FIRST UNION MONEY MARKET PORTFOLIO
(A Portfolio of First Union Funds)
Class C Investment Shares
Supplement to Prospectus dated February 28, 1994
First Union Money Market Portfolio ( the "Fund") has implemented the following
changes:
Effective September 21, 1994, Class C Investment Shares ("Class C Shares")
will charge a shareholder service fee of 0.25 of 1% of the Class C Shares'
average daily net assets; and
Class C Shares have implemented a new contingent deferred sales charge
schedule for all new purchases.
A. Please delete the "Summary of Fund Expenses" table on page 3 and replace it
with the following:
SUMMARY OF
FUND EXPENSES
FIRST UNION MONEY MARKET PORTFOLIO
CLASS C SHARES
CLASS C SHARES--SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price) None
Contingent Deferred Sales Load (as a percentage of original
purchase price or redemption proceeds, as applicable) (1) 5%
during the first year,
4%
during the second year,
3%
during the third year,
3%
during the fourth year,
2%
during the fifth year,
1%
during the sixth year,
1%
during the seventh year,
and 0%
after the seventh year
Redemption Fees (as a percentage of amount redeemed, if applicable) None
Exchange Fee None
ANNUAL CLASS C SHARES OPERATING EXPENSES*
(as a percentage of projected average net assets)
Management Fee (after waiver) (2) 0.11%
12b-1 Fees 0.75%
Total Other Expenses 0.61%
Shareholder Service Fee 0.25%
Total Class C Shares Operating Expenses (3) 1.47%
(1) No contingent deferred sales charge is imposed on (a) Shares purchased
more than seven years prior to redemption, (b) Shares acquired through
the reinvestment of dividends and distributions, and (c) the portion of
redemption proceeds attributable to increases in the value of an account
above the net cost of the investment due to increases in the net asset
value per Share.
(2) The management fee has been reduced to reflect anticipated voluntary
waiver by the Adviser. The Adviser may terminate this voluntary waiver
at any time at its sole discretion. The maximum management fee is 0.35%.
(3) Total Class C operating expenses for the Fund are estimated to be
1.71%, absent the voluntary waiver described in note 2.
*Expenses in the table are estimated based on average expenses expected
to be incurred during the fiscal year ending December 31, 1994. During the
course of this period, expenses may be more or less than the average amount
shown.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of the Fund will bear, either
directly or indirectly. For more complete descriptions of the various costs
and expenses, see "Fees and Expenses." Wire-transferred redemptions of less
than $5,000 may be subject to additional fees.
Because of the asset-based sales charge, long-term shareholders may pay more
than the economic equivalent of the maximum front-end sales charges permitted
under the rules of the National Association of Securities Dealers, Inc
("NASD"). However, in order for a Fund investor to exceed the NASD's maximum
front-end sales charge of 6.25%, a continuous investment in the Fund for 8.3
years would be required.
EXAMPLE 1 year 3 years
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and
(2) redemption at the end of each time period. $67 $80
You would pay the following expenses on the same
investment , assuming no redemptions $15 $46
The above example should
not be considered a representation of past or future expenses. Actual
expenses may be greater or less than those shown. The example for Class C
Shares is based on estimated data for the fiscal year ending December 31,
1994.
The information set forth in the foregoing table and example relates only to
Class C Shares of the Fund. The Fund also offers two additional classes of
shares called Trust Shares and Class B Shares. Trust Shares bear no sales
load, 12b-1 fee or Shareholder Service Fee. Class B Shares are subject to a
12b-1 fee of 0.35 of 1% and bear no sales load or Shareholder Service Fee.
See "Other Classes of Shares."
B. Please delete the first paragraph and the table under the section
entitled "What Shares Cost" on page 9 and replace it with the following:
"Class C Shares are sold at net asset value per Share without the
imposition of a sales charge at the time of purchase. Shares redeemed
within seven years of their purchase will be subject to a CDSC according
to the following schedule (applicable only to purchases beginning
September 1, 1994):
Year of Redemption Contingent Deferred
After Purchase Sales Charge
First 5.0%
Second 4.0%
Third 3.0%
Fourth 3.0%
Fifth 2.0%
Sixth 1.0%
Seventh 1.0%"
C. Please insert the following paragraph as the third paragraph under the
section entitled "Fund Administration" on page 13:
"First Union Brokerage Services, Charlotte, North Carolina, is the
shareholder servicing agent for Class C Shares of the Fund. As such,
FUBS provides shareholder services which include, but are not limited
to, distributing prospectuses and other information, providing
shareholder assistance, and communicating or facilitating purchases and
redemptions of Class C Shares. The Fund may pay FUBS a fee equal to
0.25 of 1% of the average daily net asset value of Class C Shares for
which FUBS provides shareholder services. FUBS may voluntarily choose
to waive all of a portion of its fee at any time."
September 30, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
337359533
G00389-17 (9/94)
