Municipal Bond Fund and Tax-Free
Reserve, CoreStates Advisers intends to invest, when possible, such Funds'
assets in Pennsylvania Municipal Securities, provided the investment is
consistent with the Funds' investment objectives and policies and their status
as diversified investment companies. Because of the relatively limited number of
Pennsylvania municipal issuers and the restricted supply of outstanding
municipal securities issued by them that meet the Funds' investment criteria,
CoreStates Advisers cannot predict precisely what percentage of each Fund's
portfolio will be invested in such issuers.
Except as stated above with respect to Pennsylvania Municipal Securities,
CoreStates Advisers does not intend on a regular basis to invest more than 25%
of either Fund's total assets in (i) municipal securities whose issuers are in
the same state, (ii) municipal securities, the interest on which is paid solely
from revenues of similar projects, and (iii) industrial development bonds,
although it may do so from time to time. To the extent such Funds' assets are so
concentrated, they would be subject to the peculiar risks presented by the laws
and economic conditions relating to such states, projects, and bonds to a
greater extent than it would be if its assets were not so concentrated.

AMT OBLIGATIONS
While Intermediate Municipal Bond Fund and Tax-Free Reserve are permitted to
purchase 'private activity bonds' that are subject to the Alternative Minimum
Tax (the 'AMT') imposed by Section 55 of the Code, these Funds do not currently
hold or anticipate purchasing such bonds. If they did so, however, a portion of
the dividends received would be subject to the AMT. The purchase of such bonds
by these Funds could have a material effect on the AMT liability of their
investors, and hence these Funds do not intend to invest any portion of their
assets in such bonds.
Corporate shareholders, however, should note that all exempt-interest
dividends are includable in the computation of 'adjusted current earnings' for
AMT purposes, regardless of when the bonds from which they are derived were
issued or whether they are derived from 'private activity bonds.' Accordingly,
corporate shareholders should consult their tax advisers regarding the impact
that holding shares of these Funds would have on their own AMT liability.

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Types of Securities 45

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INFORMATION ON THE FUNDS (CONTINUED)

TEMPORARY INVESTMENTS __________________________________________________________

On occasion, a Fund may be unable to achieve its investment objective due to
market conditions. Under such circumstances, a Fund is permitted to make certain
temporary investments which deviate from the investment policies described
above. Such investments may be used to invest uncommitted cash balances, to
maintain liquidity to meet shareholder redemptions, or to take a temporary
defensive position against potential or serious stock market declines. The
temporary investments the Funds are permitted to make under such circumstances
are described below.

GROWTH EQUITY FUND
EQUITY FUND
SPECIAL EQUITY FUND
EQUITY INDEX FUND
INTERNATIONAL GROWTH FUND
Although these Funds normally seek to remain fully invested in equity
securities, they may invest all or a portion of their assets temporarily in
certain short-term and fixed income vehicles, in accordance with the investment
restrictions described herein. Money market instruments, such as commercial
paper, and fixed income securities, such as bonds, must be assigned, or
determined by the advisers to be equal to, certain minimum ratings in each
category by either Moody's or S&P at the time of purchase by a Fund. Temporary
investments may include the following:

Money Market Instruments
U.S. Government Obligations
Fixed Income Securities
Repurchase Agreements

BALANCED FUND Although Balanced Fund normally seeks to remain fully invested in
a combination of equity, fixed income, and money market securities, when
CoreStates Advisers determines that market conditions warrant, it may invest up
to 100% of its assets in money market instruments, including securities issued
or guaranteed by the U.S. Government, its agencies or instrumentalities,
repurchase agreements, certificates of deposit and bankers' acceptances issued
by banks or savings and loan associations having net assets of at least $500
million as of the end of their most recent fiscal year, and commercial paper
rated, at time of purchase, in the top two categories by a national rating
agency or determined to be of comparable quality by the investment adviser at
time of purchase, and other long- and short-term debt instruments which are
rated A or higher at time of purchase, and may hold a portion of its assets in
cash reserves.

PENNSYLVANIA MUNICIPAL BOND FUND
NEW JERSEY MUNICIPAL BOND FUND
Each of these Funds may increase its investment in Taxable Obligations to over
20% of its total assets if suitable tax-exempt obligations are unavailable or
for temporary defensive purposes.

GLOBAL BOND FUND For temporary defensive purposes, when the advisers determine
that market conditions warrant, Global Bond Fund may invest up to 100% of its
assets in U.S. dollar-denominated fixed income securities or debt obligations
and the following domestic and foreign money market instruments: government
obligations, certificates of deposit, bankers' acceptances, time deposits,
commercial paper, short-term corporate debt issues and repurchase agreements.
This Fund may hold a portion of its assets in cash for liquidity purposes.

TAX-FREE RESERVE Tax-Free Reserve may hold uninvested cash reserves which do not
earn income (pending investment) during temporary defensive periods or if, in
the opinion of

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46 Types of Securities

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/X/ COREFUND

CoreStates Advisers, suitable tax-exempt obligations are unavailable. There is
no percentage limitation on the amount of assets which may be held uninvested.
In addition, such Fund may invest from time to time, to the extent consistent
with its investment objective, a portion of its assets on a temporary basis or
for temporary defensive purposes in short-term money market instruments, the
income from which is subject to federal income tax.
Temporary investments will generally not exceed 20% of the total assets of
Tax-Free Reserve except when made for temporary defensive purposes, and may
include obligations of the U.S. Government or its agencies or instrumentalities;
debt securities (including taxable commercial paper) of issuers having been
assigned, at the time of purchase, the highest short-term rating of either
Moody's or S&P; certificates of deposit or bankers' acceptances of domestic
branches of U.S. Banks with total assets at the time of purchase of $1 billion
or more; repurchase agreements with respect to such obligations; or reverse
repurchase agreements.

/X/
INVESTMENT
RESTRICTIONS

Investment policies of the Funds that are not fundamental may be changed by the
Board of Directors without shareholder approval, provided such changes are
deemed to be consistent with a Fund's objective and in the best interests of its
shareholders. However, the investment objectives of each Fund, along with the
restrictions and limitations described herein and in the Statement of Additional
Information, are fundamental and may be changed only by the affirmative vote of
a majority of the outstanding shares of such Fund. See 'Description of Shares.'
A FUND MAY NOT:
1. Make loans, except that each Fund may purchase or hold certain debt
instruments and enter into repurchase agreements, in accordance with its
policies and limitations.
2. Borrow money or issue senior securities, except that each Fund may
borrow from banks and enter into reverse repurchase agreements for temporary
purposes in amounts not to exceed 10% of the value of its total 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 its total assets at the time
of such borrowing. A Fund will not purchase any securities while its borrowings
(including reverse repurchase agreements) are outstanding.

3. Invest more than 10% of its total assets in illiquid securities,
including repurchase agreements maturing in more than seven days or the lending
of securities which provide for settlement more than seven days after notice.
This fundamental restriction does not apply to Balanced Fund, Government Income
Fund, Intermediate Municipal Bond Fund, Pennsylvania Municipal Bond Fund, New
Jersey Municipal Bond Fund, Global Bond Fund, Equity Fund, Special Equity Fund,
Bond Fund or Short-Term Income Fund. These Funds, as a matter of non-fundamental
investment policy, may invest up to 15% of their assets in illiquid securities.

4. Purchase securities of any one issuer (other than obligations issued or
guaranteed as to principal and interest by the U.S.

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Investment Restrictions 47

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INFORMATION ON THE FUNDS (CONTINUED)

Government, its agencies or instrumentalities) if, immediately after such
purchase, more than 5% of the value of the Fund's total assets would be invested
in such issuer, except that up to 25% of the value of the Fund's total assets
may be invested without regard to such 5% limitation. With respect to the Fixed
Income Funds and Cash Reserve, however, there is no limit to the percentage of
assets that may be invested in U.S. Treasury bills and notes, or other
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities. With respect to Global Bond Fund, there is no limit to the
percentage of assets that may be invested in securities issued by foreign
governments. This restriction does not apply to Pennsylvania Municipal Bond
Fund, New Jersey Municipal Bond Fund or Treasury Reserve. Subject to shareholder
approval, the Board of Directors has proposed that this restriction not apply to
the Global Bond Fund.

5. Invest 25% or more of its total assets in any one industry. For
purposes of this limitation, wholly-owned finance companies will be considered
to be in the industries of their parents if their activities are primarily
related to financing the activities of their parents, and utilities will be
divided according to their services-for example, gas, gas transmission, electric
and gas, electric, and telephone will each be considered a separate industry.
This restriction does not apply to Treasury Reserve.
With respect to Intermediate Municipal Bond Fund, Pennsylvania Municipal
Bond Fund, New Jersey Municipal Bond Fund and Tax-Free Reserve, this limitation
does not apply to investments in tax-exempt securities issued by governments or
political sub-divisions of governments.
With respect to Global Bond Fund, there is no limitation with respect to
obligations issued by the U.S. Government, foreign governments, or supranational
agencies.
With respect to Cash Reserve, there is no limitation with respect to
obligations issued or guaranteed by the U.S. Government or its
instrumentalities.

EQUITY FUNDS In addition, an Equity Fund may not purchase securities of any one
issuer (other than obligations issued or guaranteed as to principal and interest
by the U.S. Government, its agencies or instrumentalities) if, as a result
thereof, more than 10% of the voting securities of such issuer would be held by
the Fund.

TREASURY RESERVE In addition, Treasury Reserve may not purchase securities other
than direct obligations of the U.S. Treasury, such as Treasury bills and notes,
none of which may be subject to repurchase agreements.

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48 Investment Restrictions

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/X/ COREFUND

expected that the annual turnover rate for the Fixed Income Funds will not
exceed 250%.
High rates of portfolio turnover necessarily result in correspondingly
heavier brokerage and portfolio trading costs which are paid by a Fund. Trading
in fixed income securities does not generally involve the payment of brokerage
commissions, but does involve indirect transaction costs. In addition to
portfolio trading costs, higher rates of portfolio turnover may result in the
realization of capital gains. As a general rule, net gains are distributed to
shareholders and will be taxable at ordinary income tax rates, for federal
income tax purposes, regardless of long- or short-term capital gains status. See
'Distributions' and 'Taxes' for more information on taxation. The tables set
forth in 'Financial Highlights' present the Funds' historical portfolio turnover
rates.

/X/
INVESTOR
CONSIDERATIONS

INVESTMENT SUITABILITY _________________________________________________________

EQUITY FUNDS
The Equity Funds are appropriate for investors seeking long-term growth.
Historically, equities have provided significantly higher returns than fixed
income and money market instruments, yet subject the investor to greater price
fluctuation. The CoreFund Equity Funds offer a range of growth and risk
characteristics, incorporating high grade domestic and international securities.

Growth Equity Fund
Equity Fund
Special Equity Fund
These Funds are appropriate for investors who are seeking long-term income and
capital appreciation, and who do not need to earn current income from their
investments in a Fund. They are suited to those investors who are willing to
hold their investments over a long horizon in anticipation of the returns that
common stocks may provide. Because these Funds invest in equity securities,
investors should be able to tolerate fluctuations in the principal value of
their investment. Investors should be cognizant of the inherent volatility in
the stock market, and the investment risks discussed below; and understand that
all investments carry a risk factor.

Equity Index Fund
Equity Index Fund is suitable for those who want to participate in the equity
market's superior long-term performance without the near-term commitment and
risks associated with choosing a particular investment style which may or may
not be out of favor during any period of time. Investors generally can expect
returns in line with the S&P 500 Index, which is tracked closely by the Fund.

Balanced Fund
Balanced Fund is appropriate for investors who seek to capture the interest
income of bonds and the capital appreciation of stocks while reducing risk
through diversification among these securities.

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Investor Considerations 49

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INFORMATION ON THE FUNDS (CONTINUED)

Fund invests in foreign equity securities, investors should be able to tolerate
fluctuations in the principal value of their investment. Investors should be
cognizant of the unique risks of international investing, including their
exposure to currency fluctuations; and understand that all investments carry a
risk factor.

Short Intermediate Bond Fund will purchase U.S. Government and corporate
securities rated A or better and is expected to have an average maturity of no
more than five years.

Bond Fund will normally invest in domestic and foreign corporate debt
securities, U.S. government securities, mortgage-backed securities and
asset-backed securities, without limitation to the average maturity of the Fund.

Short-Term Income Fund will invest in a diversified portfolio of
investment-grade debt securities, including corporate debt securities and U.S.
government securities, having an expected or remaining maturity of three years
or less. The Fund is expected to have an average dollar-weighted maturity of
approximately one year.

Government Income Fund will invest only in obligations issued or
guaranteed by the U.S. Government and its agencies. There is no limit to the
average maturity so it is appropriate for investors who seek a higher level of
current income than that which is generally possible with money market funds,
and who can tolerate moderate fluctuations in principal value.
Intermediate Municipal Bond Fund is for investors seeking income exempt
from federal income taxes, generally investors in a high income tax bracket.
This Fund will only purchase securities rated A or better and is expected to
have an average maturity of three to ten years.
Pennsylvania Municipal Bond Fund is appropriate generally for investors
seeking an investment vehicle that offers a higher level of current income
exempt from federal income taxes and (as to Pennsylvania residents) Pennsylvania
income taxes, with low to moderate share price fluctuations.
New Jersey Municipal Bond Fund is appropriate generally for investors
seeking an investment vehicle that offers a higher level of current income
exempt from federal income taxes and (as to New Jersey residents) New Jersey
income taxes, with low to moderate share price fluctuations.
Global Bond Fund is suitable for long-term investors who are looking for
both income and capital appreciation from a portfolio of fixed income securities
denominated in U.S. and foreign currencies. Because the value of the securities
will fluctuate with changes in interest rates and relative currency values,
investors must be willing to invest their money over a longer time horizon in
anticipation of the returns afforded by a diversified portfolio of U.S. and
foreign bonds.

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50 Investor Considerations

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/X/ COREFUND

provides current interest income at competitive rates of return.
By investing in direct obligations of the U.S. Treasury, Treasury Reserve
affords an extra margin of protection for investors for whom a high degree of
safety is a primary concern. Treasury Reserve is considered to be the most
secure of the Money Market Funds. This Fund is appropriate for investors who are
seeking an investment vehicle that provides current interest income at
competitive rates of return.
Tax-Free Reserve is appropriate for conservative investors in higher-level
federal income tax brackets who may benefit from an investment that offers
current interest income that is at least 80% free of federal income taxes.
Therefore, investors contemplating the purchase of this Fund should first
consider their 'taxable equivalent yield.' This is the comparison between the
tax-exempt yield from Tax-Free Reserve and the equivalent yield from a taxable
investment, using a calculation that takes into account the investor's current
tax bracket. Tax-Free Reserve's current taxable equivalent yield may be obtained
by contacting its distributor.

INVESTMENT RISKS _______________________________________________________________

The Funds differ significantly in terms of risk. Because of the concerns listed
below, a Fund should not be considered a complete investment program. Most
investors should maintain diversified holdings of securities with different risk
characteristics-including common stocks, bonds and different types of money
market instruments. Investors may also wish to complement an investment in a
Fund with other portfolios offered by CoreFunds.

EQUITY FUNDS
The Equity Funds are subject to market risk and fund risk. Market risk is the
possibility that stock prices in general will decline over short or even
extended periods of time. Stock markets tend to be cyclical, with periods when
stock prices generally rise and periods when stock prices generally decline.
Fund risk is the possibility that a Fund's performance during a specific period
may not meet or exceed that of the stock market as a whole. Therefore, investors
should consider their holdings in equity mutual funds to be long-term
investments. In addition to the risks noted above for all equity funds, the
following equity funds are also subject to additional risks as described below.

Balanced Fund
With respect to Balanced Fund, the market value of fixed income securities bears
an inverse relationship to changes in market interest rates. Moreover, changes
by recognized rating agencies in the ratings of any fixed income security and in
the ability of an issuer to make payments of interest and principal may also
affect the market value of these securities. Each of these factors will cause
the net asset value of shares of Balanced Fund to fluctuate over time.
In addition, mortgage-backed securities are subject to prepayment of the
underlying mortgages. During periods of declining interest rates, pre-payment of
mortgages underlying these securities can be expected to accelerate. When the
mortgage-backed securities held by a Fund are prepaid, the Fund must reinvest
the proceeds in securities, the yield of which reflects prevailing interest
rates, which may be lower than the yield on the prepaid

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Investor Considerations 51

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INFORMATION ON THE FUNDS (CONTINUED)

securities. Thus, mortgage-backed securities may not be an effective means of
locking in long-term interest rates for Balanced Fund.

International Growth Fund
In addition to market and fund risk, International Growth Fund is also subject
to currency risk. Currency risk is the risk that changes in foreign exchange
rates will affect, favorably or unfavorably, the value of foreign securities
held by the Fund. In a period when the U.S. dollar generally rises against
foreign currencies, the returns on foreign stocks for U.S. investors will
usually be diminished. By contrast, in a period when the U.S. dollar generally
declines, the returns on foreign stocks will usually be enhanced. In addition,
investments in foreign stock markets can be as volatile, if not more volatile,
than investments in U.S. markets.
Investors should also recognize that investing in foreign companies
involves certain special considerations which are not typically associated with
investing in U.S. companies. Since the stocks of foreign companies are
frequently denominated in foreign currencies, and since this Fund may
temporarily hold uninvested reserves in bank deposits in foreign currencies, its
portfolio will be affected favorably or unfavorably by changes in currency rates
and in exchange control regulations, and may incur costs in connection with
conversions between various currencies. The investment policies of International
Growth Fund permit it to enter into forward foreign currency exchange contracts
in order to hedge its holdings and commitments against changes in the level of
future currency rates. Such contracts involve an obligation to purchase or sell
a specific currency at a future date at a price set at the time of the contract.
In addition, as foreign companies are not generally subject to uniform
accounting, auditing, and financial reporting standards and practices comparable
to those applicable to domestic companies, there may be less publicly available
information about certain foreign companies than about domestic companies.
Securities of some foreign companies are generally less liquid and more volatile
than securities of comparable domestic companies. There is generally less
government supervision and regulation of stock exchanges, brokers, and listed
companies than in the U.S. In addition, with respect to certain foreign
countries, there is the possibility of expropriation or confiscatory taxation,
political or social instability, or diplomatic developments which could affect
U.S. investments in those countries.
Although International Growth Fund will endeavor to achieve the most
favorable execution costs in its portfolio transactions, fixed commissions on
many foreign stock exchanges are generally higher than negotiated commissions on
U.S. exchanges. Moreover, transactions executed on foreign exchanges may be
subject to longer settlement periods than transactions executed on U.S.
exchanges. In addition, it is expected that the expenses for custodial
arrangements of the Fund's foreign securities will be somewhat greater than
typical expenses for custodial arrangements for handling U.S. securities of
equal value.
Certain foreign governments levy withholding taxes against dividend and
interest income. Although in some countries a portion of these taxes are
recoverable, the non-recovered portion of foreign withholding taxes will reduce
the income received from the companies comprising International Growth Fund's
portfolio. However, these foreign withholding taxes are not expected to have a
significant impact since this Fund's investment objective is to seek long-term
capital appreciation and any income should be considered incidental.

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52 Investor Considerations

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/X/ COREFUND

International Growth Fund attempts to reduce international investment
risks by diversifying among as many foreign economies and currencies as
possible. This includes investments in both developed and selected emerging
markets. In addition, the International Growth Fund offers its shareholders the
ability to diversify their equity investments to reduce the risk of having such
investments affected solely by political and economic events in one country.

FIXED INCOME FUNDS
Securities held by the Fixed Income Funds may be subject to several types of
investment risk, including market risk, credit risk, and call risk. With respect
to these Funds, market risk (or interest rate risk) is the potential for a
decline in the price of fixed income securities due to rising interest rates.
Market risk will be greater for longer term securities than for shorter term
securities. Credit risk is the possibility that a bond issuer will be unable to
make timely payments of either principal or interest. Call risk (or income risk)
relates to corporate bonds during periods of falling interest rates, and
involves the possibility that securities with high interest rates will be
prepaid (or 'called') by the issuer prior to maturity. Such an event would
require a Fund to invest the resulting proceeds elsewhere, at generally lower
interest rates, which would cause fluctuations in the Fund's net income.

Short Intermediate Bond Fund, Bond Fund and Short-Term Income Fund may
also be exposed to event risk, the possibility that corporate fixed income
securities held by these Funds may suffer a substantial decline in credit
quality and market value due to a corporate restructuring. Corporate
restructurings (mergers, leveraged buyouts, takeovers or similar events) are
often financed by a significant expansion of corporate debt. As a result, the
credit quality and market value of a firm's existing debt securities may decline
significantly. While event risk may be high for certain corporate securities
held by these Funds, event risk in the aggregate should be low because of the
Funds' diversified holdings.

The Bond Fund, Short-Term Income Fund and Government Income Fund may all
acquire mortgage-backed and asset-backed securities, and therefore, may be
subject to the risks associated with these securities, which are described
above.

The concentration of investments in Pennsylvania Municipal Securities by
the Pennsylvania Municipal Bond Fund raises special investment considerations.
In particular, changes in the economic condition and governmental policies of
the Commonwealth of Pennsylvania and its municipalities could adversely affect
the value of the Fund and the portfolio securities held by it. Rising medical
assistance costs, a slow rate of economic recovery, increased costs of union
contracts, rising unemployment and the potential negative impact of pending
litigation may place increased pressures on the tax resources of the
Commonwealth and its municipalities. See 'Special Risk Factors-Pennsylvania
Municipal Securities' in the Statement of Additional Information for further
discussion of the risks associated with Pennsylvania Municipal Securities.
The concentration of investments in New Jersey Municipal Securities by the
New Jersey Municipal Bond Fund raises special investment considerations that are
discussed under the caption 'Special Risk Factors-New Jersey Municipal
Securities' in the

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Investor Considerations 53

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INFORMATION ON THE FUNDS (CONTINUED)

Statement of Additional Information. In particular, changes in economic
conditions and governmental policies of the State of New Jersey and its
municipalities could adversely affect the value of the Fund and the portfolio
securities held by it.
Global Bond Fund is also subject to currency risk and other risks
associated with investing in the securities of foreign companies, as described
above with respect to International Growth Fund.

MONEY MARKET FUNDS
Securities held by Cash Reserve and Treasury Reserve may be subject, on a
limited basis, to credit risk. The credit risk of an investment portfolio is a
function of its underlying securities, and in general, securities of somewhat
lower credit quality provide correspondingly higher yields.
Securities held by Tax-Free Reserve may be subject, on a limited basis, to
several types of investment risk, including market risk (or interest rate risk),
credit risk and call risk (or income risk).

/X/
DISTRIBUTIONS

Shareholders of each Fund are entitled to dividends and distributions arising
from the net investment income and capital gains, if any, earned on investments
held by such Fund. Class Y Shares of the Money Market Funds begin earning
dividends on the business day on which the purchase order for the shares is
executed and continue to earn dividends through, and including, the day before
the redemption order for such shares is executed. Class Y Shares of the Fixed
Income Funds begin earning dividends on the business day following the day on
which the purchase order for the shares is executed and continue to earn
dividends through, and including, the day on which the redemption order for such
shares is executed.

Dividends are paid in the form of additional Class Y Shares of a Fund
unless a shareholder selects one of the following options on the Account
Application Form: Cash Dividend Option-to receive dividends in cash and capital
gains distributions in additional shares of the Fund at net asset value; All
Cash Option-to receive both dividends and capital gains distributions in cash.
In the absence of either of these selections on the Account Application Form,
each purchase of shares is made upon the condition and understanding that the
Fund's agent is automatically appointed to receive the dividends and
distributions upon all shares in the shareholder's account and to reinvest them
in full and fractional shares of the Fund at the net asset value in effect at
the close of business on the reinvestment date. Dividends and distributions are
automatically paid in cash (along with any redemption proceeds) not later than
seven business days after a shareholder closes an account with the Fund.

The dividends from Class Y Shares are normally higher than those of Class
A or Class C Shares because of the distribution and incremental transfer agent
expenses charged to Class A or Class C Shares.

The Funds maintain different dividend and capital gain distributions
policies. These are:

EQUITY FUNDS
Growth Equity Fund
Equity Fund
Special Equity Fund
Equity Index Fund
Balanced Fund
Dividends from the net investment income of each of these Funds are declared and
paid to shareholders on a quarterly basis.

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54 Distributions

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/X/ COREFUND

Distributions of any capital gains will be made at least annually.

International Growth Fund
The net investment income of this Fund is periodically declared and paid as a
dividend. Distributions of any capital gains will be made at least annually.

FIXED INCOME FUNDS
MONEY MARKET FUNDS
The net investment income of each of these Funds except Global Bond Fund is
declared daily as a dividend to its shareholders and paid monthly. Global Bond
Fund will distribute its net investment income in the form of quarterly
dividends. Capital gains distributions, if any, will be made by the Fixed Income
Funds and Money Market Funds at least annually.
If any capital gains are realized from the sale of underlying securities,
the Funds normally distribute such gains with the last dividend for the calendar
year.
In all Funds except the Money Market Funds, undistributed net investment
income is included in the Fund's net assets for the purpose of calculating net
asset value per share. Therefore, on the 'ex-dividend' date, the net asset value
per share excludes the dividend (i.e., is reduced by the per share amount of the
dividend). Dividends paid shortly after the purchase of shares by an investor,
although in effect a return of capital, are taxable as ordinary income.

/X/
TAXES

The following is only a brief summary of some of the important tax
considerations generally affecting the Funds and their shareholders. No attempt
has been made to present a detailed explanation of the federal, state or local
income tax treatment of the Funds or their shareholders, and this discussion is
not intended as a substitute for careful tax planning. Potential investors in
the Funds are urged to consult their tax advisers with specific reference to
their own tax situations.
The following summary is based on current tax laws and regulations which
may be changed by legislative, judicial or administrative action.

ALL FUNDS
Each Fund is treated as a separate entity for federal income tax purposes and is
not combined with any of CoreFunds' other portfolios. Each Fund intends to
qualify for the favorable tax treatment afforded a 'regulated investment
company' under the Code. This requires, among other things, that a Fund
distribute to its shareholders at least 90% of its net investment income.
Provided a Fund meets this 90% distribution and other requirements, it will be
relieved of federal income tax on that part of its net investment income and any
net capital gains (the excess of net long-term capital gain over net short-term
capital loss) distributed to shareholders.
Whether paid in cash or in additional shares, dividends attributable to a
Fund's net investment income (including ordinary income and net short-term
capital gains), including any dividends attributable to taxable net investment
income of Tax-Free Reserve or Intermediate Municipal Bond Fund, will be taxable
to shareholders as ordinary income. Capital gains distributions of all Funds
will be taxable as long-term capital gain, regardless of how long a shareholder
has held shares.
Dividends declared by a Fund in October, November, or December of any

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Taxes 55

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INFORMATION ON THE FUNDS (CONTINUED)

year and payable to shareholders of record on a date in such a month will be
deemed to have been paid by the Fund and received by the shareholders on
December 31 of that year, if paid by the Fund during the following January.

INTERNATIONAL GROWTH FUND
GLOBAL BOND FUND
International Growth Fund and Global Bond Fund will receive dividends and
interest paid by foreign issuers which are frequently subject to withholding
taxes by foreign governments. Provided that more than 50% of the value of the
total assets of either International Growth Fund or Global Bond Fund at the
close of any taxable year consists of equity or debt securities of foreign
corporations, such Fund may elect (for U.S. federal income tax purposes) to
treat each shareholder as having additional income equal to a proportionate
amount of such foreign taxes paid by the Fund and as having directly paid such
foreign taxes. In addition, if a Fund makes such an election, shareholders will
be treated as having directly earned a portion of the Fund's gross income from
foreign sources. The Fund will make such an election only if it deems it to be
in the best interests of its shareholders and will notify shareholders
accordingly.

TAX-FREE RESERVE
INTERMEDIATE MUNICIPAL BOND FUND
PENNSYLVANIA MUNICIPAL BOND FUND
NEW JERSEY MUNICIPAL BOND FUND
Each of these Funds expects to qualify to pay exempt-interest dividends to its
shareholders by satisfying the Code's requirement that at the close of each
quarter of its taxable year, at least 50% of the value of its total assets
consists of obligations the interest on which is exempt from regular federal
income tax. Tax-exempt interest dividends may generally be treated by such
Fund's shareholders as items of income excludible from their gross income under
the Code unless, under the circumstances applicable to the particular
shareholder, exclusion would be disallowed. Exempt-interest dividends may also
have certain collateral federal income tax consequences, including Alternative
Minimum Tax consequences.
Current federal tax law limits the types and volume of bonds qualifying
for the federal income tax exemption of interest, which may have an effect on
the ability of these Funds to purchase sufficient amounts of tax-exempt
securities to satisfy the Code's requirements for the payment of
'exempt-interest' dividends.
Interest on indebtedness incurred or continued by a shareholder in order
to purchase or carry shares of these Funds is not deductible for federal income
tax purposes. Furthermore, these Funds may not be an appropriate investment for
persons (including corporations and other business entities) who are
'substantial users' (or persons related to 'substantial users') of facilities
financed by industrial development or private activity bonds. Such persons
should consult their tax advisers before purchasing shares. A 'substantial user'
is defined generally to include 'certain persons' who regularly use in their
trade or business a part of a facility financed from the proceeds of such bonds.
Except as noted below, tax-exempt interest dividends and other
distributions paid by these Funds may be taxable to investors as dividend income
under state or local law even though a substantial portion of such distributions
may be derived from interest on tax-exempt obligations which, if received
directly, would be exempt from such income taxes.

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56 Taxes

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/X/ COREFUND

CASH RESERVE
TREASURY RESERVE
TAX-FREE RESERVE
With respect to investments in STRIPS and Receipts which are sold at original
issue discount and thus do not make periodic cash interest payments, a Fund will
be required to include as part of its current income the imputed interest on
such obligations even though the Fund has not received any interest payments on
such obligations during that period. Because each Fund distributes all of its
net investment income to its shareholders, a Fund may have to sell portfolio
securities to distribute such imputed income, which may occur at a time when the
investment adviser would not have chosen to sell such securities and which may
result in a taxable gain or loss.

PENNSYLVANIA TAX CONSIDERATIONS
For purposes of the Pennsylvania Personal Income Tax and the Philadelphia School
District Investment Net Income Tax, distributions which are attributable to
interest received by the Pennsylvania Municipal Bond Fund from its investments
in Pennsylvania Municipal Securities or in direct obligations of the United
States, its territories and certain of its agencies and instrumentalities
('Federal Securities'), including obligations issued by U.S. possessions, are
not taxable. Distributions by the Fund to a Pennsylvania resident that are
attributable to most other sources may be subject to the Pennsylvania Personal
Income Tax and (for residents of Philadelphia) to the Philadelphia School
District Investment Net Income Tax.
Shares of the Pennsylvania Municipal Bond Fund are exempt from
Pennsylvania county personal property taxes and (as to residents of Pittsburgh)
from personal property taxes imposed by the City of Pittsburgh and the School
District of Pittsburgh to the extent that the Fund's portfolio consists of
Pennsylvania Municipal Securities and Federal Securities, including obligations
issued by U.S. possessions.
To the extent that gain on the disposition of a share represents gain
realized on Pennsylvania Municipal Securities held by the Pennsylvania Municipal
Bond Fund, such gain may be subject to the Pennsylvania Personal Income Tax and
the School District Tax, except that gain realized with respect to a share held
for more than six months is not subject to the School District Tax.

NEW JERSEY TAX CONSIDERATIONS
Investors of the New Jersey Municipal Bond Fund will not be subject to the New
Jersey Gross Income Tax on distributions from the Fund attributable to interest
income from (and net gain, if any, from the disposition of) New Jersey Municipal
Securities or Federal Securities held by the Fund, either when received by the
Fund or when credited or distributed to the investors, provided that the Fund
meets the requirements for a qualified investment fund by: (i) maintaining its
registration as a registered investment company; (ii) investing at least 80% of
the aggregate principal amount of the Fund's investments, excluding cash and
cash items, in New Jersey Municipal Securities or Federal Securities; and (iii)
investing 100% of its assets in interest-bearing obligations, discount
obligations, and cash, including receivables.
For New Jersey Gross Income Tax purposes, net income or gains and
distributions derived from investments in other than New Jersey Municipal
Securities

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Taxes 57

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INFORMATION ON THE FUNDS (CONTINUED)

and Federal Securities, and distributions from net realized capital gains in
respect of such investments, will be taxable.
Gain on the disposition of shares of this Fund is not subject to New
Jersey Gross Income Tax, provided that the Fund meets the requirements for a
qualified investment fund set forth above.

BACK-UP WITHHOLDING
Generally, the Funds are required to withhold 31% of ordinary income dividends,
capital gains distributions, and redemptions paid to shareholders who have not
complied with IRS taxpayer identification regulations and in certain other
circumstances. Shareholders who are not otherwise subject to back-up withholding
may avoid this withholding requirement by certifying on the Account Application
Form their proper Social Security or Taxpayer Identification Number and
certifying that they are not subject to back-up withholding.

IN GENERAL
The sale or redemption of shares of a mutual fund is a taxable event to the
selling or redeeming shareholder. Gains or losses (if any) may also be realized
from an ordinary redemption of shares, as described herein, or on a telephone
exchange among the CoreFunds portfolios.
In the opinion of counsel, shares of the Funds are exempt from current
Pennsylvania Personal Property Taxes.
Shareholders will be advised at least annually as to the federal income
tax status of distributions made during the year. See the Statement of
Additional Information for further information regarding taxes.

/X/
VALUATION OF SHARES

NET ASSET VALUE ________________________________________________________________

EQUITY FUNDS
FIXED INCOME FUNDS
The shares of these Funds will fluctuate in value as a result of changes in the
value of their portfolio investments. Shares in the Funds will realize capital
gains or losses as portfolio investments are sold above or below costs,
respectively.
The net asset value per share of these Funds for purposes of pricing
purchase and redemption orders is normally determined as of 4:00 p.m. (Eastern
time) (the 'valuation time') on each business day of the Funds. A 'business day'
of a Fund is a day on which the New York Stock Exchange is open for trading, and
any other day (other than a day on which no shares of the Fund are tendered for
redemption and no order to purchase any shares is received) during which there
is a sufficient degree of trading in securities or instruments held by the Fund
such that the Fund's net asset value per share might be materially affected. Net
asset value per share is calculated by dividing the value of all of the Fund's
portfolio securities and other assets, less liabilities, by the number of
outstanding shares of the Fund at the time of the valuation. The result
(adjusted to the nearest cent) is the net asset value per share.

MONEY MARKET FUNDS The net asset value per share of each of these Funds for
purposes of pricing purchase and redemption orders is normally determined as of
12:00 noon (Eastern time) on each business day of the Funds. These Funds are
managed to maintain a stable price per share of $1.00.

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58 Valuation of Shares

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/X/ COREFUND

PORTFOLIO PRICING ______________________________________________________________

INTERNATIONAL GROWTH FUND
GLOBAL BOND FUND
Securities listed on a foreign exchange are valued at the most recent closing
price available before the time when assets are valued. All prices of listed
securities are taken from the exchange where the security is primarily traded.
Securities regularly traded in the over-the-counter market for which market
quotations are readily available will be valued at the current bid price.
Securities may be valued on the basis of prices provided by a pricing service
when such prices are believed to reflect the fair market value of such
securities. Other assets and securities for which no quotations are readily
available will be valued in a manner determined in good faith by the Board of
Directors to reflect their fair market value.
In addition, all assets and liabilities initially expressed in foreign
currencies will be translated into U.S. dollars at the bid price of such
currencies against U.S. dollars last quoted by a major bank or by a broker. If
such quotations are not available as of the close of the Exchange, the rate of
exchange will be determined in accordance with the policies established in good
faith by the Board of Directors.

FIXED INCOME FUNDS Portfolio securities which are traded both over-the-counter
and on a national securities exchange are valued according to the broadest and
most representative market, and it is expected that for bonds, and other fixed
income securities, this would ordinarily be the over-the-counter market.
Valuation of such securities is the currently quoted bid price on each business
day. When securities exchange valuations are used, the valuation will be the
latest sale price on such exchange on such business day or, if there is no such
reported sale, the current bid price. Short-term investments (if any) are stated
at cost, which approximates market value. Other assets and securities for which
no quotations are readily available will be valued in a manner determined in
good faith by the Board of Directors to reflect their fair market value.
Bonds and other fixed income securities may be valued on the basis of
prices provided by a pricing service when such prices are believed to reflect
the fair market value of such securities. The prices provided by a pricing
service take into account a variety of factors in determining fair market value.
Even though the market prices of intermediate-term, fixed income
securities tend to be relatively stable, the prices of such securities vary
inversely with changes in interest rates and are therefore subject to market
price fluctuations. The longer maturity a bond has, the greater the potential
for fluctuations in prices.

MONEY MARKET FUNDS The assets in the Money Market Funds are valued based upon
the amortized cost method, pursuant

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Valuation of Shares 59

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INFORMATION ON THE FUNDS (CONTINUED)

to rules promulgated under the Investment Company Act. Under this method of
valuation, the value of a Fund's shares normally will not change in response to
fluctuating interest rates. In connection with its use of this valuation method,
however, each Fund monitors the deviation between the amortized cost value of
its assets and their market value (which can be expected to vary inversely with
changes in prevailing interest rates). Although each Fund seeks, through its use
of amortized cost valuation, to maintain its net asset value per share at $1.00,
there can be no assurance that the net asset value will not vary.

/X/
MANAGEMENT

The business and affairs of each Fund are managed under the direction of
CoreFunds' Board of Directors.

INVESTMENT ADVISER,
SUB-ADVISERS ___________________________________________________________________

CoreStates Advisers has overall responsibility for portfolio management for each
of the Funds. CoreStates Advisers is a wholly-owned subsidiary of CoreStates
Bank, itself a wholly-owned subsidiary of CoreStates Corp. CoreStates Corp,
based in Philadelphia, Pennsylvania, is one of the 30 largest bank holding
companies in the United States, and leads the region in investing corporate
cash. CoreStates Corp currently has over $29 billion in assets and discretionary
management over $22 billion in customer accounts through a variety of banking
activities at over 355 domestic and foreign locations. Corestates Corp's leading
subsidiary, CoreStates Bank, currently ranks thirty-second in the management of
discretionary trust assets.
CoreStates Advisers is an adviser registered under the Investment Advisers
Act of 1940. It performs most investment management and advisory functions for
the trust departments of CoreStates Corp's banking subsidiaries, related
investment advisory, research, trading, and fund management functions, and also
provides similar services to customers unrelated to CoreStates Corp. CoreStates
Advisers currently manages discretionary and nondiscretionary client security
portfolios with a total aggregate market value of over $10 billion, for
individuals, corporations, institutions, and municipalities. CoreStates Advisers
has extensive experience in the management of money market, tax-free, fixed
income, equity, and international investments. CoreStates Advisers has principal
offices at 1500 Market Street, P.O. Box 7558, Philadelphia, PA 19102.

In October 1995, CoreStates Corp announced its intention to acquire
Meridian Bancorp. Pursuant to this proposed acquisition, CoreFunds has entered
into an agreement with Conestoga Funds (Meridian's mutual fund family) for the
purpose of acquiring the Conestoga Fund portfolios for addition to the CoreFunds
family of mutual funds. CoreStates Corp is expected to have total assets of
approximately $45 billion after the proposed acquisition with discretionary
management over $ billion in customer accounts. CoreStates Advisers is
expected to have over $22 billion in assets under management with over $3.7
billion consisting of the combined CoreFunds accounts after the acquisition. As
a result of the proposed acquisition by CoreStates Corp, a 'change of control'
of CoreStates Advisers will occur as defined in the 1940 Act, and therefore,
shareholders of the Funds will be asked to approve new advisory agreements with
CoreStates Advisers as well as sub-advisory

- ----
60 Management

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/X/ COREFUND

agreements with all existing sub-advisers to the Funds.

As investment adviser, CoreStates Advisers manages the investment
portfolio of each Fund, makes decisions with respect to and places orders for
all purchases and sales of a Fund's portfolio securities, and maintains certain
records relating to such purchases and sales. CoreStates Advisers pays all
expenses incurred by it in connection with its investment advisory activities,
other than the cost of securities (including any brokerage commissions)
purchased for the Funds and the cost of obtaining market quotations for
portfolio securities held by the Funds.

CoreStates Advisers has delegated some of its portfolio management
functions with respect to Equity Fund to Cashman Farrell and Associates
('Cashman Farrell'), although CoreStates Advisers expects to terminate Cashman,
Farrell shortly after the date hereof and act as the sole investment Adviser for
the Equity Fund. CoreStates Advisers has also delegated certain portfolio
management functions, with respect to International Growth Fund to Martin
Currie, Inc. ('Martin Currie'), and with respect to Global Bond Fund to Alpha
Global Fixed Income Managers, Inc. ('Alpha Global') pursuant to separate
Sub-Advisory Agreements between CoreStates Advisers and each of Martin Currie
and Alpha Global.

In December 1995, CoreStates Advisers informed the Board that a
multi-adviser structure with respect to the International Growth Fund is
preferable as regards the existing structure and is in the best interest of the
Fund. Accordingly, the Board determined that the multi-adviser structure is in
the best interest of the Fund and its shareholders. The Board further determined
that it is in the best interest of the Fund to retain Martin Currie and add
Aberdeen Fund Managers, Inc. ('Aberdeen Managers') as a second investment
sub-adviser for the International Growth Fund, with the allocation of Fund
assets to each investment sub-adviser determined by the Board. Shareholders have
been asked to approve the establishment of the multi-adviser structure for the
International Growth Fund at a Special Shareholders Meeting.

Martin Currie, a New York corporation located in Edinburgh, Scotland, is a
wholly-owned subsidiary of Martin Currie, Ltd., which is wholly-owned by its
full-time working executives and is one of Scotland's largest independent
investment management groups. Martin Currie was founded in order to provide
foreign investment advisory services to U.S. funds seeking diversification into
international markets. Although Martin Currie has had extensive experience in
managing a variety of international equity investment companies, International
Growth Fund is the first U.S. registered investment company for which Martin
Currie has acted in an investment advisory capacity. Martin Currie has principal
offices at Saltire Court, 20 Castle Terrace, Edinburgh EH 2ES, Scotland.

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Management 61

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INFORMATION ON THE FUNDS (CONTINUED)

extensive experience in managing a variety of international equity investment
companies, International Growth Fund is the first U.S. registered investment
company for which Aberdeen Managers has acted in an investment advisory
capacity. Aberdeen Managers is located at Nations Bank Tower, 22nd Floor, Ft.
Lauderdale, Florida 33396.

Alpha Global is a specialist manager of fixed income securities and cash
for institutional investors. Based in London, England, it is a wholly-owned
subsidiary of United Asset Management Corporation of Boston, Massachusetts,
whose assets under management currently exceed $130 billion. Alpha Global is a
member of the Investment Management Regulatory Organization, one of the
regulatory bodies approved by the U.K. Government, and its activities are
regulated accordingly. Alpha Global is located at 25/28 Old Burlington Street,
London WIX 1LB, England.

As sub-advisers to International Growth Fund and Global Bond Fund, Martin
Currie and Aberdeen Managers, and Alpha Global manage the investment portfolio
of their respective Funds, make decisions with respect to and place orders for
the majority of the purchases and sales of such Fund's portfolio securities, and
maintain certain records relating to such purchases and sales. Martin Currie and
Aberdeen Managers, and Alpha Global pay all expenses incurred by them in
connection with their sub-advisory activities, other than the cost of securities
(including any brokerage commissions) purchased for a Fund and the cost of
obtaining market quotations for portfolio securities held by a Fund.

ADVISORY FEES
For the services provided and expenses assumed as investment adviser of each
Fund, CoreStates Advisers is entitled to receive an annual fee from each of the
Funds, computed daily and paid monthly, at the annual rate of .40% of the
average daily net assets of Equity Index Fund; .74% of the average daily net
assets of Equity Fund; .75% of the average daily net assets of Growth Equity
Fund; .80% of the average daily net assets of International Growth Fund; 1.50%
of the average daily net assets of Special Equity Fund; .70% of the average
daily net assets of Balanced Fund; .74% of the average daily net assets of the
Bond Fund and the Short-Term Income Fund, respectively; .60% of the average
daily net assets of Global Bond Fund; and .50% of the average daily net assets
of Short Intermediate Bond Fund, Intermediate Municipal Bond Fund, Government
Income Fund, Pennsylvania Municipal Bond Fund, New Jersey Municipal Bond Fund,
Treasury Reserve, Cash Reserve, and Tax-Free Reserve, respectively. CoreStates
Advisers may, from time to time and at its discretion, voluntarily waive all or
a portion of its investment advisory fees in order to assist the Funds in
maintaining competitive expense ratios.

For the services provided as sub-advisers to the International Growth
Fund, Martin Currie and Aberdeen Managers are entitled to receive a fee from
CoreStates Advisers, computed daily and paid monthly, at the annual rate of .50%
and .50%, respectively, of such Fund's average net assets. For the services
provided as Global Bond Fund's sub-adviser, Alpha Global is entitled to receive
a fee from CoreStates Advisers, computed daily and paid monthly, at the annual
rate of .30% of such Fund's average net assets.

FUND MANAGERS __________________________________________________________________

The following individuals are primarily responsible for managing the investment
portfolios of the Funds:

GROWTH EQUITY FUND Timothy R. Stives, a Managing Director and Senior Vice
President

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62 Management

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/X/ COREFUND

of CoreStates Advisers, manages Growth Equity Fund. Prior to joining CoreStates
Advisers, Mr. Stives was Vice President of Chancellor Capital Management. Prior
to joining Chancellor, he was a securities analyst and portfolio manager with
CitiCorp. Mr. Stives has been managing growth stock portfolios, including
corporate and public pension fund portfolios, since 1988. Mr. Stives holds an
M.B.A from Rutgers University and a B.A. from Pennsylvania State University.

EQUITY AND SPECIAL EQUITY FUNDS Joseph E. Stocke, CFA, is a ______________ of
CoreStates Advisers and manages the Equity and Special Equity Funds. Previously,
he was a Senior Vice President and Senior Equity Manager with Meridian
Investment Company. Mr. Stocke had been with Meridian Investment Company (or a
predecessor) since 1983. Mr. Stocke began his investment career in 1982 and
obtained his B.S. in Economics attending The Wharton School, and University of
Pennsylvania and completed graduate courses at New York University. Mr. Stocke
has been part of Meridian's Equity Unit Committee overseeing the Equity Fund and
the Special Equity Fund since their inception.

EQUITY INDEX FUND Lary Aasheim, C.F.A., a Vice President of CoreStates Advisers,
is portfolio manager of Equity Index Fund. In addition, he is a securities
analyst with responsibility for the technology and telecommunications equipment
industries, paper, forest products and building material industries. Prior to
joining CoreStates Advisers in 1990, Mr. Aasheim worked as an analyst at First
Fidelity Bank/Fidelity Bank, First Pennsylvania Bank and Bear Stearns in New
York. He received his B.S. degree in Economics from The Wharton School,
University of Pennsylvania. He also has earned his CFA from the Institute of
Chartered Financial Analysts.

INTERNATIONAL GROWTH FUND Michael J. Gibson, Director of Client Services for
Martin Currie, is the lead director of an investment team responsible for
managing International Growth Fund. Mr. Gibson has 21 years experience of
portfolio investment in international stock markets. A graduate of the
University of Oxford, England, he spent seven years as an investment manager
with British Investment Trust in Edinburgh and a further four years with The
Bank of Scotland in the same capacity. He joined Martin Currie in 1983 where he
worked initially in the North American investment team and was then made
responsible for the firm's investments in Continental Europe. He became Director
of Client Services in 1992.

_____________, Director of Aberdeen Managers, is the lead director of an
investment team responsible for managing International Growth Fund.

BALANCED FUND Paul Kuper, a Vice President of CoreStates Advisers, is portfolio
manager of the Balanced Fund. Mr. Kuper has managed some of CoreStates Bank's
largest pension, personal and charitable accounts, including the taxable equity
and balanced commingled funds. He has served on the Investment Policy and
Portfolio Review Committees, and was formerly director of the Investment
Research Division. Prior to joining CoreStates Advisers, he was an Executive
Vice President of Centre Square Investment Group and spent 14 years with First
Pennsylvania Bank as a divisional vice-president of the Balanced Portfolio
Management Division. Mr. Kuper has an

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Management 63

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INFORMATION ON THE FUNDS (CONTINUED)

M.B.A. in finance from Northwestern University and a B.S. in economics from the
Wharton School of Finance of the University of Pennsylvania.

SHORT INTERMEDIATE BOND FUND
GOVERNMENT INCOME FUND
William T. Lawrence, a Vice President of CoreStates Advisers, is portfolio
manager for Short Intermediate Bond Fund and Government Income Fund. Mr.
Lawrence is also involved in specialized fixed income products including the GIC
and Mortgage Backed Securities. Prior to joining CoreStates Advisers, he was
Vice President, Fixed Income Sales for First Boston Corp. He has an M.B.A. in
Finance from the Wharton School and a B.A. in Economics and English from
Bucknell University.

BOND FUND Leslie M. Varrelman is a _________________ of CoreStates Advisers. She
formerly was a Vice President and Fixed Income Manager with Meridian Investment
Company, since January 1994. Prior to her position with Meridian, Ms. Varrelman
was Vice President of CoreStates Investment Advisers where she managed the
commingled fixed income funds and managed the Limited Maturity Products area.
Ms. Varrelman obtained her B.S. in Business Administration from Juniata College
in 1981. Ms. Varrelman is directly responsible for management of the Bond Fund.

SHORT-TERM INCOME FUND Cathy L. Rahab is a ______________ of CoreStates
Advisers. She formerly was an Assistant Vice President and Portfolio Manager
with Meridian Investment Company. Ms. Rahab began her investment career in 1986
and obtained her B.S. in Business Administration from Villanova University. Ms.
Rahab joined the Fixed Income Unit in July of 1994. Ms. Rahab is directly
responsible for management of the Short-Term Income Fund.

INTERMEDIATE MUNICIPAL BOND FUND
PENNSYLVANIA MUNICIPAL BOND FUND
NEW JERSEY MUNICIPAL BOND FUND
Joseph R. Baxter manages these Funds. Mr. Baxter, a Vice President of CoreStates
Advisers, is head of the Tax-Advantaged unit at CoreStates Advisers. He is
directly responsible for management of the CoreStates Pennsylvania Tax Exempt
Common Trust Fund. Mr. Baxter graduated from LaSalle University with a Bachelor
of Science Degree majoring in Finance and Marketing. In June 1980, he joined a
stock brokerage firm, Elkins & Co., in an operations capacity and came to
Philadelphia National Bank in May 1982 as an operations supervisor. In October
1984, he joined the Investment Management Division as a corporate cash manager
and in 1986 assumed responsibility for the tax exempt common trust funds.

GLOBAL BOND FUND George McNeill, President and Chief Executive Officer of Alpha
Global, is portfolio manager for Global Bond Fund. Together with United Asset
Management Corporation of Boston, Mr. McNeill founded Alpha Global and has
overall responsibility for its operations. After graduating from Edinburgh
University with degrees in Political Economy and Economic History, he joined the
investment department of Scottish Equitable Life Assurance Society. He then
joined Wallace Brothers Bank where he spent nine years, including seven years as
a Director with principal responsibility for the bank's fixed income
investments. Since 1977, he has worked as Managing Director of the investment
management operating company of Gillett Brothers, and for eight years as
Managing Director of Reserve Asset Managers, a specialist fixed income manager.
In 1989 Mr. McNeill joined Axe-Houghton, Ltd., the London subsidiary of USF&G
Corporation, as Director and Chairman of the Investment Strategy Committee.

- ----
64 Management

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/X/ COREFUND

CASH RESERVE Rosemary B. Crowley, a Senior Investment Officer of CoreStates
Advisers, is responsible for managing Cash Reserve. Ms. Crowley also manages the
CoreStates Liquidity Fund, as well as individually managed fixed income
portfolios. She is pursuing a Bachelor's Degree at the Wharton Evening School,
University of Pennsylvania. Ms. Crowley joined the Philadelphia National Bank in
1980 in the Institutional Sales Department and in 1981 transferred to the
Investment Management Division.

TREASURY RESERVE Ronald R. Brasten, a Senior Investment Officer of CoreStates
Advisers, manages Treasury Reserve. He also manages the CoreFund Fiduciary
Treasury Reserve and has investment responsibility for individually managed
corporate and personal accounts. After receiving his B.S. in Accounting from
Drexel University, Mr. Brasten joined the Financial Division of CoreStates in
1984. In 1986, he transferred to the Asset and Liability group as an ALCO
analyst. Mr. Brasten joined CoreStates Advisers in August 1989.

TAX-FREE RESERVE Folu Abiona, Senior Investment Officer, is portfolio manager of
the Tax-Free Reserve portfolio. Ms. Abiona also manages the Fiduciary Tax-Free
Reserve portfolio. She joined CoreStates Advisers in 1985 and became fixed
income portfolio manager in 1990. Prior to that, she was a mutual fund
administrator with CoreStates' Institutional Custody Division. She holds an
M.B.A. from Temple University and B.Sc. from the University of Ife, Nigeria.

ADMINISTRATOR __________________________________________________________________

SEI Financial Management Corporation ('SFMC' or the 'Administrator'), with
principal offices at 680 East Swedesford Road, Wayne, PA 19087, acts as each
Fund's administrator. For its administrative services, SFMC is entitled to
receive a fee from each Fund, computed daily and paid monthly, at the annual
rate of .25% of such Fund's average daily net assets. As Administrator, SFMC
generally assists in the Funds' administration and operations. State Street Bank
and Trust Company located at 225 Franklin Street, Boston, MA 02110, serves as
each Fund's transfer agent (the 'Transfer Agent') and dividend paying agent.

DISTRIBUTOR ____________________________________________________________________

SEI Financial Services Company ('SFS' or the 'Distributor'), with principal
offices at 680 East Swedesford Road, Wayne, PA 19087, serves as each Fund's
distributor pursuant to a Distribution Agreement which applies to Class Y, Class
A and Class C Shares. Class A and Class C Shares are also subject to a separate
distribution plan (the 'Distribution Plan') approved by the Board of Directors
on April 13, 1992. The Distribution Plan provides that CoreFunds will pay the
Distributor an annual fee, calculated on an average daily net basis and paid
monthly, of up to .25% of the average daily net assets of Class A or Class C
Shares of each Fund. The Distributor may use this fee as compensation for its
distribution-related services or to compensate Participating Broker/Dealers and
Shareholder Servicing Agents for performing distribution-related or shareholder
services.

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Management 65

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INFORMATION ON THE FUNDS (CONTINUED)

customer account cash balances; providing periodic statements to customers;
arranging for bank wires; answering routine customer inquiries concerning their
investments; assisting customers in changing dividend options, account
designations and addresses; performing sub-accounting functions; processing
dividend payments on behalf of customers; forwarding certain shareholder
communications from the Funds to customers; and providing other similar
services.

Persons selling Class A or Class C Shares will receive different
compensation with respect to Class A or Class C Shares than Class Y Shares.

EXPENSES The Funds' expenses are accrued daily and are deducted from total
income before dividends are paid. Except as noted herein and in the Statement of
Additional Information, the Funds' service contractors bear all expenses
incurred in connection with the performance of their services on behalf of the
Funds. Similarly, the Funds bear the expenses incurred in their operations.

GLASS-STEAGALL ACT CoreStates Corp and its banking subsidiaries are permitted to
perform the services contemplated by the investment advisory agreements with the
Funds and to engage in certain activities in connection with the investment of
their customer accounts in Series A Shares of the Funds without violating the
federal banking law commonly referred to as the Glass-Steagall Act, or other
applicable banking laws or regulations. Future changes to any of these laws or
regulations or administrative or judicial interpretations of such laws or
regulations, however, could prevent or restrict CoreStates Corp (and its banking
subsidiaries) from performing such services. If CoreStates Advisers was thereby
prohibited from serving as investment adviser to the Funds, the Board of
Directors would promptly seek to retain another qualified investment adviser for
the Funds.
In addition, certain state securities laws may require banks and other
institutional investors purchasing shares on behalf of their customers in such
states to register as dealers pursuant to state law.

/X/
PERFORMANCE
INFORMATION

TOTAL RETURN AND YIELD _________________________________________________________

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66 Performance Information

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/X/ COREFUND

be stated in the advertisement). This income is then 'annualized.' That is, the
amount of income generated by the investment during that month is assumed to be
generated each month over a 12-month 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 the Fund is assumed to be reinvested. The
'effective yield' will be slightly higher than the 'yield' because of the
compounding effect of this assumed reinvestment. See 'Yields' in the Statement
of Additional Information.
Intermediate Municipal Bond Fund, Pennsylvania Municipal Bond Fund, New
Jersey Municipal Bond Fund and Tax-Free Reserve may also advertise their
'taxable equivalent yield,' which is calculated by taking into account the
investor's current tax bracket. This is the yield an investor would need to earn
from a taxable investment in order to realize an 'after-tax' benefit equal to
the tax-free yield provided by the Fund.
IN GENERAL _____________________________________________________________________

With the exception of Equity Index Fund, the Funds will include performance data
for Class Y and Class A or Class C, as appropriate, in any advertisement or
information including performance data of the Funds. Total return and
performance data concerning Class A Shares will reflect the sales charge and
distribution and incremental transfer agent expenses borne exclusively by Class
A Shares. Total return and performance data concerning Class C Shares will
reflect the distribution and incremental of transfer agent expenses borne
exclusively by Class C Shares.

The performance of any investment will generally reflect market
conditions, portfolio quality and maturity, type of investment, and operating
expenses. Each Fund's performance will fluctuate and is not necessarily
representative of future results. A Fund's performance would be favorably
affected by any investment advisory fee waivers on the part of CoreStates
Advisers. Shareholders will receive unaudited semi-annual reports describing the
Funds' investment operations and annual financial statements audited by
independent auditors.

EXPENSE RATIOS OF INTERNATIONAL GROWTH FUND AND GLOBAL BOND FUND Investors
should understand that the expense ratios of International Growth Fund and
Global Bond Fund can be expected to be higher than the expense ratios of funds
that invest only in domestic securities, since the cost of maintaining the
custody of foreign securities and the rate of advisory fees relating to foreign
portfolios are generally higher.

/X/
HOW TO
PURCHASE
AND REDEEM
SHARES

PURCHASE OF SHARES _____________________________________________________________

Institutional investors may acquire Class Y Shares of a Fund for their own
account or as a record owner on behalf of fiduciary, agency, or custody accounts
by placing orders with the Distributor. Purchases may be made on any business
day of the Fund at the net asset value per share (see 'Valuation of Shares')
next determined after

----
How to Purchase and Redeem Shares 67

<PAGE>
- --------------------------------------------------------------------------------
INFORMATION ON THE FUNDS (CONTINUED)

receipt by the Fund of an order to purchase shares. Shares of the Funds are
offered only to residents of states in which the shares are eligible for
purchase.
An order received before the valuation time on any business day will be
executed on the date of receipt at the net asset value determined as of the
valuation time on such date so long as federal funds are transmitted or
delivered to the Fund's custodian by close of business on the next business day
(or, in the case of the Money Market Funds, by the close of business on the same
business day). An order received after the valuation time on any business day
will be executed on the next business day of the Fund at the net asset value
determined on such date.
Funds should be wired to CORESTATES PHIL, Philadelphia, PA ABA #031000011,
for credit to COREFUNDS-A/C #0169-0541. The wire instructions must also include
the account number. Before wiring any funds however, an investor must call SEI
Financial Management Corporation at 1-800-355-CORE in order to confirm the wire
instructions for the Transfer Agent, State Street Bank and Trust Company. An
order to purchase shares by federal funds wire will be deemed to have been
received by a Fund on the business day that investors notify SEI Financial
Management Corporation by 12:00 p.m. (Eastern time) of their intentions to wire
money provided that federal funds are received by the custodian on the following
business day.
The minimum investment amount is $1,000,000 for the initial purchase of
shares by an investor which amount may be waived at the discretion of the
Distributor. However, the minimum initial investment amount for retail investors
investing in Equity Index Fund (primarily through IRAs) is $500. There is no
minimum for subsequent investments.
The Funds reserve the right to reject any order for the purchase of their
shares in whole or in part.
Every shareholder of record will receive a confirmation of each new share
transaction with a Fund, which will also show the total number of shares being
held in safekeeping by the Transfer Agent for the account of the shareholder.
Shareholders may rely on these statements in lieu of certificates. Certificates
representing shares of the Funds will not be issued.
Beneficial ownership of shares held of record by institutional investors
on behalf of their customers will be recorded by the institutions and reflected
in the regular account statements provided by them to their customers.

REDEMPTION OF SHARES ___________________________________________________________

Class Y Shares may ordinarily be redeemed in accordance with the procedures
described below.

With respect to shares held by institutional investors on behalf of their
customer accounts, all or part of the shares beneficially owned by a customer
may be redeemed in accordance with instructions and limitations pertaining to
their account at the institution.

Shareholders who desire to redeem Class Y Shares of a Fund must place
their redemption orders with SEI Financial Management Corporation for the
Transfer Agent, State Street Bank and Trust Company, prior to 4:00 p.m. (Eastern
Time) on any business day (12:00 p.m. for the Money Market Funds). Payment will
be made the next business day after proper receipt by the Transfer Agent by
transfer of federal funds. Otherwise, the redemption order will be effective the
next business day.

The Funds intend to pay cash for all shares redeemed but under abnormal

- ----
68 How to Purchase and Redeem Shares

<PAGE>
- --------------------------------------------------------------------------------
/X/ COREFUND

conditions which make payment in cash unwise, the Funds may make payment wholly
or partly in portfolio securities at their then market value equal to the
redemption price. In such cases, a shareholder may incur brokerage costs in
converting such securities to cash.

/X/
DESCRIPTION
OF SHARES

CoreFunds has set up Class Y Shares representing the following portfolios:
Growth Equity, Equity, Special Equity, International Growth, Balanced, Short
Intermediate Bond, Bond, Short-Term Income, Government Income, Intermediate
Municipal Bond, Pennsylvania Municipal Bond, New Jersey Municipal Bond and
Global Bond. CoreFunds offers two classes of shares of each portfolio except for
Equity Index Fund, CoreFund Elite Cash Reserve, CoreFund Elite Government
Reserve, CoreFund Elite Treasury Reserve, Fiduciary Reserve, Fiduciary Tax-Free
Reserve, and Fiduciary Treasury Reserve. In total, CoreFunds presently offers
shares in twenty-three different portfolios. CoreFunds may in the future create
one or more additional portfolios, or one or more Classes A and C Shares --
Individual classes of shares within a portfolio and shares of CoreFund Elite
Cash Reserve, CoreFund Elite Government Reserve, CoreFund Elite Treasury
Reserve, Fiduciary Reserve, Fiduciary Treasury Reserve, and Fiduciary Tax-Free
Reserve, are offered in separate prospectuses. This Prospectus solely relates to
the Class Y Shares -- Institutional Prospectus.

Class A Shares differ from Class Y Shares in that Class A Shares are
subject to a sales load and distribution and transfer agent expenses for certain
additional shareholder services they receive. Class C Shares also differ from
Class Y Shares in that Class C Shares are subject to distribution and transfer
agent expenses for certain additional shareholder services, but unlike Class A
Shares, are not subject to a sales load. Class A and Class C Shares also have
voting rights which Class Y Shares do not, in connection with the Distribution
Plan affecting Class A or Class C Shares. In addition, the distribution and
transfer agent expenses charged to Class A and Class C Shares result in Class A
and Class C Shares having different dividends and performance results from Class
Y Shares. In addition, the minimum initial investment for Class Y Shares is
substantially higher than that required for Class A and Class C Shares.

THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION INCORPORATED
HEREIN RELATE PRIMARILY TO SERIES A SHARES OF THE FUNDS AND SHARES OF EQUITY
INDEX FUND AND DESCRIBE ONLY THE INVESTMENT OBJECTIVE AND POLICIES, OPERATIONS,
CONTRACTS, AND OTHER MATTERS RELATING TO SUCH SHARES. INVESTORS WISHING TO
OBTAIN SIMILAR INFORMATION REGARDING OTHER COREFUNDS PORTFOLIOS MAY OBTAIN
PROSPECTUSES DESCRIBING SUCH PORTFOLIOS BY CONTACTING THE DISTRIBUTOR AT
1-800-355-CORE.

Except for differences between classes of shares of CoreFunds' portfolios
pertaining to distribution costs, incremental transfer agency fees and any other
incremental expenses identified that should be properly allocated to a class,
each share in each Fund represents an equal proportionate interest in that Fund
with each other share of the same Fund and is entitled to such dividends

----
Description of Shares 69

<PAGE>
- --------------------------------------------------------------------------------
INFORMATION ON THE FUNDS (CONTINUED) /X/ COREFUND

and distributions out of the income earned on the assets belonging to such Fund
as are declared in the discretion of the Board of Directors.

CoreFunds' shareholders are entitled to one vote for each full share held,
and fractional votes for fractional shares held, and will vote in the aggregate
and not by portfolio or class except as otherwise expressly required by law or
when the Board of Directors determines that the matter to be voted upon affects
only the interests of the shareholders of a particular portfolio or class. See
the Statement of Additional Information under 'Description of Shares' for
examples where the Investment Company Act requires voting by portfolio or class.
Voting rights are not cumulative and, accordingly, the holders of more than 50%
of the aggregate number of shares of all of the Funds may elect all of the
directors if they choose to do so and, in such event, the holders of the
remaining shares would not be able to elect any person or persons to the Board
of Directors.

As used in this Prospectus, a 'vote of a majority of the outstanding
shares' of a Fund means the affirmative vote of the lesser of (a) more than 50%
of the outstanding shares of a Fund, or (b) at least 67% of the shares of a Fund
present at a meeting at which the holders of more than 50% of the outstanding
shares of such Fund are represented in person or by proxy.

/X/
GENERAL
INFORMATION

In accordance with the Maryland General Corporation Law, CoreFunds is not
required to hold annual meetings of shareholders unless the Investment Company
Act requires the shareholders to elect members of the Board of Directors.
However, a meeting of shareholders may be called for any purpose upon the
written request of the holders of at least 10% of the outstanding shares of
CoreFunds, or of a Fund with respect to matters affecting only such Fund.
As used in this Prospectus, 'assets belonging to the Fund' means the
consideration received by CoreFunds upon the issuance or sale of shares in a
Fund, together with all income, earnings, profits and proceeds derived from the
investment thereof, including any proceeds from the sale, exchange or
liquidation of such investments, and any funds or payments derived from any
reinvestment of such proceeds, and a portion of any general assets of CoreFunds
not belonging to that Fund or CoreFunds' other portfolios. Assets belonging to a
Fund are charged with the direct liabilities in respect of that Fund and with a
share of the general liabilities of CoreFunds allocated in proportion to the
relative asset values of each of CoreFunds' portfolios at the time the expense
or liability is incurred. The management of CoreFunds makes determinations with
respect to a Fund as to liabilities when they are incurred and as to assets when
they are acquired. Such determinations are reviewed and approved annually by the
Board of Directors and are conclusive.

/X/
DESCRIPTION
OF RATINGS

DESCRIPTION OF MUNICIPAL AND
CORPORATE BOND RATINGS _________________________________________________________

- ----
70 Description of Ratings

<PAGE>
- --------------------------------------------------------------------------------
/X/ COREFUND

Debt rated A by S&P has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.
Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
Bonds which are rated Aaa by Moody's 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 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. Bonds rated Aa by
Moody's are judged by Moody's to be of high quality by all standards. Together
with bonds rated Aaa, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of 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.
Bonds which are rated A by Moody's 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.
Bonds which are rated Baa by Moody's 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 of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Bonds rated AAA by Fitch are judged by Fitch to be strictly high grade,
broadly marketable, suitable for investment by trustees and fiduciary
institutions liable to only slight market fluctuation other than through changes
in the money rate. The prime feature of an AAA bond is a showing of earnings
several times or many times interest requirements, with such stability of
applicable earnings that safety is beyond reasonable question whatever changes
occur in conditions. Bonds rated AA by Fitch are judged by Fitch to be of safety
virtually beyond question and are readily salable, whose merits are not unlike
those of the AAA class, but whose margin of safety is less strikingly broad. The
issue may be the obligation of a small company, strongly secured but influenced
as to rating by the lesser financial power of the enterprise and more local type
market.
Bonds rated Duff-1 are judged by Duff to be of the highest credit quality
with negligible risk factors, only slightly more than U.S. Treasury debt. Bonds
rated Duff-2, 3 and 4 are judged by Duff to be of high credit quality with
strong protection factors. Risk is modest but may vary slightly from time to
time because of economic conditions.

----
Description of Ratings 71

<PAGE>
- --------------------------------------------------------------------------------
INFORMATION ON THE FUNDS (CONTINUED) /X/ COREFUND

Obligations rated AAA by IBCA have the lowest expectation of investment
risk. Capacity for timely repayment of principal and interest is substantial,
such that adverse changes in business, economic or financial conditions are
unlikely to increase investment risk significantly. Obligations for which there
is a very low expectation of investment risk are rated AA by IBCA. Capacity for
timely repayment of principal and interest is substantial. Adverse changes in
business, economic or financial conditions may increase investment risk albeit
not very significantly.

DESCRIPTION OF MUNICIPAL NOTE RATINGS __________________________________________

Moody's highest rating for state and municipal and other short-term notes is
MIG-1 and VMIG-1. Short-term municipal securities rated MIG-1 or VMIG-1 are of
the best quality. They have strong protection from established cash flows of
funds for their servicing or from established and broad-based access to the
market for refinancing or both. Short-term municipal securities rated MIG-2 or
VMIG-2 are of high quality. Margins of protection are ample although not so
large as in the preceding group.
An S&P note rating reflects the liquidity concerns and market access risks
unique to notes. Notes due in 3 years or less will likely receive a note rating.
Notes maturing beyond 3 years will most likely receive a long-term debt rating.
The following criteria will be used in making that assessment.

/ / Amortization schedule (the larger the final maturity relative to other
maturities, the more likely it will be treated as a note).

/ / Source of Payment (the more dependent the issue is on the market for its
refinancing, the more likely it will be treated as a note).

S&P NOTE RATING SYMBOLS ARE AS FOLLOWS:
SP-1 Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will be given a
plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest.

- ----
72 Description of Ratings

<PAGE>
NOTES

<PAGE>

COREFUND FAMILY OF MUTUAL FUNDS
EQUITY
FUNDS
(STOCKS)

GROWTH EQUITY FUND seeks capital growth by investing primarily in the equity
securities of companies believed by management to show the potential for growth
of earnings over time.

EQUITY FUND seeks capital growth by investing principally in a diversified
portfolio of common stocks with large, medium or small capitalizations.

SPECIAL EQUITY FUND seeks capital growth by investing principally in a
diversified portfolio of common stocks of domestic companies expected to
experience growth in earnings and price.

EQUITY INDEX FUND seeks to track the price and yield performance of the Standard
& Poor's 500 Composite Stock Price Index.

INTERNATIONAL GROWTH FUND seeks long-term capital appreciation by investing
primarily in appreciation-oriented equity securities of companies located
outside the United States.

BALANCED FUND seeks to provide total return while preserving capital by
investing in a combination of common stocks and fixed income securities.

FIXED INCOME
FUNDS
(BONDS)

SHORT INTERMEDIATE BOND FUND seeks income through investment in a diversified
portfolio of intermediate term, fixed income obligations with an expected
average weighted maturity of three to ten years.

BOND FUND seeks to maximize long-term total return by investing principally in a
diversified portfolio of debt securities.

SHORT-TERM INCOME FUND seeks to obtain consistent current income with relative
stability of principal by investing principally in a diversified portfolio of
investment grade debt securities.

GOVERNMENT INCOME FUND seeks to provide current income while preserving
principal value and maintaining liquidity by investing exclusively in securities
of the United States government and its agencies.

INTERMEDIATE MUNICIPAL BOND FUND seeks a high level of income generally exempt
from federal income taxes by investing at least 80% of its assets in tax-exempt
municipal securities.

PENNSYLVANIA MUNICIPAL BOND FUND seeks to provide a high rate of current income
that is exempt from both federal income taxes and (for Pennsylvania residents)
Pennsylvania state income taxes. The Fund invests primarily in highly-rated,
long-term municipal bonds issued by state, county, and local agencies within the
Commonwealth of Pennsylvania.

THERE IS NO ASSURANCE THAT THE FUNDS WILL ACHIEVE THEIR RESPECTIVE OBJECTIVES.

<PAGE>
- --------------------------------------------------------------------------------
/x/ COREFUND

NEW JERSEY MUNICIPAL BOND FUND seeks to provide a high rate of current income
that is exempt from both federal income taxes and (for New Jersey residents) New
Jersey state income taxes. The Fund invests primarily in highly-rated, long-term
municipal bonds issued by state, county, and local agencies within the state of
New Jersey.

GLOBAL BOND FUND seeks to provide capital appreciation and current income
through investment primarily in fixed income securities of United States and
foreign issuers denominated in United States dollars and in other currencies.

MONEY MARKET FUNDS

CASH RESERVE seeks to obtain maximum current income consistent with the
preservation of principal and maintenance of liquidity by investing in a
diversified portfolio of money market instruments of the highest quality,
including a broad range of U.S. dollar-denominated government, bank, and
commercial paper obligations.

TREASURY RESERVE seeks to provide current interest income, liquidity and safety
of principal by investing in direct obligations of the U.S. Treasury and
repurchase agreements relating to such obligations.

TAX-FREE RESERVE seeks a high level of income exempt from federal income taxes
through investment of at least 80% of its total assets in tax-free securities.

THERE IS NO ASSURANCE THAT THE FUNDS WILL ACHIEVE THEIR RESPECTIVE OBJECTIVES.

<PAGE>
/x/
COREFUND(R)
FAMILY OF
MUTUAL FUNDS

COREFUNDS, INC.

DIRECTORS
EMIL J. MIKITY, CHAIRMAN
GEORGE H. STRONG
ERIN ANDERSON

OFFICERS
DAVID G. LEE, PRESIDENT
JAMES W. JENNINGS, SECRETARY

INVESTMENT ADVISER
CORESTATES INVESTMENT ADVISERS, INC.
PHILADELPHIA, PA 19101

ADMINISTRATOR
SEI FINANCIAL MANAGEMENT CORPORATION
WAYNE, PA 19087

DISTRIBUTOR
SEI FINANCIAL SERVICES COMPANY
WAYNE, PA 19087

LEGAL COUNSEL
MORGAN, LEWIS & BOCKIUS LLP
PHILADELPHIA, PA 19103

AUDITORS
ERNST & YOUNG LLP
PHILADELPHIA, PA 19103

INDIVIDUAL SHARES

PROSPECTUS

MARCH 18, 1996

INVESTMENT ADVISER

GRAPHICS-CORESTATES LOGO

CORESTATES
INVESTMENT ADVISERS

FOR CURRENT PERFORMANCE, PURCHASE, REDEMPTION AND
OTHER INFORMATION, CALL 1-800-355-CORE (2673)

COR-F-045-03

<PAGE>

/X/
COREFUND
FAMILY OF
MUTUAL FUNDS

PROSPECTUS
COREFUNDS, INC.

MARCH 18, 1996
CLASS A AND CLASS C SHARES-INDIVIDUAL

CoreFunds, Inc. is an open-end management investment company presently
offering shares in twenty-three diversified and non-diversified portfolios that
offer a variety of investment opportunities. These portfolios are managed by
CoreStates Investment Advisers, Inc. This Prospectus relates to Class A and
Class C Shares in sixteen portfolios, including equity, fixed income, and money
market portfolios (the "Funds").

CoreFunds, Inc.
680 East Swedesford Road
Wayne, PA 19087
1-800-355-CORE

Keep this Prospectus for future reference.

SHARES IN THE FUNDS ARE NOT OBLIGATIONS, DEPOSITS, OR ACCOUNTS OF, OR GUARANTEED
OR ENDORSED BY, CORESTATES BANK, N.A., THE PARENT CORPORATION OF EACH FUND'S
INVESTMENT ADVISER, OR ANY OF ITS AFFILIATES. SUCH SHARES ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD
OR ANY OTHER AGENCY. INVESTMENT IN THE SHARES INVOLVES RISK, INCLUDING POSSIBLE
LOSS OF PRINCIPAL.

<PAGE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS /X/ COREFUND

<TABLE>
<S> <C>
Transaction and Operating Expense Tables............. 3
Financial Highlights................................. 7
Highlights........................................... 10
</TABLE>

- ----------------------------
FUNDAMENTALS OF MUTUAL FUND INVESTING

<TABLE>
<S> <C>
Types of investment vehicles......................... 14
How to invest in stocks, bonds, and money market
instruments....................................... 16
Developing your investment strategy.................. 21
</TABLE>

- ----------------------------------------
INFORMATION ON THE FUNDS

<TABLE>
<S> <C>
Investment Objectives of the Funds................... 25
Equity Funds....................................... 25
Fixed Income Funds................................. 25
Money Market Funds................................. 26
Investment Policies.................................. 26
Equity Funds....................................... 26
Fixed Income Funds................................. 29
Money Market Funds................................. 34
Other Investment Practices of the Funds............ 35
Types of Securities in Which the Funds Invest........ 40
Equity Funds....................................... 40
Taxable Fixed Income Funds......................... 40
Taxable Money Market Funds......................... 42
Tax-Free Fixed Income and Money Market Funds....... 43
Temporary Investments.............................. 45
Investment Restrictions.............................. 46
Investor Considerations.............................. 48
Investment Suitability............................. 48
Investment Risks................................... 50
Distributions........................................ 53
Taxes................................................ 54
Valuation of Shares.................................. 57
Net Asset Value.................................... 57
Portfolio Pricing.................................. 58
Management........................................... 59
Investment Adviser, Sub-Advisers................... 59
Fund Managers...................................... 62
Administrator...................................... 64
Distributor........................................ 64
Performance Information.............................. 66
Total Return and Yield............................. 66
In General......................................... 66
Description of Shares................................ 67
General Information.................................. 68
Description of Ratings............................... 69
Description of Municipal and Corporate Bond
Ratings......................................... 69
Description of Municipal Note
Ratings......................................... 70
</TABLE>

- -------------------------------------
SHAREHOLDER SERVICES GUIDE

<TABLE>
<S> <C>
Opening an Account and Purchasing
Shares............................................ 71
Selling Your Shares.................................. 75
Exchanging Shares.................................... 78
</TABLE>

No person is authorized by CoreFunds, Inc. to give any information or make any
representation other than those contained in this Prospectus or in other printed
or written material issued by CoreFunds, Inc., and you should not rely on any
other information or representation.

- -----
2 Table of Contents

<PAGE>
- --------------------------------------------------------------------------------
TRANSACTION AND OPERATING EXPENSE TABLES /X/ COREFUND

The information contained in the tables should not be considered a
representation of past or future expenses. Actual expenses may be more or less
than those shown.

<TABLE>
<CAPTION>
------ ------ ------- ------------- --------
GROWTH SPECIAL INTERNATIONAL
Equity Funds EQUITY EQUITY(7) EQUITY GROWTH BALANCED
- ------------- ------ ------ ------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
Class A Shares
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases 3.25 % 3.25 % 3.25% 3.25% 3.25%
Maximum Sales Load Imposed on Reinvested
Dividends none none none none none
Deferred Sales Load none none none none none
Redemption Fee none none none none none
Exchange Fee none none none none none

ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets):
Investment Advisory Fees After Fee
Waivers(1) .72% .75% .10% .80% .67%
12b-1 Fees(2) .25% .25% .25% .25% .25%
Administrative Fees After Fee Waivers(3) .16% .16% .16% .16% .16%
Other Expenses(4) .08% .08% .05% .25% .10%
Net Annual Fund Operating Expenses(5) 1.21% 1.24% .56% 1.46% 1.18%

EXAMPLE
You would pay the following
expenses on a $1,000 investment, 1 year $ 44 $ 45 $ 38 $ 47 $ 44
assuming (1) a 5% annual return 3 years 70 71 50 77 69
and (2) redemption at the end 5 years 97 98 63 110 95
of each time period.(6) 10 years 174 178 100 201 171
</TABLE>

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

(1) Absent voluntary waivers, the Adviser's investment advisory fees are
calculated at the annual rate of .75%, .75%, 1.50%, .80%, and .70% of the
average net assets of Growth Equity Fund, Equity, Special Equity,
International Growth Fund, and Balanced Fund, respectively.

(2) Note that long-term shareholders may pay more than the economic equivalent
of the maximum front-end load (6.25%) permitted by the Rules of Fair
Practice of the National Association of Securities Dealers.
(3) Absent voluntary waivers, the Administrator's fee is calculated at the
annual rate of .25% of each Fund's average net assets.
(4) Includes (among others) legal, auditing, and printing fees.

(5) The Adviser and the Administrator have voluntarily waived a portion of their
fees in order to assist the Funds in maintaining a competitive expense
ratio. The expense ratios noted herein are net of investment advisory and
administrative fee waivers expected to be in effect during the fiscal period
ending June 30, 1996. Absent any fee waivers, such expense ratios would have
been 1.33%, 1.33%, 2.05%, 1.55% and 1.30% for Growth Equity Fund, Equity,
Special Equity, International Growth Fund and Balanced Fund, respectively.
The service providers of all the Funds have been waiving all or a portion of
their fees since inception. However, during this year, these providers may
change the waiver so that a Fund's expense ratio will approach the
contractually mandated ratio.

(6) Absent the voluntary fee waiver of the Adviser and the Administrator, the
amounts in this Example, for one year, three years, five years and ten
years, would be $46, $73, $103 and $187 for Growth Equity Fund; $46, $73,
$103 and $187 for Equity Fund; $53, $95, $139 and $263 for Special Equity
Fund; $48, $80, $114 and $211 for International Growth Fund; and $45, $72,
$101, and $198 for Balanced Fund.

(7) Prior to the date of this Prospectus, this Fund's name was Value Equity
Fund.

-----
Transaction and Operating Expense Tables 3

<PAGE>
- --------------------------------------------------------------------------------
TRANSACTION AND OPERATING EXPENSE TABLES (CONTINUED)

<TABLE>
<CAPTION>
------------ ----- ------ ---------- ------------
SHORT SHORT- INTERMEDIATE
INTERMEDIATE TERM GOVERNMENT MUNICIPAL
Fixed Income Funds BOND(7) BOND INCOME INCOME BOND
- ------------------- ------------ ----- ------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Class A Shares
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on
Purchases 3.25% 3.25% 3.25% 3.25% 3.25%
Maximum Sales Load Imposed on
Reinvested Dividends none none none none none
Deferred Sales Load none none none none none
Redemption Fee none none none none none
Exchange Fee none none none none none
ANNUAL FUND OPERATING EXPENSES
(as a percentage of net
assets):
Investment Advisory Fees
After Fee Waivers(1) .37% .35% .25% .37% .37%
12b-1 Fees(2) .25% .25% .25% .25% .25%
Administrative Fees After Fee
Waivers(3) .16% .16% .16% .16% .16%
Other Expenses(4) .07% .05% .05% .21% .06%
Net Annual Fund Operating
Expenses(5) .85% .81% .71% .99% .84%
EXAMPLE
You would pay the following
expenses on a $1,000
investment, 1 year $ 41 $ 41 $ 40 $ 42 $ 41
assuming (1) a 5% annual
return 3 years 59 58 54 63 58
and (2) redemption at the end 5 years 78 76 N/A 85 78
of each time period.(6) 10 years 134 129 N/A 150 133
</TABLE>

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

(1) Absent voluntary waivers, the Adviser's investment advisory fees are
calculated at the annual rate of .50%, .74%, .74%, .50% and .50% of the
average net assets of Short Intermediate Bond Fund, Bond Fund, Short-Term
Income Fund, Government Income Fund and Intermediate Municipal Bond Fund,
respectively.

(5) The Adviser and the Administrator have voluntarily waived a portion of their
fees in order to assist the Funds in maintaining a competitive expense
ratio. The expense ratios noted herein are net of investment advisory and
administrative fee waivers expected to be in effect during the fiscal period
ending June 30, 1996. Absent fee waivers, such expense ratios would have
been 1.07%, 1.29%, 1.29%, 1.21% and 1.06% for Short Intermediate Bond Fund,
Bond Fund, Short-Term Income Fund, Government Income Fund and Intermediate
Municipal Bond Fund, respectively. The service providers of all the Funds
have been waiving all or a portion of their fees since inception. However,
during this year, these providers may change the waiver so that a Fund's
expense ratio will approach the contractually mandated ratio.

(6) Absent the voluntary fee waiver of the Adviser and the Administrator, the
amounts in this Example, for one year, three years, five years and ten
years, would be $43, $65, $90 and $159 for Short Intermediate Bond Fund;
$53, $95, $139 and $263 for Bond Fund; $53, $95, $139 and $263 for
Short-Term Income Fund; $44, $70, $97, and $174 for Government Income Fund;
and $43, $65, $89, and $158 for Intermediate Municipal Bond Fund.

(7) Prior to the date of this Prospectus, this Fund's name was Intermediate Bond
Fund.

- -----
4 Transaction and Operating Expense Tables

<PAGE>
- --------------------------------------------------------------------------------
/X/ COREFUND

<TABLE>
<CAPTION>
------------ ---------- ------
PENNSYLVANIA NEW JERSEY
MUNICIPAL MUNICIPAL GLOBAL
Fixed Income Funds BOND BOND BOND
- --------------------- ------------ ---------- ------
<S> <C> <C> <C> <C>
Class A Shares
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases 3.25% 3.25% 3.25%
Maximum Sales Load Imposed on Reinvested Dividends none none none
Deferred Sales Load none none none
Redemption Fee none none none
Exchange Fee none none none

ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets):
Investment Advisory Fees After Fee Waivers(1) 0% 0% .52%
12b-1 Fees(2) .25% .25% .25%
Administrative Fees After Fee Waivers(3) 0% 0% .16%
Other Expenses(4) .37% .40% .21%
Net Annual Fund Operating Expenses(5) .62% .65% 1.14%

EXAMPLE
You would pay the following
expenses on a $1,000 investment, 1 year $ 39 $ 39 $ 44
assuming (1) a 5% annual return 3 years 52 53 68
and (2) redemption at the end 5 years 66 68 93
of each time period.(6) 10 years 107 111 167
</TABLE>

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

(1) Absent voluntary waivers, the Adviser's investment advisory fees are
calculated at the annual rate of .50%, .50% and .60% of the average net
assets of Pennsylvania Municipal Bond Fund, New Jersey Municipal Bond Fund
and Global Bond Fund, respectively.
(2) Note that long-term shareholders may pay more than the economic equivalent
of the maximum front-end load (6.25%) permitted by the Rules of Fair
Practice of the National Association of Securities Dealers.
(3) Absent voluntary waivers, the Administrator's fee is calculated at the
annual rate of .25% of each Fund's average net assets.
(4) Includes (among others) legal, auditing and printing fees.
(5) The Adviser and the Administrator have voluntarily waived a portion of their
fees in order to assist the Funds in maintaining a competitive expense
ratio. The expense ratios noted herein are net of investment advisory and
administrative fee waivers expected to be in effect during the fiscal period
ending June 30, 1996. Absent fee waivers, such expense ratios would have
been 1.21%, 1.24% and 1.31% for Pennsylvania Municipal Bond Fund, New Jersey
Municipal Bond Fund and Global Bond Fund, respectively. The service
providers of all the Funds have been waiving all or a portion of their fees
since inception. However, during this year, these providers may change the
waiver so that a Fund's expense ratio will approach the contractually
mandated ratio.
(6) Absent the voluntary fee waiver of the Adviser and the Administrator, the
amounts in this Example, for one year, three years, five years and ten
years, would be $44, $70, $97, and $174 for Pennsylvania Municipal Bond
Fund; $45, $73, $102, and $185 for New Jersey Municipal Bond Fund; and $45,
$71, $98, and $178 for Global Bond Fund.

-----
Highlights 5

<PAGE>
- --------------------------------------------------------------------------------
TRANSACTION AND OPERATING EXPENSE TABLES (CONTINUED) /X/ COREFUND

<TABLE>
<CAPTION>
------- -------- --------
CASH TREASURY TAX-FREE
Money Market Funds RESERVE RESERVE RESERVE
- ---------------------- ------- -------- --------
<S> <C> <C> <C> <C>

Class C Shares
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases none none none
Maximum Sales Load Imposed on Reinvested
Dividends none none none
Deferred Sales Load none none none
Redemption Fee none none none
Exchange Fee none none none

ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets):
Investment Advisory Fees After Fee Waivers(1) .29% .29% .29%
12b-1 Fees(2) .25% .25% .25%
Administrative Fees After Fee Waivers(3) .16% .16% .16%
Other Expenses(4) .08% .08% .08%
Net Annual Fund Operating Expenses(5) .78% .78% .78%

EXAMPLE
You would pay the following
expenses on a $1,000 investment, 1 year $ 8 $ 8 $ 8
assuming (1) a 5% annual return 3 years 25 25 25
and (2) redemption at the end 5 years 43 43 43
of each time period.(6) 10 years 97 97 97
</TABLE>

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

(1) Absent voluntary waivers, the Adviser's investment advisory fees are
calculated at the annual rate of .50%, .50%, and .50% of the average net
assets of Cash Reserve, Treasury Reserve, and Tax-Free Reserve,
respectively.
(2) Note that long-term shareholders may pay more than the economic equivalent
of the maximum front-end load (6.25%) permitted by the Rules of Fair
Practice of the National Association of Securities Dealers.
(3) Absent voluntary waivers, the Administrator's fee is calculated at the
annual rate of .25% of each Fund's average net assets.
(4) Includes (among others) legal, auditing, and printing fees.
(5) The Adviser and the Administrator have voluntarily waived a portion of their
fees in order to assist the Funds in maintaining a competitive expense
ratio. The expense ratios noted herein are net of investment advisory and
administrative fee waivers expected to be in effect during the fiscal period
ending June 30, 1996. Absent any fee waivers, such expense ratios would have
been 1.08%, 1.08%, and 1.08% for Cash Reserve, Treasury Reserve, and
Tax-Free Reserve, respectively. The service providers of all the Funds have
been waiving all or a portion of their fees since inception. However, during
this year, these providers may change the waiver so that a Fund's expense
ratio will approach the contractually mandated ratio.
(6) Absent the voluntary fee waiver of the Adviser and the Administrator, the
amounts in this Example, for one year, three years, five years and ten
years, would be $11, $34, $60 and $132 for Cash Reserve; $11, $34, $60, and
$132 for Treasury Reserve; and $11, $34, $60 and $132 for Tax-Free Reserve.

- -----
6 Transaction and Operating Expense Tables

<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS /X/ COREFUND

The tables that follow present information about the investment results of
the shares of the Funds. The financial highlights for each of the periods
presented have been audited by Ernst & Young LLP, independent certified public
accountants, whose report thereon appears in CoreFunds' annual report which
accompanies the Statement of Additional Information.

FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD ENDED JUNE 30,

Equity Funds

<CAPTION>
_______
EQUITY
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
1995 $ 12.58 $ 0.15 $ 1.97 $(0.15) $(0.28) $ 14.27 17.29% $ 31,003
1994 13.11 0.09 (0.27) (0.09) (0.26) 12.58 (1.51) 25,448
1993 11.22 0.16 1.89 (0.16) -- 13.11 18.31 15,397
1992 10.33 0.15 0.89 (0.15) -- 11.22 9.98 10,882
1991 10.31 0.15 0.18 (0.15) (0.16) 10.33 3.37 5,182
1990(2) 10.00 0.10 0.31 (0.10) -- 10.31 4.10+ 5,154
CLASS A
1995 $ 12.60 $ 0.13 $ 1.96 $(0.12) $(0.28) $ 14.29 16.96% $ 3,708
1994 13.12 0.06 (0.26) (0.06) (0.26) 12.60 (1.69) 4,737
1993* 12.49 0.05 0.67 (0.09) -- 13.12 5.77+ 714

<CAPTION>
_________________
SPECIAL EQUITY

_______________
EQUITY INDEX
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
1995 $ 20.54 $ 0.52 $ 4.24 $(0.52) $(0.99) $ 23.79 24.45% $ 112,553
1994 20.97 0.55 (0.43) (0.55) -- 20.54 0.55 72,552
1993 19.22 0.52 1.84 (0.52) (0.09) 20.97 12.39 50,551
1992 18.46 0.52 1.80 (0.48) (1.08) 19.22 12.59 20,166
1991(3) 19.48 0.03 (0.94) (0.02) (0.09) 18.46 (4.64)+ 12,117

<CAPTION>
_________________________
INTERNATIONAL GROWTH
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
1995 $ 13.18 $ 0.12 $(0.17) $(0.04) $(0.80) $ 12.29 (0.21)% $ 110,838
1994 11.71 0.12 1.78 (0.12) (0.31) 13.18 16.28 108,911
1993 10.52 0.10 1.16 (0.07) -- 11.71 12.06 61,655
1992 10.10 0.17 0.31 -- (0.06) 10.52 4.90 42,594
1991 10.75 0.19 (0.44) (0.27) (0.13) 10.10 (2.71) 20,582
1990(4) 10.00 0.11 0.86 (0.09) (0.13) 10.75 9.74+ 13,513
CLASS A
1995 $ 13.17 $ 0.09 $(0.17) $(0.02) $(0.80) $ 12.27 (0.48)% $ 1,943
1994 11.71 0.06 1.82 (0.11) (0.31) 13.17 16.08 2,019
1993* 10.07 0.05 1.59 -- -- 11.71 16.29+ 344

<CAPTION>
__________
BALANCED
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
1995 $ 9.88 $ 0.35 $ 1.21 $(0.35) $(0.03) $ 11.06 16.21% $ 61,092
1994 10.39 0.35 (0.51) (0.35) -- 9.88 (1.62) 42,429
1993(5) 10.00 0.16 0.39 (0.16) -- 10.39 5.52+ 29,434
CLASS A
1995 $ 9.89 $ 0.34 $ 1.19 $(0.33) $(0.03) $ 11.06 15.84% $ 2,344
1994 10.38 0.31 (0.49) (0.31) -- 9.89 (1.86) 2,222
1993* 10.00 0.16 0.38 (0.16) -- 10.38 2.50+ 701

CLASS Y
<S> <C> <C> <C> <C> <C>
1995 0.76% 0.84% 1.10% 0.50% 113%
1994 0.69 0.48 1.11 0.06 127
1993 0.43 0.85 1.11 0.17 103
1992(1) 0.14 1.38 1.12 0.40 66
CLASS A
1995 1.01% 0.59% 1.35% 0.25% 113%
1994 0.94 0.23 1.36 (0.19) 127
1993* 0.80 0.39 1.48 (0.29) 103

<CAPTION>
- ------
EQUITY

CLASS Y
<S> <C> <C> <C> <C> <C>
1995 0.86% 1.12% 1.10% 0.88% 108%
1994 0.80 0.73 1.09 0.44 78
1993 0.71 1.29 1.18 0.82 97
1992 0.99 1.36 1.63 0.72 117
1991 1.74 1.53 2.39 0.88 96
1990(2) 1.76 2.35 2.43 1.68 20
CLASS A
1995 1.11% 0.89% 1.35% 0.65% 108%
1994 1.05 0.48 1.34 0.19 78
1993* 0.85 0.97 1.32 0.50 97

<CAPTION>
- --------------
SPECIAL EQUITY

- ------------
EQUITY INDEX

CLASS Y
<S> <C> <C> <C> <C> <C>
1995 0.37% 2.48% 0.76% 2.09% 27%
1994 0.35 2.63 0.75 2.23 13
1993 0.49 2.82 0.88 2.43 4
1992 0.57 2.66 1.06 2.17 27
1991(3) 0.97 1.79 1.20 1.56 --

- --------------------
INTERNATIONAL GROWTH

CLASS Y
<S> <C> <C> <C> <C> <C>
1995 1.05% 0.98% 1.19% 0.84% 59%
1994 0.99 0.23 1.18 0.04 67
1993 0.99 1.22 1.28 0.93 59
1992 0.96 1.67 1.40 1.23 87
1991 0.99 1.80 1.56 1.23 49
1990(4) 1.22 2.57 1.99 1.80 20
CLASS A
1995 1.30% 0.73% 1.44% 0.59% 59%
1994 1.24 0.05 1.43 (0.14) 67
1993* 1.15 1.51 1.44 1.22 59

- --------
BALANCED

CLASS Y
<S> <C> <C> <C> <C> <C>
1995 0.73% 3.51% 1.07% 3.17% 46%
1994 0.62 3.46 1.08 3.00 56
1993(5) 0.45 3.38 1.39 2.45 21
CLASS A
1995 0.98% 3.27% 1.32% 2.93% 46%
1994 0.87 3.21 1.33 2.75 56
1993* 0.55 5.76 1.48 4.83 21
</TABLE>

- --------------------------------------------------------------------------------
+ Returns are for the period indicated and have not been annualized.
* Series B has been offered since January 4, 1993. Balanced has offered
Series B since March 16, 1993.
(1) Growth Equity commenced operations on February 3, 1992. All ratios for the
period have been annualized.
(2) Value Equity commenced operations on February 6, 1990. All ratios for the
period have been annualized.
(3) Equity Index commenced operations on June 1, 1991. All ratios for the period
have been annualized.
(4) International Growth commenced operations on February 12, 1990. All the
ratios for the period have been annualized.
(5) Balanced commenced operations on January 4, 1993. All ratios for the period
have been annualized.

-----
Financial Highlights 7

<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)

FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD ENDED JUNE 30,

Fixed Income Funds

<TABLE>
<CAPTION>
Net
Realized and Assets,
Net Asset Unrealized Dividends End of
Value, Net Net Gains or from Net Distributions Net Asset Period
Beginning Investment (Losses) on Investment from Capital Value, End Total (000
of Period Income Securities Income Gains of Period Return omitted)
--------- ---------- ------------- ---------- ------------- ----------- ------ ---------
________________________
GOVERNMENT INCOME
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
1995 $ 9.52 $ 0.62 $ 0.31 $(0.62) $ -- $ 9.83 10.26% $11,305
1994 10.18 0.50 (0.62) (0.50) (0.04) 9.52 (1.34) 9,089
1993(1) 10.00 0.13 0.18 (0.13) -- 10.18 3.12+ 6,323
CLASS A
1995 $ 9.51 $ 0.61 $ 0.33 $(0.61) $ -- $ 9.84 10.23% $ 1,374
1994 10.17 0.47 (0.62) (0.47) (0.04) 9.51 (1.57) 1,536
1993* 10.00 0.07 0.17 (0.07) -- 10.17 1.71+ 201

<CAPTION>
_____________________________
SHORT INTERMEDIATE BOND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
1995 $ 9.63 $ 0.53 $ 0.21 $(0.53) $ -- $ 9.84 8.22% $55,128
1994 10.18 0.43 (0.53) (0.43) (0.02) 9.63 (0.32) 48,379
1993 10.01 0.47 0.31 (0.47) (0.14) 10.18 7.90 44,692
1992(2) 10.00 0.23 0.01 (0.23) -- 10.01 2.49+ 22,623
CLASS A
1995 $ 9.63 $ 0.54 $ 0.20 $(0.53) $ -- $ 9.84 7.95% $ 1,961
1994 10.18 0.41 (0.53) (0.41) (0.02) 9.63 (0.56) 9,365
1993* 10.01 0.20 0.17 (0.20) -- 10.18 3.95+ 5,752

<CAPTION>
______
BOND

_______________________
SHORT-TERM INCOME

__________________________________
INTERMEDIATE MUNICIPAL BOND

<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
1995 $ 9.68 $ 0.38 $ 0.15 $(0.38) $ -- $ 9.83 5.58% $ 365
1994 10.09 0.39 (0.41) (0.39) -- 9.68 (0.27) 1,088
1993(3) 10.00 0.04 0.09 (0.04) -- 10.09 1.33+ 2,009
CLASS A
1995 $ 9.67 $ 0.35 $ 0.16 $(0.35) $ -- $ 9.83 5.42% $ 1,027
1994 10.08 0.37 (0.41) (0.37) -- 9.67 (0.52) 1,311
1993* 10.00 0.03 0.08 (0.03) -- 10.08 1.19+ 166

<CAPTION>
______________
GLOBAL BOND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
1995 $ 9.06 $ 0.62 $ 0.24 $(0.30) $ -- $ 9.62 9.70% $26,898
1994(4) 10.00 0.25 (1.15) (0.04) -- 9.06 (9.00)+ 24,957
CLASS A
1995 $ 9.04 $ 0.61 $ 0.24 $(0.28) $ -- $ 9.61 9.57% $ 170
1994(4) 10.00 0.19 (1.11) (0.04) -- 9.04 (9.22)+ 167

<CAPTION>
___________________________________
PENNSYLVANIA MUNICIPAL BOND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
1995 $ 9.95 $ 0.51 $ 0.21 $(0.51) $ -- $ 10.16 7.50% $ 2,272
1994(5) 10.00 0.06 (0.05) (0.06) -- 9.95 0.14+ 434
CLASS A
1995 $ 9.95 $ 0.49 $ 0.21 $(0.49) $ -- $ 10.16 7.25% $ 317
1994(5) 10.00 0.06 (0.05) (0.06) -- 9.95 0.09+ 163

<CAPTION>
_________________________________
NEW JERSEY MUNICIPAL BOND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
1995 $ 9.94 $ 0.52 $ 0.18 $(0.52) $ -- $ 10.12 7.25% $ 1,550
1994(5) 10.00 0.06 (0.06) (0.06) -- 9.94 0.01+ 1,432
CLASS A
1995 $ 9.95 $ 0.49 $ 0.17 $(0.49) $ -- $ 10.12 6.84% $ 24
1994(5) 10.00 0.06 (0.05) (0.06) -- 9.95 0.08+ 2

CLASS Y
<S> <C> <C> <C> <C> <C>
1995 0.59% 6.53% 0.98% 6.14% 368%
1994 0.50 4.93 1.00 4.43 157
1993(1) 0.44 5.41 1.10 4.75 93
CLASS A
1995 0.85% 6.25% 1.24% 5.86% 368%
1994 0.75 4.68 1.25 4.18 157
1993* 0.63 5.35 1.29 4.69 93

<CAPTION>
- -----------------------
SHORT INTERMEDIATE BOND

CLASS Y
<S> <C> <C> <C> <C> <C>
1995 0.60% 5.76% 0.84% 5.52% 405%
1994 0.58 4.30 0.86 4.02 299
1993 0.42 4.62 0.86 4.18 188
1992(2) 0.11 5.73 0.84 5.00 51
CLASS A
1995 0.85% 5.27% 1.09% 5.03% 405%
1994 0.83 4.05 1.11 3.77 299
1993* 0.75 3.78 1.19 3.34 188

<CAPTION>
- ----
BOND

- -----------------
SHORT-TERM INCOME

- ---------------------------
INTERMEDIATE MUNICIPAL BOND

CLASS Y
<S> <C> <C> <C> <C> <C>
1995 0.82% 3.91% 1.26% 3.47% 9%
1994 0.63 3.91 1.17 3.37 43
1993(3) 0.58 2.74 1.45 1.87 10
CLASS A
1995 1.08% 3.65% 1.52% 3.21% 9%
1994 0.88 3.66 1.42 3.12 43
1993* 0.81 2.51 1.68 1.64 10

- -----------
GLOBAL BOND

CLASS Y
<S> <C> <C> <C> <C> <C>
1995 0.64% 6.84% 1.03% 6.45% 133%
1994+ 0.73 5.04 1.12 4.65 161
CLASS A
1995 0.89% 6.59% 1.28% 6.20% 133%
1994(4) 0.98 4.79 1.37 4.40 161

- ---------------------------
PENNSYLVANIA MUNICIPAL BOND

CLASS Y
<S> <C> <C> <C> <C> <C>
1995 0.39% 5.26% 1.14% 4.51% 18%
1994(5) 0.42 5.09 1.17 4.34 3
CLASS A
1995 0.64% 4.95% 1.39% 4.20% 18%
1994(5) 0.67 4.84 1.42 4.09 3

<CAPTION>
- -------------------------
NEW JERSEY MUNICIPAL BOND

CLASS Y
<S> <C> <C> <C> <C> <C>
1995 0.42% 5.21% 1.17% 4.46% 32%
1994(5) 0.43 5.07 1.35 4.15 13
CLASS A
1995 0.68% 4.97% 1.44% 4.21% 32%
1994(5) 0.68 4.82 1.60 3.90 13
</TABLE>

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

<PAGE>
- --------------------------------------------------------------------------------
/X/ COREFUND

FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD ENDED JUNE 30,

Money Market Funds

<TABLE>
<CAPTION>
Net
Assets
Net Asset Dividends Net End of Ratio of Ratio of
Value Net from Net Asset Value Period Expenses to Net Income
Beginning Investment Investment End of Total (000 Average Net to Average
of Period Income Income Period Return omitted) Assets Net Assets
--------- ---------- ---------- ----------- ------ --------- ----------- ----------
_______________
CASH RESERVE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
1995 $1.00 $ 0.05 $(0.05) $1.00 5.15% $ 510,341 0.48% 5.04%
1994 1.00 0.03 (0.03) 1.00 3.00 505,273 0.47 2.95
1993 1.00 0.03 (0.03) 1.00 2.99 460,832 0.46 2.97
1992 1.00 0.05 (0.05) 1.00 4.83 568,672 0.38 4.68
1991 1.00 0.07 (0.07) 1.00 7.28 473,187 0.37 6.94
1990 1.00 0.08 (0.08) 1.00 8.65 316,290 0.34 8.28
1989 1.00 0.09 (0.09) 1.00 8.87 186,151 0.37 8.62
1988 1.00 0.07 (0.07) 1.00 6.70 82,399 0.55 6.54
1987 1.00 0.06 (0.06) 1.00 5.85 35,054 0.54 5.60
1986(1) 1.00 0.06 (0.06) 1.00 3.36+ 56,416 0.59 6.93
CLASS C
1995 $1.00 $ 0.05 $(0.05) $1.00 4.89% $ 17,583 0.73% 4.86%
1994 1.00 0.03 (0.03) 1.00 2.74+ 11,451 0.72 2.70
1993* 1.00 0.01 (0.01) 1.00 1.23+ 15,330 0.76 2.52

<CAPTION>
____________________
TREASURY RESERVE

<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
1995 $1.00 $ 0.05 $(0.05) $1.00 4.98% $ 479,206 0.48% 4.91%
1994 1.00 0.03 (0.03) 1.00 2.91 484,974 0.48 2.87
1993 1.00 0.03 (0.03) 1.00 2.96 446,788 0.46 2.89
1992 1.00 0.05 (0.05) 1.00 4.73 444,388 0.38 4.58
1991 1.00 0.07 (0.07) 1.00 7.11 427,439 0.37 6.80
1990 1.00 0.08 (0.08) 1.00 8.38 270,524 0.37 8.03
1989(2) 1.00 0.06 (0.06) 1.00 4.66+ 220,479 0.20 9.26
CLASS C
1995 $1.00 $ 0.05 $(0.05) $1.00 4.72% $ 21,612 0.73% 4.81%
1994 1.00 0.03 (0.03) 1.00 2.65 7,573 0.73 2.62
1993* 1.00 0.01 (0.01) 1.00 1.21+ 7,672 0.75 2.46

<CAPTION>
____________________
TAX-FREE RESERVE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS Y
1995 $1.00 $ 0.03 $(0.03) $1.00 3.12% $ 62,756 0.48% 3.09%
1994 1.00 0.02 (0.02) 1.00 2.03 79,384 0.49 2.00
1993 1.00 0.02 (0.02) 1.00 2.23 72,255 0.51 2.20
1992 1.00 0.03 (0.03) 1.00 3.56 80,147 0.37 3.39
1991(3) 1.00 0.01 (0.01) 1.00 1.07+ 42,573 0.06 4.20
CLASS C
1995 $1.00 $ 0.03 $(0.03) $1.00 2.86% $ 1,524 0.73% 2.80%
1994 1.00 0.02 (0.02) 1.00 1.78 2,708 0.74 1.75
1993* 1.00 0.01 (0.01) 1.00 0.85+ 1,795 0.76 1.71

<CAPTION>
Ratio of Ratio of
Expenses to Net Income
Average Net to Average
Assets Net Assets
(Excluding (Excluding
Waivers) Waivers)
----------- ----------
- ------------
CASH RESERVE
CLASS Y
<S> <C> <C>
1995 0.85% 4.67%
1994 0.85 2.57
1993 0.85 2.58
1992 0.82 4.24
1991 0.82 6.49
1990 0.80 7.82
1989 0.90 8.05
1988 1.14 5.96
1987 1.01 5.13
1986(1) 1.21 6.31
CLASS C
1995 1.10% 4.49%
1994 1.10 2.32
1993* 1.15 2.13

<CAPTION>
- ----------------
TREASURY RESERVE

CLASS Y
<S> <C> <C>
1995 0.85% 4.54%
1994 0.86 2.49
1993 0.85 2.50
1992 0.82 4.14
1991 0.82 6.35
1990 0.84 7.56
1989(2) 0.84 8.62
CLASS C
1995 1.10% 4.44%
1994 1.11 2.24
1993* 1.14 2.07

<CAPTION>
- ----------------
TAX-FREE RESERVE
CLASS Y
<S> <C> <C>
1995 0.85% 2.72%
1994 0.87 1.62
1993 0.89 1.82
1992 0.88 2.88
1991(3) 0.81 3.45
CLASS C
1995 1.10% 2.43%
1994 1.12 1.37
1993* 1.14 1.33
</TABLE>

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

Financial Highlights----
9

<PAGE>
- --------------------------------------------------------------------------------
HIGHLIGHTS

<TABLE>
<S> <C>
COREFUNDS CoreFunds, Inc. ('CoreFunds') is an open-end management investment company presently offering shares
in seventeen diversified and non-diversified portfolios. This Prospectus offers Class A and Class C
Shares of sixteen portfolios. Class A and Class C Shares are primarily offered to the general public
as well as various types of institutional investors, which may include CoreStates Bank and its
affiliate and corresponding banks, for the investment of their own funds or for funds for which they
serve in a fiduciary, agency or custodial capacity. Investors may also include shareholders of other
investment companies which are advised by a Fund's adviser or sub-adviser, and whose assets a Fund
acquires in a tax-free reorganization, who propose to become shareholders of the Fund as a result of
such reorganization. Investors purchasing Series B Shares will normally be those who desire certain
additional shareholder services from certain security broker/dealers and financial institutions which
have entered into shareholder servicing agreements with the Funds' distributor. Materials relating to
Class Y Shares of the Funds may be obtained by calling 1-800-355-CORE or by writing to CoreFunds,
Inc., 680 East Swedesford Road, Wayne, PA 19087. Prior to the date of this Prospectus, all Class A
Shares were known as Series B -- Individual for all portfolios other than Money Market Funds; Class C
Shares were known as Series B -- Individual for the Money Market Funds; and Class Y Shares were known
as Series A -- Institutional. CoreFunds has changed these designations to conform to the standard
designations suggested by the Investment Company Institute.
- -------------------------------------------------------------------------------------------------------------------------------
FUNDAMENTALS OF MUTUAL This section will assist you in appreciating investments generally. It describes the three basic
FUND INVESTING types of investment vehicles--stocks, bonds, and money market instruments--as well as mutual funds
which employ one or more of these instruments. The various types of mutual funds available and the
advantages of mutual fund investing are discussed.
PAGE 14
- -------------------------------------------------------------------------------------------------------------------------------
MULTIPLE PORTFOLIOS Investors may choose to invest in any of the sixteen funds of CoreFunds offered in this Prospectus.
EQUITY FUNDS FIXED INCOME FUNDS MONEY MARKET FUNDS
Growth Equity Fund Short Intermediate Bond Fund Cash Reserve
Equity Fund Bond Fund Treasury Reserve
Special Equity Fund Short-Term Income Fund Tax-Free Reserve
International Growth Fund Government Income Fund
Balanced Fund Intermediate Municipal
Bond Fund
Pennsylvania Municipal
Bond Fund
New Jersey Municipal
Bond Fund
Global Bond Fund
PAGE 25
</TABLE>

- -----
10 Highlights

<PAGE>
- --------------------------------------------------------------------------------
/X/ COREFUND

<TABLE>
<S> <C>
RISK Investment in the Funds involves a number of risks, including possible loss of principal. The Funds
CHARACTER- differ significantly in terms of specific risks. Certain risk factors applicable to the Funds are
ISTICS described below.

EQUITY FUNDS
The Equity Funds are subject to market risk and fund risk. Market risk is the possibility that stock
prices in general will decline over short or even extended periods of time. Stock markets tend to be
cyclical, with periods when stock prices generally rise and periods when stock prices generally
decline. Fund risk is the possibility that a Fund's performance during a specific period may not meet
or exceed that of the stock market as a whole. Investors should consider their holdings in equity
mutual funds to be long-term investments.

In addition to market and fund risks, International Growth Fund is subject to foreign market and
currency risk. Investments in foreign stock markets can be as volatile, if not more volatile, than
investments in U.S. markets. Currency risk is the risk that changes in foreign exchange rates will
affect, favorably or unfavorably, the value of foreign securities held by the Fund.

FIXED INCOME FUNDS
Securities held by the Fixed Income Funds may be subject to several types of investment risk,
including market risk, credit risk, and call risk. With respect to these Funds, market risk (or
interest rate risk) is the potential for a decline in the price of fixed-income securities due to
rising interest rates. Credit risk is the possibility that a bond issuer will be unable to make
timely payments of either principal or interest. Call risk (or income risk) relates to corporate and
municipal bonds during periods of falling interest rates, and involves the possibility that
securities with high interest rates will be prepaid (or 'called') by the issuer prior to maturity.
Such an event would require a Fund to invest the resulting proceeds elsewhere, at generally lower
interest rates, which would cause fluctuations in the Fund's net income.

Highlights----
11

<PAGE>
- --------------------------------------------------------------------------------
HIGHLIGHTS (CONTINUED)

<TABLE>
<S> <C>
New Jersey municipal securities by the New Jersey Municipal Bond Fund raises certain investment
considerations, including the possibility that changes in the economic condition and governmental
policies of either state or its municipalities could adversely affect the value of the corresponding
Fund and the portfolio securities held by it.

Global Bond Fund is also subject to foreign market and currency risks, as described above.

Securities held by Tax-Free Reserve may be subject, on a limited basis, to several types of
investment risk, including market risk (or interest rate risk), credit risk and call risk (or income
risk).
PAGE 48
- ------------------------------------------------------------------------------------------------------------------------------
INVESTMENT CoreStates Investment Advisers, Inc. ('CoreStates Advisers') serves as the investment adviser for
ADVISER each Fund. Equity Fund, International Growth Fund and Global Bond Fund also retain sub-advisers.
CoreStates Advisers has extensive experience in the management of money market, tax-free, fixed
income, equity, and international investments. It currently manages discretionary and non-
discretionary client security portfolios with a total aggregate market value exceeding $29 billion,
for individuals, corporations, institutions and municipalities.
PAGE 57
- ------------------------------------------------------------------------------------------------------------------------------
DIVIDEND Shareholders of a Fund are entitled to dividends and distributions arising from the net investment
POLICY income and capital gains, if any, earned on investments held by the Fund.
PAGE 51
- ------------------------------------------------------------------------------------------------------------------------------
TAXES The sale or redemption of shares of a mutual fund is a taxable event to the selling or redeeming
shareholder. In addition, any receipt of dividends which represent capital gain distributions will
be subject to federal and state income taxes. However, receipt of other dividends will generally not
be subject to federal income taxes. Ordinary dividends also will be subject to state income taxes,
except as to Pennsylvania residents for the Pennsylvania Municipal Bond Fund and New Jersey
residents for the New Jersey Municipal Bond Fund.
PAGE 52
- ------------------------------------------------------------------------------------------------------------------------------
PURCHASING You may purchase shares by mail, wire or exchange from another account or Fund. The minimum initial
SHARES investment is $500 for each Fund. There is no minimum for subsequent investments. There is also no
minimum initial investment for automatic investment plans.
PAGE 67
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

- -----
12 Highlights

<PAGE>
- --------------------------------------------------------------------------------
/X/ COREFUND

<TABLE>
<S> <C>
SELLING You may redeem or sell shares of each Fund by mail or telephone. You may also redeem shares of the
SHARES Money Market Funds by check. There is no charge for redemptions, except for wire withdrawals which
are subject to the transfer agent's then-current wire fee. Your bank may also impose a fee upon
receipt of a wire. The share price of each Fund except for the Money Market Funds is expected to
fluctuate, and may at redemption be more or less than at the time of initial purchase, resulting in
a gain or loss.
PAGE 71
- ------------------------------------------------------------------------------------------------------------------------------

SERVICES TO CoreFunds offers checkwriting services (minimum $250) on the Money Market Funds for easy access to
SHAREHOLDERS your account balances.

CoreFunds also offers additional services including automatic investment and systematic withdrawal
plans.

PAGE 68
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Highlights----
13

<PAGE>
- --------------------------------------------------------------------------------
FUNDAMENTALS OF MUTUAL FUND INVESTING

AN INTRODUCTORY GUIDE FOR INVESTORS

It describes the three basic types of investment vehicles -- stocks, bonds,
and money market instruments -- as well as mutual funds which employ one or more
of these investments.

/X/
PART I:
TYPES OF INVESTMENT VEHICLES

FOR DETAILS ON HOW EACH OF THESE INSTRUMENTS IS USED IN MUTUAL FUNDS, PLEASE
SEE THE SECTION ENTITLED, "WHAT TYPES OF MUTUAL FUNDS ARE AVAILABLE?"

The three most popular types of investments are stocks, bonds, and money
market instruments. The following is an introduction to what they are and how
they work.

WHAT IS A STOCK?

Stocks are bought and sold on the open market, through a variety of stock
exchanges in the U.S. and around the world. This system allows any individual
to purchase and sell shares through stockbrokers, who are licensed to
participate in the exchange.

ALSO SEE: "EQUITY MUTUAL FUNDS" AND "WHAT ARE BALANCED FUNDS?"

- -----
14 Fundamentals

<PAGE>
- --------------------------------------------------------------------------------
/X/ COREFUND

FOR DEFINITIONS OF INVESTMENT TERMS, PLEASE SEE THE
GLOSSARY FOLLOWING THIS SECTION.

WHAT IS A BOND?

When the bond is issued by a state or municipality, the interest paid to
investors is generally free of federal income taxes.

Generally, the longer the maturity of a bond, the higher its yield and the
greater its price volatility. The shorter the maturity, the lower the yield and
the greater its price stability.

ALSO SEE: "FIXED INCOME MUTUAL FUNDS"

Price of the
same bond if
Price of a 7% the yield
coupon bond increases to 8%
Years to now trading to to keep pace with Percent change
maturity yield 7% rising interest rates in price
<S> <C> <C> <C>
1 year $100.00 $99.06 -0.94%
3 years $100.00 $97.38 -2.62%
10 years $100.00 $93.20 -6.80%
30 years $100.00 $88.69 -11.31%
</TABLE>

WHAT IS A MONEY MARKET INSTRUMENT?

Money market securities are issued by a number of sources, including the
U.S. Government, its agencies and large, reputable banks and corporations.

Money market instruments are generally quite stable, due to their short
maturities. Therefore, they are chosen by investors who wish to maintain the
safety of their investment.

ALSO SEE: "MONEY MARKET MUTUAL FUNDS"
-----
Fundamentals 15

<PAGE>
- --------------------------------------------------------------------------------
FUNDAMENTALS OF MUTUAL FUND INVESTING

PART II:
HOW TO INVEST IN STOCKS, BONDS, AND MONEY
MARKET INSTRUMENTS

Now that you've reviewed the basic types of investment vehicles available,
here's a discussion of how mutual funds can help you invest in stocks, bonds,
and money market securities.

WHAT IS A MUTUAL FUND?

An equity fund pools its money to purchase stocks, a fixed-income fund
purchases bonds, and a money market fund purchases short-term debt instruments.

ADVANTAGES OF MUTUAL FUND INVESTING.

While many investors enjoy excellent results by purchasing individual stocks
or bonds, most investors find that mutual funds offer a more viable
alternative, for the following reasons:

LOW COSTS: With mutual funds, trading costs are modest because they are
shared by all investors in the fund.

WHAT TYPES OF MUTUAL FUNDS ARE AVAILABLE?

The three basic categories of mutual funds are as follows:

- -----
16 Fundamentals

<PAGE>
- --------------------------------------------------------------------------------
/X/ COREFUND

There are a wide range of fixed-income funds to choose from, each with its
own investment objectives. These objectives range from stability of principal,
to maximum yield, to tax-free income.

MONEY MARKET FUNDS Of the basic mutual fund categories, money market funds
are managed to maintain the greatest stability of principal. They are managed
to maintain a value of $1 per share.

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

WHAT ARE TAX-FREE FUNDS?

It's Easy to Compare Tax-Free and Taxable Yields:
Tax-Free Yield = Taxable Yield
--------------
1 - Tax Rate
-----
Fundamentals 17

<PAGE>
- --------------------------------------------------------------------------------
FUDAMENTALS OF MUTUAL FUND INVESTING (Continuted)

WHAT ARE BALANCED FUNDS?

In addition to the types of mutual funds already described, there are also
funds which blend investments in stock, bond, and money market securities.
These are commonly known as balanced funds.

Typically, the fund's professional manager has the flexibility to change
the investment mix based on current economic conditions.

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

COMPARING THE PERFORMANCE OF STOCK, BOND, AND MONEY MARKET INVESTMENTS

In order to balance risks and rewards, it's helpful to see how stocks, bonds,
and money market investments have performed over time.

Of course, past returns are no guarantee of future results. But historical
data tells a story which surprises many investors.

As the chart on the following page shows, for the forty-year period
between January 1955 and December 1994, stocks have averaged annual returns of
10.7%, while long-term bonds have averaged 5.6%, intermediate-term bonds have
averaged 6.6%, and money market instruments have averaged 5.6%. During this
same period, inflation averaged 4.4%. Therefore, bonds and money market
investments actually delivered very little growth in excess of inflation.

Stocks, on the other hand, averaged more than double the rate of inflation.
What about the price fluctuations? Well, it's true that stocks do fluctuate--
and probably always will. But as the accompanying chart shows, stocks have
consistently rewarded long-term investors.

Since money market funds are managed to have a constant $1 share price,
their total return consists only of the interest earned on their investments.

- -----
18 Fundamentals

<PAGE>
- --------------------------------------------------------------------------------
/X/ COREFUND

GROWTH OF $1,000 (HISTORICAL PERFORMANCE
OF STOCKS, BONDS AND CASH)

<TABLE>

Dollars in Thousands

Large Long-Term Intermediate-Term
Year Stocks TBills Inflation Gov't Bonds Gov't Bonds
<S> <C> <C> <C> <C> <C>
1955 1.32 1.02 1.00 0.99 0.99
1956 1.4 1.04 1.03 0.93 0.99
1957 1.25 1.07 1.06 1.00 1.07
1958 1.79 1.09 1.08 0.94 1.05
1959 2.01 1.12 1.10 0.92 1.05
1960 2.02 1.15 1.12 1.05 1.17
1961 2.56 1.18 1.12 1.06 1.19
1962 2.34 1.21 1.14 1.13 1.26
1963 2.87 1.25 1.16 1.14 1.28
1964 3.35 1.29 1.17 1.18 1.33
1965 3.77 1.34 1.19 1.19 1.35
1966 3.39 1.40 1.23 1.23 1.41
1967 4.20 1.46 1.27 1.12 1.42
1968 4.66 1.54 1.33 1.12 1.49
1969 4.27 1.64 1.41 1.06 1.48
1970 4.44 1.75 1.49 1.19 1.73
1971 5.07 1.82 1.54 1.35 1.88
1972 6.04 1.89 1.59 1.42 1.97
1973 5.15 2.02 1.73 1.41 2.07
1974 3.79 2.19 1.94 1.47 2.18
1975 5.19 2.31 2.08 1.60 2.35
1976 6.43 2.43 2.18 1.87 2.66
1977 5.97 2.56 2.32 1.86 2.69
1978 6.36 2.74 2.53 1.84 2.79
1979 7.53 3.02 2.87 1.82 2.90
1980 9.97 3.36 3.23 1.74 3.02
1981 9.48 3.86 3.51 1.78 3.30
1982 11.51 4.26 3.65 2.49 4.26
1983 14.10 4.64 3.79 2.51 4.58
1984 14.99 5.09 3.94 2.90 5.22
1985 19.82 5.48 4.09 3.80 6.28
1986 23.48 5.82 4.14 4.73 7.23
1987 24.70 6.14 4.32 4.60 7.44
1988 28.85 6.53 4.51 5.04 7.89
1989 37.94 7.08 4.72 5.96 8.94
1990 36.73 7.63 5.00 6.33 9.81
1991 47.93 8.06 5.16 7.55 11.33
1992 51.62 8.34 5.31 8.15 12.14
1993 56.78 8.58 5.45 9.64 13.51
1994 57.52 8.92 5.60 8.89 12.81

</TABLE>

HISTORICAL ANNUALIZED RETURN
(JANUARY 1955 -DECEMBER 1994)

<TABLE>
<S> <C>
Stocks 10.7%
Long-Term Government Bonds 5.6
Intermediate-Term Government Bonds 6.6
Cash 5.6
Inflation 4.4

</TABLE>

RANGE OF STOCK RATES OF RETURN FOR ONE-
AND FIVE-YEAR ROLLING PERIODS
(1955-1994)

Percent
<TABLE>
<CAPTION>

One-Year Five-Year
Rolling Periods Rolling Periods
<S> <C> <C>
95th Percentile 37.2 20.0
5th Percentile -10.8 1.6
</TABLE>

-----
Fundamentals 19

<PAGE>
- --------------------------------------------------------------------------------
FUNDAMENTALS OF MUTUAL FUND INVESTING (Continued)

WHAT ARE INTERNATIONAL FUNDS?

International funds invest primarily in stock, bond and money market
securities issued by corporations, governments and banks worldwide.

International equity funds invest in the equity (stock) securities
of companies based outside the United States. Today, international markets
account for over 60% of the world's equity capitalization, as measured by the
Morgan Stanley World Index in February, 1995. This indicates that many
investment opportunities now exist globally. Likewise, international bond
funds may invest in government and corporate debt obligations from around the
world with the aim of providing income and the potential for capital
appreciation. Investing in international equity (stock) and fixed income (bond)
funds provides investors with a way to participate in a diversified portfolio
of many international securities of many countries.

GROWTH OF $1,000
(PERFORMANCE OF INTERNATIONAL AND DOMESTIC STOCKS)

Dollars in Thousands

Year MSCI EAFE S&P 500
<S> <C> <C>
1975 1.371 1.372
1976 1.4223 1.6985
1977 1.6986 1.5762
1978 2.2812 1.6803
1979 2.4222 1.9894
1980 3.014 2.634
1981 2.9829 2.505
1982 2.9573 3.041
1983 3.6851 3.7252
1984 3.9749 3.9599
1985 6.2296 5.235
1986 10.586 6.2035
1987 13.226 6.5261
1988 17.007 7.6225
1989 18.843 10.024
1990 14.473 9.7028
1991 16.281 12.662
1992 14.352 13.637
1993 19.08 15.001
1994 20.618 15.196

</TABLE>

A COMPARISON OF FOREIGN GOV'T BOND
RETURN PERFORMANCE 1994

Dollars in Thousands

<S> <C>
Japan 8.88%
U.K. -1.54%
Australia 6.88%
France 4.37%
Canada -9.86%
U.S. -3.36%
Germany 9.98%

</TABLE>

SOURCE: SEI FINANCIAL SERVICES COMPANY

- -----
20 Fundamentals

<PAGE>
- --------------------------------------------------------------------------------
/X/ COREFUND

/X/
PART III:
DEVELOPING YOUR INVESTMENT STRATEGY

Now that you have a basic understanding of the investments available to you,
let's look at how these investments can be used to help you achieve your
goals.

Whatever your personal goals, the best way to achieve them is to take
control of your financial future. And one of the best ways to do that is
through a coordinated program of saving and investing.

Saving money provides the foundation for reaching your goals, while
investing builds on that foundation by using the money you save to make even
more money.

Mutual funds provide one of the most convenient and rewarding means of
saving and investing.

Mutual funds are particularly well-suited to long-term goals such as
education and retirement, because they offer a convenient way to invest
regularly in a diversified portfolio of securities.

Once you've decided to use mutual funds to help reach your goals, here are
some very simple steps to follow:

STEP 1:

SET WELL-DEFINED GOALS.
Whether you're investing for retirement, education, wealth accumulation, or
regular income, start by determining how much you will need to satisfy your
goals. When making this assessment, you may want to seek the guidance of an
investment professional. Also take into account the effects of inflation,
which historically has reduced purchasing power by an average of 4.4% per year.

Once you determine your primary and secondary goals, you'll then need to
calculate how soon you will need your money.

STEP 2:

-----
Fundamentals 21

<PAGE>
- --------------------------------------------------------------------------------
FUNDAMENTALS OF MUTUAL FUND INVESTING (Continued)

STEP 3:

STEP 4:

- -----
22 Fundamentals

<PAGE>
- --------------------------------------------------------------------------------
/X/ COREFUND

REDUCTION OF RISK
OVER TIME

<TABLE>
Average Annual Return

<S> <C> <C>
1 Year
Stocks 43.40 -26.5
Long Term Bonds 40.36 -9.18
Intermediate-Term Bonds 29.10 -5.14
Cash 14.70 1.50
Inflation 13.30 0.40

5 Years
Stocks 20.40 -2.36
Long Term Bonds 21.62 -2.14
Intermediate-Term Bonds 16.98 0.96
Cash 11.12 2.33
Inflation 10.06 1.24

10 Years
Stocks 17.59 1.24
Long Term Bonds 15.56 1.13
Intermediate-Term Bonds 13.13 2.92
Cash 9.170 2.58
Inflation 7.340 1.57

20 Years
Stocks 14.58 6.53
Long Term Bonds 10.10 1.94
Intermediate-Term Bonds 9.85 3.98
Cash 7.72 4.00
Inflation 6.36 3.37

</TABLE>

THE LONGER YOU HOLD ANY PARTICULAR ASSET CLASS (STOCKS, BONDS, MONEY MARKET
INSTRUMENTS), THE LESS THE VARIATION IN RETURN. WHILE STOCKS HAVE FLUCTUATED
IN VALUE MUCH MORE THAN OTHER INVESTMENTS, THEY HAVE ALSO DELIVERED HIGHER
RETURNS OVER THE LONG RUN. IN ADDITION, THE LONGER AN INVESTOR REMAINS
INVESTED IN STOCKS, THE LESS THE CHANCE THERE IS FOR A CAPITAL LOSS. THE
BEST- AND WORST-CASE SCENARIOS PRESENTED IN THIS ILLUSTRATION REPRESENT THE
ABSOLUTE HIGHEST AND LOWEST RETURNS FROM JANUARY 1955 TO 1994. SOURCE: BASED
ON HISTORICAL DATA ON THE S&P 500 INDEX, INTERMEDIATE- AND LONG-TERM
GOVERNMENT BONDS, AND 30-DAY TREASURY BILLS FOR ROLLING ONE-, FIVE-, 10-, AND
20-YEAR PERIODS BETWEEN 1955 AND 1994. PAST RESULTS DO NOT GUARANTEE FUTURE
PERFORMANCE.

STEP 5:

For full details on how the principles of mutual fund investing can
work for you, please contact your investment representative.

STEP 6:

BE DISCIPLINED.
Once you have a good strategy, stay with it. Avoid sudden changes in reaction
to temporary market trends. Remember, you're interested in long-term
performance.

<PAGE>
- --------------------------------------------------------------------------------
FUNDAMENTALS OF MUTUAL FUND INVESTING (Continued)

GLOSSARY OF KEY INVESTMENT TERMS