<PAGE> 1
As filed with the Securities and Exchange Commission on June 18, 1997
Registration Nos. 2-95973 and 811-4236
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-lA
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
POST-EFFECTIVE AMENDMENT NO. 42 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT [X]
OF 1940
AMENDMENT NO. 43 [X]
THE ONE GROUP(R)
(Exact Name of Registrant as Specified in Charter)
1111 POLARIS PARKWAY
P.O. BOX 710211
COLUMBUS, OHIO 43271-0211
(Address of Principal Executive Offices)
(800) 480-4111
(Registrant's Telephone Number)
GEORGE MARTINEZ
3435 STELZER ROAD
COLUMBUS, OHIO 43219
(Name and Address of Agent for Service)
Copies To:
Alan G. Priest, Esquire Michael V. Wible, Esquire
Ropes & Gray Banc One Corporation
One Franklin Square 100 East Broad Street, 18th Fl.
1301 K Street, N.W., Suite 800E Columbus, Ohio 43271
Washington, D.C. 20005
It is proposed that this filing will become effective (check appropriate box)
X Immediately upon filing pursuant to paragraph(b)
---
on (date) pursuant to paragraph(b)
---
60 days after filing pursuant to paragraph(a)(1)
---
on (DATE) pursuant to paragraph (a)(1)
---
75 days after filing pursuant to paragraph (a)(2)
---
--- on (DATE) pursuant to paragraph (a)(2)
of Rule 485.
The Registrant has registered an indefinite number or amount of securities under
the Securities Act of 1933 pursuant to Section (a) (1) of Rule 24f-2. Rule 24f-2
Notice for the Registrant's fiscal year ending June 30, 1996 was filed on August
28, 1996.
<PAGE> 2
THE ONE GROUP(R)
CROSS REFERENCE SHEET FOR EACH OFFERED PROSPECTUS
- -------------------------------------------------
<TABLE>
<CAPTION>
Form N-1A Part A Item Prospectus Caption
- --------------------- ------------------
<S> <C>
1. Cover Page . . . . . . . . . . . . . . . . Cover Page
2. Synopsis . . . . . . . . . . . . . . . . . Expense Summary
3. Financial Highlights . . . . . . . . . . . Financial Highlights
4. General Description Investment Objectives and
of Registrant . . . . . . . . . . . . . Permissible Investments; Additional
Investment Information; Other
Information; How To Do Business with
The One Group(R); Other Investment
Policies; Description of Permitted
Investments
5. Management of the Fund . . . . . . . . . Management of the Funds; The
Advisor; The Fund Managers, The
Administrator; The Distributor;
Other Information
6. Capital Stock and Other Investment Objectives and Permissible
Securities . . . . . . . . . . . . . . . Investments; How to Do Business
with The One Group(R); Other
Information
7. Purchase of Securities How To Do Business with
Being Offered . . . . . . . . . . . . . The One Group(R)
8. Redemption or Repurchase . . . . . . . . . How To Do Business with
The One Group(R)
9. Pending Legal Proceedings . . . . . . . . . Inapplicable
</TABLE>
2
<PAGE> 3
PART A
The One Group(R) U.S. Treasury Securities Money Market Fund
The One Group(R) Prime Money Market Fund
The One Group(R) Municipal Money Market Fund
The One Group(R) Ohio Municipal Money Market Fund
The One Group(R) Income Equity Fund
The One Group(R) Disciplined Value Fund
The One Group(R) Growth Opportunities Fund
The One Group(R) Equity Index Fund
The One Group(R) International Equity Index Fund
The One Group(R) Large Company Value Fund
The One Group(R) Large Company Growth Fund
The One Group(R) Asset Allocation Fund
The One Group(R) Texas Tax-Free Bond Fund
he One Group(R) Treasury Money Market Fund
The One Group(R) Treasury Only Money Market Fund
The One Group(R) Government Money Market Fund
The One Group(R) Tax-Exempt Money Market Fund
The One Group(R) Institutional Prime Money Market Fund
The One Group(R) Investor Growth Fund
The One Group(R) Investor Growth & Income Fund
The One Group(R) Investor Conservative Growth Fund
The One Group(R) Investor Balanced Fund
The One Group(R) Investor Aggressive Growth Fund
The One Group(R) Investor Fixed Income Fund
The One Group(R) Income Bond Fund
The One Group(R) Limited Volatility Bond Fund
The One Group(R) Intermediate Bond Fund
The One Group(R) Government Bond Fund
The One Group(R) Ultra Short-Term Bond Fund
The One Group(R) Value Growth Fund
The One Group(R) Gulf South Growth Fund
The One Group(R) Income Fund
The information required by Items 1 through 9 for the above-referenced Funds of
The One Group(R) (the "Registrant") is hereby incorporated by reference to the
Prospectuses for these Funds filed with the Securities and Exchange Commission
under Rule 497(c) on November 5, 1996.
3
<PAGE> 4
THE ONE GROUP(R)
FAMILY OF MUTUAL FUNDS
November 1, 1996
THE ONE GROUP(R) TREASURY & AGENCY FUND
This Prospectus describes The One Group(R) Treasury & Agency Fund (the "Fund")
which seeks a high level of current income by investing in U.S. Treasury and
other U.S. Agency obligations with a primary, but not exclusive, focus on issues
that produce income exempt from state income taxes. The Fund is a series of The
One Group(R) (the "Trust"). Banc One Investment Advisors Corporation ("Banc One
Advisors") serves as investment advisor to the Fund. Banc One Advisors currently
manages more than $39 billion in assets.
The following three classes of shares are available to investors:
Class A and Class B shares are offered to the general public.
Fiduciary Class shares are offered to institutional investors, including
affiliates of BANC ONE CORPORATION and any bank, depository institution,
insurance company, pension plan or other organization authorized to act in
fiduciary, advisory, agency, custodial or similar capacities (each an
"Authorized Financial Organization").
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED
BY BANC ONE CORPORATION OR ITS AFFILIATES. THE TRUST'S SHARES ARE NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR BY ANY OTHER
GOVERNMENTAL AGENCY OR GOVERNMENT SPONSORED AGENCY OF THE FEDERAL GOVERNMENT OR
ANY STATE. AN INVESTMENT IN MUTUAL FUND SHARES INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. BANC ONE
INVESTMENT ADVISORS CORPORATION RECEIVES FEES FROM THE FUND FOR INVESTMENT
ADVISORY AND OTHER SERVICES.
The Trust is registered with the Securities and Exchange Commission (the "SEC")
as an open-end management investment company. This Prospectus contains
information about the Trust and the Fund that a prospective investor should know
before investing. Please read this Prospectus carefully and retain it for future
reference. A Statement of Additional Information dated November 1, 1996 has been
filed with the SEC and is available without charge by calling (800) 480-4111 or
writing to the Distributor, The One Group(R) Services Company, at 3435 Stelzer
Road, Columbus, Ohio 43219. The Statement of Additional Information is
incorporated into this Prospectus by reference.
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.
PROSPECTUS
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY................................................................................ 3
ABOUT THE FUND......................................................................... 4
Expense Summary...................................................................... 4
The Fund............................................................................. 6
Investment Objective and Permissible Investments..................................... 6
Risk Factors......................................................................... 6
HOW TO DO BUSINESS WITH THE ONE GROUP(R)............................................... 7
How to Invest in The One Group....................................................... 7
Alternative Sales Arrangements....................................................... 10
Exchanges............................................................................ 12
Redemptions.......................................................................... 13
FUND MANAGEMENT........................................................................ 14
The Trustees......................................................................... 14
The Advisor.......................................................................... 14
The Fund Managers.................................................................... 14
The Distributor...................................................................... 15
The Administrator.................................................................... 15
The Transfer Agent and Custodian..................................................... 16
Counsel and Independent Accountants.................................................. 16
OTHER INFORMATION...................................................................... 16
The Trust............................................................................ 16
Other Investment Policies............................................................ 17
Description of Permitted Investments................................................. 18
Description of Ratings............................................................... 20
Performance.......................................................................... 20
Taxes................................................................................ 21
</TABLE>
PROSPECTUS
2
<PAGE> 6
SUMMARY
The Trust is an open-end management investment company that provides a
convenient way to invest in professionally managed portfolios of securities. The
following provides basic information about the various classes of shares of the
Fund.
WHAT IS THE INVESTMENT OBJECTIVE? The Fund seeks a high level of current income
by investing in U.S. Treasury and other U.S. Agency obligations with a primary,
but not exclusive, focus on issues that produce income exempt from state income
taxes. A more detailed discussion of the Fund's investment objectives and
policies can be found in this Prospectus under the heading "Investment
Objectives and Permissible Investments."
WHAT ARE THE PERMITTED INVESTMENTS? The Fund will normally invest at least 65%
of its total assets in U.S. Treasury bills, notes and other obligations issued
or guaranteed by the U.S. Treasury, and securities issued or guaranteed by U.S.
Government agencies or instrumentalities. The Fund's assets may be invested in
securities of other government-only investment companies, (including The One
Group(R)), government mortgage-backed securities and government adjustable rate
mortgage loans. The Fund's investments are subject to market and interest rate
fluctuations, which may affect the value of the Fund's shares. The securities in
which the Fund may invest are described in more detail in "Description of
Permitted Investments."
WHO IS THE ADVISOR? Banc One Investment Advisors Corporation ("Banc One
Advisors"), an indirect subsidiary of BANC ONE CORPORATION, serves as the
advisor of the Trust. Banc One Advisors is entitled to a fee for advisory
services provided to the Trust. Banc One Advisors may voluntarily agree to waive
a part of its fees. A more detailed discussion regarding Banc One Advisors, its
services and compensation can be found in the Prospectus under the headings "The
Advisor" and "Expense Summary."
WHO IS THE ADMINISTRATOR? The One Group(R) Services Company serves as the
Administrator of the Trust. The Administrator is entitled to a fee for services
provided to the Trust. Banc One Advisors serves as the Sub-Administrator of the
Trust, pursuant to an agreement with the Administrator for which Banc One
Advisors receives a fee paid by the Administrator. Additional information
regarding the Administrator can be found in this Prospectus under the headings
"The Administrator" and "Expense Summary."
WHO IS THE TRANSFER AGENT AND CUSTODIAN? State Street Bank and Trust Company
serves as Transfer Agent and Custodian for the Trust, for which services it
receives a fee. Bank One Trust Company, N.A. serves as Sub-Custodian for the
Trust, for which services it receives a fee. See "The Transfer Agent and
Custodian."
WHO IS THE DISTRIBUTOR? The One Group(R) Services Company acts as Distributor of
the Trust's shares. The Distributor is entitled to fees for distribution
services for the Class A and Class B shares. No compensation is paid to the
Distributor for the distribution services for the Fiduciary Class shares of the
Fund. The activities of the Distributor are discussed under the heading "The
Distributor."
HOW DO I PURCHASE AND REDEEM SHARES? Purchases and redemptions of shares of the
Fund may be made through the Distributor on any day that the New York Stock
Exchange is open for trading ("Business Days"). Purchase and redemption
procedures are explained in greater detail in "How to Invest in The One
Group(R)" and "Redemptions."
HOW ARE DIVIDENDS PAID? Substantially all of the Fund's net investment income
(exclusive of capital gains) is determined and declared daily, and is
distributed in the form of periodic dividends to Shareholders of the Fund on the
first Business Day of each month. Any capital gains are distributed at least
annually. Distributions are paid in additional shares of the same class unless
the Shareholder elects to take the payment in cash. For a more detailed
discussion of dividends, see "Dividends."
PROSPECTUS
3
<PAGE> 7
ABOUT THE FUND
EXPENSE SUMMARY -- THE ONE GROUP(R) TREASURY & AGENCY FUND
<TABLE>
<CAPTION>
FIDUCIARY
CLASS A CLASS B CLASS
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES(1)
Maximum Sales Charge Imposed on Purchases(2)
(as a percentage of offering price)................................ 3.00% none none
Maximum Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable).............. none 3.00% none
Redemption Fees...................................................... none none none
Exchange Fees........................................................ none none none
ANNUAL OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Advisory Fees (after fee waivers)(3)...................... .30% .30% .30%
12b-1 Fees (after fee waivers)(4).................................... .25% .75% none
Other Expenses(5).................................................... .15% .15% .15%
Total Operating Expenses(6).......................................... .70% 1.20% .45%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) A person who purchases shares through an account with a financial
institution or broker/dealer may be charged separate transaction fees by the
financial institution or broker/dealer. In addition, a wire redemption
charge, currently $7.00, is deducted from the amount of a wire redemption
payment made at the request of a Shareholder.
(2) A person who purchases $1 million or more Class A shares and is not assessed
a sales charge at the time of purchase, will be assessed a sales charge
equivalent to 1% of the purchase price if such purchaser redeems any or all
of the Class A shares prior to the first anniversary of purchase.
(3) Investment Advisory Fees have been revised to reflect fee waivers effective
as of the date of this Prospectus. Banc One Advisors may voluntarily agree
to waive a part of its fees. Absent this voluntary reduction, Investment
Advisory Fees would be .40% for all classes of shares.
(4) Absent the voluntary waiver of fees under the Trust's Distribution and
Shareholder Services Plans, 12b-1 fees (as a percentage of average daily net
assets) would be .35% for Class A shares and 1.00% for Class B shares. There
are no 12b-1 fees charged to Fiduciary Class shares. See "The Distributor."
(5) Other Expenses have been revised to reflect fee waivers effective as of the
date of this Prospectus. Absent this voluntary reduction, Other Expenses
would be .29% for all classes of shares.
(6) Total Operating Expenses have been revised to reflect fee waivers effective
as of the date of this Prospectus. Absent the voluntary reduction of
Investment Advisory and 12b-1 fees, Total Operating Expenses would be 1.04%
for Class A shares, 1.69% for Class B shares, and .69% for Fiduciary Class
shares.
PROSPECTUS
4
<PAGE> 8
EXAMPLE: An investor would pay the following expenses on a $1,000 investment in
Class A and Fiduciary Class shares of the Fund, assuming: (1) imposition of the
maximum sales charge for Class A shares; (2) 5% annual return; and (3)
redemption at the end of each time period.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Class A $ 37 $ 52
Fiduciary Class $ 5 $ 14
</TABLE>
Absent the voluntary reduction of fees, the dollar amounts in the above example
would be as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Class A $ 40 $ 62
Fiduciary Class $ 7 $ 22
</TABLE>
EXAMPLE: An investor would pay the following expenses on a $1,000 investment in
Class B shares, assuming: (1) deduction of the applicable maximum Contingent
Deferred Sales Charge; and (2) 5% annual return.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Assuming a complete redemption at end of period $ 42 $ 58
Assuming no redemption $ 12 $ 38
</TABLE>
Absent the voluntary reduction of fees, the dollar amounts in the above example
would be as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Assuming a complete redemption at end of period $ 47 $ 73
Assuming no redemption $ 17 $ 53
</TABLE>
These tables are designed to assist the investor in understanding the various
costs and expenses that may be directly or indirectly borne by investors in the
Trust. THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The rules of the SEC require that the maximum sales charge be reflected in the
above table. However, investors of the Fund ("Shareholders") may, under certain
circumstances, qualify for reduced sales charges. See "How to Invest in The One
Group(R)." Long-term Shareholders of Class A shares and Class B shares may pay
more than the equivalent of the maximum front-end sales charges otherwise
permitted by the National Association of Securities Dealers' Rules.
PROSPECTUS
5
<PAGE> 9
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Financial Highlights
<TABLE>
<CAPTION>
TREASURY & AGENCY FUND
-------------
CLASS A
-------------
JANUARY 20,
1997 TO
MARCH 31,
1997 (A)
-------------
(Unaudited)
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.00
---------
Investment Activities
Net investment income 0.13
Net realized and unrealized gains (losses)
from investments (0.14)
---------
Total from Investment Activities (0.01)
---------
Distributions
Net investment income (0.13)
---------
Total Distributions (0.13)
---------
NET ASSET VALUE,
END OF PERIOD $ 9.86
=========
Total Return (Excludes Sales Charge) -0.11%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ -(c)
Ratio of expenses to
average net assets 0.70%(d)
Ratio of net investment income
to average net assets 6.23%(d)
Ratio of expenses to
average net assets * 1.14%(d)
Ratio of net investment income
to average net assets * 5.79%(d)
Portfolio Turnover (e) 35.57%
<FN>
- ------------
* During the period certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been
as indicated.
(a) Period from commencment of operations.
(b) Not annualized.
(c) Amount is less than 1,000.
(d) Annualized.
(e) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
6
<PAGE> 10
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Financial Highlights
<TABLE>
<CAPTION>
TREASURY & AGENCY FUND
---------
CLASS B
---------
JANUARY 20,
1997 TO
MARCH 31,
1997 (A)
---------
(Unaudited)
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.00
--------
Investment Activities
Net investment income 0.12
Net realized and unrealized gains (losses)
from investments (0.14)
--------
Total from Investment Activities (0.02)
--------
Distributions
Net investment income (0.12)
In excess of net investment income
Net realized gains --
--------
Total Distributions (0.12)
--------
NET ASSET VALUE,
END OF PERIOD $ 9.86
========
Total Return (Excludes Redemption Charge) -0.17%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ -(c)
Ratio of expenses to
average net assets 1.20%(d)
Ratio of net investment income
to average net assets 5.73%(d)
Ratio of expenses to
average net assets * 1.79%(d)
Ratio of net investment income
to average net assets * 5.14%(d)
Portfolio Turnover (e) 35.57%
<FN>
- ------------
* During the period certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been
as indicated.
(a) Period from commencment of operations.
(b) Not annualized.
(c) Amount is less than 1,000.
(d) Annualized.
(e) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
7
<PAGE> 11
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Financial Highlights
<TABLE>
<CAPTION>
TREASURY & AGENCY FUND
---------
FIDUCIARY
---------
JANUARY 20,
1997 TO
MARCH 31,
1997 (A)
---------
(Unaudited)
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.00
-------------
Investment Activities
Net investment income 0.12
Net realized and unrealized gains (losses)
from investments (0.13)
-------------
Total from Investment Activities (0.01)
Distributions
Net investment income (0.12)
-------------
Total Distributions (0.12)
-------------
NET ASSET VALUE,
END OF PERIOD $ 9.87
=============
Total Return -0.06%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 112,228
Ratio of expenses to
average net assets 0.45%(c)
Ratio of net investment income
to average net assets 6.48%(c)
Ratio of expenses to
average net assets * 0.79%(c)
Ratio of net investment income
to average net assets * 6.14%(c)
Portfolio Turnover (d) 35.57%
- ------------
<FN>
* During the period certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been
as indicated.
(a) Period from commencment of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
8
<PAGE> 12
THE FUND
The Fund is part of the Trust, which is an open-end management investment
company that offers shares in 40 separate funds, most of which offer three
classes of shares. This Prospectus relates to Class A, Class B and Fiduciary
Class shares of the Fund, which provide for variations in distribution costs,
voting rights, dividends and per share net asset value. Except for these
differences among classes, each share of the Fund represents an undivided,
proportionate interest in the Fund. The Fund is a diversified mutual fund.
Information regarding the Trust's 39 other funds and their classes is contained
in separate prospectuses which may be obtained from the Trust's Distributor, The
One Group(R) Services Company, 3435 Stelzer Road, Columbus, Ohio 43219, or by
calling 1-800-480-4111.
INVESTMENT OBJECTIVE AND PERMISSIBLE INVESTMENTS
The investment objective of the Fund is "fundamental" and may not be changed
without a Shareholder vote. For additional information on Shareholder voting,
see the sections of this Prospectus entitled "Other Information -- Voting
Rights" and "Investment Limitations." Unless expressly deemed to be fundamental,
the investment policies of the Fund are non-fundamental and may be changed
without a Shareholder vote. You will be notified if a material change is made in
a non-fundamental policy. There is no assurance that the Fund will meet its
investment objective.
Below is a description of the Fund's investment objective and policies, as well
as a summary of the types of securities in which the Fund will invest. For
additional information concerning the Fund's investments, see "Description of
Permitted Investments." The risks associated with investment in the Fund and
with certain investment techniques used by the Fund can be found in the sections
entitled "Risk Factors" and "Description of Permitted Investments."
The Fund seeks a high level of current income by investing in U.S. Treasury and
other U.S. Agency obligations with a primary, but not exclusive, focus on issues
that produce income exempt from state income taxes.
The Fund will normally invest at least 65% of its total assets in U.S. Treasury
bills, notes and other obligations issued or guaranteed by the U.S. Treasury,
and securities issued or guaranteed by U.S. Government agencies or
instrumentalities. The Fund's assets may be invested in U.S. Treasury
obligations, which may include Separately Traded Registered Interest and
Principal Securities ("STRIPS") and Coupon Under Book Entry Safekeeping
("CUBES"), and securities of other government-only investment companies,
(including The One Group(R)). The Fund may also invest in government
mortgage-backed securities and government adjustable rate mortgage loans
("ARMs"). In addition, the Fund may engage in securities lending transactions.
Under normal market conditions, it is anticipated that the Fund's average
weighted maturity will range between two and five years.
For a detailed description of the Fund's permitted investments and ratings, see
"Description of Permitted Investments" and "Description of Ratings" and the
Statement of Additional Information. For a description of permitted investments
for temporary defensive purposes, see "Temporary Defensive Position." In the
event a security owned by the Fund is downgraded below these rating categories,
Banc One Advisors will review and take appropriate action with regard to the
security.
RISK FACTORS
RISKS OF INVESTING IN FIXED-INCOME SECURITIES
The market value of the Fund's fixed-income investments will change in response
to interest rate changes and other factors. During periods of falling interest
rates, the values of outstanding fixed-income securities generally rise.
Conversely, during periods of rising interest rates, the values of such
securities generally decline. Moreover, while securities with longer maturities
tend to produce higher yields, the prices of longer maturity securities are also
subject to greater market fluctuations as a result of changes in interest rates.
Changes by recognized agencies in the rating of any fixed-income security and in
the ability of an issuer to make payments of interest and principal also affect
the value of these investments. Except under condition of default, changes in
the value of fixed-income securities will not affect cash income derived from
these securities but will affect the Fund's net asset value.
Because the Fund's investments are interest rate sensitive, the Fund's
performance will depend in varying degrees on fluctuations in market interest
rates. Banc One Advisors will utilize appropriate strategies which attempt to
maximize returns to the Fund, while minimizing the associated risks to its
invested capital. Operating results also will depend upon the availability of
opportunities for the investment of the Fund's assets, including purchases and
sales of suitable securities.
RISKS OF INVESTING IN MORTGAGE-RELATED SECURITIES
The Fund may invest in mortgage-related securities. Mortgage-related securities
include, among other things, mortgage-backed securities, and adjustable rate
mortgage loans. The investment characteristics of mortgage-related securities
differ from traditional debt securities. These differences can result in
significantly greater price and yield volatility than is the case with
traditional fixed-income securities. The major differences typically include
more frequent
PROSPECTUS
9
<PAGE> 13
interest and principal payments, usually monthly, the adjustability of interest
rates, and the possibility that prepayments of principal may be made at any
time. Prepayment rates are influenced by changes in current interest rates and a
variety of economic, geographic, social, and other factors. During periods of
declining interest rates, prepayment rates can be expected to accelerate. Under
certain interest rate and prepayment rate scenarios, the Fund may fail to recoup
fully its investment in mortgage-related securities notwithstanding a direct or
indirect governmental or agency guarantee. The Fund intends to use hedging
techniques to control this risk. In general, changes in the rate of prepayments
on a mortgage-related security will change that security's market value and its
yield to maturity. When interest rates fall, high prepayments could force the
Fund to reinvest principal at a time when investment opportunities are not
attractive. Thus, mortgage-related securities may not be an effective means for
the Fund to lock in long-term interest rates. Conversely, during periods when
interest rates rise, slow prepayments could cause the average life of the
securities to lengthen and the value to decline more than anticipated.
RISK OF CERTAIN INVESTMENT TECHNIQUES
Certain investment management techniques that the Fund may use may expose the
Fund to special risks. These include, but are not limited to, lending portfolio
securities. These practices could expose the Fund to potentially greater risk of
loss than more traditional fixed-income investments.
For additional information on each of the Fund's permitted investments and
associated risks, see "Description of Permitted Investments."
HOW TO DO BUSINESS WITH THE ONE GROUP(R)
HOW TO INVEST IN THE ONE GROUP(R)
Shares of the Fund are sold on a continuous basis and may be purchased directly
from the Trust's Distributor, The One Group(R) Services Company, by mail, by
telephone, or by wire. Shares may also be purchased through a financial
institution, such as a bank, savings and loan association or insurance company
(each a "Shareholder Servicing Agent"), that has established a Shareholder
servicing agreement with the Distributor, or through a broker-dealer that has
established a dealer agreement with the Distributor.
Purchases and redemptions of shares of the Fund may be made on any day that the
New York Stock Exchange is open for trading ("Business Days"). The minimum
initial and subsequent investments in the Fund are $50,000 and $1,000,
respectively. Initial and subsequent investment minimums may be waived at the
Distributor's discretion. Investors may purchase up to a maximum of $250,000 of
Class B shares per individual purchase order.
Class A and Class B shares are offered to the general public. Fiduciary Class
shares are offered to institutional investors, including affiliates of BANC ONE
CORPORATION and any bank, depository institution, insurance company, pension
plan or other organization authorized to act in fiduciary, advisory, agency,
custodial or similar capacities (each an "Authorized Financial Organization").
For additional details regarding eligibility, call the Distributor at
1-800-480-4111.
BY MAIL
Investors may purchase Class A and Class B shares of the Fund by completing and
signing an Account Application Form and mailing it, along with a check (or other
negotiable bank instrument or money order) payable to "The One Group(R)," to
State Street Bank and Trust Company (the Trust's Transfer Agent and Custodian),
P.O. Box 8500, Boston, MA 02266-8500. Subsequent purchases of shares may be made
at any time by mailing a check to the Transfer Agent. Account Application Forms
are available through the Distributor by calling 1-800-480-4111. All purchases
made by check should be in U.S. dollars. Third party checks will not be
accepted. When purchases are made by check or under the Systematic Investment
Plan (see below), redemptions will not be allowed until the investment being
redeemed has been in the Fund for 10 calendar days.
Purchases of Fiduciary Class shares and Class A shares that are being offered to
investors in certain retirement plans such as 401(k) and similar plans, other
than Individual Retirement Accounts, are made by an institutional investor and/
or other intermediary on behalf of an investor (each also a "Shareholder
Servicing Agent"). The Shareholder Servicing Agent may require an investor to
complete forms in addition to the Account Application Form and to follow
procedures established by the Shareholder Servicing Agent. Such Shareholders
should contact their Shareholder Servicing Agents regarding purchases, exchanges
and redemptions of shares. See "Additional Information Regarding Purchases."
BY TELEPHONE OR BY WIRE
Once an Account Application Form has been received, Shareholders are eligible to
make purchases by telephone or wire (if that option has been selected by a
Shareholder) by calling the Transfer Agent at 1-800-480-4111 or the Shareholder
Servicing Agent, if applicable.
PROSPECTUS
10
<PAGE> 14
Shareholders may revoke their automatic eligibility to make purchases and/or
redemptions by telephone or by wire, by sending a letter so stating to the
Transfer Agent, State Street Bank and Trust Company, P.O. Box 8500, Boston, MA
02266-8500.
FUND-DIRECT IRA
The Trust offers a tax-advantaged retirement plan for which the shares of the
Fund may be an appropriate investment. The Trust's retirement plan allows
participants to defer taxes while helping them build their retirement savings.
The One Group(R)'s Fund-Direct IRA is a retirement plan with a wide choice of
investments, offering people with earned income the opportunity to compound
earnings on a tax-deferred basis. An IRA Adoption Agreement may be obtained by
calling the Distributor at 1-800-480-4111.
ADDITIONAL INFORMATION REGARDING PURCHASES
A purchase order will be effective as of the day received by the Distributor if
the Distributor receives the order before 4:00 p.m., eastern time. However, an
order may be cancelled if the Transfer Agent does not receive Federal funds
before close of business on the next Business Day for Fiduciary Class shares,
and before the close of business on the third Business Day for Class A and Class
B shares, and the investor could be liable for any fees or expenses incurred by
the Trust. Federal funds are monies credited to a bank's account with a Federal
Reserve Bank. The purchase price of shares of the Fund is the net asset value
next determined after a purchase order is effected plus any applicable sales
charge (the "offering price"). The net asset value per share of the Fund is
determined by dividing the total market value of the Fund's investments and
other assets allocable to a class, less any liabilities allocable to that class,
by the total number of outstanding shares of such class. Net asset value per
share is determined daily as of 4:00 p.m., eastern time, on each Business Day.
For a further discussion of the calculation of net asset value, see the
Statement of Additional Information. Shares may also be issued in transactions
involving the acquisition by the Fund of securities held by collective
investment funds sponsored and administered by affiliates of Banc One Advisors.
Purchases will be made in full and fractional shares of the Fund calculated to
three decimal places. Although the methodology and procedures are identical, the
net asset value per share of classes within the Fund may differ because the
distribution expenses charged to Class A shares and Class B shares are not
charged to Fiduciary Class shares.
The Trust reserves the right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Trust and/or its
Shareholders to accept such order. Except as provided below, neither the Trust's
Transfer Agent nor the Trust will be responsible for any loss, liability, cost
or expense for acting upon telephone or wire instructions, and the investor will
bear all risk of loss. The Trust will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine, including requiring a
form of personal identification prior to acting upon instructions received by
telephone and recording telephone instructions. If such procedures are not
employed, the Trust may be liable for any losses due to unauthorized or
fraudulent instructions.
Fiduciary Class shares offered to institutional investors and to investors in
certain retirement plans, and Class A shares that are offered to investors in
certain retirement plans such as 401(k) and similar plans, other than Individual
Retirement Accounts, will normally be held in the name of the Shareholder
Servicing Agent effecting the purchase on the Shareholder's behalf, and it is
the Shareholder Servicing Agent's responsibility to transmit purchase orders to
the Distributor. A Shareholder Servicing Agent may impose an earlier cut-off
time for receipt of purchase orders directed through it to allow for processing
and transmittal of these orders to the Distributor for effectiveness the same
day. The Shareholder should contact his or her Shareholder Servicing Agent for
information as to the Shareholder Servicing Agent's procedures for transmitting
purchase, exchange or redemption orders to the Trust. A Shareholder who desires
to transfer the registration of shares beneficially owned by him or her, but
held of record by a Shareholder Servicing Agent, should contact the Shareholder
Servicing Agent to accomplish such change. Other Shareholders who desire to
transfer the registration of their shares should contact the Transfer Agent.
No certificates representing the shares of the Fund will be issued. In
communications to Shareholders, the Fund will not duplicate mailings of Fund
material to Shareholders who reside at the same address.
PROSPECTUS
11
<PAGE> 15
SALES CHARGE
The following table shows the initial sales charge on Class A shares to a
"single purchaser" (defined below) together with the commission paid to
financial institutions and intermediaries (the "commission"):
<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE COMMISSION
AS A AS APPROPRIATE AS A
PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF
OFFERING NET AMOUNT OFFERING
AMOUNT OF PURCHASE PRICE INVESTED PRICE
- ------------------------------------------------------- ------------- -------------- -------------
<S> <C> <C> <C>
less than $100,000..................................... 3.00% 3.09% 2.70%
$100,000 but less than $250,000........................ 2.50% 2.56% 2.18%
$250,000 but less than $500,000........................ 2.00% 2.04% 1.64%
$500,000 but less than $1,000,000...................... 1.50% 1.52% 1.20%
$1,000,000 or more..................................... 0.00% 0.00% 0.00%
</TABLE>
The commissions shown in the table apply to sales through financial institutions
and intermediaries. Under certain circumstances, the Distributor will use its
own funds to compensate financial institutions and intermediaries in amounts
that are additional to the commissions shown above. The maximum cash
compensation payable by the Distributor as a sales charge is 3.00% of the
offering price (including the commission shown above and additional cash
compensation described below). In addition, the Distributor will, from time to
time and at its own expense, provide promotional incentives to financial
institutions and intermediaries, whose registered representatives have sold or
are expected to sell significant amounts of the shares of the Fund, in the form
of payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives to places within or outside
the United States, and additional compensation in an amount up to 1.00% of the
offering price of Class A shares of the Fund for sales of $1 million to $5
million, and 0.50% for sales over $5 million. An investor who purchases $1
million or more of Class A shares and is not assessed a sales charge at the time
of purchase, will be assessed a sales charge equivalent to 1% of the purchase
price if such investor redeems any or all of the Class A shares prior to the
first anniversary of purchase. Under certain circumstances, commissions up to
the amount of the entire sales charge will be reallowed to financial
institutions and intermediaries, which might then be deemed to be "underwriters"
under the Securities Act of 1933.
RIGHT OF ACCUMULATION
In calculating the sales charge rates applicable to current purchases of Class A
shares, a "single purchaser" is entitled to cumulate current purchases with the
current value at the offering price of previously purchased Class A and Class B
shares of the Fund and other eligible funds of the Trust, other than the Trust's
money market funds, that are sold subject to a comparable sales charge.
The term "single purchaser" refers to (i) an individual, (ii) an individual and
spouse purchasing shares of the Fund for their own account or for trust or
custodial accounts for their minor children, or (iii) a fiduciary purchasing for
any one trust, estate or fiduciary account, including employee benefit plans
created under Sections 401 or 457 of the Internal Revenue Code of 1986, as
amended (the "Code"), and including related plans of the same employer. To be
entitled to a reduced sales charge based upon shares already owned, the investor
must ask the Distributor for such reduction at the time of purchase and provide
the account number(s) of the investor, the investor and spouse, and their minor
children, and give the age of such children. The Fund may amend or terminate
this right of accumulation at any time as to subsequent purchases.
LETTER OF INTENT
By initially investing at least $2,000 in Class A shares of one or more funds
that impose a comparable sales charge over the next 13 months, the sales charge
may be reduced by completing the Letter of Intent section of the Account
Application Form. The Letter of Intent includes a provision for a sales charge
adjustment depending on the amount actually purchased within the 13-month
period. In addition, pursuant to a Letter of Intent, the Custodian will hold in
escrow the difference between the sales charge applicable to the amount
initially purchased and the sales charge paid at the time of investment, which
is based on the amount covered by the Letter of Intent.
For example, assume an investor signs a Letter of Intent to purchase $250,000 in
Class A shares of one (or more) of the funds of the Trust that impose a
comparable sales charge and, at the time of signing the Letter of Intent,
purchases $100,000 of Class A shares of one of these funds. The investor would
pay an initial sales charge of 2.00% (the sales charge applicable to purchases
of $250,000) and .50% of the investment (representing the difference between the
2.50% sales charge applicable to purchases of $100,000 and the 2.00% sales
charge already paid) would be held in escrow until the investor has purchased
the remaining $150,000 or more in Class A shares under the investor's Letter of
Intent.
PROSPECTUS
12
<PAGE> 16
The amount held in escrow will be applied to the investor's account at the end
of the 13-month period unless the amount specified in the Letter of Intent is
not purchased. In order to qualify for a Letter of Intent, the investor will be
required to make a minimum purchase of at least $2,000.
The Letter of Intent will not obligate the investor to purchase Class A shares,
but if he or she does, each purchase during the period will be at the sales
charge applicable to the total amount intended to be purchased. The Letter of
Intent may be dated as of a prior date to include any purchases made within the
past 90 days.
OTHER CIRCUMSTANCES
No sales charge is imposed on Class A shares of the Fund: (i) issued through
reinvestment of dividends and capital gains distributions; (ii) acquired through
the exercise of exchange privileges where a comparable sales charge has been
paid for exchanged shares; (iii) purchased by officers, directors or trustees,
retirees and employees (and their spouses and immediate family members) of the
Trust, of BANC ONE CORPORATION and its subsidiaries and affiliates, of the
Distributor and its subsidiaries and affiliates, of the Custodian and Transfer
Agent and their subsidiaries and affiliates, or of an investment sub-Advisor of
a fund of the Trust and such sub-Advisor's subsidiaries and affiliates; (iv)
sold to affiliates of BANC ONE CORPORATION and certain accounts (other than
Individual Retirement Accounts) for which Authorized Financial Organizations act
in fiduciary, advisory, agency, custodial or similar capacities, or purchased by
investment Advisors, financial planners or other intermediaries who have a
dealer arrangement with the Distributor, who place trades for their own accounts
or for the accounts of their clients and who charge a management, consulting or
other fee for their services, as well as clients of such investment Advisors,
financial planners or other intermediaries who place trades for their own
accounts if the accounts are linked to the master account of such investment
Advisor, financial planner or other intermediary; (v) purchased with proceeds
from the recent redemption of Fiduciary Class shares of a fund of the Trust or
acquired in an exchange of Fiduciary Class shares of a fund for Class A shares
of the same fund; (vi) purchased with proceeds from the recent redemption of
shares of a mutual fund (other than a fund of the Trust) for which a sales
charge was paid; (vii) purchased in an Individual Retirement Account with the
proceeds of a distribution from an employee benefit plan, provided that, at the
time of distribution, the employee benefit plan had plan assets invested in a
fund of the Trust; (viii) purchased with Trust assets; (ix) purchased in
accounts as to which a bank or broker-dealer charges an asset allocation fee,
provided the bank or broker-dealer has an agreement with the Distributor; (x)
directly purchased with the proceeds of a dividend distribution on a bond for
which a BANC ONE CORPORATION affiliate bank or trust company is the Trustee or
Paying Agent; or (xi) purchased in connection with plans of reorganization of
the Fund, such as mergers, asset acquisitions and exchange offers to which the
Fund is a party.
An investor relying upon any of the categories of waivers of the sales charge
must qualify for such waiver in advance of the purchase with the Distributor or
the financial institution or intermediary through which shares are purchased by
the investor.
The waiver of the sales charge under circumstances (v), (vi) and (vii) above
applies only if the purchase is made within 60 days of the redemption or
distribution and if conditions imposed by the Distributor are met. The waiver
policy with respect to the purchase of shares through the use of proceeds from a
recent redemption or distribution as described in clauses (v), (vi) and (vii)
above will not be continued indefinitely and may be discontinued at any time
without notice. Investors should call the Distributor at 1-800-480-4111 to
determine whether they are eligible to purchase shares without paying a sales
charge through the use of proceeds from a recent redemption or distribution as
described above, and to confirm continued availability of the waiver policies
prior to initiating the procedures described in clauses (v), (vi) and (vii).
ALTERNATIVE SALES ARRANGEMENTS
CLASS B SHARES
Class B shares are not subject to a sales charge when they are purchased, but
are subject to a sales charge (the "Contingent Deferred Sales Charge") if a
Shareholder redeems them prior to the fourth anniversary of purchase. When a
Shareholder purchases Class B shares, the full purchase amount is invested
directly in the Fund. Class B shares of the Fund are subject to an ongoing
distribution and Shareholder service fee at an annual rate of 1.00% of the
Fund's average daily net assets as provided in the Class B Plan (described below
under "The Distributor"). The Distributor has voluntarily agreed to reduce the
amount of this fee to .75% of the Fund's average daily net assets attributable
to the Class B shares, for the indefinite future. This ongoing fee will cause
Class B shares to have a higher expense ratio and to pay lower dividends than
Class A shares. Class B shares convert automatically to Class A shares after six
years, commencing from the end of the calendar month in which the purchase order
was accepted under the circumstances and subject to the qualifications described
in this Prospectus.
Proceeds from the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees under the Class B Plan are payable to the Distributor
and financial intermediaries to defray the expenses of advance brokerage
commissions and expenses related to providing distribution-related and
Shareholder services to the Fund in connection with the sale of the Class B
shares, such as the payment of compensation to dealers and agents for selling
Class B shares. A dealer
PROSPECTUS
13
<PAGE> 17
reallowance of 2.75% of the original purchase price of the Class B shares will
be paid to financial institutions and intermediaries.
CONTINGENT DEFERRED SALES CHARGE
If the Shareholder redeems Class B shares prior to the fourth anniversary of
purchase, the Shareholder will pay a Contingent Deferred Sales Charge at the
rates set forth below. The Contingent Deferred Sales Charge is assessed on an
amount equal to the lesser of the then-current market value or the cost of the
shares being redeemed. Accordingly, no sales charge is imposed on increases in
net asset value above the initial purchase price. In addition, no charge is
assessed on shares derived from reinvestment of dividends or capital gain
distributions.
The amount of the Contingent Deferred Sales Charge, if any, varies depending on
the number of years from the time of payment for the purchase of Class B shares
until the time of redemption of such shares. Solely for purposes of determining
the number of years from the time of any payment for the purchase of shares, all
payments during a month are aggregated and deemed to have been made on the first
day of the month.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
YEAR(S) PERCENTAGE OF
SINCE DOLLAR AMOUNT
PURCHASE SUBJECT TO CHARGE
---------------------------------------------------------------------- --------------------
<S> <C>
0-1................................................................... 3.00%
1-2................................................................... 3.00%
2-3................................................................... 2.00%
3-4................................................................... 1.00%
4-5................................................................... None
5-6................................................................... None
</TABLE>
In determining whether a particular redemption is subject to a Contingent
Deferred Sales Charge, it is assumed that the redemption is first of any Class A
shares in the Shareholder's Fund account (unless the Shareholder elects to have
Class B shares redeemed first) or shares representing capital appreciation, next
of shares acquired pursuant to reinvestment of dividends and capital gain
distributions, and finally of other shares held by the Shareholder for the
longest period of time. This method should result in the lowest possible sales
charge.
To provide an example, assume you purchased 100 shares at $10 per share (a total
cost of $1,000) and prior to the second anniversary after purchase, the net
asset value per share is $12 and during such time you have acquired 10
additional shares through dividends paid in shares. If you then make your first
redemption of 50 shares (proceeds of $600), 10 shares will not be subject to
charge because you received them as dividends. With respect to the remaining 40
shares, the charge is applied only to the original cost of $10 per share and not
to the increase in net asset value of $2 per share. Therefore, $400 of the $600
redemption proceeds is subject to a Contingent Deferred Sales Charge at a rate
of 3.00% (the applicable rate prior to the second anniversary after purchase).
The Contingent Deferred Sales Charge is waived on redemption of shares: (i) for
distributions that are made under a Systematic Withdrawal Plan of the Trust and
that are limited to no more than 10% of the account value annually, determined
in the first year, as of the date the redemption request is received by the
Transfer Agent, and in subsequent years, as of the most recent anniversary of
that date; (ii) following the death or disability (as defined in the Code) of a
Shareholder or a participant or beneficiary of a qualifying retirement plan if
redemption is made within one year of such death or disability; or (iii) to the
extent that the redemption represents a minimum required distribution from an
Individual Retirement Account or other qualifying retirement plan to a
Shareholder who has attained the age of 70 1/2. A Shareholder or his or her
representative should contact the Transfer Agent to determine whether a
retirement plan qualifies for a waiver and must notify the Transfer Agent prior
to the time of redemption if such circumstances exist and the Shareholder is
eligible for this waiver. In addition, the following circumstances are not
deemed to result in a "redemption" of Class B shares for purposes of the
assessment of a Contingent Deferred Sales Charge, which is therefore waived: (i)
plans of reorganization of the Fund, such as mergers, asset acquisitions and
exchange offers to which the Fund is a party; or (ii) exchanges for Class B
shares of other funds of the Trust as described under "Exchanges."
CONVERSION FEATURE
Class B shares include all shares purchased pursuant to the Contingent Deferred
Sales Charge which have been outstanding for less than the period ending six
years after the end of the month in which the shares were purchased. At the end
of this period, Class B shares will automatically convert to Class A shares and
will be subject to the lower distribution and Shareholder service fees charged
to Class A shares. Such conversion will be on the basis of the relative net
asset values of the two classes, without the imposition of any sales charge, fee
or other charge. The conversion is not a taxable event to a Shareholder.
PROSPECTUS
14
<PAGE> 18
For purposes of conversion to Class A shares, shares received as dividends and
other distributions paid on Class B shares in a Shareholder's Fund account will
be considered to be held in a separate sub-account. Each time any Class B shares
in a Shareholder's Fund account (other than those in the sub-account) convert to
Class A shares, a pro-rata portion of the Class B shares in the sub-account will
also convert to Class A shares.
If a Shareholder effects one or more exchanges among Class B shares of the funds
of the Trust during the six-year period, the Trust will aggregate the holding
periods for the shares of each fund of the Trust for purposes of calculating
that six-year period. Because the per share net asset value of the Class A
shares may be higher than that of the Class B shares at the time of conversion,
a Shareholder may receive fewer Class A shares than the number of Class B shares
converted, although the dollar value will be the same.
EXCHANGES
CLASS A AND FIDUCIARY CLASS
Fiduciary Class Shareholders of the Fund may exchange their shares for Class A
shares of the Fund or for Class A shares or Fiduciary Class shares of another
fund of the Trust.
Class A Shareholders may exchange their shares for Fiduciary Class shares of the
Fund or for Fiduciary Class shares or Class A shares of another fund of the
Trust, if the Shareholder is eligible to purchase such shares.
The exchange privilege may be exercised only in those states where the shares of
the Fund or such other fund of the Trust may be legally sold. All exchanges
discussed herein are made at the net asset value of the exchanged shares, except
as provided below. The Trust does not impose a charge for processing exchanges
of shares. If a Shareholder seeks to exchange Class A shares of a fund that does
not impose a sales charge for Class A shares of a fund that does or the fund
being exchanged into has a higher sales charge, the Shareholder will be required
to pay a sales charge in the amount equal to the difference between the sales
charge applicable to the fund into which the shares are being exchanged and any
sales charges previously paid for the exchanged shares, including any sales
charges incurred on any earlier exchanges of the shares (unless such sales
charge is otherwise waived, as provided in "Other Circumstances"). The exchange
of Fiduciary Class shares for Class A shares also will require payment of the
sales charge unless the sales charge is waived, as provided in "Other
Circumstances."
CLASS B
Class B Shareholders of the Fund may exchange their shares for Class B shares of
any other fund of the Trust on the basis of the net asset value of the exchanged
Class B shares, without the payment of any Contingent Deferred Sales Charge that
might otherwise be due upon redemption of the outstanding Class B shares. The
newly acquired Class B shares will be subject to the higher Contingent Deferred
Sales Charge of either the fund from which the shares were exchanged or the fund
into which the shares were exchanged. With respect to outstanding Class B shares
as to which previous exchanges have taken place, "higher Contingent Deferred
Sales Charge" shall mean the higher of the Contingent Deferred Sales Charge
applicable to either the fund the shares are exchanging into or any other fund
from which the shares previously have been exchanged. For purposes of computing
the Contingent Deferred Sales Charge that may be payable upon a disposition of
the newly acquired Class B shares, the holding period for outstanding Class B
shares of the fund from which the exchange was made is "tacked" to the holding
period of the newly acquired Class B shares. For purposes of calculating the
holding period applicable to the newly acquired Class B shares, the newly
acquired Class B shares shall be deemed to have been issued on the date of
receipt of the Shareholder's order to purchase the outstanding Class B shares of
the fund from which the initial exchange was made.
ADDITIONAL INFORMATION REGARDING EXCHANGES
In the case of shares held of record by a Shareholder Servicing Agent but
beneficially owned by a Shareholder, to exchange such shares the Shareholder
should contact the Shareholder Servicing Agent, who will contact the Transfer
Agent and effect the exchange on behalf of the Shareholder. If an exchange
request in good order is received by the Transfer Agent by 4:00 p.m., eastern
time, on any Business Day, the exchange usually will occur on that day. Any
Shareholder who wishes to make an exchange must receive a current prospectus of
the fund of the Trust in which he or she wishes to invest before the exchange
will be effected.
The Trust reserves the right to change the terms and conditions of the exchange
privilege discussed herein upon sixty days' written notice. An exchange between
classes of shares of the same fund is not considered a taxable event; however,
an exchange between funds of the Trust is considered a sale of shares and
usually results in a capital gain or loss for Federal income tax purposes.
Shareholders should consult their tax Advisors for a more complete explanation
of the Federal income tax consequences of an exchange of shares of the Fund.
A more detailed description of the above is set forth in the Statement of
Additional Information.
PROSPECTUS
15
<PAGE> 19
The Fund's exchange privilege is not intended to afford Shareholders a way to
speculate on short-term movements in the market. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt the
management of the Fund and increase transaction costs, the Fund has established
a policy of limiting excessive exchange activity.
Exchange activity generally will not be deemed excessive if limited to TWO
SUBSTANTIVE EXCHANGE REDEMPTIONS (AT LEAST 30 DAY APART) from the Fund during
any twelve month period. Notwithstanding these limitations, the Fund reserves
the right to reject any purchase request (including exchange purchases from
other One Group portfolios) that is reasonably deemed to be disruptive to
efficient portfolio management.
REDEMPTIONS
Shareholders may redeem their shares without charge (except Class B shares, as
provided above) on any Business Day; shares may ordinarily be redeemed by mail,
by telephone or by wire. All redemption orders are effected at the net asset
value per share next determined for Class A and Fiduciary Class shares, and at
net asset value per share next determined reduced by any applicable Contingent
Deferred Sales Charge for Class B shares, after receipt of a valid request for
redemption. Payment to Shareholders for shares redeemed will be made within
seven days after receipt by the Transfer Agent of the request for redemption.
BY MAIL
A written request for redemption must be received by the Transfer Agent in order
to constitute a valid request for redemption. All requests for redemptions from
IRA accounts must be in writing. Redemption request forms may be obtained from
the Transfer Agent by calling (800) 480-4111. All written redemption requests
should be sent to The One Group, c/o State Street Bank and Trust Company, P.O.
Box 8500, Boston, MA 02266-8500, or the Shareholder Servicing Agent, if
applicable. The Transfer Agent may require that the signature on the written
request be guaranteed by a commercial bank, a member firm of a domestic stock
exchange, or by a member of the Securities Transfer Association Medallion
Program or the Stock Exchange Medallion Program.
The signature guarantee requirement will be waived if all of the following
conditions apply: (i) the redemption is for $50,000 worth of shares or less;
(ii) the redemption check is payable to the Shareholder(s) of record; and (iii)
the redemption check is mailed to the Shareholder(s) at the address of record.
The Shareholder may also have the proceeds mailed to a commercial bank account
previously designated on the Account Application Form or by written instruction
to the Transfer Agent or the Shareholder Servicing Agent, if applicable. There
is no charge for having redemption requests mailed to a designated bank account.
BY TELEPHONE AND WIRE
Shareholders may have the payment of redemption requests wired or mailed to a
domestic commercial bank account previously designated on the Account
Application Form. Wire redemption requests may be made by the Shareholder by
telephone to the Transfer Agent at 1-800-480-4111, provided that the Shareholder
has elected the telephone redemption privilege in writing to the Distributor, or
to the Shareholder Servicing Agent, if applicable. The Transfer Agent may reduce
the amount of a wire redemption payment by its then-current wire redemption
charge, which, as of the date of this Prospectus, is $7.00.
Neither the Trust nor the Transfer Agent will be responsible for the
authenticity of the redemption instructions received by telephone if it
reasonably believes those instructions to be genuine. The Trust and the Transfer
Agent will each employ reasonable procedures to confirm that telephone
instructions are genuine, and may be liable for losses resulting from
unauthorized or fraudulent telephone transactions if it does not employ those
procedures. Such procedures may include requesting personal identification
information or recording telephone conversations.
SYSTEMATIC WITHDRAWAL PLAN
Shareholders whose accounts have a value of at least $10,000 may elect to
receive, or may designate another person to receive, monthly, quarterly or
annual payments in a specified amount of not less than $100 each. There is no
charge for this service. Purchases of additional Class A shares while the
Systematic Withdrawal Plan is in effect are generally undesirable because a
sales charge is incurred whenever purchases are made.
Pursuant to the Systematic Withdrawal Plan, Class B Shareholders may elect to
receive, or may designate another person to receive, distributions provided the
distributions are limited to no more than 10% of their account value annually,
determined in the first year as of the date the redemption request is received
by the Transfer Agent, and in subsequent years, as of the most recent
anniversary of that date. In addition, Shareholders who have attained the age of
70 1/2 may elect to receive distributions, to the extent that the redemption
represents a minimum required distribution from an Individual Retirement Account
or other qualifying retirement plan.
PROSPECTUS
16
<PAGE> 20
If the amount of the systematic withdrawal exceeds the income accrued since the
previous withdrawal under the Systematic Withdrawal Plan, the principal balance
invested will be reduced and shares will be redeemed.
OTHER INFORMATION REGARDING REDEMPTIONS
At various times, the Fund may be requested to redeem shares for which it has
not yet received good payment. In such circumstances, the forwarding of proceeds
may be delayed for 10 or more days until payment has been collected for the
purchase of such shares. The Fund intends to pay cash for all shares redeemed.
See "How to invest in The One Group(R) -- by Mail."
Due to the relatively high costs of handling small investments, the Fund
reserves the right to redeem, at net asset value, the shares of any Shareholder
if, because of redemptions of shares by or on behalf of the Shareholder, the
account of such Shareholder in the Fund has a value of less than $1,000, the
minimum initial purchase amount. Accordingly, an investor purchasing shares of
the Fund in only the minimum investment amount may be subject to such
involuntary redemption if he or she thereafter redeems any of these shares.
Before the Fund exercises its right to redeem such shares and to send the
proceeds to the Shareholder, the Shareholder will be given notice that the value
of the shares in his or her account is less than the minimum amount and will be
allowed 60 days to make an additional investment in the Fund in an amount which
will increase the value of the account to at least $1,000.
See "Redemption of Shares" in the Statement of Additional Information for
examples of when the Trust may suspend the right of redemption or redeem shares
involuntarily if it appears appropriate to do so in light of the Trust's
responsibilities under the Investment Company Act of 1940.
FUND MANAGEMENT
THE TRUSTEES
The Trustees oversee the management and administration of the Fund. Among their
other duties the Trustees' are responsible for making major decisions relating
to the Fund's investment objectives and policies. The Trustees delegate the
day-to-day management of the Fund to the officers of the Trust and meet at least
quarterly to review the Fund's investment policies, performance, expenses and
other business affairs.
THE ADVISOR
The Trust and Banc One Advisors have entered into an investment advisory
agreement (the "Advisory Agreement"). Under the Advisory Agreement, Banc One
Advisors makes the day-by-day investment decisions for the Fund and continuously
reviews, supervises and administers the Fund's investment program. Banc One
Advisors discharges its responsibilities subject to the supervision of, and
policies established by, the Trustees of the Trust. Banc One Advisors began
serving as investment advisor to the Trust in 1993 and currently serves as
investment advisor to all of the funds of the Trust, as well as advisor to other
mutual funds and individual, corporate, charitable and retirement accounts. Banc
One Advisors and its affiliates have considerable investment management
experience dating back to 1985.
Banc One Advisors is an indirect, wholly-owned subsidiary of BANC ONE
CORPORATION, a bank holding company incorporated in the state of Ohio. BANC ONE
CORPORATION currently has affiliate banking organizations in Arizona, Colorado,
Illinois, Indiana, Kentucky, Louisiana, Ohio, Oklahoma, Texas, Utah, West
Virginia and Wisconsin. In addition, BANC ONE CORPORATION has several affiliates
that engage in data processing, venture capital, investment and merchant
banking, and other diversified services including trust management, investment
management, brokerage, equipment leasing, mortgage banking, consumer finance and
insurance. The Trust's shares are not deposits or obligations of, or endorsed or
guaranteed by BANC ONE CORPORATION or its bank or non-bank affiliates. The
Trust's shares are not insured or guaranteed by the Federal Deposit Insurance
Corporation ("FDIC") or by any other governmental agency or government sponsored
agency of the Federal government or any state.
On a consolidated basis, BANC ONE CORPORATION had assets of over $97 billion as
of June 30, 1996.
THE FUND MANAGERS
Gary J. Madich, CFA, is Senior Managing Director of Fixed Income Securities. Mr.
Madich joined Banc One Advisors in February, 1995. Prior to joining Banc One
Advisors, Mr. Madich was a Senior Vice President and Portfolio Manager with
Federated Investors. Mr. Madich has seventeen years of investment management
experience.
Scott Grimshaw is the Manger of the Fund. Mr. Grimshaw also is head of
Derivatives Research for Banc One Advisors and Manager of the fixed income
portion of the Asset Allocation Fund, having served in that position since
November, 1994. Mr. Grimshaw served as the Senior Investment Officer in the
Quantitative and Analysis Group for BANC ONE CORPORATION prior to his current
position. Mr. Grimshaw has been employed by BANC ONE CORPORATION or its
affiliates since 1988.
PROSPECTUS
17
<PAGE> 21
The Fund pays Banc One Advisors an investment advisory fee, which is calculated
daily and paid monthly, at an annual rate of .40% of the average daily net
assets of the Fund. Banc One Advisors may voluntarily agree to waive a part of
its fees. (See "About the Fund -- Expense Summary.") These fee waivers are
voluntary and may be terminated at any time. Shareholders will be notified in
advance if and when these waivers are terminated.
THE DISTRIBUTOR
The One Group(R) Services Company (the "Distributor"), a wholly-owned subsidiary
of the BISYS Group, Inc., and the Trust are parties to a distribution agreement
(the "Distribution Agreement") under which shares of the Fund are sold on a
continuous basis.
Class A shares are subject to a distribution and Shareholder services plan (the
"Plan"). As provided in the Plan, the Trust will pay the Distributor a fee of
.35% of the average daily net assets of Class A shares of the Fund. Currently,
the Distributor has voluntarily agreed to limit payments under the Plan to .25%
of the average daily net assets of Class A shares of the Fund. Up to .25% of the
fees payable under the Plan may be used as compensation for Shareholder services
by the Distributor and/or financial institutions and intermediaries. All such
fees that may be paid under the Plan will be paid pursuant to Rule 12b-1 of the
Investment Company Act of 1940. The Distributor may apply these fees toward: (i)
compensation for its services in connection with distribution assistance or
provision of Shareholder services; or (ii) payments to financial institutions
and intermediaries such as banks (including affiliates of Banc One Advisors),
savings and loan associations, insurance companies, investment counselors,
broker-dealers, and the Distributor's affiliates and subsidiaries, as
compensation for services or reimbursement of expenses incurred in connection
with distribution assistance or provision of Shareholder services.
Class B shares are subject to a Contingent Deferred Sales Charge if such shares
are redeemed prior to the sixth anniversary of purchase. Class B shares of the
Fund are subject to an ongoing distribution and Shareholder service fee as
provided in the Class B distribution and Shareholder services plan (the "Class B
Plan") at an annual rate of 1.00% of the Fund's average daily net assets, which
includes Shareholder servicing fees of .25% of the Fund's average daily net
assets. Currently, the Distributor has voluntarily agreed to limit payments
under the Class B Plan to .75% of the average daily net assets of the Class B
shares of the Fund.
Proceeds from the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees under the Class B Plan are payable to the Distributor
and financial intermediaries to defray the expenses of advance brokerage
commissions and expenses related to providing distribution-related and
Shareholder services to the Fund in connection with the sale of Class B shares,
such as the payment of compensation to dealers and agents for selling Class B
shares. The combination of the Contingent Deferred Sales Charge and the
distribution and Shareholder service fees facilitate the ability of the Fund to
sell the Class B shares without a sales charge being deducted at the time of
purchase.
The Plan and the Class B Plan are characterized as compensation plans since the
distribution fees will be paid to the Distributor without regard to the
distribution or Shareholder service expenses incurred by the Distributor or the
amount of payments made to financial institutions and intermediaries. The Fund
also may execute brokerage or other agency transactions through an affiliate of
Banc One Advisors or through the Distributor for which the affiliate or the
Distributor receives compensation. Pursuant to guidelines adopted by the Board
of Trustees of the Trust, any such compensation will be reasonable and fair
compared to compensation received by other brokers in connection with comparable
transactions.
Fiduciary Class shares of the Fund are offered without distribution fees to
institutional investors, including Authorized Financial Organizations. It is
possible that an institution may offer different classes of shares to its
customers and thus receive different compensation with respect to different
classes of shares. In addition, a financial institution that is the record owner
of shares for the account of its customers may impose separate fees for account
services to its customers.
THE ADMINISTRATOR
The One Group(R) Services Company (the "Administrator"), a wholly-owned
subsidiary of the BISYS Group, Inc., and the Trust are parties to an
administration agreement relating to the Fund (the "Administration Agreement").
Under the terms of the Administration Agreement, the Administrator is
responsible for providing the Trust with administrative services (other than
investment advisory services), including regulatory reporting and all necessary
office space, equipment, personnel and facilities.
Banc One Advisors also serves as Sub-Administrator to each fund of the Trust,
pursuant to an agreement between the Administrator and Banc One Advisors.
Pursuant to this agreement, Banc One Advisors performs many of the
Administrator's duties, for which Banc One Advisors receives a fee paid by the
Administrator.
The Administrator is entitled to a fee for administrative services, which is
calculated daily and paid monthly, at an annual rate of .20% of each fund's
average daily net assets on the first $1.5 billion in Trust assets (excluding
The One Group Treasury Only Money Market Fund, The One Group(R) Government Money
Market Fund and The One Group(R) Investor Funds), .18% of each fund's average
daily net assets to $2 billion in Trust assets (excluding The One Group(R)
Treasury
PROSPECTUS
18
<PAGE> 22
Only Money Market Fund, The One Group(R) Government Money Market Fund and The
One Group(R) Investor Funds), and .16% of each fund's average daily net assets
when Trust assets exceed $2 billion (excluding The One Group(R) Treasury Only
Money Market Fund, The One Group(R) Government Money Market Fund and The One
Group(R) Investor Funds).
THE TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company, P.O. Box 8500, Boston, MA 02266-8500 acts
as Transfer Agent and Custodian for the Trust, for which services it receives a
fee. The Custodian holds cash, securities and other assets of the Trust as
required by the Investment Company Act of 1940. Bank One Trust Company, N.A.
serves as Sub-Custodian in connection with the Trust's securities lending
activities, pursuant to an agreement between State Street Bank and Trust Company
and Bank One Trust Company. Bank One Trust Company receives a fee paid by the
Trust.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Ropes & Gray serves as counsel to the Trust. Coopers & Lybrand L.L.P. serves as
the independent accountants of the Trust.
OTHER INFORMATION
THE TRUST
The Trust was organized as a Massachusetts Business Trust under a Declaration of
Trust filed on May 23, 1985. The Declaration of Trust permits the Trust to offer
separate funds and different classes of each fund. All consideration received by
the Trust for shares of any fund and all assets of such fund belong to that fund
and would be subject to liabilities related thereto.
The Trust pays its expenses, including fees of its service providers, audit and
legal expenses, expenses of preparing prospectuses, proxy solicitation material
and reports to Shareholders, costs of custodial services and registering the
shares under Federal and state securities laws, pricing, insurance expenses,
litigation and other extraordinary expenses, brokerage costs, interest charges,
taxes and organizational expenses. The total expenses for the Fund for the most
recent fiscal year are set forth in this Prospectus under the heading "Expense
Summary."
Banc One Advisors and the Administrator of the Fund each bears all expenses
incurred in connection with the performance of their services as investment
Advisor and administrator, respectively, other than the cost of securities
(including brokerage commissions, if any) purchased for the Fund.
As a general matter, expenses are allocated to each class of shares of the Fund
on the basis of the net asset value of that class in relation to the net asset
value of the Fund. At present, the only expenses that are allocated to Class A
and Class B shares, other than in accordance with the relative net asset value
of the class, are the different distribution and Shareholder services costs. See
"Expense Summary." At present, no expenses are allocated to Fiduciary Class
shares as a class that are not also borne by the other classes of shares of the
Fund in proportion to the relative net asset values of the shares of such
classes.
The organizational expenses of the Fund have been capitalized and are being
amortized in the first five years of the Fund's operations. Such amortization
will reduce the amount of income available for payment as dividends.
VOTING RIGHTS
Each share held entitles the Shareholder of record to one vote. Therefore, the
number of votes a Shareholder is entitled to depends on the number of shares
owned by that Shareholder. Each fund of the Trust will vote separately on
matters relating solely to that fund. In addition, each class of a fund shall
have exclusive voting rights on any matter submitted to Shareholders that
relates solely to that class, and shall have separate voting rights on any
matter submitted to Shareholders in which the interests of one class differ from
the interests of any other class. However, all fund Shareholders will have equal
voting rights on matters that affect all fund Shareholders equally. As a
Massachusetts Business Trust, the Trust is not required to hold annual meetings
of Shareholders but approval will be sought for certain changes in the operation
of the Trust and for the election of Trustees under certain circumstances. In
addition, a Trustee may be elected or removed by the remaining Trustees or by
Shareholders at a special meeting called upon written request of Shareholders
owning at least 10% of the outstanding shares of the Trust. In the event that
such a meeting is requested, the Trust will provide appropriate assistance and
information to the Shareholders requesting the meeting.
DIVIDENDS
Substantially all of the net investment income (exclusive of capital gains) is
determined and declared daily, and is distributed in the form of monthly
dividends to Shareholders of Record of the Fund on the first Business Day of
each month. Capital gains of the Fund, if any, will be distributed at least
annually.
PROSPECTUS
19
<PAGE> 23
To maintain a relatively even rate of distributions from the Fund rather than
having substantial fluctuations from period to period, the monthly distributions
level from the Fund may be fixed from time to time at rates consistent with Banc
One Advisors' long-term earnings expectations.
Shareholders automatically receive all income dividends and capital gain
distributions in additional Class A, Class B, or Fiduciary Class shares, as
applicable, at the net asset value next determined following the record date,
unless the Shareholder has elected to take such payment in cash. Such election,
or any revocation thereof, must be made in writing, at least 15 days prior to
distribution, to the Transfer Agent at P.O. Box 8500, Boston, MA 02266-8500, and
will become effective with respect to dividends and distributions having record
dates after its receipt by the Transfer Agent. Reinvested dividends and
distributions receive the same tax treatment as dividends and distributions paid
in cash.
Class B shares received as dividends and capital gains distributions at the net
asset value next determined following the record date shall be held in a
separate Class B sub-account. Each time any Class B shares (other than those in
the sub-account) convert to Class A shares, a pro-rata portion of the Class B
shares in the sub-account will also convert to Class A shares. (See "Conversion
Feature.")
Dividends and distributions of the Fund are paid on a per-share basis. The value
of each share will be reduced by the amount of the payment. If shares are
purchased shortly before the record date for a dividend or the distribution of
capital gains, a Shareholder will pay the full price for the shares and receive
some portion of the price back as a taxable dividend or distribution even though
such distribution would, in effect, represent a return of the Shareholder's
investment.
The amount of dividends payable on Fiduciary Class shares will be more than the
dividends payable on Class A and Class B shares because of the distribution
expenses charged to Class A and Class B shares.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to the Administrator, The One Group(R)
Services Company, 3435 Stelzer Road, Columbus, Ohio 43219.
REPORTING
The Trust issues unaudited financial information semiannually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE POSITION
For temporary defensive purposes during periods when Banc One Advisors
determines that market conditions warrant such action, the Fund may invest up to
100% of its assets in money market instruments, and may hold a portion of its
assets in cash for liquidity purposes.
To the extent the Fund is engaged in a temporary defensive position, it will not
be pursuing its investment objective.
PORTFOLIO TURNOVER
Portfolio turnover may vary greatly from year to year, as well as within a
particular year. It is presently estimated that the annual portfolio turnover
rate of the Fund will not exceed 100%. Higher portfolio turnover rates will
likely result in higher transaction costs to the Fund and may result in
additional tax consequences to the Fund's Shareholders.
INVESTMENT LIMITATIONS
The investment objective and the following investment limitations are
fundamental policies of the Fund. Fundamental policies cannot be changed without
the consent of the holders of a majority of the Fund's outstanding shares. The
term "majority of the outstanding shares" means the vote of (i) 67% or more of
the Fund's shares present at a meeting, if more than 50% of the outstanding
shares of the Fund are present or represented by proxy, or (ii) more than 50% of
the Fund's outstanding shares, whichever is less.
The Fund may not:
1. Purchase securities of any issuer (except securities issued or guaranteed by
the United States, its agencies or instrumentalities, and if consistent with the
Fund's investment objective and policies, repurchase agreements involving such
securities) if as a result more than 5% of the total assets of the Fund would be
invested in the securities of such issuer or the Fund would own more than 10% of
the outstanding voting securities of such issuer. This restriction applies to
75% of the Fund's assets. For purposes of these limitations, a security is
considered to be issued by the government entity whose assets and revenues
guarantee or back the security. With respect to private activity bonds or
industrial development bonds backed only by the assets and revenues of a
non-governmental user, such user would be considered the issuer.
PROSPECTUS
20
<PAGE> 24
2. Purchase any securities that would cause more than 25% of the total assets of
the Fund to be invested in the securities of one or more issuers conducting
their principal business activities in the same industry, provided that this
limitation does not apply to investments in obligations issued or guaranteed by
the U.S. government or its agencies and instrumentalities and repurchase
agreements involving such securities. For purposes of this limitation (i)
utilities will be divided according to their services (for example, gas, gas
transmission, electric and telephone will each be considered a separate
industry); and (ii) 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.
3. Make loans, except that the Fund may (i) purchase or hold debt instruments in
accordance with its investment objective and policies; (ii) enter into
repurchase agreements; and (iii) engage in securities lending as described in
this Prospectus and in the Statement of Additional Information.
The foregoing percentages will apply at the time of the purchase of a security.
Additional investment limitations are set forth in the Statement of Additional
Information.
DESCRIPTION OF PERMITTED INVESTMENTS
The following is a description of certain of the permitted investments for the
Fund.
U.S. TREASURY OBLIGATIONS -- The Fund may invest in bills, notes and bonds
issued by the U.S. Treasury 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 Interest and Principal
Securities ("STRIPS") and Coupon Under Book Entry Safekeeping ("CUBES").
STRIPS and CUBES are 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. Because
of these features, these securities may be subject to greater interest rate
volatility than interest-paying U.S. Treasury obligations.
U.S. GOVERNMENT AGENCIES -- Certain Federal agencies have been established as
instrumentalities of the U.S. government to supervise and finance specific types
of activities. Select agencies, such as the Government National Mortgage
Association ("Ginnie Mae") and the Export-Import Bank, are supported by the full
faith and credit of the U.S. Treasury; others, such as the Federal National
Mortgage Association ("Fannie Mae"), are supported by the credit of the
instrumentality and have the right to borrow from the U.S. Treasury; others are
supported by the authority of the U.S. government to purchase the agency's
obligations; while still others, such as the Federal Farm Credit Banks and the
Federal Home Loan Mortgage Corporation ("Freddie Mac"), are supported solely by
the credit of the instrumentality itself. No assurance can be given that the
U.S. government would provide financial support to U.S. government sponsored
agencies or instrumentalities if it is not obligated to do so by law.
Obligations of U.S. government agencies include debt issues, callable debt
issues, securities with step-up coupons and mortgage-backed securities issued or
guaranteed by select agencies.
INVESTMENT COMPANY SECURITIES -- The Fund may invest up to 5% of its total
assets in the securities of any one investment company, but may not own more
than 3% of the securities of any one investment company or invest more than 10%
of its assets in the securities of other investment companies. The Fund will
only invest in investment companies which invest exclusively in U.S. Treasury
and other U.S. Agency obligations. Because other investment companies employ an
investment Advisor, such investment by the Fund may cause Shareholders to bear
duplicative fees. Banc One Advisors will waive its fee attributable to the
assets of the investing fund invested in a money market fund of the Trust and in
other funds advised or administered by Banc One Advisors; and, to the extent
required by the laws of any state in which shares of the Trust are sold, Banc
One Advisors will waive its fees attributable to the assets of the Fund invested
in any investment company.
SECURITIES LENDING -- In order to generate additional income, the Fund may lend
up to 33% of the securities in which it is invested pursuant to agreements
requiring that the loan be continuously secured by cash, securities of the U.S.
government or its agencies, shares of an investment trust or mutual fund or any
combination of cash and such securities as collateral equal at all times to at
least 100% of the market value plus accrued interest on the securities lent. The
Fund will continue to receive interest on the securities lent while
simultaneously seeking to earn interest on the investment of cash collateral in
U.S. government securities, shares of an investment trust or mutual fund, or
other short-term, highly liquid investments. Collateral is marked to market
daily to provide a level of collateral at least equal to the market value of the
securities lent. There may be risks of delay in recovery of the securities or
even loss of rights in the collateral should the borrower of the securities fail
financially. However, loans will only be made to borrowers deemed by Banc One
Advisors to be of good standing under guidelines established by the Trust's
Board of Trustees and when, in the judgment of Banc One Advisors, the
consideration which can be earned currently from such securities loans justifies
the attendant risk. The Fund will enter into loan arrangements only with
counterparties which Banc One Advisors has deemed to be
PROSPECTUS
21
<PAGE> 25
creditworthy under guidelines established by the Board of Trustees. Loans are
subject to termination by the Fund or the borrower at any time, and are
therefore, not considered to be illiquid investments.
VARIABLE AND FLOATING RATE INSTRUMENTS -- Certain of the obligations purchased
by the Fund may carry variable or floating rates of interest, may involve a
conditional or unconditional demand feature and may include variable amount
master demand notes. The interest rates on these securities may be reset daily,
weekly, quarterly or some other reset period, and may have a floor or ceiling on
interest rate charges. There is a risk that the current interest rate on such
obligations may not accurately reflect existing market interest rates. These
instruments will be purchased only if they are issued by the U.S. Treasury or
another U.S. government agency.
MORTGAGE-BACKED SECURITIES -- Mortgage-backed securities are debt obligations
secured by real estate loans and pools of loans. The Fund may acquire securities
representing an interest in a pool of mortgage loans that are issued or
guaranteed by Ginnie Mae, Fannie Mae and Freddie Mac. The Fund will only
purchase mortgage-backed securities that are not structured to provide for
redistribution of the cash flows of mortgage-related products to different bond
classes (called tranches), and are thus not considered to be derivatives.
Mortgage-backed securities are in most cases "pass-through" instruments, through
which the holder receives a share of all interest and principal payments from
the mortgages underlying the certificate. Because the prepayment characteristics
of the underlying mortgages vary, it is not possible to predict accurately the
average life or realized yield of a particular issue of pass-through
certificates. During periods of declining interest rates, prepayment of
mortgages underlying mortgage-backed securities can be expected to accelerate.
When the mortgage obligations are prepaid, the Fund may have to reinvest in
securities with a lower yield. Moreover, prepayment of mortgages which underlie
securities purchased at a premium could result in capital losses.
REGULATION OF MORTGAGE LOANS -- Mortgage loans are subject to a variety of state
and Federal regulations designed to protect borrowers which may impair the
ability of the mortgage lender to enforce its rights under the mortgage
documents. These regulations include legal restraints on foreclosures, homeowner
rights of redemption after foreclosure, Federal and state bankruptcy and debtor
relief laws, restrictions on enforcement of mortgage loan "due on sale" clauses
and state usury laws. Even when the Fund invests in mortgage-backed securities
issued or guaranteed by the U.S. government, its agencies or instrumentalities,
these regulations may adversely affect the Fund's investments by delaying the
Fund's receipt of payments derived from principal or interest on mortgage loans
affected by such regulations.
GOVERNMENT ADJUSTABLE RATE MORTGAGE LOANS ("ARMS") -- ARMs eligible for
inclusion in a mortgage pool will generally provide for a fixed initial mortgage
interest rate for a specified period of time. Thereafter, the interest rates
(the "Mortgage Interest Rates") may be subject to periodic adjustment based on
changes in the applicable index rate (the "Index Rate"). The adjusted rate would
be equal to the Index Rate plus a gross margin, which is a fixed percentage
spread over the Index Rate established for each ARM at the time of its
origination.
Adjustable interest rates can cause payment increases that some borrowers may
find difficult to make. However, certain ARMs may provide that the Mortgage
Interest Rate may not be adjusted to a rate above an applicable lifetime maximum
rate or below an applicable lifetime minimum rate for such ARM. Certain ARMs may
also be subject to limitations on the maximum amount by which the Mortgage
Interest Rate may adjust for any single adjustment period (the "Maximum
Adjustment"). Other ARMs ("Negatively Amortizing ARMs") may provide instead or
as well for limitations on changes in the monthly payment on such ARMs.
Limitations on monthly payments can result in monthly payments which are greater
or less than the amount necessary to amortize a Negatively Amortizing ARM by its
maturity at the Mortgage Interest Rate in effect in any particular month. In the
event that a monthly payment is not sufficient to pay the interest accruing on a
Negatively Amortizing ARM, any such excess interest is added to the principal
balance of the loan, causing negative amortization and will be repaid through
future monthly payments. It may take borrowers under Negatively Amortizing ARMs
longer periods of time to achieve equity and may increase the likelihood of
default by such borrowers. In the event that a monthly payment exceeds the sum
of the interest accrued at the applicable Mortgage Interest Rate and the
principal payment which would have been necessary to amortize the outstanding
principal balance over the remaining term of the loan, the excess (or
"accelerated amortization") further reduces the principal balance of the ARM.
Negatively Amortizing ARMs do not provide for the extension of their original
maturity to accommodate changes in their Mortgage Interest Rate. As a result,
unless there is a periodic recalculation of the payment amount (which there
generally is), the final payment may be substantially larger than the other
payments. These limitations on periodic increases in interest rates and on
changes in monthly payments protect borrowers from unlimited interest rate and
payment increases.
There are two main categories of indices which provide the basis for rate
adjustments on ARMs: those based on U.S. Treasury securities and those derived
from a calculated measure such as a cost of funds index or a moving average of
mortgage rates. Commonly utilized indices include the one-year, three-year and
five-year constant maturity Treasury bill rates, the three-month Treasury bill
rate, the 180-day Treasury bill rate, rates on longer-term Treasury securities,
the 11th District Federal Home Loan Bank Cost of Funds, the National Median Cost
of Funds, the one-month, three-month, six-month or one-year London Interbank
Offered Rate ("LIBOR"), the prime rate of a specific bank, or commercial paper
rates. Some indices, such as the one-year constant maturity Treasury rate,
closely mirror changes in market interest rate levels. Others, such as the 11th
District Federal Home Loan Bank Cost of Funds index, tend to lag
PROSPECTUS
22
<PAGE> 26
behind changes in market rate levels and tend to be somewhat less volatile. The
degree of volatility in the market value of the Fund's portfolio and therefore
in the net asset value of the Fund's shares will be a function of the length of
the interest rate reset periods and the degree of volatility in the applicable
indices.
DESCRIPTION OF RATINGS
The following descriptions are summaries of published ratings.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
The following descriptions of commercial paper ratings have been published by
Standard & Poor's Corporation ("S&P"), Moody's Investors Service ("Moody's"),
Fitch's Investors Service ("Fitch"), Duff and Phelps ("Duff"), and IBCA Limited
("IBCA"), respectively.
Commercial paper rated A by S&P is regarded by S&P as having the greatest
capacity for timely payment. Issues rated A are further refined by use of the
numbers 1+, 1, and 2 to indicate the relative degree of safety. Issues rated
A-1+ are those with an "overwhelming degree" of credit protection. Those rated
A-1 reflect a "very strong" degree of safety regarding timely payment. Those
rated A-2 reflect a high degree of safety regarding timely payment but not as
high as A-1.
Commercial paper issues rated Prime-1 and Prime-2 by Moody's are judged by
Moody's to be of the "highest" quality and "higher" quality respectively on the
basis of relative repayment capacity.
The rating Fitch-1 (Highest Grade) is the highest commercial rating assigned by
Fitch. Paper rated Fitch-1 is regarded as having the strongest degree of
assurance for timely payment. The rating Fitch-2 (Very Good Grade) is the second
highest commercial paper rating assigned by Fitch which reflects an assurance of
timely payment only slightly less in degree than the strongest issues.
The rating Duff-1 is the highest commercial paper rating assigned by Duff. Paper
rated Duff-1 is regarded as having very high certainty of timely payment with
excellent liquidity factors which are supported by ample asset protection. Risk
factors are minor. Paper rated Duff-2 is regarded as having good certainty of
timely payment, good access to capital markets and sound liquidity factors and
company fundamentals. Risk factors are small.
The designation A1 by IBCA indicates that the obligation is supported by a very
strong capacity for timely repayment. Those obligations rated A1+ are supported
by the highest capacity for timely repayment. Obligations rated A2 are supported
by a strong capacity for timely repayment, although such capacity may be
susceptible to adverse changes in business, economic or financial conditions.
DESCRIPTION OF CORPORATE/MUNICIPAL BOND RATINGS
The following descriptions of S&P's and Moody's corporate and municipal bond
ratings have been published by S&P and Moody's, respectively.
Bonds rated AAA have the highest rating S&P assigns to a debt obligation. Such a
rating indicates an extremely strong capacity to pay principal and interest.
Bonds rated AA also qualify as high-quality debt obligations. Capacity to pay
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in a small degree. Debt rated A 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.
Bonds that 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 that
make the long-term risks appear somewhat larger than in Aaa securities.
Bonds that are rated A possess many favorable investment attributes and are to
be considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
MISCELLANEOUS
The Trust believes that as of May 19, 1997, BANC ONE CORPORATION (100 East
Broad Street, Columbus, OH 43271), through its affiliates, owned of record
substantially all of the Fiduciary Class shares of the Fund. The Trust believes
that as of the same date, BANC ONE CORPORATION, through its affiliate possessed
on behalf of its customers, voting or investment power with respect to
substantially all of the Fiduciary Class shares of the Fund. As a result, BANC
ONE CORPORATION may be deemed to be a controlling person of the Fiduciary Class
shares of the Fund.
PERFORMANCE
From time to time, the Fund may advertise yield, total return and/or
distribution rate. These figures will be based on historical earnings and are
not intended to indicate future performance. The yield of the Fund refers to the
annualized
PROSPECTUS
23
<PAGE> 27
income generated by an investment in the Fund over a specified 30-day period.
The yield is calculated by assuming that the income generated by the investment
during that period is generated over a one-year period and is shown as a
percentage of the investment.
Total return is the change in value of an investment in the Fund over a given
period, assuming reinvestment of any dividends and capital gains. A cumulative
total return reflects an actual rate of return over a stated period of time. An
average annual total return is a hypothetical rate of return that, if achieved
annually, would have produced the same cumulative total return if performance
had been constant over the entire period. Average annual total returns smooth
out variations in performance; they are not the same as actual year-by-year
results.
The distribution rate is computed by dividing the total amount of the dividends
per share paid out during the past period by the maximum offering price or
month-end net asset value depending on the class of the Fund. This figure is
then "annualized" (multiplied by 365 days and divided by the applicable number
of days in the period). Funds with a front-end sales charge would incorporate
the offering price into the distribution yield in place of month-end net asset
value.
Distribution rate is a measure of the level of income paid out in cash to
Shareholders over a specified period. It differs from yield and total return and
is not intended to be a complete measure of performance. Furthermore, the
distribution rate may include return of principal and/or capital gains. Total
return is the change in value of a hypothetical investment over a given period
assuming reinvestment of dividends and capital gain distributions. The yield
refers to the cumulative 30-day rolling net investment income, divided by
maximum offering price and multiplied by average shares outstanding during this
period. See the Statement of Additional Information.
The Trust will include information on all classes of shares of the Fund in any
advertisement or information including performance data for the Fund. The
performance for Fiduciary Class shares may be higher than for Class A shares and
Class B shares because Fiduciary Class shares are not subject to sales charges
and distribution expenses.
The performance of each class of the Fund may from time to time be compared to
that of other mutual funds tracked by mutual fund rating services, to that of
broad groups of comparable mutual funds or to that of unmanaged indices that may
assume investment of dividends but do not reflect deductions for administrative
and management costs. In addition, the performance of each class of the Fund may
be compared to other funds or to relevant indices that may calculate total
return without reflecting sales charges; in which case, the Fund may advertise
its total return in the same manner. If reflected, sales charges would reduce
these total return calculations.
Further information about the performance of each class of the Fund is contained
in the Trust's Annual Report to Shareholders for The One Group(R) Treasury &
Agency Fund, which may be obtained without charge by calling 1-800-480-4111.
TAXES
The following summary of Federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial, or
administrative action. No attempt has been made to present a complete
explanation of the Federal, state, local or foreign income tax treatment of the
Fund or its Shareholders. Accordingly, Shareholders are urged to consult their
tax Advisors regarding specific questions as to the tax consequences of
investing in the Fund.
TAX STATUS OF THE FUND
The Fund is treated as a separate entity for Federal income tax purposes and is
not combined with the Trust's other funds. The Fund intends to qualify as a
"regulated investment company" for Federal income tax purposes and to meet all
other requirements that are necessary for it to be relieved of Federal taxes on
that part of its net investment income and net capital gains (the excess of net
long-term capital gain over net short-term capital loss) that is distributed to
Shareholders.
TAX STATUS OF DISTRIBUTIONS
The Fund will distribute substantially all of its net investment income
(including, for this purpose, net short-term capital gain) to Shareholders of
each class of shares of the Fund on at least an annual basis. Generally,
dividends from net investment income will be taxable to Shareholders as ordinary
income whether received in cash or in additional shares, and any net capital
gains will be distributed at least annually and will be taxed to Shareholders as
long-term capital gains, regardless of how long the Shareholder has held shares.
Distributions by the Fund to retirement plans that qualify for tax-exempt
treatment under the Code ("qualified retirement plans"), will not be taxable.
The Federal tax treatment of qualified retirement plans, as well as
distributions from such plans, is governed by specific provisions of the Code.
If shares are held by a retirement plan that ceases to qualify for tax-exempt
treatment under the Code or by an individual who has received such shares as a
distribution from a retirement plan, the Fund's distributions will be taxable to
such plan or individual as described in the preceding paragraph. Persons
considering directing the investment of their qualified retirement plan account
in the Fund and
PROSPECTUS
24
<PAGE> 28
qualified retirement plan trusts considering purchasing such shares, should
consult their tax Advisors for a more complete explanation of the Federal tax
consequences, and for an explanation of the state, local and (if applicable)
foreign tax consequences of making such an investment.
The Fund will make annual reports to Shareholders of the Federal income tax
status of all distributions.
Certain securities purchased by the Fund (such as STRIPS, and CUBES), as defined
in the "Description of Permitted Investments," are sold at original issue
discount and thus do not make periodic cash interest payments. The 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 the Fund distributes substantially all
of its net investment income to its Shareholders (including such imputed
interest), the Fund may have to sell portfolio securities in order to generate
the cash necessary for the required distributions. Such sales may occur at a
time when Banc One Advisors would not have chosen to sell such securities and
may result in a taxable gain or loss.
Dividends declared by the Fund in October, November or December of any 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 Shareholders on December 31 of that
year, if paid by the Fund at any time during the following January.
The Fund intends to make sufficient distributions prior to the end of each
calendar year to avoid liability for Federal excise tax.
Dividends received by a Shareholder that are derived from the Fund's investments
in U.S. government obligations may not be entitled to the exemptions from state
and local income taxes that would be available if the Shareholder had purchased
U.S. government obligations directly. The Fund will inform Shareholders annually
of the percentage of income and distributions derived from U.S. government
obligations. Shareholders should consult their tax Advisors regarding the state
and local tax treatment of the income dividends received from the Fund.
Sale, exchange, or redemption of Fund shares by a Shareholder will generally be
a taxable event to such Shareholder.
PROSPECTUS
25
<PAGE> 29
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 30
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 31
Investment Advisor and Sub-Administrator
Banc One Investment Advisors Corporation
774 Park Meadow Road
Columbus, OH 43271-0211
Distributor
The One Group(R) Services Company
3435 Stelzer Road
Columbus, OH 43219
Administrator
The One Group(R) Services Company
3435 Stelzer Road
Columbus, OH 43219
Transfer Agent and Custodian
State Street Bank and Trust Company
P.O. Box 8500
Boston, MA 02266-8500
Legal Counsel
Ropes & Gray
One Franklin Square
1301 K Street, N.W.
Suite 800 East
Washington, D.C. 20005
Independent Accountants
Coopers & Lybrand L.L.P.
100 East Broad Street
Columbus, OH 43215
TOG-F-129
<PAGE> 32
THE ONE GROUP(R)
A FAMILY OF MUTUAL FUNDS
3435 Stelzer Road
Columbus, Ohio 43219-3035
(800) 480-4111
November 1, 1996
THE ONE GROUP(R) INTERMEDIATE TAX-FREE BOND FUND
THE ONE GROUP(R) MUNICIPAL INCOME FUND
THE ONE GROUP(R) ARIZONA MUNICIPAL BOND FUND
THE ONE GROUP(R) WEST VIRGINIA MUNICIPAL BOND FUND
THE ONE GROUP(R) LOUISIANA MUNICIPAL BOND FUND
THE ONE GROUP(R) OHIO MUNICIPAL BOND FUND
THE ONE GROUP(R) KENTUCKY MUNICIPAL BOND FUND
This Prospectus describes seven bond mutual funds (the "Funds") that attempt to
produce income exempt from Federal and/or state income tax. Each Fund is a
series of The One Group(R) (the "Trust"). Banc One Investment Advisors
Corporation ("Banc One Advisors") serves as investment advisor to each Fund.
Banc One Advisors currently manages more than $39 billion in assets.
The following three classes of shares are available to investors:
Class A and Class B shares are offered to the general public.
Fiduciary Class shares are offered to institutional investors,
including affiliates of BANC ONE CORPORATION and any bank, depository
institution, insurance company, pension plan or other organization
authorized to act in fiduciary, advisory, agency, custodial or similar
capacities (each an "Authorized Financial Organization").
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR
GUARANTEED BY BANC ONE CORPORATION OR ITS AFFILIATES. THE TRUST'S SHARES ARE
NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR BY
ANY OTHER GOVERNMENTAL AGENCY OR GOVERNMENT SPONSORED AGENCY OF THE FEDERAL
GOVERNMENT OR ANY STATE. AN INVESTMENT IN MUTUAL FUND SHARES INVOLVES
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
BANC ONE INVESTMENT ADVISORS CORPORATION RECEIVES FEES FROM THE FUND FOR
INVESTMENT ADVISORY AND OTHER SERVICES.
The Trust is registered with the Securities and Exchange Commission (the "SEC")
as an open-end management investment company. This Prospectus contains
information about the Trust and the Funds that a prospective investor should
know before investing. Please read this Prospectus carefully and retain it for
future reference.
A Statement of Additional Information dated November 1, 1996 has been filed
with the SEC and is available without charge by calling or writing to the
Distributor, The One GroupR Services Company at the number and address listed
above. The Statement of Additional Information is incorporated into this
Prospectus by reference.
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.
COMBINED PROSPECTUS
<PAGE> 33
TABLE OF CONTENTS
SUMMARY
ABOUT THE FUND
Expense Summary
Financial Highlights
The Funds
Investment Objectives and Permissible Investments
Additional Investment Information
HOW TO DO BUSINESS WITH THE ONE GROUP
How to Invest in The One Group
Alternative Sales Arrangements
Exchanges
Redemptions
MANAGEMENT OF THE FUNDS
The Trustees
The Advisor
The Fund Managers
The Distributor
The Administrator
The Transfer Agent and Custodian
Counsel and Independent Accountants
OTHER INFORMATION
The Trust
Other Investment Policies
Description of Permitted Investments
Description of Ratings
Miscellaneous
Performance
Taxes
2
<PAGE> 34
SUMMARY
The Trust is an open-end management investment company that provides a
convenient way to invest in professionally managed portfolios of securities.
The following provides basic information about various classes of shares of the
Funds.
WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES? Below is a brief overview of the
Funds and their investment objectives. A more detailed discussion of the Funds'
investment objectives and policies can be found in the Prospectus under the
heading "Investment Objectives and Permissible Investments."
THE ONE GROUP INTERMEDIATE TAX-FREE BOND FUND ("Intermediate Tax-Free Bond
Fund") is a diversified mutual fund that seeks current income exempt from
Federal income taxes consistent with prudent investment management and the
preservation of capital.
THE ONE GROUP MUNICIPAL INCOME FUND ("Municipal Income Fund") is a diversified
mutual fund that seeks current income exempt from Federal income taxes.
THE ONE GROUP ARIZONA MUNICIPAL BOND FUND ("Arizona Municipal Bond Fund") is a
non-diversified mutual fund that seeks current income exempt from Federal
income tax and Arizona personal income tax, consistent with the preservation of
principal.
THE ONE GROUP WEST VIRGINIA MUNICIPAL BOND FUND ("West Virginia Municipal Bond
Fund") is a non-diversified mutual fund that seeks current income exempt from
Federal income tax and West Virginia personal income tax, consistent with the
preservation of principal.
THE ONE GROUP LOUISIANA MUNICIPAL BOND FUND ("Louisiana Municipal Bond Fund")
is a non-diversified mutual fund that seeks current income both consistent with
the preservation of principal and exempt from Federal income tax and Louisiana
income tax.
THE ONE GROUP OHIO MUNICIPAL BOND FUND ("Ohio Municipal Bond Fund") is a
non-diversified mutual fund that seeks current income exempt from Federal
income tax and Ohio personal income tax, consistent with the preservation of
principal.
THE ONE GROUP KENTUCKY MUNICIPAL BOND FUND ("Kentucky Municipal Bond Fund") is
a non-diversified mutual fund that seeks current income exempt from Federal
income tax and Kentucky personal income tax, consistent with the preservation
of principal.
WHAT ARE THE PERMITTED INVESTMENTS? The Intermediate Tax-Free Bond Fund and the
Municipal Income Fund will invest at least 80% of their total assets in debt
securities issued by or on behalf of the states, territories and possessions of
the United States and the District of Columbia and their respective
authorities, political subdivisions, agencies and instrumentalities, the
interest on which is exempt from Federal income tax. The Intermediate Tax-Free
Bond Fund will invest no more that 20% of its assets in private activity,
municipal securities the interest on which is treated as a preference item for
purposes of the Federal alternative minimum tax.
The Arizona Municipal Bond Fund, the West Virginia Municipal Bond Fund, the
Louisiana Municipal Bond Fund, and The Ohio Municipal Bond Fund will invest at
least 80% of their total assets in debt securities issued by or on behalf of
their respective states and each states respective authorities, political
subdivisions, agencies and instrumentalities that produce interest that, in the
opinion of counsel for the issuer, is exempt from Federal income tax and each
respective states' personal income tax.
The Kentucky Municipal Bond Fund will invest at least 80% of its total assets
in debt securities that, in the opinion of counsel for the issuer, produce
interest that is exempt from Federal income tax or the Fund will invest its
assets so that at least 80% of its annual interest income is exempt from
Federal income tax. In addition, the Kentucky Municipal Bond Fund will invest
at least 65% of its total assets in bonds issued by or on behalf of the State
of Kentucky or its respective authorities, political subdivisions, agencies and
instrumentalities, the interest on which, in the opinion of counsel for the
issuer, is exempt from Kentucky personal income tax.
The securities in which the Funds may invest are described in more detail in
"Description of Permitted Investments."
WHO IS THE ADVISOR? Banc One Investment Advisors Corporation ("Banc One
Advisors"), an indirect subsidiary of BANC ONE CORPORATION, serves as the
advisor of the Trust. Banc One Advisors is entitled to a fee for advisory
services provided to the Trust. Banc One Advisors may voluntarily agree to
waive a part of its fees. A more detailed discussion regarding Banc One
Advisors, its services and compensation can be found in the Prospectus under
the heading, "The Advisor" and "Expense Summary."
3
<PAGE> 35
WHO IS THE ADMINISTRATOR? The One Group Services Company, serves as the
Administrator of the Trust. The Administrator is entitled to a fee for services
provided to the Trust. Banc One Advisors serves as the Sub-Administrator of the
Trust, pursuant to an agreement with the Administrator for which Banc One
Advisors receives a fee paid by the Administrator. Additional information
regarding the Administrator can be found in the Prospectus under the heading,
"The Administrator" and "Expense Summary."
WHO IS THE TRANSFER AGENT AND CUSTODIAN? State Street Bank and Trust Company
serves as Transfer Agent and Custodian for the Trust for which services it
receives a fee. Bank One Trust Company, N.A. serves as Sub-Custodian for the
Trust, for which services it receives a fee. See "The Transfer Agent and
Custodian."
WHO IS THE DISTRIBUTOR? The One Group Services Company acts as Distributor of
the Trust's shares. The Distributor is entitled to fees for distribution
services for the Class A and Class B shares of the Funds. No compensation is
paid to the Distributor for distribution services for the Fiduciary Class
shares of the Funds. The activities of the Distributor are discussed in the
Prospectus under the heading, "The Distributor."
HOW DO I PURCHASE AND REDEEM SHARES? Purchases and redemptions of shares of the
Funds may be made through the Distributor on any day that the New York Stock
Exchange is open for trading ("Business Days"). Purchase and redemption
procedures are explained in greater detail in "How to Invest in The One Group"
and "Redemptions."
HOW ARE DIVIDENDS PAID? Substantially all of the net investment income
(exclusive of capital gains) of the Funds is determined and declared daily, and
is distributed in the form of periodic dividends to such Shareholders of the
Funds on the first Business Day of each month. Any capital gains are
distributed at least annually. Distributions are paid in additional shares of
the same class unless the Shareholder elects to take the payment in cash. For a
more detailed discussion of dividends, see "Dividends."
4
<PAGE> 36
ABOUT THE FUNDS
EXPENSE SUMMARY -- THE ONE GROUP CLASS A SHARES
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES(1)
Maximum Sales Charge Imposed on Purchases(2) 4.50%
(as a percentage of offering price)
Maximum Contingent Deferred Sales Charge none
(as a percentage of original purchase
price or redemption proceeds, as applicable)
Redemption Fees none
Exchange Fees none
</TABLE>
ANNUAL OPERATING EXPENSES(3)
(as a percentage of average daily net assets)
<TABLE>
<CAPTION>
Investment Total Operating
Advisory Fees 12b-1 Fees Expenses
(AFTER FEE WAIVERS)(4) (AFTER FEE WAIVERS)(5) OTHER EXPENSES (AFTER FEE WAIVERS)(6)
---------------------- --------------------- -------------- ---------------------
<S> <C> <C> <C> <C>
The One Group Intermediate Tax-Free
Bond Fund .40% .25% .27% .92%
The One Group Municipal Income Fund .35% .25% .21% .81%
The One Group Arizona Municipal Bond Fund .40% .25% .26% .91%
The One Group West Virginia Municipal Fund .40% .25% .30% .95%
The One Group Louisiana Municipal Bond Fund .40% .25% .21% .86%
The One Group Ohio Municipal Bond Fund .30% .25% .33% .88%
The One Group Kentucky Municipal Bond Fund .40% .25% .42% 1.07%
</TABLE>
(1) A person who purchases shares through an account with a financial
institution or broker/dealer may be charged separate transaction fees
by the financial institution or broker/dealer. In addition, a wire
redemption charge, currently $7.00, is deducted from the amount of a
wire redemption payment made at the request of a Shareholder.
(2) A person who purchases $1 million or more of Class A shares and is not
assessed a sales charge at the time of purchase, will be assessed a
sales charge equivalent to 1% of the purchase price if such purchaser
redeems any or all of the Class A shares prior to the first
anniversary of purchase.
(3) The expense information in the table has been restated to reflect
current fees that would have been applicable had they been in effect
during the previous fiscal year.
(4) Investment Advisory Fees have been revised to reflect fee waivers
effective as of the date of this Prospectus. Banc One Advisors may
voluntarily agree to waive a part of its fees. Absent this voluntary
reduction, Investment Advisory Fees would be .60% for all classes of
shares of the Intermediate Tax-Free Bond Fund, the Ohio Municipal Bond
Fund, and the Louisiana Municipal Bond Fund, and .45% for the
Municipal Income Fund, the Arizona Municipal Bond Fund, the West
Virginia Municipal Bond Fund, and the Kentucky Municipal Bond Fund.
(5) Absent the voluntary waiver of fees under the Trust's Distribution and
Shareholder Services Plans, 12b-1 fees (as a percentage of average
daily net assets) would be .35% for Class A shares. For a discussion
of 12b-1 fees, see "The Distributor."
(6) Total Operating Expenses have been revised to reflect fee waivers
effective as of the date of this Prospectus. Other Expenses are based
on the Funds' expenses during the most recent fiscal year. Absent the
voluntary reduction of Investment Advisory and 12b-1 fees, Total
Operating Expenses would be 1.22% for Class A Shares of the
Intermediate Tax-Free Bond Fund, 1.01% for Class A shares of the
Municipal Income Fund, 1.06% for the Class A shares of the Arizona
Municipal Bond Fund, 1.10% for the Class A shares of the West Virginia
Municipal Bond Fund, 1.16% for the Class A
5
<PAGE> 37
shares of the Louisiana Municipal Bond Fund, 1.28% for the Class A
shares of the Ohio Municipal Bond Fund, and 1.22% for the Class A
shares of the Kentucky Municipal Bond Fund.
EXAMPLE: An investor would pay the following expenses on a $1,000 investment in
Class A shares of the Fund, assuming: (1) imposition of the maximum sales
charge; (2) 5% annual return; and (3) redemption at the end of each time
period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
The One Group Intermediate Tax-Free
Bond Fund $54 $73 $94 $153
The One Group Municipal Income Fund $53 $70 $88 $141
The One Group Arizona Municipal Bond Fund $54 $73 $93 $152
The One Group West Virginia Municipal Fund $54 $74 $95 $156
The One Group Louisiana Municipal Bond Fund $53 $71 $91 $146
The One Group Ohio Municipal Bond Fund $54 $72 $92 $149
The One Group Kentucky Municipal Bond Fund $55 $78 $101 $170
</TABLE>
Absent the voluntary reduction of fees, the dollar amounts in the above example
would be as follows:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
The One Group Intermediate Tax-Free
Bond Fund $57 $82 $109 $186
The One Group Municipal Income Fund $55 $76 $ 98 $163
The One Group Arizona Municipal Bond Fund $55 $77 $101 $169
The One Group West Virginia Municipal Fund $56 $78 $103 $173
The One Group Louisiana Municipal Bond Fund $56 $80 $106 $180
The One Group Ohio Municipal Bond Fund $57 $84 $112 $193
The One Group Kentucky Municipal Bond Fund $57 $82 $109 $186
</TABLE>
6
<PAGE> 38
EXPENSE SUMMARY -- THE ONE GROUP CLASS B SHARES
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES(1)
Maximum Sales Charge Imposed on Purchases none
(as a percentage of offering price)
Maximum Contingent Deferred Sales Charge 5.00%
(as a percentage of original purchase
price or redemption proceeds, as applicable)
Redemption Fees none
Exchange Fees none
</TABLE>
ANNUAL OPERATING EXPENSES(2)
(as a percentage of average daily net assets)
<TABLE>
<CAPTION>
Investment Total Operating
Advisory Fees 12b-1 Fees Expenses
(AFTER FEE WAIVERS)(3) (AFTER FEE WAIVERS)(4) OTHER EXPENSES (AFTER FEE WAIVERS)(5)
--------------------- ---------------------- -------------- ----------------------
<S> <C> <C> <C> <C>
The One Group Intermediate Tax-Free
Bond Fund .40% .90% .27% 1.57%
The One Group Municipal Income Fund .35% .90% .21% 1.46%
The One Group Arizona Municipal Bond Fund .40% .90% .26% 1.56%
The One Group West Virginia Municipal Fund .40% .90% .30% 1.60%
The One Group Louisiana Municipal Bond Fund .40% .90% .21% 1.51%
The One Group Ohio Municipal Bond Fund .30% .90% .33% 1.53%
The One Group Kentucky Municipal Bond Fund .40% .90% .42% 1.72%
</TABLE>
(1) A person who purchases shares through an account with a financial
institution or broker/dealer may be charged separate transaction fees
by the financial institution or broker/dealer. In addition, a wire
redemption charge, currently $7.00, is deducted from the amount of a
wire redemption payment made at the request of a Shareholder.
(2) The expense information in the table has been restated to reflect
current fees that would have been applicable had they been in effect
during the previous fiscal year.
(3) Investment Advisory Fees have been revised to reflect fee waivers
effective as of the date of this Prospectus. Banc One Advisors may
voluntarily agree to waive a part of its fees. Absent this voluntary
reduction, Investment Advisory Fees would be .60% for all classes of
shares of the Intermediate Tax-Free Bond Fund, the Ohio Municipal Bond
Fund, and the Louisiana Municipal Bond Fund, and .45% for the
Municipal Income Fund, the Arizona Municipal Bond Fund, the West
Virginia Municipal Bond Fund, and the Kentucky Municipal Bond Fund.
(4) Absent the voluntary waiver of fees under the Trust's Distribution and
Shareholder Services Plans, 12b-1 fees (as a percentage of average
daily net assets) would be 1.00% for Class B shares. For a discussion
of 12b-1 fees, see "The Distributor."
(5) Total Operating Expenses have been revised to reflect fee waivers
effective as of the date of this Prospectus. Other Expenses are based
on the Fund's expenses during the most recent fiscal year. Absent the
voluntary reduction of Investment Advisory and 12b-1 fees, Total
Operating Expenses would be 1.87% for Class B Shares of the
Intermediate Tax-Free Bond Fund, 1.66% for Class B shares of the
Municipal Income Fund, 1.71% for the Class B shares of the Arizona
Municipal Bond Fund, 1.75% for the Class B shares of the West Virginia
Municipal Bond Fund, 1.81% for the Class B shares of the Louisiana
Municipal Bond Fund, 1.93% for the Class B shares of the Ohio
Municipal Bond Fund, and 1.87% for the Class B shares of the Kentucky
Municipal Bond Fund.
7
<PAGE> 39
EXAMPLE: An investor would pay the following expenses on a $1,000 investment in
Class B shares, assuming: (1) deduction of the applicable maximum Contingent
Deferred Sales Charge; and (2) 5% annual return.
Assuming a Complete Redemption
at the End of the Period
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
The One Group Intermediate Tax-Free
Bond Fund $66 $80 $106 $169
The One Group Municipal Income Fund $65 $76 $100 $157
The One Group Arizona Municipal Bond Fund $66 $79 $105 $168
The One Group West Virginia Municipal Fund $66 $80 $107 $173
The One Group Louisiana Municipal Bond Fund $65 $78 $102 $163
The One Group Ohio Municipal Bond Fund $66 $78 $103 $165
The One Group Kentucky Municipal Bond Fund $67 $84 $113 $186
</TABLE>
Assuming No Redemption
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
The One Group Intermediate Tax-Free
Bond Fund $16 $50 $86 $169
The One Group Municipal Income Fund $15 $46 $80 $157
The One Group Arizona Municipal Bond Fund $16 $49 $85 $168
The One Group West Virginia Municipal Fund $16 $50 $87 $173
The One Group Louisiana Municipal Bond Fund $15 $48 $82 $163
The One Group Ohio Municipal Bond Fund $16 $48 $83 $165
The One Group Kentucky Municipal Bond Fund $17 $54 $93 $186
</TABLE>
Absent the voluntary reduction of fees, the dollar amounts in the above example
would be as follows:
Assuming a Complete Redemption
at the End of the Period
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
The One Group Intermediate Tax-Free
Bond Fund $69 $89 $121 $202
The One Group Municipal Income Fund $67 $82 $110 $179
The One Group Arizona Municipal Bond Fund $67 $84 $113 $185
The One Group West Virginia Municipal Fund $68 $85 $115 $189
The One Group Louisiana Municipal Bond Fund $68 $87 $118 $195
The One Group Ohio Municipal Bond Fund $70 $91 $124 $208
The One Group Kentucky Municipal Bond Fund $69 $89 $121 $202
</TABLE>
8
<PAGE> 40
Assuming No Redemption
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
The One Group Intermediate Tax-Free
Bond Fund $19 $59 $101 $202
The One Group Municipal Income Fund $17 $52 $ 90 $179
The One Group Arizona Municipal Bond Fund $17 $54 $ 93 $185
The One Group West Virginia Municipal Fund $18 $55 $ 95 $189
The One Group Louisiana Municipal Bond Fund $18 $57 $ 98 $195
The One Group Ohio Municipal Bond Fund $20 $61 $104 $208
The One Group Kentucky Municipal Bond Fund $19 $59 $101 $202
</TABLE>
Class B shares automatically convert to Class A shares after eight (8) years.
Therefore, the "10 Years" examples above reflect the effect of such conversion.
9
<PAGE> 41
EXPENSE SUMMARY -- THE ONE GROUP FIDUCIARY CLASS SHARES
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES(1)
Maximum Sales Charge Imposed on Purchases none
(as a percentage of offering price)
Maximum Contingent Deferred Sales Charge none
(as a percentage of original purchase
price or redemption proceeds, as applicable)
Redemption Fees none
Exchange Fees none
</TABLE>
ANNUAL OPERATING EXPENSES(2)
(as a percentage of average daily net assets)
<TABLE>
<CAPTION>
Investment Total Operating
Advisory Fees Expenses
(AFTER FEE WAIVERS)(3) 12B-1 FEES OTHER EXPENSES (AFTER FEE WAIVERS)(4)
---------------------- ---------- -------------- ----------------------
<S> <C> <C> <C> <C>
The One Group Intermediate Tax-Free
Bond Fund .40% none .27% .67%
The One Group Municipal Income Fund .35% none .21% .56%
The One Group Arizona Municipal Bond Fund .40% none .26% .66%
The One Group West Virginia Municipal Fund .40% none .30% .70%
The One Group Louisiana Municipal Bond Fund .40% none .21% .61%
The One Group Ohio Municipal Bond Fund .30% none .33% .63%
The One Group Kentucky Municipal Bond Fund .40% none .42% .82%
</TABLE>
(1) A person who purchases shares through an account with a financial
institution or broker/dealer may be charged separate transaction fees
by the financial institution or broker/dealer. In addition, a wire
redemption charge, currently $7.00, is deducted from the amount of a
wire redemption payment made at the request of a Shareholder.
(2) The expense information in the table has been restated to reflect
current fees that would have been applicable had they been in effect
during the previous fiscal year.
(3) Investment Advisory Fees have been revised to reflect fee waivers
effective as of the date of this Prospectus. Banc One Advisors may
voluntarily agree to waive a part of its fees. Absent this voluntary
reduction, Investment Advisory Fees would be .60% for all classes of
shares of the Intermediate Tax-Free Bond Fund, the Ohio Municipal Bond
Fund, and the Louisiana Municipal Bond Fund, and .45% for the
Municipal Income Fund, the Arizona Municipal Bond Fund, the West
Virginia Municipal Bond Fund, and the Kentucky Municipal Bond Fund.
(4) Total Operating Expenses have been revised to reflect fee waivers
effective as of the date of this Prospectus. Other Expenses are based
on the Funds' expenses during the most recent fiscal year. Absent the
voluntary reduction of Investment Advisory and 12b-1 fees, Total
Operating Expenses would be .87% for Fiduciary Class Shares of the
Intermediate Tax-Free Bond Fund, .66% for Fiduciary Class shares of
the Municipal Income Fund, .71% for the Fiduciary Class shares of the
Arizona Municipal Bond Fund, .75% for the Fiduciary Class shares of
the West Virginia Municipal Bond Fund, .81% for the Fiduciary Class
shares of the Louisiana Municipal Bond Fund, .93% for the Fiduciary
Class shares of the Ohio Municipal Bond Fund, and .87% for the
Fiduciary Class shares of the Kentucky Municipal Bond Fund.
10
<PAGE> 42
EXAMPLE: An investor would pay the following expenses on a $1,000 investment in
Fiduciary Class shares of the Fund, assuming: (1) imposition of the maximum
sales charge; (2) 5% annual return; and (3) redemption at the end of each time
period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
The One Group Intermediate Tax-Free
Bond Fund $7 $21 $37 $ 83
The One Group Municipal Income Fund $6 $18 $31 $ 70
The One Group Arizona Municipal Bond Fund $7 $21 $37 $ 82
The One Group West Virginia Municipal Fund $7 $22 $39 $ 87
The One Group Louisiana Municipal Bond Fund $6 $20 $34 $ 76
The One Group Ohio Municipal Bond Fund $6 $20 $35 $ 79
The One Group Kentucky Municipal Bond Fund $8 $26 $46 $101
</TABLE>
Absent the voluntary reduction of fees, the dollar amounts in the above example
would be as follows:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
The One Group Intermediate Tax-Free
Bond Fund $9 $28 $48 $107
The One Group Municipal Income Fund $7 $21 $37 $ 82
The One Group Arizona Municipal Bond Fund $7 $23 $40 $ 88
The One Group West Virginia Municipal Fund $8 $24 $42 $ 93
The One Group Louisiana Municipal Bond Fund $8 $26 $45 $100
The One Group Ohio Municipal Bond Fund $9 $30 $51 $114
The One Group Kentucky Municipal Bond Fund $9 $28 $48 $107
</TABLE>
The tables on pages ____ are designed to assist the investor in understanding
the various costs and expenses that may be directly or indirectly borne by
investors in the Trust. THESE EXAMPLES SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN.
The rules of the SEC require that the maximum sales charge be reflected in the
above tables. However, investors in the Funds ("Shareholders") may, under
certain circumstances, qualify for reduced sales charges. See "How to Invest in
The One Group." Long-term Shareholders of Class A shares and Class B shares may
pay more than the equivalent of the maximum front-end sales charges otherwise
permitted by the National Association of Securities Dealers' Rules.
FINANCIAL HIGHLIGHTS
The Trust was organized as a Massachusetts Business Trust on May 23, 1985. The
Trust currently consists of 40 separate investment portfolios (the "Funds").
Currently, shares in the Funds are offered in three separate classes: Class A
shares, Class B shares and Fiduciary Class shares.
The following tables set forth certain financial information with respect to the
Financial Highlights for Class A, Class B and Fiduciary Class shares of the
Funds for the period from commencement of operations of each class of each Fund
to June 30, 1996 and for the period ended December 31, 1996 (other than the
unaudited financial information for the Arizona Municipal Bond Fund and the West
Virginia Municipal Bond Fund, which present information for the periods from the
commencement of operations to March 31, 1997). The information is a part of the
financial statements audited by Coopers & Lybrand L.L.P., independent
accountants for the Trust, whose report on the Trust's financial statements for
the year ended June 30, 1996 appears in the Statement of Additional Information.
The financial statements for the period from July 1, 1996 to December 31, 1996
and the financial statements for the Arizona Municipal Income Fund and the West
Virginia Municipal Bond Fund are unaudited. Further information about the Funds'
performance is contained in the Annual Report to Shareholders, which may be
obtained without charge from the Distributor by calling 1-800-480-4111 during
business hours.
11
<PAGE> 43
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS DECEMBER 31, 1996
<TABLE>
<CAPTION>
INTERMEDIATE TAX-FREE BOND FUND
------------------------------------------------------------------------------------------
FIDUCIARY
------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, -------------------------------------------------------------------------
1996 1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ................. $ 10.67 $ 10.64 $ 10.49 $ 11.15 $ 10.69 $ 10.28
----------- ----------- ----------- ----------- ----------- -----------
Investment Activities:
Net investment income ................ 0.26 0.52 0.54 0.52 0.53 0.55
Net realized and unrealized
gains (losses) from investments ..... 0.24 0.04 0.15 (0.52) 0.49 0.42
----------- ----------- ----------- ----------- ----------- -----------
Total from Investment
Activities ........................ 0.50 0.56 0.69 0.00 1.02 0.97
----------- ----------- ----------- ----------- ----------- -----------
Distributions:
Net investment income ................ (0.26) (0.51) (0.54) (0.53) (0.52) (0.55)
In excess of net investment income ... -- -- -- (0.01) -- --
Net realized gains ................... (0.02) (0.02) -- (0.01) (0.04) (0.01)
In excess of net realized gains ...... -- -- -- (0.11) -- --
----------- ----------- ----------- ----------- ----------- -----------
Total Distributions ................ (0.28) (0.53) (0.54) (0.66) (0.56) (0.56)
----------- ----------- ----------- ----------- ----------- -----------
NET ASSET VALUE,
END OF PERIOD ....................... $ 10.89 $ 10.67 $ 10.64 $ 10.49 $ 11.15 $ 10.69
=========== =========== =========== =========== =========== ===========
Total Return (Excludes Sales Charge) .. 4.75%(a) 5.39% 6.75% (0.11)% 9.79% 9.54%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ... $ 244,981 $ 217,201 $ 211,229 $ 182,611 $ 166,489 $ 142,672
Ratio of expenses to average
net assets ......................... 0.56%(b) 0.54% 0.53% 0.48% 0.54% 0.55%
Ratio of net investment
income to average net assets ...... 4.84%(b) 4.87% 5.17% 4.78% 4.93% 5.28%
Ratio of expenses to average
net assets* ....................... 0.83%(b) 0.87% 0.88% 0.84% 0.94% 1.07%
Ratio of net investment
income to average net assets* ..... 4.57%(b) 4.54% 4.82% 4.42% 4.53% 4.77%
Portfolio turnover (c) ............. 46.63% 111.58% 199.76% 105.98% 31.99% 11.50%
<FN>
- ----------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Not annualized.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 44
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS DECEMBER 31, 1996
<TABLE>
<CAPTION>
INTERMEDIATE TAX-FREE BOND FUND
-----------------------------------------------------------------------------
CLASS A
-----------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ----------------------------------------------------------------
1996 1996 1995 1994 1993 1992(a)
----------- ----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............... $ 10.67 $ 10.63 $ 10.48 $ 11.14 $ 10.69 $ 10.57
--------- --------- --------- --------- --------- ---------
Investment Activities:
Net investment income ............. 0.25 0.50 0.51 0.50 0.55 0.15
Net realized and unrealized gains
(losses) from investments ........ 0.23 0.05 0.15 (0.52) 0.44 0.18
--------- --------- --------- --------- --------- ---------
Total from Investment Activities . 0.48 0.55 0.66 (0.02) 0.99 0.33
--------- --------- --------- --------- --------- ---------
Distributions:
Net investment income ............. (0.25) (0.49) (0.49) (0.52) (0.50) (0.21)
In excess of net investment income -- -- (0.02) (0.01) -- --
Net realized gains ................ (0.02) (0.02) -- -- (0.04) --
In excess of net realized gains ... -- -- -- (0.11) -- --
--------- --------- --------- --------- --------- ---------
Total Distributions .............. (0.27) (0.51) (0.51) (0.64) (0.54) (0.21)
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE,
END OF PERIOD .................... $ 10.88 $ 10.67 $ 10.63 $ 10.48 $ 11.14 $ 10.69
========= ========= ========= ========= ========= =========
Total Return (Excludes Sales Charge) 4.52%(b) 5.28% 6.49% (0.33)% 9.47% 8.68%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) . $ 6,357 $ 6,622 $ 5,614 $ 5,556 $ 5,480 $ 5
Ratio of expenses to average net
assets .......................... 0.79%(c) 0.79% 0.78% 0.73% 0.71% 1.02%(c)
Ratio of net investment income to
average net assets .............. 4.58%(c) 4.62% 4.91% 4.57% 4.77% 4.91%(c)
Ratio of expenses to average net
assets* ......................... 1.16%(c) 1.22% 1.23% 1.19% 1.27% 1.32%(c)
Ratio of net investment income to
average net assets* ............. 4.21%(c) 4.19% 4.46% 4.11% 4.21% 4.61%(c)
Portfolio turnover (d) ............ 46.63% 111.58% 199.76% 105.98% 31.99% 11.50%
---------
<FN>
- -----------------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class A Shares commenced offering on February 18, 1992.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 45
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERMEDIATE TAX-FREE BOND FUND
-----------------------------------------------------------
CLASS B
-----------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, -----------------------------------------
1996 1996 1995 1994(a)
----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ................................. $ 10.68 $ 10.65 $ 10.50 $ 11.18
--------- --------- --------- ---------
Investment Activities:
Net investment income ............................... 0.22 0.43 0.46 0.17
Net realized and unrealized gains (losses)
from investments ................................... 0.23 0.04 0.14 (0.67)
--------- --------- --------- ---------
Total from Investment Activities ................... 0.45 0.47 0.60 (0.50)
--------- --------- --------- ---------
Distributions:
Net investment income ............................... (0.22) (0.42) (0.45) (0.17)
Net realized gains .................................. (0.02) (0.02) -- --
In excess of net realized gains ..................... -- -- -- (0.01)
--------- --------- --------- ---------
Total Distributions ................................ (0.24) (0.44) (0.45) (0.18)
--------- --------- --------- ---------
NET ASSET VALUE,
END OF PERIOD ....................................... $ 10.89 $ 10.68 $ 10.65 $ 10.50
========= ========= ========= =========
Total Return (Excludes Sales Charge) ................. 4.19%(b) 4.48% 5.89% (4.48)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $ 2,724 $ 2,439 $ 1,116 $ 549
Ratio of expenses to average net assets ............. 1.48%(c) 1.44% 1.43% 1.40%(c)
Ratio of net investment income to average net assets 4.01%(c) 3.97% 4.29% 4.08%(c)
Ratio of expenses to average net assets* ............ 1.83%(c) 1.87% 1.88% 1.85%(c)
Ratio of net investment income to average net assets* 3.66%(c) 3.54% 3.84% 3.63%(c)
Portfolio turnover (d) .............................. 46.63% 111.58% 199.76% 105.98%
<FN>
- -----------------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on January 14, 1994.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 46
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS DECEMBER 31, 1996
<TABLE>
<CAPTION>
MUNICIPAL INCOME FUND
-----------------------------------------------------------------------------
FIDUCIARY
-----------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, --------------------------------------------------------------
1996 1996 1995 1994 1993(a)
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .......................... $ 9.66 $ 9.69 $ 9.66 $ 10.11 $ 10.00
----------- ----------- ----------- ----------- -----------
Investment Activities:
Net investment income ........................ 0.27 0.56 0.57 0.56 0.19
Net realized and unrealized gains (losses)
from investments ............................ 0.12 (0.03) 0.03 (0.42) 0.11
----------- ----------- ----------- ----------- -----------
Total from Investment Activities ........... 0.39 0.53 0.60 0.14 0.30
----------- ----------- ----------- ----------- -----------
Distributions:
Net investment income ........................ (0.27) (0.56) (0.57) (0.56) (0.19)
Net realized gains ........................... -- -- -- (0.03) --
----------- ----------- ----------- ----------- -----------
Total Distributions ........................ (0.27) (0.56) (0.57) (0.59) (0.19)
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE,
END OF PERIOD ............................... $ 9.78 $ 9.66 $ 9.69 $ 9.66 $ 10.11
=========== =========== =========== =========== ===========
Total Return (Excludes Sales Charge) .......... 4.05%(b) 5.54% 6.46% 1.36% 5.18%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ............ $ 286,951 $ 241,115 $ 185,916 $ 152,763 $ 40,777
Ratio of expenses to average net assets ...... 0.57%(c) 0.56% 0.56% 0.54% 0.54%(c)
Ratio of net investment income to average
net assets .................................. 5.45%(c) 5.70% 6.02% 5.61% 5.66%(c)
Ratio of expenses to average net assets* ..... 0.69%(c) 0.76% 0.74% 0.71% 1.01%(c)
Ratio of net investment income to average
net assets* ................................. 5.33%(c) 5.50% 5.84% 5.44% 5.19%(c)
Portfolio turnover (d) ....................... 27.20% 83.17% 66.02% 101.48% 66.12%
<FN>
- --------------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Fund commenced operations on February 9, 1993.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 47
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MUNICIPAL INCOME FUND
----------------------------------------------------------------------------
CLASS A
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ----------------------------------------------------------
1996 1996 1995 1994 1993(a)
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............................. $ 9.69 $ 9.72 $ 9.67 $ 10.12 $ 10.06
---------- ---------- ---------- ---------- ----------
Investment Activities:
Net investment income ........................... 0.26 0.55 0.55 0.55 0.19
Net realized and unrealized gains (losses)
from investments ............................... 0.12 (0.04) 0.05 (0.43) 0.05
---------- ---------- ---------- ---------- ----------
Total from Investment Activities .............. 0.38 0.51 0.60 0.12 0.24
---------- ---------- ---------- ---------- ----------
Distributions:
Net investment income ........................... (0.26) (0.54) (0.55) (0.54) (0.18)
Net realized gains .............................. -- -- -- (0.03) --
---------- ---------- ---------- ---------- ----------
Total Distributions ........................... (0.26) (0.54) (0.55) (0.57) (0.18)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE,
END OF PERIOD .................................. $ 9.81 $ 9.69 $ 9.72 $ 9.67 $ 10.12
========== ========== ========== ========== ==========
Total Return (Excludes Sales Charge) ............. 3.93%(b) 5.35% 6.21% 1.34% 6.86%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ............... $ 29,366 $ 25,787 $ 11,462 $ 10,725 $ 4,106
Ratio of expenses to average net assets ......... 0.82%(c) 0.81% 0.81% 0.79% 0.80%(c)
Ratio of net investment income to average net
assets ......................................... 5.20%(c) 5.45% 5.76% 5.44% 5.71%(c)
Ratio of expenses to average net assets* ........ 1.04%(c) 1.11% 1.09% 1.06% 1.36%(c)
Ratio of net investment income to average net
assets* ........................................ 4.98%(c) 5.15% 5.48% 5.17% 5.15%(c)
Portfolio turnover (d) .......................... 27.20% 83.17% 66.02% 101.48% 66.12%
<FN>
- -------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class A Shares commenced offering on February 23, 1993.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 48
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MUNICIPAL INCOME FUND
-----------------------------------------------------------
CLASS B
-----------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, -----------------------------------------
1996 1996 1995 1994(a)
----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ................................. $ 9.66 $ 9.69 $ 9.62 $ 10.10
---------- ---------- ---------- ----------
Investment Activities:
Net investment income ............................... 0.22 0.47 0.49 0.24
Net realized and unrealized gains (losses) from
investments ....................................... 0.11 (0.03) 0.07 (0.48)
---------- ---------- ---------- ----------
Total from Investment Activities ................. 0.33 0.44 0.56 (0.24)
---------- ---------- ---------- ----------
Distributions:
Net investment income ............................... (0.22) (0.47) (0.49) (0.24)
---------- ---------- ---------- ----------
Total Distributions .............................. (0.22) (0.47) (0.49) (0.24)
---------- ---------- ---------- ----------
NET ASSET VALUE,
END OF PERIOD ....................................... $ 9.77 $ 9.66 $ 9.69 $ 9.62
========== ========== ========== ==========
Total Return (Excludes Sales Charge) ................. 3.49%(b) 4.65% 5.58% (1.98)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $ 29,055 $ 23,204 $ 8,326 $ 4,855
Ratio of expenses to average net assets ............. 1.47%(c) 1.46% 1.46% 1.41%(c)
Ratio of net investment income to average net assets 4.55%(c) 4.80% 5.14% 4.95%(c)
Ratio of expenses to average net assets* ............ 1.68%(c) 1.76% 1.74% 1.62%(c)
Ratio of net investment income to average net assets* 4.34%(c) 4.50% 4.86% 4.74%(c)
Portfolio turnover (d) .............................. 27.20% 83.17% 66.02% 101.48%
<FN>
- ---------------------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on January 14, 1994.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 49
<TABLE>
<CAPTION>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Financial Highlights
ARIZONA MUNICIPAL BOND FUND
---------------
FIDUCIARY
---------------
JANUARY 20,
1997 TO
MARCH 31,
1997 (A)
---------------
(Unaudited)
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.00
--------------
Investment Activities
Net investment income 0.10
Net realized and unrealized gains (losses)
from investments (0.10)
--------------
Total from Investment Activities 0.00
--------------
Distributions
Net investment income (0.10)
--------------
Total Distributions (0.10)
--------------
NET ASSET VALUE,
END OF PERIOD $ 9.90
==============
Total Return -0.02%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 258,768
Ratio of expenses to
average net assets 0.59%(c)
Ratio of net investment income
to average net assets 5.13%(c)
Ratio of expenses to
average net assets * 0.74%(c)
Ratio of net investment income
to average net assets * 4.98%(c)
Portfolio Turnover (d) 1.18%
<FN>
------------
* During the period certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been
as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
18
<PAGE> 50
<TABLE>
<CAPTION>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Financial Highlights
ARIZONA MUNICIPAL BOND FUND
---------------
CLASS A
---------------
JANUARY 20,
1997 TO
MARCH 31,
1997 (A)
---------------
(Unaudited)
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $10.00
------
Investment Activities
Net investment income 0.03
Net realized and unrealized gains (losses)
from investments (0.09)
------
Total from Investment Activities (0.06)
------
Distributions
Net investment income (0.03)
------
Total Distributions (0.03)
------
NET ASSET VALUE,
END OF PERIOD $ 9.91
======
Total Return (Excludes Sales Charge) -0.62%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 4
Ratio of expenses to
average net assets 0.84%(c)
Ratio of net investment income
to average net assets 4.88%(c)
Ratio of expenses to
average net assets * 1.09%(c)
Ratio of net investment income
to average net assets * 4.63%(c)
Portfolio Turnover (d) 1.18%
<FN>
- ------------
* During the period certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been
as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
19
<PAGE> 51
<TABLE>
<CAPTION>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Financial Highlights
ARIZONA MUNICIPAL BOND FUND
---------------
CLASS B
---------------
JANUARY 20,
1997 TO
MARCH 31,
1997 (A)
---------------
(Unaudited)
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $10.00
---------
Investment Activities
Net realized and unrealized gains (losses)
from investments (0.09)
---------
Total from Investment Activities (0.09)
---------
NET ASSET VALUE,
END OF PERIOD $ 9.91
=========
Total Return (Excludes Redemption Charge) -0.90%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ --(c)
Ratio of expenses to
average net assets 1.49%(d)
Ratio of net investment income
to average net assets 4.23%(d)
Ratio of expenses to
average net assets * 1.74%(d)
Ratio of net investment income
to average net assets * 3.98%(d)
Portfolio Turnover (e) 1.18%
<FN>
- ---------
* During the period certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been
as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Amount is less than 1,000.
(d) Annualized
(e) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
20
<PAGE> 52
<TABLE>
<CAPTION>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Financial Highlights
WEST VIRGINIA MUNICIPAL BOND FUND
---------------
FIDUCIARY
---------------
JANUARY 20,
1997 TO
MARCH 31,
1997 (A)
---------------
(Unaudited)
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.00
----------
Investment Activities
Net investment income 0.10
Net realized and unrealized gains (losses)
from investments (0.06)
----------
Total from Investment Activities 0.04
----------
Distributions
Net investment income (0.10)
----------
Total Distributions (0.10)
----------
NET ASSET VALUE,
END OF PERIOD $ 9.94
===========
Total Return 0.35% (b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 93,342
Ratio of expenses to
average net assets 0.59% (c)
Ratio of net investment income
to average net assets 5.08% (c)
Ratio of expenses to
average net assets * 0.77% (c)
Ratio of net investment income
to average net assets * 4.90% (c)
Portfolio Turnover (d) 1.09%
<FN>
- ------------------------
* During the period certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been
as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
21
<PAGE> 53
<TABLE>
<CAPTION>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Financial Highlights
WEST VIRGINIA MUNICIPAL BOND FUND
---------------
CLASS A
---------------
JANUARY 20,
1997 TO
MARCH 31,
1997 (A)
---------------
(Unaudited)
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.00
-------
Investment Activities
Net investment income 0.03
Net realized and unrealized gains (losses)
from investments 0.03
-------
Total from Investment Activities 0.06
-------
Distributions
Net investment income (0.03)
-------
Total Distributions (0.03)
-------
NET ASSET VALUE,
END OF PERIOD $ 10.03
=======
Total Return (Excludes Sales Charge) 0.65% (b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 791
Ratio of expenses to
average net assets 0.84% (c)
Ratio of net investment income
to average net assets 4.83% (c)
Ratio of expenses to
average net assets * 1.12% (c)
Ratio of net investment income
to average net assets * 4.55% (c)
Portfolio Turnover (d) 1.09%
<FN>
------------
* During the period certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been
as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
22
<PAGE> 54
<TABLE>
<CAPTION>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Financial Highlights
WEST VIRGINIA MUNICIPAL BOND FUND
---------------
CLASS B
---------------
JANUARY 20,
1997 TO
MARCH 31,
1997 (A)
---------------
(Unaudited)
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $10.00
------
Investment Activities
Net investment income 0.04
Net realized and unrealized gains (losses)
from investments (0.01)
------
Total from Investment Activities 0.03
------
Distributions
Net investment income (0.04)
------
Total Distributions (0.04)
------
NET ASSET VALUE,
END OF PERIOD $ 9.99
======
Total Return (Excludes Redemption Charge) 0.27% (b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 56
Ratio of expenses to
average net assets 1.49% (c)
Ratio of net investment income
to average net assets 4.18% (c)
Ratio of expenses to
average net assets * 1.77% (c)
Ratio of net investment income
to average net assets * 3.90% (c)
Portfolio Turnover (d) 1.09%
<FN>
- -----------------
* During the period certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been
as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
23
<PAGE> 55
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
KENTUCKY MUNICIPAL BOND FUND
----------------------------------------------------------------------
FIDUCIARY
------------------------------------------
SIX MONTHS YEAR JANUARY 20, FEBRUARY 1, MARCH 12,
ENDED ENDED 1995 TO 1994, TO 1993, TO
DECEMBER 31, JUNE 30, JUNE 30, JANUARY 19, JANUARY 31,
1996 1996 1995(A) 1995(B) 1994(B)(C)
--------- --------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .................... $ 10.04 $ 9.92 $ 9.49 $ 10.45 $ 10.00
---------- ---------- ---------- ---------- ----------
Investment Activities:
Net investment income .................. 0.24 0.50 0.20 0.41 0.36
Net realized and unrealized
gains (losses) from investments ....... 0.16 0.12 0.43 (0.95) 0.43
---------- ---------- ---------- ---------- ----------
Total from Investment Activities ..... 0.40 0.62 0.63 (0.54) 0.79
---------- ---------- ---------- ---------- ----------
Distributions:
Net investment income ................. (0.24) (0.50) (0.20) (0.42) (0.34)
---------- ---------- ---------- ---------- ----------
Total Distributions ................. (0.24) (0.50) (0.20) (0.42) (0.34)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD .......... $ 10.20 $ 10.04 $ 9.92 $ 9.49 $ 10.45
========== ========== ========== ========== ==========
Total Return (Excludes Sales Charge) .... 4.02%(d) 6.35% 6.56%(d) (5.17)%(d) 8.05%(d)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) .... $ 32,458 $ 30,300 $ 32,520 $ 41,953 $ 64,663
Ratio of expenses to average net assets 0.60%(e) 0.68% 0.65%(e) 1.03%(e) 0.70%(e)
Ratio of net investment
income to average net assets ......... 4.69%(e) 4.60% 4.70%(e) 4.27%(e) 4.19%(e)
Ratio of expenses to average
net assets* .......................... 0.88%(e) 1.02% 0.97%(e) 1.05%(e) 0.91%(e)
Ratio of net investment
income to average net assets* ......... 4.41%(e) 4.26% 4.38%(e) 4.25%(e) 3.98%(e)
Portfolio turnover (f) ............... 3.30% 16.78% 19.75% 10.00% 5.00%
<FN>
- ----------------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from date reorganized as a fund of The One Group.
(b) Prior to reorganizing as a fund of The One Group, the Fund offered only one
class of shares.
(c) Period from commencement of operations.
(d) Not annualized. (e)Annualized. ( f )Portfolio turnover is calculated on the
basis of the Fund as a whole without distinguishing among the classes of
shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 56
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
KENTUCKY MUNICIPAL BOND FUND
---------------------------------------------
CLASS A
---------------------------------------------
SIX MONTHS YEAR JANUARY 20,
ENDED ENDED 1995 TO
DECEMBER 31, JUNE 30, JUNE 30,
1996 1996 1995
----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .................................. $ 10.05 $ 9.93 $ 9.49
--------- --------- ---------
Investment Activities:
Net investment income ................................ 0.22 0.44 0.19
Net realized and unrealized gains from investments ... 0.17 0.12 0.44
--------- --------- ---------
Total from Investment Activities ................... 0.39 0.56 0.63
--------- --------- ---------
Distributions
Net investment income ............................... (0.23) (0.44) (0.19)
--------- --------- ---------
Total Distributions ............................... (0.23) (0.44) (0.19)
--------- --------- ---------
NET ASSET VALUE,
END OF PERIOD ....................................... $ 10.21 $ 10.05 $ 9.93
========= ========= =========
Total Return (Excludes Sales Charge) .................. 3.88%(b) 5.70% 5.66%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $ 8,076 $ 8,178 $ 8,818
Ratio of expenses to average net assets ............. 0.86%(c) 0.93% 0.90%(c)
Ratio of net investment income to average net assets 4.43%(c) 4.35% 4.44%(c)
Ratio of expenses to average net assets* ............ 1.23%(c) 1.37% 1.33%(c)
Ratio of net investment income to average net assets* 4.06%(c) 3.91% 4.01%(c)
Portfolio turnover (d) .............................. 3.30% 16.78% 19.75%
<FN>
- -----------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from date reorganized as a fund of The One Group.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 57
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
KENTUCKY MUNICIPAL BOND FUND
---------------------------------------------
CLASS B
---------------------------------------------
SIX MONTHS YEAR MARCH 16,
ENDED ENDED 1995 TO
DECEMBER 31, JUNE 30, JUNE 30,
1996 1996 1995(a)
----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .................................. $ 9.99 $ 9.87 $ 9.75
--------- --------- ---------
Investment Activities:
Net investment income ................................ 0.19 0.38 0.14
Net realized and unrealized gains from investments ... 0.15 0.13 0.12
--------- --------- ---------
Total from Investment Activities ................... 0.34 0.51 0.26
--------- --------- ---------
Distributions:
Net investment income ................................ (0.19) (0.39) (0.14)
--------- --------- ---------
Total Distributions ................................ (0.19) (0.39) (0.14)
--------- --------- ---------
NET ASSET VALUE,
END OF PERIOD ....................................... $ 10.14 $ 9.99 $ 9.87
========= ========= =========
Total Return (Excludes Sales Charge) .................. 3.46%(b) 5.16% 2.63%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $ 1,992 $ 1,457 $ 79
Ratio of expenses to average net assets ............. 1.50%(c) 1.58% 1.58%(c)
Ratio of net investment income to average net assets 3.77%(c) 3.70% 3.89%(c)
Ratio of expenses to average net assets* ............ 1.89%(c) 2.02% 2.21%(c)
Ratio of net investment income to average net assets* 3.38%(c) 3.26% 3.25%(c)
Portfolio turnover (d) .............................. 3.30% 16.78% 19.75%
<FN>
- ---------------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on March 16, 1995.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 58
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OHIO MUNICIPAL BOND FUND
--------------------------------------------------------------------------------------
FIDUCIARY
--------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ------------------------------------------------------------------------
1996 1996 1995 1994 1993 1992(a)
---------- ---------- ---------- ---------- ---------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............ $ 10.69 $ 10.65 $ 10.58 $ 11.11 $ 10.48 $ 10.00
---------- ---------- ---------- ---------- ---------- ----------
Investment Activities:
Net investment income ......... 0.28 0.56 0.55 0.51 0.54 0.56
Net realized and unrealized
gains (losses) from
investments .................. 0.19 0.04 0.07 (0.50) 0.62 0.47
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment
Activities ................. 0.47 0.60 0.62 0.01 1.16 1.03
---------- ---------- ---------- ---------- ---------- ----------
Distributions:
Net investment income ........... (0.28) (0.56) (0.55) (0.52) (0.53) (0.55)
In excess of net realized
gains .......................... -- -- -- (0.02) -- --
---------- ---------- ---------- ---------- ---------- ----------
Total Distributions ........... (0.28) (0.56) (0.55) (0.54) (0.53) (0.55)
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE,
END OF PERIOD .................. $ 10.88 $ 10.69 $ 10.65 $ 10.58 $ 11.11 $ 10.48
========== ========== ========== ========== ========== ==========
Total Return (Excludes Sales
Charge) ........................ 4.45%(b) 5.69% 6.07% 0.07% 11.43% 10.64%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 84,011 $ 80,611 $ 79,993 $ 93,261 $ 74,792 $ 45,199
Ratio of expenses to average net
assets ........................ 0.57%(c) 0.57% 0.58% 0.53% 0.55% 0.63%(c)
Ratio of net investment income
to average net assets ......... 5.16%(c) 5.17% 5.29% 4.76% 5.14% 5.61%(c)
Ratio of expenses to average net
assets* ....................... 0.88%(c) 0.95% 0.91% 0.86% 0.94% 1.21%(c)
Ratio of net investment income
to average net assets* ........ 4.85%(c) 4.79% 4.96% 4.43% 4.75% 5.03%(c)
Portfolio turnover (d) .......... 3.21% 24.61% 77.69% 16.77% 26.67% 9.78%
<FN>
- -------------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The Fund commenced offering on July 12, 1991.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 59
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OHIO MUNICIPAL BOND FUND
-----------------------------------------------------------------------------
CLASS A
-----------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, -------------------------------------------------------------------
1996 1996 1995 1994 1993 1992(a)
----------- ----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ................... $ 10.72 $ 10.68 $ 10.61 $ 11.13 $ 10.48 $ 10.29
---------- ---------- ---------- ---------- ---------- ----------
Investment Activities:
Net investment income ................ 0.27 0.55 0.53 0.50 0.52 0.20
Net realized and unrealized gains
(losses) from investments .......... 0.20 0.03 0.07 (0.48) 0.64 0.21
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Activities .... 0.47 0.58 0.60 0.02 1.16 0.41
---------- ---------- ---------- ---------- ---------- ----------
Distributions:
Net investment income ................. (0.27) (0.54) (0.51) (0.50) (0.51) (0.22)
In excess of net investment income .... -- -- (0.02) (0.02) -- --
In excess of net realized gains ....... -- -- -- (0.02) -- --
---------- ---------- ---------- ---------- ---------- ----------
Total Distributions .................. (0.27) (0.54) (0.53) (0.54) (0.51) (0.22)
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE,
END OF PERIOD ........................ $ 10.92 $ 10.72 $ 10.68 $ 10.61 $ 11.13 $ 10.48
========== ========== ========== ========== ========== ==========
Total Return (Excludes Sales Charge) ... 4.32%(b) 5.44% 5.79% (0.05)% 11.40% 10.85%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ..... $ 15,858 $ 16,507 $ 12,006 $ 14,883 $ 13,092 $ 41
Ratio of expenses to average net assets 0.81%(c) 0.82% 0.82% 0.78% 0.77% 1.01%(c)
Ratio of net investment income
to average net assets ............... 4.90%(c) 4.92% 5.01% 4.63% 4.85% 5.16%(c)
Ratio of expenses to average net
assets* ............................. 1.21%(c) 1.30% 1.25% 1.21% 1.25% 1.40%(c)
Ratio of net investment income
to average net assets* .............. 4.50%(c) 4.44% 4.58% 4.20% 4.37% 4.77%(c)
Portfolio turnover (d) ................ 3.21% 24.61% 77.69% 16.77% 26.67% 9.78%
<FN>
- ------------------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class A Shares commenced offering on February 18, 1992.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 60
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OHIO MUNICIPAL BOND FUND
-------------------------------------------------------------
CLASS B
-------------------------------------------------------------
Years ended June 30,
SIX MONTHS ENDED --------------------------------------
DECEMBER 31, 1996 1996 1995 1994 (a)
----------------- ---- ---- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ................................... $10.79 $10.75 $10.68 $11.31
------- ------ ------ ------
Investment Activities:
Net investment income ............................... 0.24 0.48 0.43 0.17
Net realized and unrealized gains (losses) from
investments ...................................... 0.20 0.03 0.07 (0.62)
------- ------ ------ ------
Total from Investment Activities ................. 0.44 0.51 0.50 (0.45)
------- ------ ------ ------
Distributions:
Net investment income ............................... (0.24) (0.47) (0.43) (0.17)
In excess of net investment income .................. -- -- -- (0.01)
------- ------ ------ ------
Total Distributions .............................. (0.24) (0.47) (0.43) (0.18)
------- ------ ------ ------
NET ASSET VALUE,
END OF PERIOD .......................................... $10.99 $10.79 $10.75 $10.68
======= ====== ====== ======
Total Return (Excludes Sales Charge) ................... 4.07%(b) 4.79% 5.17% (4.02)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ................... $12,117 $8,854 $3,209 $2,043
Ratio of expenses to average net assets ............. 1.46%(c) 1.47% 1.48% 1.28%(c)
Ratio of net investment income to average net assets 4.28%(c) 4.27% 4.40% 4.23%(c)
Ratio of expenses to average net assets* ............ 1.85%(c) 1.95% 1.91% 1.68%(c)
Ratio of net investment income to average net assets* 3.89%(c) 3.79% 3.97% 3.83%(c)
Portfolio turnover (d) .............................. 3.21% 24.61% 77.69% 16.77%
<FN>
- -----
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Class B Shares commenced offering on January 14, 1994.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 61
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LOUISIANA MUNICIPAL
BOND FUND
---------------------------------------
FIDUCIARY
---------------------------------------
SIX MONTHS MARCH 26, 1996
ENDED THROUGH
DECEMBER 31, 1996 JUNE 30, 1996(a)
------------------ -------------------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD .......................................... $9.93 $10.00
-------- --------
Investment Activities:
Net investment income ..................................... 0.24 0.13
Net realized and unrealized gains (losses) from investments 0.14 (0.07)
-------- --------
Total from Investment Activities ....................... 0.38 0.06
-------- --------
Distributions:
Net investment income ..................................... (0.24) (0.13)
-------- --------
Total Distributions .................................... (0.24) (0.13)
-------- --------
NET ASSET VALUE,
END OF PERIOD ................................................ $10.07 $9.93
======== ========
Total Return (Excludes Sales Charge) ......................... 3.91%(b) 0.90%(b)(d)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ......................... $126,727 $136,041
Ratio of expenses to average net assets ................... 0.65%(c) 0.71%(c)
Ratio of net investment income to average net assets ...... 4.88%(c) 4.76%(c)
Ratio of expenses to average net assets* .................. 0.86%(c) 0.86%(c)
Ratio of net investment income to average net assets* ..... 4.67%(c) 4.61%(c)
Portfolio turnover (e) .................................... 10.24% 16.72%
<FN>
- -----
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from date reorganized as a fund of The One Group.
(b) Not annualized.
(c) Annualized.
(d) Represents total return for Class A Shares from December 1, 1995 through
March 25, 1996 plus total return for Fiduciary Shares for the period March
26, 1996 through June 30, 1996. (e)Portfolio turnover is calculated on the
basis of the Fund as a whole without distinguishing among the classes of
shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 62
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LOUISIANA MUNICIPAL BOND FUND
--------------------------------------------------------------------------------------------
CLASS A
--------------------------------------------------------------------------------------------
SIX MONTHS SEVEN MONTHS YEARS ENDED NOVEMBER 30,
ENDED ENDED ---------------------------------------------------
DECEMBER 31, 1996 JUNE 30, 1996(a) 1995 1994 1993 1992
----------------- --------------- ---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ...... $9.93 $10.09 $9.38 $10.27 $9.92 $9.73
------- ------- -------- -------- -------- --------
Investment Activities:
Net investment income .. 0.23 0.24 0.50 0.49 0.52 0.55
Net realized and
unrealized gains
(losses) from
investments ......... 0.14 (0.16) 0.71 (0.79) 0.42 0.26
------- ------- -------- -------- -------- --------
Total from Investment
Activities ........ 0.37 0.08 1.21 (0.30) 0.94 0.82
------- ------- -------- -------- -------- --------
Distributions:
Net investment income .. (0.23) (0.24) (0.50) (0.49) (0.52) (0.55)
Net realized gains ..... -- -- -- (0.10) (0.07) (0.07)
------- ------- -------- -------- -------- --------
Total Distributions . (0.23) (0.24) (0.50) (0.59) (0.59) (0.62)
------- ------- -------- -------- -------- --------
NET ASSET VALUE,
END OF PERIOD ............. $10.07 $9.93 $10.09 $9.38 $10.27 $9.92
======= ======= ======== ======== ======== ========
Total Return (Excludes
Sales Charge) .......... 3.78%(b) 0.84%(b) 13.11% (2.97)% 9.65% 8.64%
RATIOS/SUPPLEMENTARY
Data:
Net Assets at end of
period (000) ........ $50,271 $53,479 $206,119 $196,820 $196,534 $135,692
Ratio of expenses to
average net assets .. 0.90%(c) 0.69%(c) 0.62% 0.65% 0.62% 0.58%
Ratio of net investment
income to average net
assets .............. 4.63%(c) 4.71%(c) 5.07% 4.97% 5.07% 5.70%
Ratio of expenses to
average net assets* . 1.21%(c) 0.86%(c) 0.77% 0.80% 0.78% 0.83%
Ratio of net investment
income to average net
assets* ............. 4.32%(c) 4.54%(c) 4.92% 4.82% 4.91% 5.45%
Portfolio turnover (d) . 10.24% 16.72% 28.00% 24.00% 25.00% 32.00%
<FN>
- -----
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Upon reorganizing as a fund of The One Group, the Paragon Louisiana
Tax-Free Fund became the Louisiana Municipal Bond Fund. Financial
highlights for the periods prior to March 26, 1996 represents the Paragon
Louisiana Tax-Free Fund. The per share data for the periods prior to March
26, 1996 have been restated to reflect the impact of restatement of net
asset value from $10.67 to $10.00 effective March 26, 1996.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 63
===============================================================================
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LOUISIANA MUNICIPAL BOND FUND
--------------------------------------------------------------
CLASS B
--------------------------------------------------------------
SIX MONTHS SEVEN MONTHS YEAR SEPTEMBER 16,
ENDED ENDED ENDED 1994 THROUGH
DECEMBER 31, JUNE 30, NOVEMBER 30, NOVEMBER 30,
1996 1996(a) 1995 1994(b)
------------ ------------ ------------ -------------
(Unaudited)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ........................ $9.93 $10.09 $9.36 $9.73
------ ------ ------ ----
Investment Activities:
Net investment income .................... 0.20 0.21 0.42 0.08
Net realized and unrealized gains (losses)
from investments ...................... 0.14 (0.16) 0.73 (0.37)
------ ------ ------ ----
Total from Investment Activities ...... 0.34 0.05 1.15 (0.29)
------ ------ ------ ----
Distributions:
Net investment income .................... (0.20) (0.21) (0.42) (0.08)
------ ------ ------ ----
Total Distributions ................... (0.20) (0.21) (0.42) (0.08)
------ ------ ------ ----
NET ASSET VALUE,
END OF PERIOD ............................. $10.07 $9.93 $10.09 $9.36
====== ====== ====== =====
Total Return (Excludes Sales Charge) ........ 3.45%(c) 0.48%(c) 12.52% 2.94%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ........ $3,605 $3,223 $2,115 $204
Ratio of expenses to average net assets .. 1.55%(d) 1.50%(d) 1.37% 1.41%(d)
Ratio of net investment income to
average net assets .................... 3.96%(d) 3.98%(d) 4.27% 4.45%(d)
Ratio of expenses to average net assets* . 1.89%(d) 1.70%(d) 1.52% 1.56%(d)
Ratio of net investment income to
average net assets* ................... 3.62%(d) 3.78%(d) 4.12% 4.30%(d)
Portfolio turnover (e) ................... 10.24% 16.72% 28.00% 24.00%
- -----
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Upon reorganizing as a fund of The One Group, the Paragon Louisiana
Tax-Free Fund became the Louisiana Municipal Bond Fund. Financial
highlights for the periods prior to March 26, 1996 represents the Paragon
Louisiana Tax-Free Fund. The per share data for the periods prior to March
26, 1996 have been restated to reflect the impact of restatement of net
asset value from $10.70 to $10.00 effective March 26, 1996.
(b) Class B Shares commenced offering on September 16, 1994.
(c) Not annualized.
(d) Annualized.
(e) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
See notes to financial statements.
<PAGE> 64
THE FUNDS
The Funds are part of the Trust, which is an open-end management investment
company that offers shares in 40 separate funds, most of which offer three
classes of shares. This Prospectus relates to the Class A, Class B and
Fiduciary Class shares of the seven tax advantaged fixed income Funds of the
Trust. Each class of shares provides for variations in distribution costs,
voting rights, dividends and per share net asset value. Except for these
differences among classes, each share of a Fund represents an undivided,
proportionate interest in the Fund. Information regarding the Trust's 33 other
funds and their classes is contained in separate prospectuses which may be
obtained from the Trust's Distributor, The One Group Services Company, 3435
Stelzer Road, Columbus, OH 43219 or by calling 1-800-480-4111.
INVESTMENT OBJECTIVES AND PERMISSIBLE INVESTMENTS
The investment objectives of the Funds are "fundamental" and may not be changed
without a Shareholder vote. For additional information on Shareholder voting,
see the sections of this Prospectus entitled "Other Information - Voting
Rights" and "Investment Limitations." Unless expressly deemed to be
fundamental, the investment policies of the Funds are non-fundamental and may
be changed without a shareholder vote. You will be notified if a material
change is made in a non-fundamental policy. There is no assurance that the
Funds will meet their investment objectives.
Below is a description of each Fund's investment objective and policies, as
well as a summary of the types of securities in which each Fund may invest. For
additional information concerning the Funds' investments, see "Description of
Permitted Investments." The risks associated with investment in the Funds and
with certain investment techniques used by the Funds can be found in the
sections entitled "Risk Factors" and "Description of Permitted Investments."
For purposes of the investment policies of the Arizona Municipal Bond Fund, the
West Virginia Municipal Bond Fund, the Louisiana Municipal Bond Fund, the Ohio
Municipal Bond Fund and the Kentucky Municipal Bond Fund, "bonds" include debt
instruments issued by the U.S. Treasury, U.S. government agencies,
municipalities and zero coupon obligations. For purposes of the Intermediate
Tax-Free Bond Fund and the Municipal Income Fund "bonds" additionally include
mortgage related securities.
The One Group Intermediate Tax-Free Bond Fund
The One Group Intermediate Tax-Free Bond Fund seeks current income exempt from
Federal income taxes consistent with prudent investment management and the
preservation of capital. The Fund will invest at least 80% of its total assets
in bonds and notes issued by or on behalf of the states, territories and
possessions of the United States and the District of Columbia and their
respective authorities, political subdivisions, agencies and instrumentalities,
the interest on which is exempt from Federal income tax and is not treated as a
preference item for purposes of the Federal alternative minimum tax ("Municipal
Securities"). Corporate shareholders, however, will be required to include the
interest on Municipal Securities in their alternative minimum taxable income.
As a matter of fundamental policy, at least 65% of the Fund's total assets will
consist of bonds. Under normal market conditions, it is anticipated that the
Fund's average weighted maturity will range between three and fifteen years.
The Fund also may invest in mortgage-backed securities, restricted securities
and mortgage dollar rolls.
The One Group Municipal Income Fund
The One Group Municipal Income Fund seeks current income exempt from Federal
income taxes. The Fund will invest at least 80% of its total assets in debt
securities issued by or on behalf of the states, territories and possessions of
the United States and the District of Columbia and their respective
authorities, political subdivisions, agencies and instrumentalities, the
interest of which is exempt from Federal income tax ("Municipal Securities").
As a matter of fundamental policy, at least 65% of the Fund's total assets will
consist of bonds. It also is a fundamental policy that the Fund will not invest
more than 25% of its net assets in securities within a single industry. This
limitation includes revenue bonds payable only from revenues derived from
facilities or revenues within a single industry (other than housing authority
obligations or securities issued by governments or political subdivisions of
governments). The Fund will invest, from time to time, more than 25% of its net
assets in obligations of municipal housing authorities and single-family
mortgage revenue bonds. The Fund does not intend to invest more than 25% of its
net assets in securities of governmental units or issuers located in the same
state, territory or possession of the United States. Under normal market
conditions, it is anticipated that the Fund's average weighted maturity will
range from five to fifteen years, although the Fund may shorten its average
weighted maturity to as little as two years if deemed appropriate for temporary
defensive purposes. The Fund maintains the ability under normal conditions to
invest as much as 100% of its assets in Municipal Securities issued to finance
private activities the interest on which is a tax preference item for purposes
of the Federal alternative minimum tax. As a result, shareholders in the Fund
who are subject to the Federal alternative minimum tax may have all or a
portion of their income from the Fund subject to Federal income tax. In
addition, corporate shareholders will be required to include the interest on
Municipal Securities in their
33
<PAGE> 65
alternative minimum taxable income. The Fund also may invest in mortgage-backed
securities, restricted securities and mortgage dollar rolls.
The One Group Arizona Municipal Bond Fund
The One Group Arizona Municipal Bond Fund seeks current income exempt from
Federal income tax and Arizona personal income tax, consistent with the
preservation of principal. The Fund will, as a matter of fundamental policy,
invest at least 80% of its total assets in debt securities that are issued by
or on behalf of Arizona or its respective authorities, agencies,
instrumentalities and political subdivisions, the interest on which, in the
opinion of counsel for the issuer, is exempt from Federal income tax, and is
exempt from Arizona personal income tax ("Arizona Municipal Securities"). The
Fund may invest up to 20% of its total assets in bonds and notes issued by or
on behalf of states (other than Arizona), territories and possessions of the
United States, the District of Columbia, and their respective authorities,
agencies, instrumentalities, and political subdivisions, the interest on which
is exempt from Federal income tax ("Municipal Securities"). The Fund's average
weighted maturity will, under normal conditions, be between 5 and 20 years.
The Fund maintains the ability under normal conditions to invest as much as
100% of its assets in Municipal Securities issued to finance private activities
the interest on which is a tax preference item for purposes of the Federal
alternative minimum tax. Thus, if you are subject to the Federal alternative
minimum tax all or a portion of your income from the Fund may be subject to
Federal income tax. In addition, corporate shareholders will be required to
include the interest on Arizona Municipal Securities and Municipal Securities
in their alternative minimum taxable income. See "Tax Status of Distributions."
The One Group West Virginia Municipal Bond Fund
The One Group West Virginia Municipal Bond Fund seeks current income exempt
from Federal income tax and West Virginia personal income tax, consistent with
the preservation of principal. The Fund will, as a matter of fundamental
policy, invest at least 80% of its total assets in debt securities that are
issued by or on behalf of West Virginia or its respective authorities,
agencies, instrumentalities and political subdivisions and that produce
interest that, in the opinion of counsel for the issuer, is exempt from Federal
income tax and is exempt from West Virginia personal income tax ("West Virginia
Municipal Securities"). The Fund may invest up to 20% of its total assets in
bonds and notes issued by or on behalf of states (other than West Virginia),
territories and possessions of the United States, the District of Columbia, and
their respective authorities, agencies, instrumentalities, and political
subdivisions the interest on which is exempt for Federal income tax ("Municipal
Securities"). The Fund's average weighted maturity will, under normal
conditions, be between 5 and 20 years.
The Fund maintains the ability under normal conditions to invest as much as
100% of its assets in Municipal Securities issued to finance private activities
the interest on which is a tax preference item for purposes of the Federal
alternative minimum tax. Thus, if you are subject to the Federal alternative
minimum tax, all or a portion of your income from the Fund may be subject to
Federal income tax. In addition, corporate shareholders will be required to
include the interest on West Virginia Municipal Securities and Municipal
Securities in their alternative minimum taxable income. See "Tax Status of
Distributions."
The One Group Louisiana Municipal Bond Fund
The One Group Louisiana Municipal Bond Fund seeks current income both
consistent with the preservation of principal and exempt from Federal income
tax and Louisiana income tax. As a matter of fundamental policy the fund will
invest at least 80% of its net assets in investment grade municipal securities
issued by or on behalf of the State of Louisiana and its political
subdivisions, agencies and instrumentalities, the interest on which is exempt
from both Federal income tax and Louisiana state income tax. The fund's
dollar-weighted average maturity will, under normal conditions, vary between
five and 20 years, although the fund may invest in securities of any maturity.
The municipal securities in which the fund invests may carry fixed rates of
return or have floating or variable rates. Although the fund intends to invest
all of its assets in the municipal securities described above, up to 20% of its
assets may be held in cash or invested in municipal securities of other states,
short-term taxable investments including repurchase agreements, U.S. Government
Securities or other cash equivalents and Louisiana municipal securities such as
"private activity" bonds the interest on which may be treated as a tax
preference item under the Federal alternative minimum tax for individuals.
Thus, if you are subject to the Federal alternative minimum tax, all or a
portion of your income from the Fund may be subject to Federal income tax. In
addition, corporate shareholders will be required to include the interest on
Municipal Securities in their alternative minimum taxable income. See "Tax
Status of Distributions."
The fund may invest its assets in: (i) general obligation bonds; (ii) revenue
bonds, including industrial development revenue bonds; (iii) short-term
municipal securities of all types, including tax anticipation notes, revenue
anticipation notes, and bond anticipation notes; and (iv) certificates of
participation in a pool of municipal securities held by a bank or other
financial institution, the interest from which is, in the opinion of counsel to
the issuer, exempt from Federal and Louisiana income tax.
34
<PAGE> 66
The One Group Kentucky Municipal Bond Fund
The One Group Kentucky Municipal Bond Fund seeks current income exempt from
Federal income tax and Kentucky personal income tax, consistent with the
preservation of principal. As a matter of fundamental policy, the Fund will
invest at least 80% of its total assets in debt securities that produce
interest that, in the opinion of counsel for the issuer, is exempt from Federal
income tax ("Municipal Securities"), or the Fund will invest its assets so that
at least 80% of its annual interest income is exempt from Federal income tax.
In addition, as a matter of fundamental policy, the Fund will invest at least
65% of its total assets in bonds that are issued by or on behalf of Kentucky or
its respective authorities, agencies, instrumentalities an political
subdivisions and that produce interest that, in the opinion of counsel for the
issuer, is exempt from Kentucky personal income tax ("Kentucky Municipal
Securities"). The Fund may invest up to 35% of its total assets in bonds and
notes issued by or on behalf of states (other than Kentucky) , territories and
possessions of the United States, the District of Columbia, and their
respective authorities, agencies, instrumentalities and political subdivisions,
that produce interest that, in the opinion of counsel for the issuer, is exempt
from Federal income tax. The Fund's average weighted maturity will, under
normal conditions, range between 5 and 20 years.
The Fund maintains the ability under normal conditions to invest as much as
100% of its assets in Kentucky Municipal Securities and Municipal Securities
issued to finance private activities the interest on which is a tax preference
item for purposes of the Federal alternative minimum tax. This, if you are
subject to the Federal alternative minimum tax, all or a portion of your income
from the Fund may be subject to Federal income tax. In addition, corporate
shareholders will be required to include the interest on Kentucky Municipal
Securities and Municipal Securities in their alternative minimum taxable
income. See "Tax Status of Distributions."
The One Group Ohio Municipal Bond Fund
The One Group Ohio Municipal Bond Fund seeks current income exempt from Federal
income tax and Ohio personal income tax, consistent with the preservation of
principal. As a matter of fundamental policy, the Fund will invest at least 80%
of its total assets in debt securities that are issued by or on behalf of Ohio
or its respective authorities, agencies, instrumentalities and political
subdivisions, interest on which, in the opinion of counsel for the issuer, is
exempt from Federal income tax, and is exempt from Ohio personal income tax
("Ohio Municipal Securities"). The Fund may invest up to 20% of its total
assets in bonds and notes issued by or on behalf of states (other than Ohio),
territories and possessions of the United States, the District of Columbia, and
their respective authorities, agencies, instrumentalities and political
subdivisions, that produce interest that, in the opinion of counsel for the
issuer, is exempt from Federal income tax ("Municipal Securities"). The Fund's
average weighted maturity will, under normal conditions, range between 5 and 20
years.
The Fund maintains the ability under normal conditions to invest as much as
100% of its assets in Ohio Municipal Securities and Municipal Securities issued
to finance private activities the interest on which is a tax preference item
for purposes of the Federal alternative minimum tax. Thus, if you are subject
to the Federal alternative minimum tax, all or a portion of your income from
the Fund may be subject to Federal income tax. In addition, corporate
shareholders will be required to include the interest on Ohio Municipal
Securities and Municipal Securities in their alternative minimum taxable
income. See "Tax Status of Distributions."
ADDITIONAL INVESTMENT INFORMATION
Additional Permissible Investments
In addition to the permissible investments described above, the Funds also may
invest in securities purchased on a when-issued basis and forward commitments,
variable and floating rate notes, commercial paper, time deposits, certificates
of deposit, receipts, which may include Treasury Receipts ("TRS"), Treasury
Investment Growth Receipts ("TIGRS") and Certificates of Accrual on Treasury
Securities ("CATS"), U.S. Treasury obligations, which may include Separately
Traded Registered Interest and Principal Securities ("STRIPS") and Coupon Under
Book Entry Safekeeping ("CUBES"), bankers' acceptances, repurchase agreements,
reverse repurchase agreements, and securities of other investment companies.
The Funds also may invest in options, futures contracts, options on futures
contracts, securities subject to demand features, zero coupon obligations, swap
transactions, structured instruments, municipal leases, and participation
interests. The Funds also may engage in securities lending transactions.
In addition to those instruments and techniques listed above, the Funds may
invest in new options, futures contracts and other financial products that may
be developed to the extent that these products are consistent with the Fund's
investment objective and policies.
35
<PAGE> 67
Debt Ratings
Municipal Securities in which the Funds may invest, if bonds, must be rated at
the time of investment, in one of the four highest rating categories described
below under "Description of Ratings" or, if unrated, determined by Banc One
Advisors to be of comparable quality.
Arizona Municipal Securities, West Virginia Municipal Securities, Louisiana
Municipal Securities, Ohio Municipal Securities, and Kentucky Municipal
Securities, if bonds, must be rated at the time of investment, in one of the
four highest rating categories described below under "Description of Ratings"
at the time of investment or, if unrated, determined by Banc One Advisors to be
of comparable quality.
Other securities in which the Funds may invest, such as tax-exempt commercial
paper, notes and variable rate demand obligations, must be rated in the highest
or second highest rating categories described below under "Description of
Ratings" or, if unrated, determined by Banc One Advisors to be of comparable
quality.
The Louisiana Municipal Bond Fund also may invest in short-term tax-exempt
municipal securities rated at least MIG-3 (VMIG-3) by Moody's or SP-2 by S&P,
or, if unrated, determined by Banc One Advisors to be of comparable quality.
Securities rated Baa, BBB, MIG-3 (VMIG-3) and SP-2 may have speculative
elements as well as investment grade characteristics. For more details, see
"Description of Ratings," in this Prospectus.
Illiquid Investments
Each Fund may invest up to 15% of its net assets in illiquid investments,
including restricted securities and private placements that are not deemed to
be liquid by Banc One Advisors. An illiquid instrument is a security that
cannot be disposed of promptly in seven (7) days. Banc One Advisors may
determine that securities that cannot be sold to the general public but may be
sold to institutional investors (for example, Rule 144A Securities and
privately placed commercial paper) are liquid. In making liquidity
determinations, Banc One Advisors will follow guidelines established by the
Board of Trustees
For a detailed description of the Funds' permitted investments, see
"Description of Permitted Investments." For a description of permitted
investments for temporary defensive purposes, see "Temporary Defensive
Position." In the event a security owned by the Funds is downgraded below the
rating categories described above, Banc One Advisors will review the
reclassification and take appropriate action with regard to the security.
RISK FACTORS
Risks of Investing in Fixed-Income Securities
The market value of a Fund's fixed-income investments will change in response
to interest rate changes and other factors. During periods of falling interest
rates, the values of outstanding fixed-income securities generally rise.
Conversely, during periods of rising interest rates, the values of such
securities generally decline. Moreover, while securities with longer maturities
tend to produce higher yields, the prices of longer maturity securities are
also subject to greater market fluctuations as a result of changes in interest
rates. Changes by recognized agencies in the rating of any fixed-income
security and in the ability of an issuer to make payments of interest and
principal also affect the value of these investments. Except under conditions
of default, changes in the value of fixed-income securities will not affect
cash income derived from these securities but will affect the Funds' net asset
value.
Because the Funds' investments are interest rate sensitive, the Fund's
performance will depend in varying degree on fluctuations in market interest
rates. Banc One Advisors will utilize appropriate strategies which attempt to
maximize returns to the Funds, while minimizing the associated risks to their
invested capital. Operating results also will depend upon the availability of
opportunities for the investment of the Funds' assets, including purchases and
sales of suitable securities.
Risks of Investing in Mortgage-Related Securities and Municipal Housing Bonds
The Funds may invest in mortgage-related securities. Mortgage-related
securities include, among other things, mortgage-backed securities, adjustable
rate mortgage loans, and mortgage dollar rolls. The investment characteristics
of mortgage-related securities differ from traditional debt securities. These
differences can result in significantly greater price and yield volatility than
is the case with traditional fixed-income securities. The major differences
typically include more frequent interest and principal payments, usually
monthly, the adjustability of interest rates, and the possibility that
prepayments of principal may be made at any time. Prepayment rates are
influenced by changes in current interest rates and a variety of economic,
geographic, social, and other factors. During periods of declining interest
rates, prepayment rates can be expected to accelerate. Under certain interest
rate and prepayment
36
<PAGE> 68
rate scenarios, the Funds may fail to recoup any premium paid on
mortgage-related securities notwithstanding a direct or indirect governmental
or agency guarantee. The Funds will attempt to control this risk by using
various analytical and hedging techniques. In general, changes in the rate of
prepayments on a mortgage-related security will change that security's market
value and its yield to maturity. When interest rates fall, high prepayments
could force the Funds to reinvest principal at a time when investment
opportunities are not attractive. Thus, mortgage-related securities may not be
an effective means for the Funds to lock in long-term interest rates.
Conversely, during periods when interest rates rise, slow prepayments could
cause the average life of the security to lengthen and the value to decline
more than anticipated.
Risk of Investing in Certain Municipal Securities
Municipal Securities rated in the fourth highest rating category are generally
considered investment grade securities, although S&P indicates that such
Municipal Securities have speculative characteristics. Changes in economic
conditions or other circumstances are more likely to lead to a weakened
capacity of the issuers of such securities to make principal and interest
payments than is the case with higher grade securities.
Risk Relating to Certain Investment Techniques
Certain investment management techniques that a Fund may use may expose the
Fund to special risks. These include, but are not limited to, engaging in
hedging transactions (including mortgage and interest rate swaps and interest
rate floors and caps), purchasing and selling futures and options, making
forward commitments, purchasing structured instruments, lending portfolio
securities and entering into mortgage dollar rolls. These practices could
expose a Fund to potentially greater risk of loss than more traditional
fixed-income investments. In addition, the permissible investments listed
above includes selected securities that may be considered to be derivatives,
including options, futures, options on futures, structured instruments,
collateralized mortgage obligations (CMOs and REMICs), swaps, caps, floors, new
financial products and inverse floating rate instruments, and stripped
mortgage-backed securities.
For additional information on each of the Fund's permitted investments and
associated risks, see "Description of Permitted Investments."
FACTS ABOUT NON-DIVERSIFIED FUNDS
All of the Funds, with the exception of the Intermediate Tax Free Bond Fund and
the Municipal Income Fund, are "non-diversified" investment companies. This
means that these Funds are less limited in the proportion of their assets that
may be invested in securities of a single issuer. However, the Funds intend to
conduct their operations so as to qualify as a "regulated investment company"
for purposes of the Internal Revenue Code of 1986, as amended (the "Code").
Because of the relatively small number of issuers of Arizona, West Virginia,
Kentucky, Louisiana and Ohio Municipal Securities, each respective Fund may
invest a higher percentage of its assets in the securities of a single issuer
than an investment company that invests in a broad range of tax-exempt
securities. This concentration involves an increased risk of loss to the Funds
if the issuer is unable to make interest or principal payments or if the market
value of such securities were to decline and, consequently, may cause greater
fluctuation in the net asset value of the Fund's shares.
As a matter of non-fundamental policy, the Funds will not concentrate in any
industry. However, each Fund may invest up to 25% of its assets in revenue
securities that are based, directly or indirectly, on the credit of private
entities in any one industry.
SPECIAL CONSIDERATIONS RELATED TO:
Ohio Municipal Securities
The economy of Ohio, while becoming increasingly diversified and increasingly
reliant on the service sector, continues to rely in significant part on durable
goods manufacturing, which is largely concentrated in motor vehicles and
equipment, steel, rubber products, and household appliances. As a result,
general economic activity in Ohio, as in many other industrial states, tends to
be more cyclical than in some other states and in the nation as a whole.
Agriculture also is an important segment of the Ohio economy, and the state has
instituted several programs to provide financial assistance to farmers.
Although revenue obligations of the state or its political subdivisions may be
payable from a specific source or project, and general obligation debt may be
payable from a specific tax, there can be no assurance that future economic
difficulties and the resulting impact on state and local government finances
will not adversely affect the market value of the Ohio Municipal Securities in
the Fund or the ability of the respective obligers to make timely payment of
interest and principal on such obligations. See the Statement of Additional
Information.
37
<PAGE> 69
Arizona Municipal Securities
The composition of the State's economy has changed significantly in recent
years. Arizona has shifted from a resources-based economy to an economy based
on high-tech manufacturing, construction and services. The construction sector
is cyclical and is now in the upward portion of the cycle. No assurances can be
given that any sector of Arizona's economy will continue to perform as it is
performing at this time. Although Arizona's economy in general has recovered
from the downturn suffered in the middle to late 1980s, not all areas of the
State have shown the same gains. Generally, employment and growth has lagged in
the agricultural sector, and on Indian reservations. In addition, Arizona's
wheat crop suffered a severe setback in 1996 with the discovery of Karnal Bunt,
resulting in an embargo on foreign sales. The wheat can now be sold
domestically only for non-human purposes.
The problems associated with Arizona's rapid growth must still be addressed.
These problems include, without limitation, air quality, transportation, school
finance, and the continuing need for public infrastructure.
The ability of Arizona and its political subdivisions to respond to the
ever-increasing burdens placed upon them by this growth has been limited in
part by Constitutional and legislative restrictions on property tax increases
and limitations on annual expenditure increases. Subject to certain exceptions,
the maximum amount of property taxes levied by any Arizona county, city, town
or community college district for its operations and maintenance expenditures
cannot exceed the amount levied in a preceding year by more than two percent.
Certain taxes are specifically exempt from this limit, including taxes levied
for debt service payments.
Annual property taxes levied for the payment of general obligation bonded
indebtedness are unlimited as to rate or amount. Taxes to pay General
Obligation Refunding Bonds are in almost all cases unlimited as to rate, but
are limited in total amount to an amount no greater than the amount that would
have been paid on the bonds refunded without regard to any prior redemption
feature. However, there are Constitutional limitations on the aggregate amount
of general obligation bonded indebtedness an Arizona municipality can incur,
and these limitations could impede a municipality's ability to respond to the
needs of a fast growing population for additional public facilities and
services.
Inasmuch as the Arizona obligations in which the Fund may invest from time to
time include general obligation bonds, revenue bonds, industrial development
bonds, special tax and special assessment bonds, and the sensitivity of each of
these types of investments to the general and economic factors discussed above
may vary significantly, no assurance can be given as to the effect, if any,
that these factors, individually or in the aggregate, may have on any
individual Arizona obligation or on the Fund as a whole.
West Virginia Municipal Securities
Because of concentration of the West Virginia Municipal Bond Fund's investments
in West Virginia Municipal Securities, the Fund is more subject to the risks of
West Virginia's economy than if the Fund was invested in municipal securities
of various states.
Coal mining and related industries remain an important part of the West
Virginia economy, but increasing governmental regulation affecting production
and usage of coal and reduction in demand for certain types of coal have had an
adverse impact on the industry. State and local governments have made
concentrated efforts to encourage diversification of the state's industries
with some success, such as the tourism industry. However, in spite of increased
taxes since 1989 and state budget surpluses at the end of the state's three
most recent fiscal years, the state, local governments and school boards
continue to struggle to produce sufficient revenues to fund operations and
support public education. In addition, West Virginia's unemployment continues
to exceed the national average.
Kentucky Municipal Securities
As of May 31, 1996, Kentucky had an unemployment rate of 4.9%, which was below
the national average of 5.3%. For the calendar year 1995, Kentucky's per capita
income ranked 43rd in the nation and was 82% of the national average. The most
current audited financial statements for Kentucky indicated a surplus of funds
in the General Fund of $389,864,000 as of June 30, 1995, which was
$299,295,000 above the budgeted balance.
Unlike the municipal securities of most states, nearly all Kentucky Municipal
Securities are not general obligations of the issuer; rather payment depends on
revenues generated by the property financed by the securities.
Louisiana Municipal Securities
The Fund is more susceptible to factors adversely affecting issuers of
Louisiana municipal securities than is a comparable municipal bond fund that is
not concentrated in these issuers to this degree. Although it has recovered in
recent years, Louisiana experienced severe financial difficulties in the late
nineteen-eighties and continues to face the risks associated with a
non-diversified economy. In particular, the significance of the oil and gas
industry in Louisiana's economy has resulted in financial difficulties during
38
<PAGE> 70
unfavorable markets for oil and gas products and in financial benefits during
favorable markets. Louisiana's general obligation bonds were rated as high as
Aa by Moody's and AA by S&P, respectively, in 1984. The decline in oil prices
affected the state through a loss of severance taxes and royalties, which
together peaked at 26% of state governmental revenues in fiscal year 1982-1983
compared with 4.3% in fiscal year 1993-1994. Indirectly the decline in economic
activity also affected the state's collection of various excise taxes. As a
result, during the period from fiscal year 1987-1988 through fiscal year 1993-
1994, Louisiana experienced operating budget deficits in three of the seven
fiscal years, and its bonds were downgraded to Baa1/BBB+. After eliminating its
deficit through the issuance of long-term bonds in 1988, the state has
maintained positive ending General Fund balances through fiscal year 1993-1994.
During the period from fiscal year 1990-91 through fiscal year 1994-95, the
State experienced operating budget surpluses in four of the five fiscal years.
The State projections for fiscal year 1995-96 indicate a potential revenue
surplus of $76.8 million to continue all existing programs and operations.
The State's budget projections may also be impacted by certain matters relating
to the Medicaid program. In fiscal year 1995-96, the State has dealt with a
Medicaid revenue shortfall by reducing disproportionate share payments to
health care providers, implementing budget cuts of approximately $300 million
in the Medicaid program. Proposed changes in the design of the Medicaid program
at the Federal level (i.e., elimination of "Medicaid" and adoption of
"Medigrant") may cause the State to make additional modifications to its
Medicaid program in order to continue to provide necessary medical services to
the indigent population of the State in future years. The State submitted a
Section 1115 Waiver to the U.S. Department of Health and Human Services
("DHHS") on December 31, 994, and subsequently amended the waiver to include
public health maintenance organizations. The proposed funding in the amended
waiver was unacceptable to DHHS. Currently, the waiver application is in
pending status and the State is working with DHHS to achieve an acceptable
funding mechanism.
In 1996, the Louisiana Legislature passed a "local option" bill which will
permit voters in each parish to decide at the general election to be held
November, 1996 whether, and in what forms, gaming will be permitted in their
parish. Each form of gaming will be considered separately in each parish. If
the voters decide to prohibit a form of gaming in a parish, those currently
holding licenses for that form of gaming will be permitted to continue
operations only until the licence expires; provided, however, video draw poker
devices, which are licensed for one-year time periods, will be permitted to be
renewed only two more times. The Louisiana Lottery and the Powerball Lottery,
which are permitted by the State Constitution, will not be included in the
referendum. It cannot be predicted whether any particular form of gaming will
be prohibited in any or all of the parishes and to what extent the revenues of
the State will be affected. If all forms of gaming are rejected in every
parish of the State, however, the impact on the State budget will be gradual,
as the "local option" bill provides for a "phrasing out" of gaming as described
above.
HOW TO DO BUSINESS WITH
THE ONE GROUP
HOW TO INVEST IN THE ONE GROUP
Shares of the Funds are sold on a continuous basis and may be purchased
directly from the Trust's Distributor, The One Group Services Company, by mail,
by telephone, or by wire. Shares may also be purchased through a financial
institution, such as a bank, savings and loan association or insurance company
(each a "Shareholder Servicing Agent"), that has established a Shareholder
servicing agreement with the Distributor or through a broker-dealer that has
established a dealer agreement with the Distributor.
Purchases and redemptions of shares of the Funds may be made on any day that
the New York Stock Exchange is open for trading ("Business Days"). The minimum
initial and subsequent investments in the Funds are $1,000 and $100,
respectively ($100 and $25, respectively, for employees of BANC ONE CORPORATION
and its affiliates). Initial and subsequent minimum investments may be waived
at the Distributor's discretion. Investors may purchase up to a maximum of
$250,000 of Class B shares per individual purchase order.
Class A and Class B shares are offered to the general public. Fiduciary Class
shares are offered to institutional investors, including affiliates of BANC ONE
CORPORATION and any bank, depository institution, insurance company, pension
plan or other organization authorized to act in fiduciary, advisory, agency,
custodial or similar capacities (each an "Authorized Financial Organization").
For additional details regarding eligibility, call the Distributor at
1-800-480-4111.
BY MAIL
Investors may purchase Class A and Class B shares of the Funds by completing
and signing an Account Application Form and mailing it, along with a check (or
other negotiable bank instrument or money order) payable to "The One Group," to
State Street Bank and Trust Company (the Trust's Transfer Agent and Custodian),
P.O. Box 8500, Boston, MA 02266-8500. Subsequent purchases of shares may be
made at any time by mailing a check to the Transfer Agent. Account Application
Forms are available through the Distributor by calling 1-800-480-4111. All
purchases made by check should be in U.S. dollars. Third party checks will not
be
39
<PAGE> 71
accepted. When purchases are made by check or under the Systematic Investment
Plan (see below), redemptions will not be allowed until the investment being
redeemed has been in a Fund for 15 calendar days.
Purchases of Fiduciary Class shares and Class A shares that are being offered
to investors in certain retirement plans such as 401(k) and similar plans,
other than Individual Retirement Accounts, are made by an institutional
investor and/or other intermediary on behalf of an investor (each also a
"Shareholder Servicing Agent"). The Shareholder Servicing Agent may require an
investor to complete forms in addition to the Account Application Form and to
follow procedures established by the Shareholder Servicing Agent. Such
Shareholders should contact their Shareholder Servicing Agents regarding
purchases, exchanges and redemptions of shares. See "Additional Information
Regarding Purchases."
BY TELEPHONE OR BY WIRE
Once an Account Application Form has been received, Shareholders are eligible
to make purchases by telephone or wire (if that option has been selected by a
Shareholder) by calling the Transfer Agent at 1-800-480-4111 or the Shareholder
Servicing Agent, if applicable.
Shareholders may revoke their automatic eligibility to make purchases and/or
redemptions by telephone or by wire, by sending a letter so stating to the
Transfer Agent, State Street Bank and Trust Company, P.O. Box 8500, Boston, MA
02266-8500.
SYSTEMATIC INVESTMENT PLAN
Class A and Class B investors may make automatic monthly investments in the
Funds from their bank, savings and loan or other depository institution
accounts. The minimum initial and subsequent investments must be $25 under the
Systematic Investment Plan, which minimum may be waived at the discretion of
the Distributor. The Trust pays the costs associated with these transfers, but
reserves the right, upon thirty days' written notice, to impose reasonable
charges for this service. A depository institution may impose a charge for
debiting an investor's account which would reduce the investor's return from an
investment in the Funds.
FUND-DIRECT IRA
The Trust offers a tax-advantaged retirement plan for which shares of the Funds
may be an appropriate investment. The Trust's retirement plan allows
participants to defer taxes while helping them build their retirement savings.
The One Group's Fund-Direct IRA is a retirement plan with a wide choice of
investments offering people with earned income the opportunity to compound
earnings on a tax-deferred basis. An IRA Adoption Agreement may be obtained by
calling the Distributor at 1-800-480-4111.
ADDITIONAL INFORMATION REGARDING PURCHASES
A purchase order will be effective as of the day received by the Distributor if
the Distributor receives the order before 4:00 p.m., eastern time. However, an
order may be cancelled if the Transfer Agent does not receive Federal funds
before close of business on the next Business Day for Fiduciary Class shares,
and before the close of business on the third Business Day for Class A and
Class B shares, and the investor could be liable for any fees or expenses
incurred by the Trust. Federal funds are monies credited to a bank's account
with a Federal Reserve Bank. The purchase price of shares of the Funds is the
net asset value next determined after a purchase order is effected plus any
applicable sales charge (the "offering price"). The net asset value per share
of each Fund is determined by dividing the total market value of the Fund's
investments and other assets allocable to a class, less any liabilities
allocable to that class, by the total number of outstanding shares of such
class. Net asset value per share is determined daily as of 4:00 p.m., eastern
time, on each Business Day. For a further discussion of the calculation of net
asset value, see the Statement of Additional Information. Shares also may be
issued in transactions involving the acquisition by the Funds of securities
held by collective investment funds sponsored and administered by affiliates of
Banc One Advisors. Purchases will be made in full and fractional shares of the
Funds calculated to three decimal places. Although the methodology and
procedures are identical, the net asset value per share of classes within the
Funds may differ because the distribution expenses charged to Class A shares
and Class B shares are not charged to Fiduciary Class shares.
The Trust reserves the right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Trust and/or its
Shareholders to accept such order. Except as provided below, neither the
Trust's Transfer Agent nor the Trust will be responsible for any loss,
liability, cost or expense for acting upon telephone or wire instructions, and
the investor will bear all risk of loss. The Trust will employ reasonable
procedures to confirm that instructions communicated by telephone are genuine,
including requiring a form of personal identification prior to acting upon
instructions received by telephone and recording telephone
40
<PAGE> 72
instructions. If such procedures are not employed, the Trust may be liable for
any losses due to unauthorized or fraudulent instructions.
Fiduciary Class shares offered to institutional investors and to investors in
certain retirement plans and Class A shares that are being offered to investors
in certain retirement plans such as 401(k) and similar plans, other than
Individual Retirement Accounts, will normally be held in the name of the
Shareholder Servicing Agent effecting the purchase on the Shareholder's behalf,
and it is the Shareholder Servicing Agent's responsibility to transmit purchase
orders to the Distributor. A Shareholder Servicing Agent may impose an earlier
cut-off time for receipt of purchase orders directed through it to allow for
processing and transmittal of these orders to the Distributor for effectiveness
the same day. The Shareholder should contact his or her Shareholder Servicing
Agent for information as to the Shareholder Servicing Agent's procedures for
transmitting purchase, exchange or redemption orders to the Trust. A
Shareholder who desires to transfer the registration of shares beneficially
owned by him or her, but held of record by a Shareholder Servicing Agent,
should contact the Shareholder Servicing Agent to accomplish such change. Other
Shareholders who desire to transfer the registration of their shares should
contact the Transfer Agent.
No certificates representing the shares of the Funds will be issued. In
communications to Shareholders, the Funds will not duplicate mailings of Fund
material to Shareholders who reside at the same address.
SALES CHARGE
The following table shows the initial sales charge on Class A shares to a
"single purchaser" (defined below) together with the commission paid to
financial institutions and intermediaries (the "commission"):
<TABLE>
<CAPTION>
SALES
SALES CHARGE CHARGE AS COMMISSION
AS A APPROPRIATE AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF OF OF
OFFERING NET AMOUNT OFFERING
AMOUNT OF PURCHASE PRICE INVESTED PRICE
----- -------- -----
<S> <C> <C> <C>
less than $100,000 4.50% 4.71% 4.05%
$100,000 but less than $250,000 3.50% 3.63% 3.05%
$250,000 but less than $500,000 2.50% 2.56% 2.05%
$500,000 but less than $1,000,000 2.00% 2.04% 1.60%
$1,000,000 or more 0.00% 0.00% 0.00%
</TABLE>
The commissions shown in the table apply to sales through financial
institutions and intermediaries. Under certain circumstances, the Distributor
will use its own funds to compensate financial institutions and intermediaries
in amounts that are additional to the commissions shown above. The maximum cash
compensation payable by the Distributor as a sales charge is 4.50% of the
offering price (including the commission shown above and additional cash
compensation described below). In addition, the Distributor will, from time to
time and at its own expense, provide promotional incentives to financial
institutions and intermediaries, whose registered representatives have sold or
are expected to sell significant amounts of shares of the Funds, in the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives to places within or
outside the United States, and additional compensation in an amount up to 1.00%
of the offering price of Class A shares of the Funds for sales of $1 million to
$5 million, and 0.50% for sales over $5 million. An investor who purchases $1
million or more of Class A shares and is not assessed a sales charge at the
time of purchase, will be assessed a sales charge equivalent to 1% of the
purchase price if such investor redeems any or all of the Class A shares prior
to the first anniversary of purchase. Under certain circumstances, commissions
up to the amount of the entire sales charge will be reallowed to financial
institutions and intermediaries, which might then be deemed to be
"underwriters" under the Securities Act of 1933.
RIGHT OF ACCUMULATION
In calculating the sales charge rates applicable to current purchases of Class
A shares, a "single purchaser" is entitled to cumulate current purchases with
the current value at the offering price of previously purchased Class A and
Class B shares of the Funds and other eligible funds of the Trust, other than
the Trust's money market funds, that are sold subject to a comparable sales
charge.
The term "single purchaser" refers to (i) an individual, (ii) an individual and
spouse purchasing shares of the Funds for their own account or for trust or
custodial accounts for their minor children, or (iii) a fiduciary purchasing
for any one trust, estate or fiduciary account, including employee benefit
plans created under Sections 401 or 457 of the Internal Revenue Code of 1986,
as amended (the
41
<PAGE> 73
"Code"), and including related plans of the same employer. To be entitled to a
reduced sales charge based upon shares already owned, the investor must ask the
Distributor for such reduction at the time of purchase and provide the account
number(s) of the investor, the investor and spouse, and their minor children,
and give the age of such children. The Funds may amend or terminate this right
of accumulation at any time as to subsequent purchases.
LETTER OF INTENT
By initially investing at least $2,000 in Class A shares of one or more funds
of the Trust that impose a comparable sales charge over the next 13 months, the
sales charge may be reduced by completing the Letter of Intent section of the
Account Application Form. The Letter of Intent includes a provision for a sales
charge adjustment depending on the amount actually purchased within the
13-month period. In addition, pursuant to a Letter of Intent, the Custodian
will hold in escrow the difference between the sales charge applicable to the
amount initially purchased and the sales charge paid at the time of the
investment, which is based on the amount covered by the Letter of Intent.
For example, assume an investor signs a Letter of Intent to purchase $250,000
of Class A shares of one (or more) of the funds of the Trust that impose a
comparable sales charge and, at the time of signing the Letter of Intent,
purchases $100,000 of Class A shares of one of these funds. The investor would
pay an initial sales charge of 2.50% (the sales charge applicable to purchases
of $250,000) and 1.00% of the investment (representing the difference between
the 3.50% sales charge applicable to purchases of $100,000 and the 2.50% sales
charge already paid) would be held in escrow until the investor has purchased
the remaining $150,000 or more in Class A shares under the investor's Letter of
Intent.
The amount held in escrow will be applied to the investor's account at the end
of the 13-month period unless the amount specified in the Letter of Intent is
not purchased. In order to qualify for a Letter of Intent, the investor will be
required to make a minimum purchase of at least $2,000.
The Letter of Intent will not obligate the investor to purchase Class A shares,
but if he or she does, each purchase during the period will be at the sales
charge applicable to the total amount intended to be purchased. The Letter of
Intent may be dated as of a prior date to include any purchases made within the
past 90 days.
OTHER CIRCUMSTANCES
No sales charge is imposed on Class A shares of the Funds: (i) issued through
reinvestment of dividends and capital gains distributions; (ii) acquired
through the exercise of exchange privileges where a comparable sales charge has
been paid for exchanged shares; (iii) purchased by officers, directors or
trustees, retirees and employees (and their spouses and immediate family
members) of the Trust, of BANC ONE CORPORATION and its subsidiaries and
affiliates, of the Distributor and its subsidiaries and affiliates, or of an
investment sub-adviser of a fund of the Trust and such sub-adviser's
subsidiaries and affiliates; (iv) sold to affiliates of BANC ONE CORPORATION
and certain accounts (other than Individual Retirement Accounts) for which
Authorized Financial Organizations act in fiduciary, advisory, agency,
custodial or similar capacities, or purchased by investment advisers, financial
planners or other intermediaries who have a dealer arrangement with the
Distributor, who place trades for their own accounts or for the accounts of
their clients and who charge a management, consulting or other fee for their
services, as well as clients of such investment advisers, financial planners or
other intermediaries who place trades for their own accounts if the accounts
are linked to the master account of such investment adviser, financial planner
or other intermediary; (v) purchased with proceeds from the recent redemption
of Fiduciary Class shares of a fund of the Trust or acquired in an exchange of
Fiduciary Class shares of a fund for Class A shares of the same fund; (vi)
purchased with proceeds from the recent redemption of shares of a mutual fund
(other than a fund of the Trust) for which a sales charge was paid; (vii)
purchased in an Individual Retirement Account with the proceeds of a
distribution from an employee benefit plan, provided that, at the time of
distribution, the employee benefit plan had plan assets invested in a fund of
the Trust; (viii) purchased with Trust assets; (ix) purchased in accounts as to
which a bank or broker-dealer charges an asset allocation fee, provided the
bank or broker-dealer has an agreement with the Distributor; (x) directly
purchased with the proceeds of a distribution on a bond for which a BANC ONE
CORPORATION affiliate bank or trust company is the Trustee or Paying Agent; or
(xi) purchased in connection with plans of reorganization of a Fund, such as
mergers, asset acquisitions and exchange offers to which a Fund is a party.
An investor relying upon any of the categories of waivers of the sales charge
must qualify for such waiver in advance of the purchase with the Distributor or
the financial institution or intermediary through which shares are purchased by
the investor.
The waiver of the sales charge under circumstances (v), (vi) and (vii) above
applies only if the purchase is made within 60 days of the redemption or
distribution and if conditions imposed by the Distributor are met. The waiver
policy with respect to the purchase of shares through the use of proceeds from
a recent redemption or distribution as described in clauses (v), (vi) and (vii)
above will not be continued indefinitely and may be discontinued at any time
without notice. Investors should call the Distributor at
42
<PAGE> 74
1-800-480-4111 to determine whether they are eligible to purchase shares
without paying a sales charge through the use of proceeds from a recent
redemption or distribution as described above, and to confirm continued
availability of the waiver policies prior to initiating the procedures
described in clauses (v), (vi) and (vii).
ALTERNATIVE SALES ARRANGEMENTS
CLASS B SHARES
Class B shares are not subject to a sales charge when they are purchased, but
are subject to a sales charge (the "Contingent Deferred Sales Charge") if a
Shareholder redeems them prior to the sixth anniversary of purchase. When a
Shareholder purchases Class B shares, the full purchase amount is invested
directly in the Funds. Class B shares of the Funds are subject to an ongoing
distribution and Shareholder service fee at an annual rate of 1.00% of the
Funds' average daily net assets as provided in the Class B Plan (described
below under "The Distributor"). The Distributor has voluntarily agreed to
reduce this fee to .90% of the Fund's average daily net assets attributable to
Class B shares, for the indefinite future. This ongoing fee will cause Class B
shares to have a higher expense ratio and to pay lower dividends than Class A
shares. Class B shares convert automatically to Class A shares after eight
years, commencing from the end of the calendar month in which the purchase
order was accepted under the circumstances and subject to the qualifications
described in this Prospectus.
Proceeds from the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees under the Class B Plan are payable to the Distributor
and financial intermediaries to defray the expenses of advance brokerage
commissions and expenses related to providing distribution-related and
Shareholder services to the Funds in connection with the sale of the Class B
shares, such as the payment of compensation to dealers and agents for selling
Class B shares. A dealer reallowance of 4.00% of the original purchase price of
the Class B shares will be paid to financial institutions and intermediaries.
CONTINGENT DEFERRED SALES CHARGE
If the Shareholder redeems Class B shares prior to the sixth anniversary of
purchase, the Shareholder will pay a Contingent Deferred Sales Charge at the
rates set forth below. The Contingent Deferred Sales Charge is assessed on an
amount equal to the lesser of the then-current market value or the cost of the
shares being redeemed. Accordingly, no sales charge is imposed on increases in
net asset value above the initial purchase price. In addition, no charge is
assessed on shares derived from reinvestment of dividends or capital gain
distributions.
The amount of the Contingent Deferred Sales Charge, if any, varies depending on
the number of years from the time of payment for the purchase of Class B shares
until the time of redemption of such shares. Solely for purposes of determining
the number of years from the time of any payment for the purchase of shares,
all payments during a month are aggregated and deemed to have been made on the
first day of the month.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
YEAR(S) PERCENTAGE OF
SINCE DOLLAR AMOUNT
PURCHASE SUBJECT TO CHARGE
- -------- -----------------
<S> <C>
0-1 5.00%
1-2 4.00%
2-3 3.00%
3-4 3.00%
4-5 2.00%
5-6 1.00%
6-7 None
7-8 None
</TABLE>
In determining whether a particular redemption is subject to a Contingent
Deferred Sales Charge, it is assumed that the redemption is first of any Class
A shares in the Shareholder's Fund account (unless the Shareholder elects to
have Class B shares redeemed first) or shares representing capital
appreciation, next of shares acquired pursuant to reinvestment of dividends and
capital gain distributions, and finally of other shares held by the Shareholder
for the longest period of time. This method should result in the lowest
possible sales charge.
To provide an example, assume you purchased 100 shares at $10 per share (a
total cost of $1,000) and prior to the second anniversary after purchase, the
net asset value per share is $12 and during such time you have acquired 10
additional shares through dividends
43
<PAGE> 75
paid in shares. If you then make your first redemption of 50 shares (proceeds
of $600), 10 shares will not be subject to charge because you received them as
dividends. With respect to the remaining 40 shares, the charge is applied only
to the original cost of $10 per share and not to the increase in net asset
value of $2 per share. Therefore, $400 of the $600 redemption proceeds is
subject to a Contingent Deferred Sales Charge at a rate of 4.00% (the
applicable rate prior to the second anniversary after purchase).
The Contingent Deferred Sales Charge is waived on redemption of shares: (i) for
distributions that are made under a Systematic Withdrawal Plan of the Trust and
that are limited to no more than 10% of the account value annually, determined
in the first year as of the date the redemption request is received by the
Transfer Agent, and in subsequent years, as of the most recent anniversary of
that date; (ii) following the death or disability (as defined in the Code), of
a Shareholder or a participant or beneficiary of a qualifying retirement plan
if redemption is made within one year of such death or disability; or (iii) to
the extent that the redemption represents a minimum required distribution from
an Individual Retirement Account or other qualifying retirement plan to a
Shareholder who has attained the age of 70 1/2. A Shareholder or his or her
representative should contact the Transfer Agent to determine whether a
retirement plan qualifies for a waiver and must notify the Transfer Agent prior
to the time of redemption if such circumstances exist and the Shareholder is
eligible for this waiver. In addition, the following circumstances are not
deemed to result in a "redemption" of Class B shares for purposes of the
assessment of a Contingent Deferred Sales Charge, which is therefore waived:
(i) plans of reorganization of a Fund, such as mergers, asset acquisitions and
exchange offers to which a Fund is a party; or (ii) exchanges for Class B
shares of other funds of the Trust as described under "Exchanges."
CONVERSION FEATURE
Class B shares include all shares purchased pursuant to the Contingent Deferred
Sales Charge which have been outstanding for less than the period ending eight
years after the end of the month in which the shares were purchased. At the end
of this period, Class B shares will automatically convert to Class A shares and
will be subject to the lower distribution and Shareholder service fees charged
to Class A shares. Such conversion will be on the basis of the relative net
asset values of the two classes, without the imposition of any sales charge,
fee or other charge. The conversion is not a taxable event to a Shareholder.
For purposes of conversion to Class A shares, shares received as dividends and
other distributions paid on Class B shares in a Shareholder's Fund account will
be considered to be held in a separate sub-account. Each time any Class B
shares in a Shareholder's Fund account (other than those in the sub-account)
convert to Class A shares, a pro-rata portion of the Class B shares in the
sub-account will also convert to Class A shares.
If a Shareholder effects one or more exchanges among Class B shares of the
funds of the Trust during the eight-year period, the Trust will aggregate the
holding periods for the shares of each fund of the Trust for purposes of
calculating that eight-year period. Because the per share net asset value of
the Class A shares may be higher than that of the Class B shares at the time of
conversion, a Shareholder may receive fewer Class A shares than the number of
Class B shares converted, although the dollar value will be the same.
EXCHANGES
CLASS A AND FIDUCIARY CLASS
Fiduciary Class Shareholders of a Fund may exchange their shares for Class A
shares of that Fund or for Class A shares or Fiduciary Class shares of another
fund of the Trust.
Class A Shareholders of a Fund may exchange their shares for Fiduciary Class
shares of that Fund or for Fiduciary Class shares or Class A shares of another
fund of the Trust, if the Shareholder is eligible to purchase such shares.
The exchange privilege may be exercised only in those states where the shares
of a Fund or such other fund of the Trust may be legally sold. All exchanges
discussed herein are made at the net asset value of the exchanged shares,
except as provided below. The Trust does not impose a charge for processing
exchanges of shares. If a Shareholder seeks to exchange Class A shares of a
fund that does not impose a sales charge for Class A shares of a fund that does
or the fund being exchanged into has a higher sales charge, the Shareholder
will be required to pay a sales charge in the amount equal to the difference
between the sales charge applicable to the fund into which the shares are being
exchanged and any sales charges previously paid for the exchanged shares,
including any sales charges incurred on any earlier exchanges of the shares
(unless such sales charge is otherwise waived, as provided in "Other
Circumstances"). The exchange of Fiduciary Class shares for Class A shares also
will require payment of the sales charge unless the sales charge is waived, as
provided in "Other Circumstances."
44
<PAGE> 76
CLASS B
Class B Shareholders of the Funds may exchange their shares for Class B shares
of any other fund of the Trust on the basis of the net asset value of the
exchanged Class B shares, without the payment of any Contingent Deferred Sales
Charge that might otherwise be due upon redemption of the outstanding Class B
shares. The newly acquired Class B shares will be subject to the higher
Contingent Deferred Sales Charge of either the fund from which the shares were
exchanged or the fund into which the shares were exchanged. With respect to
outstanding Class B shares as to which previous exchanges have taken place,
"higher Contingent Deferred Sales Charge" shall mean the higher of the
Contingent Deferred Sales Charge applicable to either the fund the shares are
exchanging into or any other fund from which the shares previously have been
exchanged. For purposes of computing the Contingent Deferred Sales Charge that
may be payable upon a disposition of the newly acquired Class B shares, the
holding period for outstanding Class B shares of the fund from which the
exchange was made is "tacked" to the holding period of the newly acquired Class
B shares. For purposes of calculating the holding period applicable to the
newly acquired Class B shares, the newly acquired Class B shares shall be
deemed to have been issued on the date of receipt of the Shareholder's order to
purchase the outstanding Class B shares of the fund from which the initial
exchange was made.
ADDITIONAL INFORMATION REGARDING EXCHANGES
In the case of shares held of record by a Shareholder Servicing Agent but
beneficially owned by a Shareholder, to exchange such shares the Shareholder
should contact the Shareholder Servicing Agent, who will contact the Transfer
Agent and effect the exchange on behalf of the Shareholder. If an exchange
request in good order is received by the Transfer Agent by 4:00 p.m., eastern
time, on any Business Day, the exchange usually will occur on that day. Any
Shareholder who wishes to make an exchange must receive a current prospectus of
the fund of the Trust in which he or she wishes to invest before the exchange
will be effected.
The Trust reserves the right to change the terms and conditions of the exchange
privilege discussed herein upon sixty days' written notice. An exchange between
classes of shares of the same fund is not considered a taxable event; however,
an exchange between funds of the Trust is considered a sale of shares and
usually results in a capital gain or loss for Federal income tax purposes.
Shareholders should consult their tax advisers for a more complete explanation
of the Federal income tax consequences of an exchange of shares of the Funds.
A more detailed description of the above is set forth in the Statement of
Additional Information.
The Trust's exchange privilege is not intended to afford Shareholders a way to
speculate on short-term movements in the market. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt
the management of the Funds and increase transaction costs, the Trust has
established a policy of limiting excessive exchange activity.
Exchange activity generally will not be deemed excessive if limited to TWO
SUBSTANTIVE EXCHANGE REDEMPTIONS (AT LEAST 30 DAYS APART) from the Fund during
any twelve month period. Notwithstanding these limitations, the Trust reserves
the right to reject any purchase request (including exchange purchases from
other funds of the Trust) that is reasonably deemed to be disruptive to
efficient portfolio management.
REDEMPTIONS
Shareholders may redeem their shares without charge (except Class B shares, as
provided above) on any Business Day; shares may ordinarily be redeemed by mail,
by telephone or by wire. All redemption orders are effected at the net asset
value per share next determined for Class A and Fiduciary Class shares, and at
net asset value per share next determined reduced by any applicable Contingent
Deferred Sales Charge for Class B shares, after receipt of a valid request for
redemption. Payment to Shareholders for shares redeemed will be made within
seven days after receipt by the Transfer Agent of the request for redemption.
BY MAIL
A written request for redemption must be received by the Transfer Agent in
order to constitute a valid request for redemption. All written redemption
requests should be sent to The One Group, c/o State Street Bank and Trust
Company, P.O. Box 8500, Boston, MA 02266-8500, or the Shareholder Servicing
Agent, if applicable. The Transfer Agent may require that the signature on the
written request be guaranteed by a commercial bank, a member firm of a domestic
stock exchange or by a member of the Securities Transfer Association Medallion
Program or the Stock Exchange Medallion Program.
The signature guarantee requirement will be waived if all of the following
conditions apply: (i) the redemption is for $5,000 worth of shares or less;
(ii) the redemption check is payable to the Shareholder(s) of record; and (iii)
the redemption check is mailed to the Shareholder(s) at the address of record.
The Shareholder may also have the proceeds mailed to a commercial bank account
previously
45
<PAGE> 77
designated on the Account Application Form or by written instruction to the
Transfer Agent or the Shareholder Servicing Agent, if applicable. There is no
charge for having redemption requests mailed to a designated bank account.
BY TELEPHONE AND WIRE
Shareholders may have the payment of redemption requests wired or mailed to a
domestic commercial bank account previously designated on the Account
Application Form. Wire redemption requests may be made by the Shareholder by
telephone to the Transfer Agent at 1-800-480-4111, provided that the
Shareholder has elected the telephone redemption privilege in writing to the
Distributor, or to the Shareholder Servicing Agent, if applicable. The Transfer
Agent may reduce the amount of a wire redemption payment by its then-current
wire redemption charge, which, as of the date of this Prospectus, is $7.00.
Neither the Trust nor the Transfer Agent will be responsible for the
authenticity of the redemption instructions received by telephone if it
reasonably believes those instructions to be genuine. The Trust and the
Transfer Agent will each employ reasonable procedures to confirm that telephone
instructions are genuine, and may be liable for losses resulting from
unauthorized or fraudulent telephone transactions if it does not employ those
procedures. Such procedures may include requesting personal identification
information or recording telephone conversations.
SYSTEMATIC WITHDRAWAL PLAN
Shareholders whose accounts have a value of at least $10,000 may elect to
receive, or may designate another person to receive, monthly, quarterly or
annual payments in a specified amount of not less than $100 each. There is no
charge for this service. Under the Systematic Withdrawal Plan, all dividends
and distributions must be reinvested in shares of the Funds from which they
were received. Purchases of additional Class A shares while the Systematic
Withdrawal Plan is in effect are generally undesirable because a sales charge
is incurred whenever purchases are made.
Pursuant to the Systematic Withdrawal Plan, Class B Shareholders may elect to
receive, or may designate another person to receive, distributions provided the
distributions are limited to no more than 10% of their account value annually,
determined in the first year as of the date the redemption request is received
by the Transfer Agent, and in subsequent years, as of the most recent
anniversary of that date. In addition, Shareholders who have attained the age
of 70 1/2 may elect to receive distributions, to the extent that the redemption
represents a minimum required distribution from an Individual Retirement
Account or other qualifying retirement plan.
If the amount of the systematic withdrawal exceeds the income accrued since the
previous withdrawal under the Systematic Withdrawal Plan, the principal balance
invested will be reduced and shares will be redeemed.
OTHER INFORMATION REGARDING REDEMPTIONS
At various times, the Funds may be requested to redeem shares for which they
have not yet received good payment. In such circumstances, the forwarding of
proceeds may be delayed for 15 or more days until payment has been collected
for the purchase of such shares. The Funds intend to pay cash for all shares
redeemed. See "How to Invest In The One Group - by Mail."
Due to the relatively high costs of handling small investments, a Fund reserves
the right to redeem, at net asset value, the shares of any Shareholder if,
because of redemptions of shares by or on behalf of the Shareholder, the
account of such Shareholder in a Fund has a value of less than $1,000, the
minimum initial purchase amount. Accordingly, an investor purchasing shares of
a Fund in only the minimum investment amount may be subject to such involuntary
redemption if he or she thereafter redeems any of these shares. Before a Fund
exercises its right to redeem such shares and to send the proceeds to the
Shareholder, the Shareholder will be given notice that the value of the shares
in his or her account is less than the minimum amount and will be allowed 60
days to make an additional investment in the Fund in an amount which will
increase the value of the account to at least $1,000.
See the Statement of Additional Information for examples of when the Trust may
suspend the right of redemption or redeem shares involuntarily if it appears
appropriate to do so in light of the Trust's responsibilities under the
Investment Company Act of 1940.
MANAGEMENT OF THE FUNDS
The Trustees
The Trustees oversee the management and administration of the Funds. Among
their other duties, the Trustees are responsible for making major decisions
relating to each Fund's investment objectives and policies. The Trustees
delegate the day-to-day management of the Funds to the officers of the Trust
and meet at least quarterly to review the Funds' investment policies,
performance, expenses and other business affairs.
46
<PAGE> 78
THE ADVISOR
The Trust and Banc One Advisors have entered into an investment advisory
agreement (the "Advisory Agreement"). Under the Advisory Agreement, Banc One
Advisors makes the day-by-day investment decisions for the Funds and
continuously reviews, supervises and administers the Funds' investment
programs. Banc One Advisors discharges its responsibilities subject to the
supervision of, and policies established by, the Trustees of the Trust. Banc
One Advisors began serving as investment adviser to the Trust in 1993 and
currently serves as investment adviser to all of the funds of the Trust, as
well as adviser to other mutual funds and individual, corporate, charitable and
retirement accounts. Banc One Advisors and its affiliates have considerable
investment management experience dating back to 1985.
Banc One Advisors is an indirect, wholly-owned subsidiary of BANC ONE
CORPORATION, a bank holding company incorporated in the state of Ohio. BANC ONE
CORPORATION currently has affiliate banking organizations in Arizona, Colorado,
Illinois, Indiana, Kentucky, Louisiana, Ohio, Oklahoma, Texas, Utah, West
Virginia and Wisconsin. In addition, BANC ONE CORPORATION has several
affiliates that engage in data processing, venture capital, investment and
merchant banking, and other diversified services including trust management,
investment management, brokerage, equipment leasing, mortgage banking, consumer
finance and insurance. The Trust's shares are not deposits or obligations of,
or endorsed or guaranteed by BANC ONE CORPORATION or its affiliates. The
Trust's shares are not insured or guaranteed by the Federal Deposit Insurance
Corporation ("FDIC") or by any other governmental agency or government
sponsored agency of the Federal government or any state.
On a consolidated basis, BANC ONE CORPORATION had assets of over $97 billion as
of June 30, 1996.
THE FUND MANAGERS
Gary J. Madich, CFA, is Senior Managing Director and Chief Investment Officer
of Fixed Income Securities. Mr. Madich joined Banc One Advisors in February,
1995. Prior to joining Banc One Advisors, Mr. Madich was a Senior Vice
President and Portfolio Manager with Federated Investors. Mr. Madich has
seventeen years of investment management experience.
Patrick M. Morrissey has served as the Manager of the Intermediate Tax-Free
Bond Fund since February, 1994 and as Manager of the Municipal Income Fund
since its inception in February, 1993. Mr. Morrissey has been employed by Banc
One Advisors and its affiliates since October, 1992. From September, 1986 to
October, 1992, Mr. Morrissey served as Portfolio Manager at Norwest Investments
and Trust.
David M. Sivinski, CFA, has served as Manager of the Ohio Municipal Bond Fund
since May, 1994, as Manager of the Kentucky Municipal Bond Fund since December,
1994, and as co-Manager of the Louisiana Municipal Bond Fund since February,
1996. Mr. Sivinski also is Manager of the West Virginia Municipal Bond Fund.
Mr. Sivinski has been with Banc One Advisors or its affiliates since 1975,
working primarily in fixed income portfolio management and
mortgage/asset-backed research.
Todd Curtis, CFA, is the Manager of the Arizona Municipal Bond Fund. From 1984
to 1996, Mr. Curtis managed a bank common trust fund with substantially the
same investment objectives as the Arizona Municipal Bond Fund. Mr. Curtis has
been involved in the management of both Arizona and national municipal
securities since 1984 and has been employed by Banc One Advisors and its
affiliates in the investment management business since 1981.
Donald Allred has served as co-Manager of the Louisiana Municipal Bond Fund
since its inception in January, 1996, as the successor to the Paragon Municipal
Bond Fund which was acquired by the Trust. Mr. Allred is also co-Manager of the
Gulf South Growth Fund. Prior to joining Banc One Advisors, Mr. Allred served
as President and Chief Executive Officer at Premier Investment Advisors,
L.L.C., from 1985 to 1996. Mr. Allred managed the Paragon Gulf South Growth
Fund from its inception in 1991 to 1996, when it was acquired by the Trust. Mr.
Allred has 30 years of investment management experience.
Each Fund pays Banc One Advisors an investment advisory fee which is calculated
daily and paid monthly. Banc One Advisors may voluntarily agree to waive a part
of its fees. See "About the Fund -- Expense Summary." These fee waivers are
voluntary and may be terminated at any time. Shareholders will be notified in
advance if and when these waivers are terminated. The following investment
advisory fee schedule (expressed as a percentage of average daily net assets),
is applicable to each Fund:
47
<PAGE> 79
<TABLE>
<CAPTION>
FEES PAID FOR FISCAL
ANNUAL RATE (%) YEAR ENDED JUNE 30, 1996
--------------- ------------------------
<S> <C> <C>
The One Group Intermediate Tax-Free
Bond Fund .60% .30%
The One Group Municipal Income Fund .45% .35%
The One Group Arizona Municipal Bond Fund .45% .14%
The One Group West Virginia Municipal Fund .45% .39%
The One Group Louisiana Municipal Bond Fund .60% .40%
The One Group Ohio Municipal Bond Fund .60% .30%
The One Group Kentucky Municipal Bond Fund .45% .40%
</TABLE>
THE DISTRIBUTOR
The One Group Services Company (the "Distributor"), a wholly-owned subsidiary
of The BISYS Group, Inc., and the Trust are parties to a distribution agreement
(the "Distribution Agreement") under which shares of the Funds are sold on a
continuous basis.
Class A shares are subject to a distribution and Shareholder services plan (the
"Plan"). As provided in the Plan, the Trust will pay the Distributor a fee of
.35% of the average daily net assets of Class A shares of the Funds. Currently,
the Distributor has voluntarily agreed to limit payments under the Plan to .25%
of the average daily net assets of the Class A shares of the Funds. Up to .25%
of the fees payable under the Plan may be used as compensation for Shareholder
services by the Distributor and/or financial institutions and intermediaries.
All such fees that may be paid under the Plan will be paid pursuant to Rule
12b-1 of the Investment Company Act of 1940. The Distributor may apply these
fees toward: (i) compensation for its services in connection with distribution
assistance or provision of Shareholder services; or (ii) payments to financial
institutions and intermediaries such as banks (including affiliates of Banc
One), savings and loan associations, insurance companies, investment
counselors, broker-dealers, and the Distributor's affiliates and subsidiaries,
as compensation for services or reimbursement of expenses incurred in
connection with distribution assistance or provision of Shareholder services.
Class B shares are subject to a Contingent Deferred Sales Charge if such shares
are redeemed prior to the sixth anniversary of purchase. Class B shares of the
Funds are subject to an ongoing distribution and Shareholder service fee as
provided in the Class B distribution and Shareholder services plan (the "Class
B Plan") at an annual rate of 1.00% of each Fund's average daily net assets,
which includes Shareholder servicing fees of .25% of each Fund's average net
assets.
Proceeds from the Contingent Deferred Sales Charge and the distribution and
Shareholder service fees under the Class B Plan are payable to the Distributor
and financial intermediaries to defray the expenses of advance brokerage
commissions and expenses related to providing distribution-related and
Shareholder services to the Funds in connection with the sale of Class B
shares, such as the payment of compensation to dealers and agents for selling
Class B shares. The combination of the Contingent Deferred Sales Charge and the
distribution and Shareholder service fees facilitate the ability of the Funds
to sell the Class B shares without a sales charge being deducted at the time of
purchase.
The Plan and the Class B Plan are characterized as compensation plans since the
distribution fees will be paid to the Distributor without regard to the
distribution or Shareholder service expenses incurred by the Distributor or the
amount of payments made to financial institutions and intermediaries. The Funds
also may execute brokerage or other agency transactions through an affiliate of
Banc One Advisors or through the Distributor for which the affiliate or the
Distributor receives compensation. Pursuant to guidelines adopted by the Board
of Trustees of the Trust, any such compensation will be reasonable and fair
compared to compensation received by other brokers in connection with
comparable transactions.
During the fiscal year ended June 30, 1996, The One Group Services Company
received fees aggregating .25% of the average daily net assets of the Class A
shares of the Funds. In addition, The One Group Services Company received
annualized fees of 1.00% of the average daily net assets of the Class B shares
of the Funds.
Fiduciary Class shares of the Funds are offered without distribution fees to
institutional investors, including Authorized Financial Organizations. It is
possible that an institution may offer different classes of shares to its
customers and thus receive different compensation with respect to different
classes of shares. In addition, a financial institution that is the record
owner of shares for the account of its customers may impose separate fees for
account services to its customers.
48
<PAGE> 80
THE ADMINISTRATOR
The One Group Services Company (the "Administrator"), a wholly-owned subsidiary
of the BISYS Group, Inc., and the Trust are parties to an administration
agreement relating to the Funds (the "Administration Agreement"). Under the
terms of the Administration Agreement, the Administrator is responsible for
providing the Trust with administrative services (other than investment
advisory services), including regulatory reporting and all necessary office
space, equipment, personnel and facilities.
Banc One Advisors also serves as Sub-Administrator to each fund of the Trust,
pursuant to an agreement between the Administrator and Banc One Advisors.
Pursuant to this agreement, Banc One Advisors performs many of the
Administrator's duties, for which Banc One Advisors receives a fee paid by the
Administrator.
The Administrator is entitled to a fee for administrative services, which is
calculated daily and paid monthly, at an annual rate of .20% of each fund's
average daily net assets on the first $1.5 billion in Trust assets (excluding
The One Group Treasury Only Money Market Fund, The One Group Government Money
Market Fund and The One Group Investor Funds), .18% of each fund's average
daily net assets to $2 billion in Trust assets (excluding The One Group
Treasury Only Money Market Fund, The One Group Government Money Market Fund,
The One Group Investor Funds), and .16% of each fund's average daily net assets
when Trust assets exceed $2 billion (excluding The One Group Treasury Only
Money Market Fund, The One Group Government Money Market Fund and The One Group
Investor Funds).
THE TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company, P.O. Box 8500, Boston, MA 02266-8500 acts
as Transfer Agent and Custodian for the Trust for which services it receives a
fee. The Custodian holds cash, securities and other assets of the Trust as
required by the Investment Company Act of 1940. Bank One Trust Company, N.A.
serves as Sub-Custodian in connection with the Trust's securities lending
activities, pursuant to an agreement between State Street Bank and Trust
Company and Bank One Trust Company. Bank One Trust Company receives a fee paid
by the Trust.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Ropes & Gray serves as counsel to the Trust. Coopers & Lybrand L.L.P. serves as
the independent accountants of the Trust.
OTHER INFORMATION
THE TRUST
The Trust was organized as a Massachusetts Business Trust under a Declaration
of Trust filed on May 23, 1985. The Declaration of Trust permits the Trust to
offer separate funds and different classes of each fund. All consideration
received by the Trust for shares of any fund and all assets of such fund belong
to that fund and would be subject to liabilities related thereto.
The Trust pays its expenses, including fees of its service providers, audit and
legal expenses, expenses of preparing prospectuses, proxy solicitation material
and reports to Shareholders, costs of custodial services and registering the
shares under Federal and state securities laws, pricing, insurance expenses,
litigation and other extraordinary expenses, brokerage costs, interest charges,
taxes and organizational expenses. The total expenses for each Fund for the
most recent fiscal year are set forth in this Prospectus under the heading
"Expense Summary."
Banc One Advisors and the Administrator of the Funds each bears all expenses
incurred in connection with the performance of their services as investment
adviser and administrator, respectively, other than the cost of securities
(including brokerage commissions, if any) purchased for the Funds.
As a general matter, expenses are allocated to each class of shares of each
Fund on the basis of the net asset value of that class in relation to the net
asset value of the Fund. At present, the only expenses that are allocated to
Class A and Class B shares, other than in accordance with the relative net
asset value of the class, are the different distribution and Shareholder
services costs. See "Expense Summary." At present, no expenses are allocated to
Fiduciary Class shares as a class that are not also borne by the other classes
of shares of the Funds in proportion to the relative net asset values of the
shares of such classes.
VOTING RIGHTS
Each share held entitles the Shareholder of record to one vote. Therefore, the
number of votes a Shareholder is entitled to depends on the number of shares
owned by the Shareholder. Each fund of the Trust will vote separately on
matters relating solely to that fund.
49
<PAGE> 81
In addition, each class of a fund shall have exclusive voting rights on any
matter submitted to Shareholders that relates solely to that class, and shall
have separate voting rights on any matter submitted to Shareholders in which
the interests of one class differ from the interests of any other class.
However, all fund Shareholders will have equal voting rights on matters that
affect all fund Shareholders equally. As a Massachusetts Business Trust, the
Trust is not required to hold annual meetings of Shareholders but approval will
be sought for certain changes in the operation of the Trust and for the
election of Trustees under certain circumstances. In addition, a Trustee may be
elected or removed by the remaining Trustees or by Shareholders at a special
meeting called upon written request of Shareholders owning at least 10% of the
outstanding shares of the Trust. In the event that such a meeting is requested,
the Trust will provide appropriate assistance and information to the
Shareholders requesting the meeting.
DIVIDENDS
Substantially all of the net investment income (exclusive of capital gains) of
the Funds is determined and declared daily, and is distributed in the form of
periodic dividends to such Shareholders of the Funds on the first Business Day
of each month. Capital gains of the Funds, if any, will be distributed at least
annually.
Shareholders automatically receive all income dividends and capital gain
distributions in additional Class A, Class B or Fiduciary Class shares, as
applicable, at the net asset value next determined following the record date,
unless the Shareholder has elected to take such payment in cash. Such election,
or any revocation thereof, must be made in writing, at least 15 days prior to
distribution, to the Transfer Agent at P.O. Box 8500, Boston, MA 02266- 8500,
and will become effective with respect to dividends and distributions having
record dates after its receipt by the Transfer Agent. Reinvested dividends and
distributions receive the same tax treatment as dividends and distributions
paid in cash.
Class B shares received as dividends and capital gains distributions at the net
asset value next determined following the record date shall be held in a
separate Class B sub-account. Each time any Class B shares (other than those in
the sub-account) convert to Class A shares, a pro-rata portion of the Class B
shares in the sub-account will also convert to Class A shares. (See "Conversion
Feature.")
Dividends and distributions of the Funds are paid on a per-share basis. The
value of each share will be reduced by the amount of the payment. If shares are
purchased shortly before the record date for a dividend or the distribution of
capital gains, a Shareholder will pay the full price for the shares and receive
some portion of the price back as a taxable dividend or distribution even
though such distribution would, in effect, represent a return of the
Shareholder's investment.
The amount of dividends payable on Fiduciary Class shares will be more than the
dividends payable on Class A and Class B shares because of the distribution
expenses charged to Class A and Class B shares.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to the Administrator, The One Group
Services Company, 3435 Stelzer Road, Columbus, OH 43219.
REPORTING
The Trust issues unaudited financial information semiannually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE POSITION
For temporary defensive purposes during periods when Banc One Advisors
determines that market conditions warrant such action, each Fund may invest up
to 100% of its assets in money market instruments and may hold a portion of its
assets in cash for liquidity purposes.
The Louisiana Municipal Bond Fund, the Arizona Municipal Bond Fund, the West
Virginia Municipal Bond Fund, Ohio Municipal Bond Fund, and the Kentucky
Municipal Bond Fund also may invest more than 20% of their net assets in
municipal securities other than Louisiana, Arizona, West Virginia, Ohio, and
Kentucky municipal securities, respectively, if deemed appropriate for
temporary defensive purposes.
To the extent a Fund is engaged in a temporary defensive position, the Fund
will not be pursuing its investment objective.
50
<PAGE> 82
PORTFOLIO TURNOVER
Portfolio turnover rates may vary greatly from year to year, as well as within
a particular year. For the fiscal year ended June 30, 1996, the portfolio
turnover rates for the Funds were as follows:
<TABLE>
<CAPTION>
PORTFOLIO
TURNOVER RATE
-------------
<S> <C>
The One Group Intermediate Tax-Free
Bond Fund 111.58
The One Group Municipal Income Fund 83.17
The One Group Arizona Municipal Bond Fund NA
The One Group West Virginia Municipal Fund NA
The One Group Louisiana Municipal Bond Fund 16.72
The One Group Ohio Municipal Bond Fund 24.61
The One Group Kentucky Municipal Bond Fund 16.78
</TABLE>
Higher portfolio turnover rates will likely result in higher transaction costs
to the Funds and may result in additional tax consequences to the Funds'
Shareholders.
INVESTMENT LIMITATIONS
The investment objective and the following investment limitations are
fundamental policies of each Fund. Fundamental policies cannot be changed
without the consent of the holders of a majority of each Fund's outstanding
shares. The term "majority of the outstanding shares" means the vote of (i) 67%
or more of the Fund's shares present at a meeting, if more than 50% of the
outstanding shares of the Fund are present or represented by proxy, or (ii)
more than 50% of the Fund's outstanding shares, whichever is less.
The Intermediate Tax-Free Bond Fund and the Municipal Income Fund may not:
1. Purchase securities of any issuer (except securities issued or guaranteed by
the United States, its agencies or instrumentalities and, if consistent with a
Fund's investment objective and policies, repurchase agreements involving such
securities) if as a result more than 5% of the total assets of a Fund would be
invested in the securities of such issuer or a Fund would own more than 10% of
the outstanding voting securities of such issuer. This restriction applies to
75% of a Fund's assets. For purposes of these limitations, a security is
considered to be issued by the government entity whose assets and revenues
guarantee or back the security. With respect to private activity bonds or
industrial development bonds backed only by the assets and revenues of a
non-governmental user, such user would be considered the issuer.
2. Purchase any securities that would cause more than 25% of the total assets
of a Fund to be invested in the securities of one or more issuers conducting
their principal business activities in the same industry, provided that this
limitation does not apply to Municipal Securities or governmental guarantees of
Municipal Securities, and with respect to the Municipal Income Fund, housing
authority obligations. For purposes of this limitation only, private activity
bonds that are backed only by the assets and revenues of a non-governmental
issuer shall not be deemed to be Municipal Securities. For purposes of this
limitation (i) utilities will be divided according to their services (for
example, gas, gas transmission, electric and telephone will each be considered
a separate industry); and (ii) 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.
The Arizona Municipal Bond Fund, the West Virginia Municipal Bond Fund, the
Louisiana Municipal Bond Fund, the Ohio Municipal Bond Fund and the Kentucky
Municipal Bond Fund may not:
1. Purchase securities of any issuer (except securities issued or guaranteed by
the United States, its agencies or instrumentalities, securities of regulated
investment companies, and, if consistent with a Fund's investment objective and
policies, repurchase agreements involving such securities) if as a result more
than 25% of the total assets of a Fund would be invested in the securities of
such issuer. This restriction applies to 50% of a Fund's assets. With respect to
the remaining 50% of its total assets, a Fund may not purchase the securities
of any issuer if as a result more than 5% of the total assets of the Fund would
be invested in the securities of such issuer. For purposes of these
limitations, a security is considered to be issued by the government entity
whose assets and revenues guarantee or back the security. With respect to
private activity bonds or industrial development bonds backed only by the
assets and revenues of a non-governmental user, such user would be considered
the issuer.
2. Purchase any securities that would cause more than 25% of the total assets
of a Fund to be invested in the securities of one or more issuers conducting
their principal business activities in the same industry, provided that (i)
this limitation does not apply to
51
<PAGE> 83
investments in obligations issued or guaranteed by the U.S. government or its
agencies and instrumentalities and repurchase agreements involving such
securities; and (ii) this limitation does not apply to Municipal Securities or
Ohio Municipal Securities, Kentucky Municipal Securities, Arizona Municipal
Securities, West Virginia Municipal Securities and Louisiana Municipal
Securities or governmental guarantees of Municipal Securities or Ohio Municipal
Securities, Kentucky Municipal Securities, Arizona Municipal Securities, West
Virginia Municipal Securities and Louisiana Municipal Securities. For purposes
of this limitation (i) utilities will be divided according to their services
(for example, gas, gas transmission, electric and telephone will each be
considered a separate industry); and (ii) 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. In addition,
with respect to the Arizona Municipal Bond Fund and the West Virginia Municipal
Bond Fund, for purposes of this limitation only, private activity bonds that
are backed only by the assets and revenues of a non-governmental issuer shall
not be deemed to be Municipal Securities or Arizona Municipal Securities (for
the Arizona Municipal Bond Fund) or West Virginia Securities (for the West
Virginia Municipal Bond Fund).
None of the Funds may:
1. Make loans, except that a Fund may (i) purchase or hold debt instruments in
accordance with its investment objective and policies; (ii) enter into
repurchase agreements; and (iii) engage in securities lending as described in
this Prospectus and in the Statement of Additional Information.
The foregoing percentages will apply at the time of the purchase of a security.
Additional investment limitations are set forth in the Statement of Additional
Information.
DESCRIPTION OF PERMITTED INVESTMENTS
Listed below is a more complete description of some of the types of securities
and other instruments in which the Funds may invest. For a more detailed
description, see the Statement of Additional Information. Not all Funds are
permitted to invest in all of the securities and instruments listed below. If
an investment is limited to certain Funds, that limitation will be noted.
U.S. TREASURY OBLIGATIONS -- The Funds may invest in bills, notes and bonds
issued by the U.S. Treasury 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 Interest and Principal
Securities ("STRIPS") and Coupon Under Book Entry Safekeeping ("CUBES").
RECEIPTS -- The Funds may purchase interests in separately traded interest and
principal component parts of U.S. Treasury obligations that are issued by banks
or brokerage firms and are created by depositing U.S. Treasury notes and U.S.
Treasury bonds into a special account at a custodian bank. Receipts include
Treasury Receipts ("TRS"), Treasury Investment Growth Receipts ("TIGRS"), and
Certificates of Accrual on Treasury Securities ("CATS").
STRIPS, CUBES, TRS, TIGRS and CATS are 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. Because of these features, these securities may be subject to greater
interest rate volatility than interest-paying U.S. Treasury obligations.
CERTIFICATES OF DEPOSIT -- Certificates of deposit ("CDs") are negotiable
interest bearing instruments with a specific maturity. CDs are issued by banks
and savings and loan institutions in exchange for the deposit of funds and
normally can be traded in the secondary market prior to maturity.
TIME DEPOSITS -- Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, a time
deposit ("TD") earns a specified rate of interest over a definite period of
time; however, it cannot be traded in the secondary market. Time deposits with
a withdrawal penalty are considered to be illiquid for purposes of the Fund's
limitations on illiquid investments.
BANKERS' ACCEPTANCES -- Bankers' acceptances are bills of exchange or time
drafts drawn on and accepted by (i.e., made an obligation of) a commercial
bank. Maturities are generally six months or less.
COMMERCIAL PAPER -- Commercial paper is the term used to designate unsecured
short-term promissory notes issued by corporations and other entities.
Maturities on these issues vary from a few days to nine months.
U.S. GOVERNMENT AGENCIES -- Certain Federal agencies have been established as
instrumentalities of the U.S. government to supervise and finance specific
types of activities. Select agencies, such as the Government National Mortgage
Association ("Ginnie
52
<PAGE> 84
Mae") and the Export-Import Bank, are supported by the full faith and credit of
the U.S. Treasury; others, such as the Federal National Mortgage Association
("Fannie Mae"), are supported by the credit of the instrumentality and have the
right to borrow from the U.S. Treasury; others are supported by the authority
of the U.S. government to purchase the agency's obligations; while still
others, such as the Federal Farm Credit Banks and the Federal Home Loan
Mortgage Corporation ("Freddie Mac"), are supported solely by the credit of the
instrumentality itself. No assurance can be given that the U.S. government
would provide financial support to U.S. government sponsored agencies or
instrumentalities if it is not obligated to do so by law. Obligations of U.S.
government agencies include debt issues and mortgage-backed securities issued
or guaranteed by select agencies.
REPURCHASE AGREEMENTS -- Repurchase agreements are agreements by which a person
obtains a security and simultaneously commits to return the security to the
seller at an agreed upon price (including principal and interest) on an agreed
upon date within a number of days from the date of purchase. The custodian or
its agent will hold the security as collateral for the repurchase agreement.
Collateral must be maintained at a value at least equal to 100% of the
repurchase price. The Funds bear a risk of loss in the event the other party
defaults on its obligations and the Funds are delayed or prevented from their
right to dispose of the collateral securities or if the Funds realize a loss on
the sale of the collateral securities. Repurchase agreements typically are
short-term in nature, generally overnight, and normally are used to invest
temporary cash balances held by the Funds. The SEC considers repurchase
agreements to be loans.
REVERSE REPURCHASE AGREEMENTS - The Funds may borrow funds for temporary
purposes by entering into reverse repurchase agreements. Pursuant to such
agreements, the Funds 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. The Funds will enter into reverse repurchase
agreements only to avoid otherwise selling securities during unfavorable market
conditions to meet redemptions. At the time the Funds enter into a reverse
repurchase agreement, they will place liquid high grade debt securities having
a value equal to the repurchase price (including accrued interest), in a
segregated custodial account 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 the Funds may
decline below the price at which the Funds are obligated to repurchase the
securities. The SEC considers reverse repurchase agreements to be borrowings
by the Funds.
SECURITIES LENDING -- In order to generate additional income, the Funds may
lend up to 33% of the securities in which they are invested pursuant to
agreements requiring that the loan be continuously secured by cash, securities
of the U.S. government or its agencies, shares of an investment trust or
mutual fund or any combination of cash and such securities as collateral equal
at all times to at least 100% of the market value plus accrued interest on the
securities lent. The Funds will continue to receive interest on the securities
lent while simultaneously seeking to earn interest on the investment of cash
collateral in U.S. government securities, shares of an investment trust or
mutual fund, or other short-term, highly liquid investments. Collateral is
marked to market daily to provide a level of collateral at least equal to the
market value of the securities lent. There may be risks of delay in recovery of
the securities or even loss of rights in the collateral should the borrower of
the securities fail financially. However, loans will only be made to borrowers
deemed by Banc One Advisors to be of good standing under guidelines established
by the Trust's Board of Trustees and when, in the judgment of Banc One
Advisors, the consideration which can be earned currently from such securities
loans justifies the attendant risk. The Funds will enter into loan arrangements
only with counter parties which Banc One Advisors has deemed to be creditworthy
under guidelines established by the Board of Trustees. Loans are subject to
termination by the Funds or the borrower at any time, and are therefore, not
considered to be illiquid investments.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS AND FORWARD COMMITMENTS -- The
Funds may purchase securities on a when-issued basis when deemed by Banc One
Advisors to present attractive investment opportunities. When-issued securities
are purchased for delivery beyond the normal settlement date at a stated price
and yield, thereby involving the risk that the yield obtained will be less than
that available in the market at delivery. When Banc One Advisors purchases a
when-issued security, the Custodian will set aside cash or liquid securities to
satisfy the purchase commitment. Although the purchase of securities on a
when-issued basis is not considered to be leveraging, it has the effect of
leveraging. The Funds generally will not pay for such securities or earn
interest on them until received. In a forward commitment transaction, the Funds
contract to purchase securities for a fixed price at a future date beyond
customary settlement time. The Funds are required to hold and maintain in a
segregated account until the settlement date, cash, U.S. government securities
or liquid high-grade debt obligations in an amount sufficient to meet the
purchase price. Alternatively, the Funds may enter into offsetting contracts
for the forward sale of other securities that they own. The purchase of
securities on a when-issued or forward commitment basis involves a risk of loss
if the value of the security to be purchased declines prior to the settlement
date.
INVESTMENT COMPANY SECURITIES -- The Funds may invest up to 5% of their total
assets in the securities of any one investment company, but may not own more
than 3% of the securities of any one investment company or invest more than 10%
of their assets in the securities of other investment companies. Other
investment company securities may include securities of a money market fund of
the Trust, and securities of other investment companies for which Banc One
Advisors serves as investment adviser or administrator. Because other
investment companies employ an investment adviser, such investments by the
Funds may cause
53
<PAGE> 85
Shareholders to bear duplicative fees. Banc One Advisors will waive its fee
attributable to the assets of the investing fund invested in a money market
fund of the Trust; and in other funds advised by Banc One Advisors, and, to the
extent required by the laws of any state in which shares of the Trust are sold,
Banc One Advisors will waive its fees attributable to the assets of any Fund
invested in any investment company.
VARIABLE AND FLOATING RATE INSTRUMENTS -- Certain of the obligations purchased
by the Funds may carry variable or floating rates of interest, may involve a
conditional or unconditional demand feature and may include variable amount
master demand notes. The interest rates on these securities may be reset daily,
weekly, quarterly or some other reset period, and may have a floor or ceiling
on interest rate changes. A demand instrument with a demand notice period
exceeding seven days will be considered illiquid. There is a risk that the
current interest rate on such obligations may not accurately reflect existing
market interest rates.
OPTIONS -- The Funds may purchase call and put options, and write (i.e., sell)
covered call options and secured put options on securities and indices. A call
option gives the purchaser the right to buy, and obligates the writer of the
option to sell, the underlying security at the agreed upon exercise (or
"strike") price during the option period. A put option gives the purchaser the
right to sell, and obligates the writer to buy, the underlying security at the
strike price during the option period. The Funds may invest in options to
either hedge or increase yield. There are risks associated with options
transactions, including the following: (i) the success of a hedging strategy
may depend on the ability of Banc One Advisors to predict movements in the
prices of the individual securities, fluctuations in markets and movements in
interest rates; (ii) there may be an imperfect or no correlation between the
changes in market value of the securities held by the Funds and the prices of
options; (iii) there may not be a liquid secondary market for options; and (iv)
while the Funds will receive a premium when they write covered call options,
they may not participate fully in a rise in the market value of the underlying
security. It is expected that the Funds will only engage in option transactions
with respect to permitted investments and related indices.
FUTURES CONTRACTS AND RELATED OPTIONS -- The Funds may enter into futures
contracts, options on futures contracts, index futures and options thereon that
are traded on an exchange regulated by the Commodities Futures Trading
Commission ("CFTC") if, to the extent that such futures and options are not for
"bona fide hedging purposes" (as defined by the CFTC), the aggregate initial
margin and premiums on such positions (excluding the amount by which options
are in the money) do not exceed 5% of each Funds' total assets at current
value. The Funds, however, may invest more than such amount for bona fide
hedging purposes. Options and futures can be volatile instruments, and involve
certain risks. If Banc One Advisors applies a hedge at an inappropriate time or
judges interest rates incorrectly, options and futures strategies may lower a
Fund's return. The Funds could also experience losses if the prices of their
options and futures positions were poorly correlated with their other
instruments, or if they could not close out their positions because of an
illiquid secondary market. The Funds also may engage in options transactions
referred to as straddles and spreads. Certain provisions of the Internal
Revenue Code may limit the extent to which the Funds invest in futures
contracts and related options.
STRUCTURED INSTRUMENTS - Structured instruments are debt securities issued by
agencies or instrumentalities of the U.S. government (such as the Student Loan
Marketing Association ("Sallie Mae"), Ginnie Mae, Fannie Mae, and Freddie Mac),
banks, municipalities, corporations, and other business entities whose interest
and/or principal payments are indexed to certain specific foreign currency
exchange rates, interest rates, or one or more other reference indices. As a
result, interest and/or principal payments may vary widely depending on a
variety of factors, including the volatility of the referenced index and the
effect of changes in the reference index or principal and/or interest payments.
Structured instruments frequently are assembled in the form of medium-term
notes, but a variety of forms are available. Structured instruments are
commonly considered to be derivatives.
While structured instruments may offer the potential for a favorable rate of
return from time to time, they also entail certain risks. Structured
instruments may be less liquid than other debt securities, and the price of
structured instruments may be more volatile. If the value of the reference
index changes in a manner other than that expected by Banc One Advisors,
principal and/or interest payments on the structured instrument may be
substantially less than expected. In addition, although structured instruments
may be sold in the form of a corporate debt obligation, they may not have some
of the protection against counterparty default that may be available with
respect to publicly traded debt securities (i.e., the existence of a trust
indenture).
SWAPS, CAPS AND FLOORS -- In order to protect the value of the Funds from
interest rate fluctuations and to hedge against fluctuations in the floating
rate market in which the Funds' investments are traded, the Funds may enter
into swaps, caps, and floors on various securities (such as U.S. government
securities), securities indexes, interest rates, prepayment rates, foreign
currencies or other financial instruments or indexes, for both hedging and
non-hedging purposes. The Funds may enter into these transactions to manage
their exposure to changing interest rates and other factors. Some transactions
may reduce the Funds' exposure to market fluctuations while others will tend to
increase market exposure. Swap contracts typically involve an exchange of
obligations by two sophisticated parties. For example, in an interest rate
swap, a fund may exchange with another party their respective rights to receive
interest, such as an exchange of fixed rate payments for floating rate
payments. Currency swaps involve the exchange of respective rights to make
54
<PAGE> 86
or receive payments in specified currencies. Mortgage swaps are similar to
interest rate swaps in that they represent commitments to pay and receive
interest. The notional principal amount, however, is tied to a reference pool
or pools of mortgages.
Caps and floors are variations on swaps. The purchase of a cap entitles the
purchaser to receive a principal amount from the party selling the cap to the
extent that a specified index exceeds a predetermined interest rate or amount.
The purchase of an interest rate floor entitles the purchaser to receive
payments on a notional principal amount from the party selling the floor to the
extent that a specified index falls below a predetermined interest rate or
amount. Caps and floors are similar in many respects to over-the-counter
options transactions, and may involve investment risks that are similar to
those associated with options transactions and options on futures contracts.
Because swap contracts are individually negotiated, they remain the obligations
of the respective counterparties, and there is a risk that a counterparty will
be unable to meet its obligations under a particular swap contract. If a
counterparty defaults, a Fund may suffer a loss. In addition, because swap
contracts are individually negotiated and ordinarily non-transferable, there
also may be circumstances in which it would be impossible for a Fund to close
out its obligations under the swap contract prior to its maturity. Under such
circumstances, a Fund might be able to negotiate another swap contract with a
different counterpart to offset the risk associated with the first swap
contract. Unless the Fund is able to negotiate such an offsetting swap
contract, however, the Fund could be subject to continued adverse developments,
even after Banc One Advisors has determined that it would be prudent to close
out or offset the first swap contract.
The use of swaps involves investment techniques and risks different from and
potentially greater than those associated with ordinary portfolio securities
transactions. If Banc One Advisors is incorrect in its expectations of market
values or interest rates, the investment performance of a Fund would be less
favorable than it would have been if this investment technique were not used.
The Funds generally will limit their investments in swaps, caps and floors to
25% of their total assets.
NEW FINANCIAL PRODUCTS -- New options and futures contracts and other financial
products, and various combinations thereof, continue to be developed and the
Funds may invest in any such options, contracts and products as may be
developed to the extent consistent with their investment objective, policies
and restrictions and the regulatory requirements applicable to investment
companies. These various products may be used to adjust the risk and return
characteristics of the Funds' portfolio of investments. These various products
may increase or decrease exposure to security prices, interest rates, commodity
prices, or other factors that affect security values, regardless of the
issuer's credit risk. If market conditions do not perform consistent with
expectations, the performance of the Funds would be less favorable than it
would have been if these products were not used. In addition, losses may occur
if counterparties involved in transactions do not perform as promised. These
products may expose the Funds to potentially greater return as well as
potentially greater risk of loss than more traditional fixed-income
investments. The Funds will generally limit their investments in new financial
products to 25% of their total assets.
MUNICIPAL SECURITIES - Municipal securities are issued by a state or political
subdivision to obtain funds for various public purposes. In addition, Municipal
Securities also may consist of certain debt obligations known as private
activity bonds and industrial development bonds may be issued to finance
certain public and privately operated facilities. Municipal securities are
generally classified as "general obligation" bonds and "revenue" bonds. General
obligation bonds are obligations involving the credit of an issuer possessing
taxing power and are payable from the issuer's general unrestricted revenues.
Revenue bonds 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 or other specific revenue source. Revenue bonds are not payable
from the issuer's general revenues. Private activity bonds and industrial
developments bonds are categorized as revenue bonds. The Funds also may
purchase short-term tax-exempt General Obligation Notes, Tax Anticipation
Notes, Bond Anticipation Notes, Revenue Anticipation Notes, Project Notes, and
other forms of short-term tax-exempt obligations. Such notes are issued with a
short-term maturity in anticipation of the receipt of tax funds, the proceeds
of bond placements, or other revenues. Municipal securities may include
municipal leases which may be considered illiquid for purposes of the Funds'
limitation on illiquid investments.
An issuer's obligations under its municipal securities are subject to the
provisions of bankruptcy, insolvency, and other laws affecting the rights and
remedies of creditors, such as the federal bankruptcy code, and laws, if any,
which may be enacted by Congress or state legislatures extending the time for
payment of principal or interest, or both, or imposing other constraints upon
the enforcement of such obligations. The power or ability of an issuer to meet
its obligations for the payment of interest on and principal of its municipal
securities may be materially adversely affected by litigation or other
conditions. Such litigation or conditions may from time to time have the effect
of introducing uncertainties in the market for tax-exempt obligations or
certain segments thereof, or may materially affect the credit risk with respect
to particular bonds or notes. Adverse economic, business, legal or political
developments might affect all or a substantial portion of a Fund's municipal
securities in the same manner. The payment of principal and interest on private
activity bonds and industrial development bonds generally is dependent solely
on the ability of the facilities user to meet its financial obligations and the
pledge, if any, of real and personal property as financed as security for such
payment. In addition, the
55
<PAGE> 87
Code imposes certain continuing requirements on issuers of tax-exempt bonds
regarding the use, expenditure and investment of bond proceeds and the payment
of rebates to the United States of America. Failure by the issuer to comply
subsequent to the issuance of tax-exempt bonds with certain of these
requirements could cause interest on the bonds to become includable in gross
income retroactive to the date of issuance. Municipal securities may include
obligations of municipal housing authorities and single family revenue bonds.
Weaknesses in Federal housing subsidy programs may result in a decrease of
subsidies available for payment of principal and interest on housing authority
bonds.
DEMAND FEATURES - The Funds may acquire securities that are subject to puts and
standby commitments ("demand features") to purchase the securities at their
principal amount at a fixed price (usually with accrued interest) within a
fixed period (usually seven days) following a demand by the Funds. The purpose
of engaging in transactions involving puts is to maintain flexibility and
liquidity to permit the Funds to meet redemption requests and remain as fully
invested as possible.
PARTICIPATION INTERESTS -- The Funds may purchase interests in municipal
securities, including municipal leases, from financial institutions such as
commercial and investment banks, savings and loan associations and insurance
companies. These interests may take the form of participations, beneficial
interests in a trust, partnership interests, or any other form of indirect
ownership that allows the Funds to treat the income from the investment as
exempt from Federal income tax. The Funds invest in these participation
interests in order to obtain credit enhancement or demand features that would
not be available through direct ownership of the underlying municipal
securities.
ZERO COUPON OBLIGATIONS -- The Funds may acquire zero coupon obligations, which
have greater price volatility than coupon obligations and which will not result
in the payment of interest until maturity. The Funds will purchase these
obligations to permit investment of assets at a more favorable rate of return.
RESTRICTED SECURITIES -- The Funds may invest in commercial paper issued in
reliance on the exemption from registration afforded by Section 4(2) of the
Securities Act of 1933. Section 4(2) commercial paper is restricted as to
disposition under Federal securities law and is generally sold to institutional
investors, such as the Funds, who agree that they are purchasing the paper for
investment purposes and not with a view to public distribution. Any resale by
the purchaser must be in an exempt transaction. Section 4(2) commercial paper
is normally resold to other institutional investors like the Funds through or
with the assistance of the issuer or investment dealers who make a market in
Section 4(2) commercial paper, thus providing liquidity. The Funds believe that
Section 4(2) commercial paper and possibly certain other restricted securities
that meet the criteria for liquidity established by the Trustees (such as Rule
144A securities and private placements) are quite liquid. The Funds intend,
therefore, to treat the restricted securities that meet the criteria for
liquidity established by the Trustees, including Section 4(2) commercial paper
and Rule 144A securities, as determined by Banc One Advisors, as liquid and not
subject to the investment limitation applicable to illiquid securities.
MORTGAGE-BACKED SECURITIES--Mortgage-backed securities are debt obligations
secured by real estate loans and pools of loans. The Funds may acquire
securities representing an interest in a pool of mortgage loans that are issued
or guaranteed by Ginnie Mae, Fannie Mae and Freddie Mac or other U.S.
government agencies or instrumentalities. Mortgage-backed securities may also
be issued by non-governmental entities and may or may not have private insurer
guarantees of timely payments. The Funds may invest in Collateralized Mortgage
Obligations ("CMOs") and Real Estate Mortgage Investment Conduits ("REMICs").
CMOs and REMICs are structures providing for redistribution of the cash flows
of mortgage-related products to different bond classes (commonly referred to as
tranches). This redistribution is achieved through specific rules for the
monthly distribution of coupon interest and principal. This reallocation of
interest and principal results in the redistribution of prepayment risk across
the different bond classes. This allows for the creation of bonds with more or
less prepayment risk than the underlying collateral exhibits.
Mortgage-backed securities are in most cases "pass-through" instruments,
through which the holder receives a share of all interest and principal
payments from the mortgages underlying the certificate. Because the prepayment
characteristics of the underlying mortgages vary, it is not possible to predict
accurately the average life or realized yield of a particular issue of
pass-through certificates. During periods of declining interest rates,
prepayment of mortgages underlying mortgage-backed securities can be expected
to accelerate. When the mortgage obligations are prepaid, the Funds may have
to reinvest in securities with a lower yield. Moreover, prepayment of mortgages
which underlie securities purchased at a premium could result in capital
losses.
MORTGAGE DOLLAR ROLLS--The Funds may enter into mortgage "dollar rolls" in
which the Funds sell securities for delivery in the current month and
simultaneously contract with the same counterparty to repurchase similar (same
type, coupon and maturity) but not identical securities on a specified future
date. The Funds benefit to the extent of any difference between the price
received for the securities sold and the lower forward price for the future
purchase (often referred to as the "drop") or fee income plus the interest
earned on the cash proceeds of the securities sold until the settlement date of
the forward purchase. Unless such benefits exceed the income, capital
appreciation and gain or loss due to mortgage prepayments that would have been
realized on the securities sold as part of the mortgage dollar roll, the use of
this technique will diminish the investment performance of the Funds compared
with what such performance would have been without the use of mortgage dollar
rolls.
56
<PAGE> 88
REGULATION OF MORTGAGE LOANS--Mortgage loans are subject to a variety of state
and Federal regulations designed to protect borrowers which may impair the
ability of the mortgage lender to enforce its rights under the mortgage
documents. These regulations include legal restraints on foreclosures,
homeowner rights of redemption after foreclosure, Federal and state bankruptcy
and debtor relief laws, restrictions on enforcement of mortgage loan "due on
sale" clauses and state usury laws. Even when the Funds will invest in
mortgage-backed securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities, these regulations may adversely affect the
Fund's investments by delaying the Funds' receipt of payments derived from
principal or interest on mortgage loans affected by such regulations.
INVERSE FLOATING RATE INSTRUMENTS -- The Municipal Income Fund may seek to
increase yield by investing in leveraged inverse floating rate debt instruments
("inverse floaters"). The interest rate on an inverse floater resets in the
opposite direction from the market rate of interest to which the inverse
floater is indexed. An inverse floater may be considered to be leveraged to the
extent that its interest rate varies by a magnitude that exceeds the magnitude
of the change in the index rate of interest. The higher degree of leverage
inherent in inverse floaters is associated with greater volatility in their
market values. Accordingly, the duration of an inverse floater may exceed its
stated final maturity.
The Fund generally will limit its investments in inverse floating rate
instruments to 15% of its total assets.
DESCRIPTION OF RATINGS
The following descriptions are summaries of published ratings.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
The following descriptions of commercial paper ratings have been published by
Standard & Poor's Corporation ("S&P"), Moody's Investors Service ("Moody's"),
Fitch's Investors Service ("Fitch"), Duff and Phelps ("Duff"), and IBCA Limited
("IBCA"), respectively.
Commercial paper rated A by S&P is regarded by S&P as having the greatest
capacity for timely payment. Issues rated A are further refined by use of the
numbers 1+, 1 and 2 to indicate the relative degree of safety. Issues rated
A-1+ are those with an "overwhelming degree" of credit protection. Those rated
A-1 reflect a "very strong" degree of safety regarding timely payment. Those
rated A-2 reflect a high degree of safety regarding timely payment but not as
high as A-1.
Commercial paper issues rated Prime-1 and Prime-2 by Moody's are judged by
Moody's to be of the "highest" quality and "higher" quality, respectively, on
the basis of relative repayment capacity.
The rating Fitch-1 (Highest Grade) is the highest commercial rating assigned by
Fitch. Paper rated Fitch-1 is regarded as having the strongest degree of
assurance for timely payment. The rating Fitch-2 (Very Good Grade) is the
second highest commercial paper rating assigned by Fitch which reflects an
assurance of timely payment only slightly less in degree than the strongest
issues.
The rating Duff-1 is the highest commercial paper rating assigned by Duff.
Paper rated Duff-1 is regarded as having very high certainty of timely payment
with excellent liquidity factors which are supported by ample asset protection.
Risk factors are minor. Paper rated Duff-2 is regarded as having good certainty
of timely payment, good access to capital markets and sound liquidity factors
and company fundamentals. Risk factors are small.
The designation A1 by IBCA indicates that the obligation is supported by a very
strong capacity for timely repayment. Those obligations rated A1+ are supported
by the highest capacity for timely repayment. Obligations rated A2 are
supported by a strong capacity for timely repayment, although such capacity may
be susceptible to adverse changes in business, economic or financial
conditions.
DESCRIPTION OF CORPORATE/MUNICIPAL BOND RATINGS
The following descriptions of S&P's and Moody's corporate and municipal bond
ratings have been published by S&P and Moody's, respectively.
Standard & Poor's Rating Services
INVESTMENT GRADE
57
<PAGE> 89
Bonds rated AAA have the highest rating S&P assigns to a debt obligation. Such
a rating indicates an extremely strong capacity to pay principal and interest.
Bonds rated AA also qualify as high-quality debt obligations. Capacity to pay
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in a small degree. Debt rated A 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.
Bonds rated BBB by S&P are 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
bonds in this category than in higher categories.
Moody's Investor Service, Inc.
INVESTMENT GRADE
Bonds that 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 that make
the long-term risks appear somewhat larger than in Aaa securities. Bonds that
are rated A possess many favorable investment attributes and are to be
considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Bonds that 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.
Changes in economic conditions or other circumstances are more likely to lead
to a weakened capacity of the issuers of securities rated BBB or Baa to make
principal and interest payments than is the case with higher grade securities.
DESCRIPTION OF MUNICIPAL NOTE RATINGS
Moody's highest rating for state, 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 and VMIG-2
are of high quality. Margins of protection are ample although not so large as
in the preceding group. MIG-3 and VMIG-3 denote favorable quality. All security
elements are accounted for, but there is lacking the undeniable strength of the
preceding grades. Liquidity and cash flow protection may be narrow and
marketing access for refinancing is likely to be less well established.
An S&P note rating reflects the liquidity concerns and market access risks
unique to notes. Notes due in three years or less will likely receive a note
rating. Notes maturing beyond three years will most likely receive a long-term
debt rating. The following criteria will be used in making that assessment:
o Amortization schedule (the larger the final maturity relative to other
maturities the more likely it will be treated as a note).
o 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).
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.
SP-3 Speculative capacity to pay principal and interest.
58
<PAGE> 90
SHORT-TERM DEBT RATINGS
Thomson Bank Watch, Inc. ("TBW") ratings are based upon a qualitative and
quantitative analysis of all segments of the organization including, where
applicable, holding company and operating subsidiaries.
BankWatch(TM) Ratings do not constitute a recommendation to buy or sell
securities of any of these companies. Further, BankWatch does not suggest
specific investment criteria for individual clients.
The TBW Short-Term Ratings apply to commercial paper, other senior short-term
obligations and deposit obligations of the entities to which the rating has
been assigned.
The TBW Short-Term Ratings apply only to unsecured instruments that have a
maturity of one year or less.
The TBW Short-Term Ratings specifically assess the likelihood of an untimely
payment of principal or interest.
TBW-1 The highest category; indicates a very high
degree of likelihood that principal and
interest will be paid on a timely basis.
TBW-2 The second highest category; while the
degree of safety regarding timely repayment
of principal and interest is strong, the
relative degree of safety is not as high as
for issues rated "TBW-1."
TBW-3 The lowest investment grade category;
indicates that while more susceptible to
adverse developments (both internal and
external) than obligations with higher
ratings, capacity to service principal and
interest in a timely fashion is considered
adequate.
TBW-4 The lowest rating category; this rating is
regarded as non-investment grade and
therefore speculative.
MISCELLANEOUS
The Trust believes that as of May 19, 1997, BANC ONE CORPORATION (100 East
Broad Street, Columbus, OH 43271), through its affiliates, owned of record
substantially all the Fiduciary Class shares of the Funds. The Trust believes
that as of the same date, BANC ONE CORPORATION, through its affiliates,
possessed on behalf of its underlying accounts, voting or investment power with
respect to substantially all of the Fiduciary Class shares of the Funds.
As a consequence, BANC ONE CORPORATION may be deemed to be a controlling person
of the Fiduciary Class shares of the Fund under the Investment Company Act of
1940.
PERFORMANCE
From time to time, the Funds may advertise yield, total return and/or
distribution rate. These figures will be based on historical earnings and are
not intended to indicate future performance. The yield of a Fund refers to the
annualized income generated by an investment in the Funds over a specified
30-day period. The yield is calculated by assuming that the income generated by
the investment during that period is generated over a one-year period and is
shown as a percentage of the investment.
Total return is the change in value of an investment in a Fund over a given
period, assuming reinvestment of any dividends and capital gains. A cumulative
total return reflects an actual rate of return over a stated period of time. An
average annual total return is a hypothetical rate of return that, if achieved
annually, would have produced the same cumulative total return if performance
had
59
<PAGE> 91
been constant over the entire period. Average annual total returns smooth out
variations in performance; they are not the same as actual year-by-year
results.
The distribution rate is computed by dividing the total amount of the dividends
per share paid out during the past period by the maximum offering price or
month-end net asset value depending on the class of a Fund. This figure is then
"annualized" (multiplied by 365 days and divided by the applicable number of
days in the period). Funds with a front-end sales charge would incorporate the
offering price into the distribution yield in place of month-end net asset
value.
Distribution rate is a measure of the level of income paid out in cash to
Shareholders over a specified period. It differs from yield and total return
and is not intended to be a complete measure of performance. Furthermore, the
distribution rate may include return of principal and/or capital gains. Total
return is the change in value of a hypothetical investment over a given period
assuming reinvestment of dividends and capital gain distributions. The yield
refers to the cumulative 30-day rolling net investment income, divided by
maximum offering price and multiplied by average shares outstanding during this
period. See the Statement of Additional Information.
The Trust will include information on all classes of a Fund in any
advertisement or information containing performance data for a Fund. The
performance of Fiduciary Class shares may be higher than for Class A shares and
Class B shares because Fiduciary Class shares are not subject to sales charges
and distribution expenses.
The performance of each class of a Fund may from time to time be compared to
that of other mutual funds tracked by mutual fund rating services, to that of
broad groups of comparable mutual funds or to that of unmanaged indices that
may assume investment of dividends but do not reflect deductions for
administrative and management costs. In addition, the performance of each class
of a Fund may be compared to other funds or to relevant indices that may
calculate total return without reflecting sales charges; in which case, a Fund
may advertise its total return in the same manner. If reflected, sales charges
would reduce these total return calculations.
Further information about the performance of each class of the Funds is
contained in the Trust's Annual Report to Shareholders for The One Group, which
may be obtained without charge by calling 1-800-480-4111.
TAXES
The following summary of Federal income tax consequences is based on current
tax laws and regulations, which may be changed by legislative, judicial, or
administrative action. No attempt has been made to present a complete
explanation of the Federal, state, local or foreign tax treatment of the Funds
or their Shareholders. Accordingly, Shareholders are urged to consult their tax
advisers regarding specific questions as to the tax consequences of investing
in the Funds.
TAX STATUS OF THE FUNDS
Each Fund is treated as a separate entity for Federal income tax purposes and
is not combined with the Trust's other funds. Each Fund intends to qualify as a
"regulated investment company" for Federal income tax purposes and to meet all
other requirements that are necessary for it to be relieved of Federal taxes on
that part of its net investment income and net capital gains (the excess of net
long-term capital gain over net short-term capital loss) that is distributed to
Shareholders.
TAX STATUS OF DISTRIBUTIONS
Each Fund will distribute substantially all of its net investment income
(including net short-term capital gain) to Shareholders of each class of shares
of the Fund on at least an annual basis. Net long-term capital gains (if any)
will be distributed at least annually. If, at the close of each quarter of its
taxable year, at least 50% of the value of a Fund's assets consists of
obligations the interest on which is excludable from gross income, the Fund may
pay "exempt-interest dividends" to Shareholders. Those dividends constitute the
portion of the aggregate dividends as designated by the Fund, equal to the
excess of the excludable interest over certain amounts disallowed as
deductions. Exempt-interest dividends are generally excludable from a
Shareholder's gross income for regular Federal income tax purposes. However,
the receipt of exempt-interest dividends may cause persons receiving Social
Security or Railroad Retirement benefits to be taxed on a portion of such
benefits. In addition, the receipt of exempt-interest dividends may result in
liability for Federal alternative minimum tax and for state and local taxes,
both for individual and corporate Shareholders. See the Statement of Additional
Information.
Current Federal law limits the types and volume of bonds qualifying for Federal
income tax exemption of interest, which may have an effect on the ability of
the Funds to purchase sufficient amounts of tax-exempt securities to satisfy
the Code's requirements for the payment of "exempt-interest dividends."
60
<PAGE> 92
Any dividends attributable to a Fund's taxable investment income (if any) will
be taxable to Shareholders as ordinary income (whether received in cash or
additional shares) to the extent of the Fund's earnings and profits and will
not qualify for the corporate dividends-received deduction. Any distributions
of net long-term capital gains will be taxable to Shareholders as such
regardless of how long the Shareholder has held shares.
Interest on indebtedness incurred or continued by a Shareholder in order to
purchase shares is not deductible. Furthermore, entities or persons who are
"substantial users" (or persons related to "substantial users") of facilities
financed by "private activity bonds" or certain industrial development bonds
should consult their tax advisers before purchasing shares.
The Funds will make annual reports to Shareholders of the Federal income tax
status of all distributions.
Certain securities purchased by the Funds (such as STRIPS, CUBES, TRS, TIGRS
and CATS), as defined in the "Description of Permitted Investments," are sold
at original issue discount and thus do not make periodic cash interest
payments. The Funds will be required to include as part of their current
income the imputed interest on such obligations even though the Funds have not
received any interest payments on such obligations during that period. Because
the Funds distribute substantially all of their net investment income to their
Shareholders (including such imputed interest), the Funds may have to sell
portfolio securities in order to generate the cash necessary for the required
distributions. Such sales may occur at a time when Banc One Advisors would not
have chosen to sell such securities and may result in a taxable gain or loss.
Dividends declared by the Funds in October, November or December of any year
and payable to Shareholders of record on a date in such a month will be deemed
to have been paid by the Funds and received by Shareholders on December 31 of
that year, if paid by the Funds at any time during the following January.
The Funds intend to make sufficient distributions prior to the end of each
calendar year to avoid liability for Federal excise tax.
Dividends received by a Shareholder that are derived from the Funds'
investments in U.S. government obligations may not be entitled to the
exemptions from state and local income taxes that would be available if the
Shareholder had purchased U.S. government obligations directly. The Funds will
inform Shareholders annually of the percentage of income and distributions
derived from U.S. government obligations. Shareholders should consult their
tax advisers regarding the state and local tax treatment of the dividends
received from the Funds.
Sale, exchange, or redemption of shares of the Funds by a Shareholder will
generally be a taxable event to such Shareholder.
LOUISIANA TAXES
The Trust has obtained a ruling from the Louisiana Department of Revenue and
Taxation to the effect that distributions to shareholders of The One Group(R)
Louisiana Municipal Bond Fund who are Louisiana residents, which are derived
from interest on tax-exempt obligations of the State of Louisiana or its
political subdivisions and certain obligations of the United States or its
territories, will not be subject to Louisiana income tax.
ARIZONA TAXES
In the opinion of special Arizona counsel for the Trust, under existing law,
Shareholders of the Trust will not be subject to Arizona income tax on
exempt-interest dividends received from the Trust to the extent that such
dividends are attributable to interest on tax-exempt obligations of the State
of Arizona and its political subdivisions ("Local Obligations") or on
obligations issued by the Territories of Guam, Northern Mariara Islands, Puerto
Rico and the Virgin Islands ("Territorial Obligations"). Other distributions
from the Trust, including those related to long-term and short-term capital
gains, will be subject to Arizona income tax.
In the event that interest paid on any Local Obligation is deemed to be
includable in Federal gross income, the Trust has been advised by special
Arizona counsel that, in its opinion, under the current provisions of the
constitution and laws of Arizona, exempt-interest dividends received by the
Shareholders of the Trust attributable to interest on Local Obligations will,
nevertheless, not be subject to Arizona income taxes.
Arizona law does not permit a deduction for interest paid or accrued on
indebtedness incurred or continued to purchase or carry obligations, the
interest on which is exempt from Arizona income tax.
Shareholders of the Trust should consult their tax advisers about other state
and local tax consequences of their investments in the Trust.
61
<PAGE> 93
WEST VIRGINIA TAXES
The following is an overview of the West Virginia income tax consequences of an
investment in the Fund to a resident of the state. No explanation of the tax
treatment of a nonresident and the effects of local income, property and other
taxes is provided. Persons interested in investing in the Fund are urged to
consult their tax advisors as to the specific effect on them of state and local
taxes arising from an investment in the Fund.
The determination of liability for West Virginia Personal Income Tax (the "West
Virginia income tax") begins with a taxpayer's Federal adjusted gross income.
Unlike the Federal income tax, the West Virginia income tax does not allow
reduction of a taxpayer's adjusted gross income for itemized deductions.
Calculation of a taxpayer's West Virginia taxable income, however, is subject
to various modifications which either increase or reduce Federal adjusted gross
income.
In 1993, the West Virginia Department of Tax and Revenue issued Technical
Assistance Advisory 93-002 (the "Advisory"). The Advisory addresses the
modifications which affect the determination of West Virginia income tax
liability for interest or dividend income received by a Shareholder from a
"regulated investment company," such as the Fund. The Department has declared
that the Advisory is of precedential value to taxpayers.
As long as the Fund qualifies as a "regulated investment company" under the
Code, a modification reducing adjusted gross income is allowed for that portion
of the interest or dividends received by Shareholders which represents interest
or dividends of the Fund on obligations or securities of any authority,
commission or instrumentality of West Virginia that is exempt from the West
Virginia personal income tax by Federal or West Virginia law. No such reduction
is allowed for any portion of interest income on obligations of any state, or
political subdivision thereof, other than West Virginia, regardless of any
exemption provided under Federal law, such as that accorded "exempt-interest
dividends;" and such portion must be added back as a modification increasing
adjusted gross income.
The Advisory also addresses the taxability of interest on Federal obligations
under the West Virginia income tax. Again, as long as the Fund qualifies as a
"regulated investment company," a modification reducing adjusted gross income
is allowed for interest or dividends received by Shareholders from the Fund
which the Fund derived from obligations of the United States and from
obligations or securities of some authorities, agencies, commissions or
instrumentalities thereof. The Advisory contains a nonexclusive list showing
the taxability for West Virginia income tax purposes of income derived from
various obligations or securities of the United States and its authorities,
agencies, commissions or instrumentalities.
The Advisory also confirms that interest on indebtedness incurred (directly or
indirectly) by a Shareholder of the Fund to purchase or hold shares of the Fund
must be added back to the Shareholder's adjusted gross income as an increasing
modification to the extent such interest was deductible in determining federal
adjusted gross income.
In the event the Fund fails to qualify as a "regulated investment company"
under Federal income tax law, the modifications reducing West Virginia income
tax liability set forth in the Advisory may be unavailable or substantially
limited, even though a Shareholder would be entitled to such modifications if
the Shareholder directly owned the obligations and securities held by the Fund.
The sale, exchange, or redemption of Fund shares is subject to the West
Virginia income tax to the extent the gain or loss therefrom affects the
determination of the Shareholder's Federal adjusted gross income.
KENTUCKY TAXES
Dividends received from the Fund that are derived from interest on Kentucky
Municipal Securities are exempt from the Kentucky individual income tax.
Dividends paid from interest earned on securities that are merely guaranteed by
the Federal government (Ginnie Maes, Freddie Macs, etc.), repurchase agreements
collateralized by U.S. government obligations, or from interest earned on
obligations of other states are not exempt from Kentucky individual income tax.
Any distributions of net short-term and net long-term capital gain earned by
the Fund are includable in each Shareholder's Kentucky adjusted gross income as
dividend income and long term capital gain, respectively, and are both taxed at
ordinary income tax rates.
Section 170 of the Kentucky Constitution exempts from intangible property
taxation the obligations of Kentucky, its counties, municipalities, taxing and
school districts. Though neither the Kentucky Constitution nor Kentucky
statutes contain specific language exempting Federal obligations form the
intangible property tax, the courts of Kentucky have recognized the power of
the United States Congress to declare that obligations of Federal
instrumentalities are exempt from state taxation. For Shareholders of the Fund,
the portion of their share value that represents such exempt assets at calendar
year-end will also be exempt from the Kentucky intangible property tax.
62
<PAGE> 94
OHIO TAXES
Dividends received from the Fund that are derived from interest on Ohio
Municipal Securities are exempt form the Ohio personal income tax. Specific
state statutes authorizing the issuance of certain Ohio Municipal Securities
provide that the interest on and gain from the sale or disposition of such
obligations are exempt from all taxation in the state. Dividends which are
attributable to interest on or gain from the sale of obligations issued
pursuant to such statutes should be exempt from Ohio personal income tax. Ohio
municipalities may not impose income taxes on dividends or any intangible
property, including shares of the Fund, except that municipalities that taxed
the types of intangible income that were not exempt from municipal income
taxation on or before April 1, 1986, may tax such intangible income if such a
tax was approved by the electors of the municipality in an election held on
November 8, 1988. Information in this paragraph is based upon current statutes
and regulations as well as current policies of the Ohio Department of Taxation,
all of which are subject to change.
63
<PAGE> 95
[THIS PAGE INTENTIONALLY LEFT BLANK]
64
<PAGE> 96
[THIS PAGE INTENTIONALLY LEFT BLANK]
65
<PAGE> 97
Investment Adviser and Sub-Administrator
Banc One Investment Advisors Corporation
774 Park Meadow Road
Columbus, OH 43081
Distributor
The One Group Services Company
3435 Stelzer Road
Columbus, OH 43219
Administrator
The One Group Services Company
3435 Stelzer Road
Columbus, OH 43219
Transfer Agent and Custodian
State Street Bank and Trust Company
P.O. Box 8500
Boston, MA 02266-8500
Legal Counsel
Ropes & Gray
One Franklin Square
1301 K Street, N.W.
Suite 800 East
Washington, D.C. 20005
Independent Accountants
Coopers & Lybrand L.L.P.
100 East Broad Street
Columbus, OH 43215
0052185.01
66
<PAGE> 98
STATEMENT OF ADDITIONAL INFORMATION
THE ONE GROUP(R)
The One Group U.S. Treasury Securities Money Market Fund
(the "U.S. Treasury Securities Money Market Fund")
The One Group Prime Money Market Fund (the "Prime Money Market Fund")
The One Group Municipal Money Market Fund (the "Municipal Money Market Fund")
The One Group Ohio Municipal Money Market Fund (the "Ohio Municipal Money Market
Fund")
The One Group Income Equity Fund (the "Income Equity Fund")
The One Group Disciplined Value Fund (the "Disciplined Value Fund")
The One Group Growth Opportunities Fund (the "Growth Opportunities Fund")
The One Group International Equity Index Fund (the "International Equity Index
Fund")
The One Group Equity Index Fund (the "Equity Index Fund")
The One Group Large Company Value Fund (the "Large Company Value Fund")
The One Group Large Company Growth Fund (the "Large Company Growth Fund")
The One Group Asset Allocation Fund (the "Asset Allocation Fund")
The One Group Income Bond Fund (the "Income Bond Fund")
The One Group Limited Volatility Bond Fund (the "Limited Volatility Bond Fund")
The One Group Intermediate Bond Fund (the "Intermediate Bond Fund")
The One Group Government Bond Fund (the "Government Bond Fund")
The One Group Ultra Short-Term Income Fund (the "Ultra Short-Term Income Fund")
The One Group Municipal Income Fund (the "Municipal Income Fund")
The One Group Intermediate Tax-Free Bond Fund (the "Intermediate Tax-Free Bond
Fund")
The One Group Ohio Municipal Bond Fund (the "Ohio Municipal Bond Fund")
The One Group Texas Tax-Free Bond Fund (the "Texas Tax-Free Bond Fund")
The One Group West Virginia Municipal Bond Fund (the "West Virginia Municipal
Bond Fund")
The One Group Kentucky Municipal Bond Fund (the "Kentucky Municipal Bond Fund")
The One Group Arizona Municipal Bond Fund (the "Arizona Municipal Bond Fund")
The One Group Treasury Money Market Fund (the "Treasury Money Market Fund")
The One Group Treasury Only Money Market Fund (the "Treasury Only Money Market
Fund")
The One Group Government Money Market Fund (the "Government Money Market Fund")
The One Group Tax Exempt Money Market Fund (the "Tax Exempt Money Market Fund")
The One Group Institutional Prime Money Market Fund (the "Institutional Prime
Money Market Fund")
The One Group Louisiana Municipal Bond Fund (the "Louisiana Municipal Bond
Fund")
The One Group Value Growth Fund (the "Value Growth Fund")
The One Group Gulf South Growth Fund (the "Gulf South Growth Fund")
The One Group Income Fund (the "Income Fund")
The One Group Investor Growth Fund (the "Investor Growth Fund) The
One Group Investor Growth & Income Fund (the "Investor Growth & Income Fund)
The One Group Investor Aggressive Growth Fund (the "Investor Aggressive Growth")
The One Group Investor Fixed Income Fund (the "Investor Fixed Income Fund")
The One Group Investor Conservative Growth Fund (the "Investor Conservative
Growth Fund")
The One Group Investor Balanced Fund (the "Investor Balanced Fund")
The One Group Treasury & Agency Fund (the "Treasury & Agency Fund")
November 1, 1996
As amended June 18, 1997
This Statement of Additional Information is not a Prospectus, but should be read
in conjunction with the Prospectuses for the U.S. Treasury Securities Money
Market Fund, the Prime Money Market Fund, the Municipal Money Market Fund, the
Income Equity Fund, the Disciplined Value Fund, the Growth Opportunities Fund,
the International Equity Index Fund, the Equity Index Fund, the Large Company
Value Fund, the Large Company Growth Fund, the Income Bond Fund, the Limited
Volatility Bond Fund, the Intermediate
1
<PAGE> 99
Bond Fund, the Intermediate Tax-Free Bond Fund, the Ohio Municipal Bond Fund,
the Government Bond Fund, the Ultra Short-Term Income Fund, the Asset
Allocation Fund, the Municipal Income Fund, the Texas Tax-Free Bond Fund, the
West Virginia Municipal Bond Fund, the Kentucky Municipal Bond Fund, the
Arizona Municipal Bond Fund, the Ohio Municipal Money Market Fund, the
Treasury Money Market Fund, the Treasury Only Money Market Fund, the Government
Money Market Fund, the Tax Exempt Money Market Fund, the Institutional Prime
Money Market Fund, the Louisiana Municipal Bond Fund, the Value Growth Fund,
the Gulf South Growth Fund, the Income Fund, the Treasury & Agency Fund, the
Investor Growth Fund, the Investor Growth & Income Fund, the Investor
Aggressive Growth Fund, the Investor Fixed Income Fund, the Investor
Conservative Growth Fund, and the Investor Balanced Fund. The Prospectuses for
each of The One Group Funds are dated November 1, 1996 (except the prospectuses
for the Income Fund, the Investor Growth Fund, the Investor Growth & Income
Fund, the Investor Aggressive Growth Fund, the Investor Fixed Income Fund, the
Investor Conservative Growth Fund, the Investor Balanced Fund, the Intermediate
Bond Fund, the Government Bond Fund, the Limited Volatility Bond Fund, the
Income Bond Fund and the Ultra Short-Term Income Fund, which are dated June
17, 1997). This Statement of Additional Information is incorporated in its
entirety into each of those Prospectuses. A copy of each of the Prospectuses
for the Trust may be obtained by writing to the Distributor for the Trust, The
One Group Services Company, 3435 Stelzer Road, Columbus, Ohio 43219, or by
telephoning toll free (800)-480-4111.
Financial Statements for the periods ending June 30, 1996 (audited) and
December 31, 1996 (unaudited) are incorporated by reference to Post-Effective
Amendment No. 41 filed by the Registrant on April 18, 1997. Unaudited Financial
Statements for the period ended March 31, 1997 for the Arizona Municipal Bond
Fund, the West Virginia Municipal Bond Fund and the Treasury & Agency Fund are
included in the Statement of Additional Information.
2
<PAGE> 100
TABLE OF CONTENTS
PAGE
THE TRUST
INVESTMENT OBJECTIVES AND POLICIES
Additional Information on Fund Instruments
High Quality Investments With Regard to the Money Market and
Institutional Money Market Funds
Bank Obligations
Commercial Paper
Repurchase Agreements
Reverse Repurchase Agreements
Government Securities
Futures and Options Trading
Futures Contracts
Restrictions on the Use of Futures Contracts
Risk Factors in Futures Transactions
Options Contracts
Covered Calls
Puts
Purchasing Call Options
Risk Factors in Options Transactions
Mortgage-related Securities
Yield, Market Value and Risk Considerations of Mortgage-Backed
Securities
Foreign Investments
PERCS*
When-Issued Securities
Securities Lending
Index Investing by the Equity Index and International Equity
Index Funds
Foreign Currency Transactions
Transaction Hedging
Position Hedging
Currency Forward and Futures Contracts
General Characteristics of Currency Futures Contracts
Foreign Currency Options
Foreign Currency Conversion
Variable and Floating Rate Notes
Municipal Securities
Demand Features
Swaps, Caps and Floors
Structured Instruments
New Financial Products
Restricted Securities
High Yield Securities
Ohio Municipal Securities
Risk Factors Regarding Investments in Ohio Municipal Securities
West Virginia Municipal Securities
Risk Factors Regarding Investments in West Virginia Municipal
Securities
Kentucky Municipal Securities
Risk Factors Regarding Investments in Kentucky Municipal
Securities
Texas Municipal Securities
Risk Factors Regarding Investments in Texas Municipal
Securities
3
<PAGE> 101
PAGE
Arizona Municipal Securities
Risk Factors Regarding Investments in Arizona Municipal
Securities
Louisiana Municipal Securities
Risk Factors Regarding Investments in Louisiana Municipal
Securities
Investment Restrictions
Portfolio Turnover
Additional Tax Information Concerning All Funds of the Trust
Additional Tax Information Concerning the Tax-Free Funds
Additional Tax Information Concerning the International Equity
Index Fund
Foreign Tax Credit
VALUATION
Valuation of the Money Market and Institutional Money Market Funds
Valuation of the Equity Funds, the Bond Funds and the Municipal
Bond Funds
ADDITIONAL INFORMATION REGARDING THE CALCULATION OF PER SHARE NET
ASSET VALUE
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
MANAGEMENT OF THE TRUST
Trustees & Officers
Investment Advisor
Banc One Investment Advisors Corporation
Boston International Advisors, Inc
Glass-Steagall Act
Portfolio Transactions
Administrator
Expenses
Distributor
Distribution Plan
Custodian and Transfer Agent
Experts
ADDITIONAL INFORMATION
Description of Shares
Shareholder and Trustee Liability
Calculation of Performance Data
Miscellaneous
APPENDIX
4
<PAGE> 102
THE TRUST
The One Group (the "Trust") is an open-end management investment
company. The Trust consists of Forty series of units of beneficial interest
("Shares") each representing interests in one of Forty separate investment
portfolios ("Funds", formerly "Portfolios"), I.E., the U.S. Treasury Securities
Money Market Fund (formerly the U.S. Treasury Money Market Portfolio), the Prime
Money Market Fund, the Municipal Money Market Fund (formerly the Tax-Free
Obligations Portfolio) and the Ohio Municipal Money Market Fund (these four
Funds being collectively referred to as the "Money Market Funds"), the Income
Equity Fund, the Disciplined Value Fund, the Growth Opportunities Fund (formerly
the Small Company Growth Fund and the Growth Equity Portfolio), the Equity Index
Fund, the International Equity Index Fund, the Large Company Value Fund
(formerly, the Quantitative Equity Portfolio), the Large Company Growth Fund,
the Asset Allocation Fund (formerly, the Flexible Balanced Portfolio), the Value
Growth Fund and the Gulf South Growth Fund (these ten Funds being collectively
referred to as the "Equity Funds"), the Income Bond Fund (formerly the Income
Portfolio), the Limited Volatility Bond Fund, the Intermediate Bond Fund, the
Treasury & Agency Fund, the Government Bond Fund, the Income Fund and the Ultra
Short-Term Income Fund (formerly the Government ARM Fund) (these seven Funds
being collectively referred to as the "Bond Funds"), the Intermediate Tax-Free
Bond Fund, the Municipal Income Fund (formerly the Tax-Free Bond Fund), the Ohio
Municipal Bond Fund, the Texas Tax-Free Bond Fund, the West Virginia Municipal
Bond Fund, the Kentucky Municipal Bond Fund, the Arizona Municipal Bond Fund,
and the Louisiana Municipal Bond Fund (these eight Funds being collectively
referred to as the "Municipal Bond Funds"), the Treasury Money Market Fund, the
Treasury Only Money Market Fund, the Government Money Market Fund, the Tax
Exempt Money Market Fund, and the Institutional Prime Money Market Fund (these
five Funds being collectively referred to as the "Institutional Money Market
Funds"), the Investor Growth Fund, the Investor Growth & Income Fund, the
Investor Aggressive Growth Fund, the Investor Fixed Income Fund, the Investor
Conservative Growth Fund, and the Investor Balanced Fund (these six Funds being
collectively referred to as the "Funds of Funds"). The Municipal Money Market
Fund, the Ohio Municipal Money Market Fund, the Ohio Municipal Bond Fund, the
Intermediate Tax-Free Bond Fund, the Municipal Income Fund, the Texas Tax-Free
Bond Fund, the West Virginia Municipal Bond Fund, the Kentucky Municipal Bond
Fund, the Arizona Municipal Bond Fund, the Tax Exempt Money Market Fund and the
Louisiana Municipal Bond Fund are sometimes referred to herein as the "Tax-Free
Funds."
All of the Trust's Funds are diversified, as defined under the
Investment Company Act of 1940, as amended (the "1940 Act"), with the exception
of the Ohio Municipal Bond Fund, the Kentucky Municipal Bond Fund, the West
Virginia Municipal Bond Fund, the Texas Tax-Free Bond Fund, the Arizona
Municipal Bond Fund, the Ohio Municipal Money Market Fund, the Louisiana
Municipal Bond Fund, and the Gulf South Growth Fund, which are non-diversified.
The shares in the Funds of the Trust (other than the Institutional Money Market
Funds, the U.S. Treasury Securities Money Market Fund, the Prime Money Market
Fund and the Funds of Funds) are offered in three separate classes: Fiduciary
Class Shares, Class A Shares and Class B Shares. The U.S. Treasury Securities
Money Market Fund and the Prime Money Market Fund offer Class A Shares,
Fiduciary Class Shares and Service Class Shares. The Funds of Funds offer
Fiduciary Class Shares, Class A Shares, Class B Shares and Class C Shares. Much
of the information contained herein expands upon subjects discussed in the
Prospectuses for the respective Funds. No investment in a particular class of
Shares of a Fund should be made without first reading that Fund's Prospectus.
5
<PAGE> 103
INVESTMENT OBJECTIVES AND POLICIES
The following policies supplement each Fund's investment objective and
policies as set forth in the respective Prospectus for that Fund.
ADDITIONAL INFORMATION ON FUND INSTRUMENTS
High Quality Investments With Regard to the Money Market and
Institutional Money Market Funds
As noted in the Prospectuses for the Money Market and Institutional
Money Market Funds, each such Fund may invest only in obligations determined by
the Fund's investment Advisor, Banc One Investment Advisors Corporation ("Banc
One Advisors") to present minimal credit risks under guidelines adopted by the
Trust's Board of Trustees.
The Treasury Money Market Fund and the Treasury Only Money Market Fund
may only invest in U.S. Treasury bills, notes and other U.S. Treasury
obligations issued or guaranteed by the U.S. Government. Some of the securities
held by the Treasury Money Market Fund may be subject to repurchase agreements.
The Government Money Market Fund invests exclusively in securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, some of which may be subject to repurchase agreements.
The Tax Exempt Money Market Fund may invest only in obligations which,
at the time of purchase, (i) possess the highest short-term ratings from a
nationally recognized statistical rating organization (an "NRSRO") in the case
of single-rated securities; or (ii) possess, in the case of multiple-rated
securities, the highest short-term ratings by at least two NRSROs; or (iii) do
not possess a rating (I.E., are unrated) but are determined by Banc One Advisors
to be of comparable quality to the rated instruments eligible for purchase by
the Fund under guidelines adopted by the Board of Trustees (collectively, "First
Tier Securities"). Some of the securities of the Tax Exempt Money Market Fund
may be subject to repurchase agreements.
With regard to the Money Market Funds and the Institutional Money
Market Funds other than the Tax Exempt Money Market Fund, investments will be
limited to those obligations which, at the time of purchase, (i) possess one of
the two highest short-term ratings from an NRSRO in the case of single-rated
securities; or (ii) possess, in the case of multiple-rated securities, one of
the two highest short-term ratings by at least two NRSROs or (iii) do not
possess a rating (I.E., are unrated) but are determined by Banc One Advisors to
be of comparable quality to the rated instruments eligible for purchase by the
Trust under guidelines adopted by the Board of Trustees (collectively, "Eligible
Securities"). A security that has not received a rating will be deemed to
possess the rating assigned to an outstanding class of the issuer's short-term
debt obligations if determined by Banc One Advisors to be comparable in priority
and security to the obligation selected for purchase by the Trust.
A security subject to a tender or demand feature will be considered an
Eligible Security only if both the demand feature and the underlying security
possess a high quality rating or, if such do not possess a rating, are
determined by Banc One Advisers to be of comparable quality; provided, however,
that where the demand feature would be readily exercisable in the event of a
default in payment of principal or interest on the underlying security, the
obligation may be acquired based on the rating possessed by the demand feature
or, if the demand feature does not possess a rating, a determination of
comparable quality by Banc One Advisors. A security which at the time of
issuance had a maturity exceeding 397 days but, at the time of purchase, has a
remaining maturity of 397 days or less, is not considered an Eligible Security
if it does not possess a high quality rating and the long-term rating, if any,
is not within the two highest rating categories.
6
<PAGE> 104
Eligible Securities include First-Tier Securities and Second-Tier
Securities. First-Tier Securities include those that possess a rating in the
highest category, in the case of a single-rated security, or at least two
ratings in the highest rating category, in the case of multiple-rated
securities, or, if the securities do not possess a rating, are determined to be
of comparable quality by Banc One Advisors pursuant to the guidelines adopted by
the Board of Trustees. Second-Tier Securities are all other Eligible Securities.
Each Money Market and Institutional Money Market Fund other than the
Ohio Municipal Money Market, the Municipal Money Market and the Tax Exempt Money
Market Funds will not invest more than 5% of its total assets in the First Tier
Securities of any one issuer. In addition, each Fund other than the Municipal
Money Market Fund, the Ohio Municipal Money Market Fund, and the Tax Exempt
Money Market Fund may not invest more than 5% of its total assets in Second Tier
Securities, with investment in the Second Tier Securities of any one issuer
further limited to the greater of 1% of the Fund's total assets or $1.0 million.
If a percentage limitation is satisfied at the time of purchase, a later
increase in such percentage resulting from a change in the Fund's net asset
value or a subsequent change in a security's qualification as a First Tier or
Second Tier Security will not constitute a violation of the limitation. In
addition, there is no limit on the percentage of a Fund's assets that may be
invested in obligations issued or guaranteed by the U.S. government, its
agencies, or instrumentalities and, with respect to each Money Market Fund and
each Institutional Money Market Fund other than the Treasury Only Money Market
Fund, repurchase agreements fully collateralized by such obligations.
Under the guidelines adopted by the Trust's Board of Trustees and in
accordance with Rule 2a-7 under the 1940 Act, Banc One Advisors may be required
to promptly dispose of an obligation held in a Fund's portfolio in the event of
certain developments that indicate a diminishment of the instrument's credit
quality, such as where an NRSRO downgrades an obligation below the second
highest rating category, or in the event of a default relating to the financial
condition of the issuer.
The Appendix to this Statement of Additional Information identifies
each NRSRO which may be utilized by Banc One Advisors with regard to portfolio
investments for the Funds and provides a description of relevant ratings
assigned by each such NRSRO. A rating by an NRSRO may be utilized only where the
NRSRO is neither controlling, controlled by, or under common control with the
issuer of, or any issuer, guarantor, or provider of credit support for, the
instrument.
Bank Obligations
Each Fund except the U.S. Treasury Securities Money Market Fund,
the Treasury & Agency Fund, the International Equity Index Fund, the Treasury
Money Market Fund, the Treasury Only Money Market Fund, and the Government Money
Market Fund may invest in bank obligations such as bankers' acceptances,
certificates of deposit, and demand and time deposits. The International Equity
Index Fund may invest in bank obligations such as certificates of deposit and
demand and time deposits.
Bankers' acceptances are negotiable drafts or bills of exchange
typically 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 on maturity.
Bankers' acceptances invested in by the Funds will be those guaranteed by
domestic and foreign banks having, at the time of investment, total assets in
excess of $1 billion (as of the date of their most recently published financial
statements).
Certificates of deposit are negotiable certificates issued against
funds deposited in a commercial bank or a savings and loan association for a
definite period of time and earning a specified return. Certificates of deposit
will be those of domestic and foreign branches of U.S. commercial banks which
are members of the Federal Reserve System or the deposits of which are insured
by the Federal Deposit Insurance Corporation and in certificates of deposit of
domestic savings and loan associations
7
<PAGE> 105
the deposits of which are insured by the Federal Deposit Insurance Corporation
if, at the time of purchase, such institutions have total assets in excess of $1
billion (as of the date of their most recently published financial statements).
Certificates of deposit may also include those issued by foreign banks outside
the United States with total assets at the time of purchase in excess of the
equivalent of $1 billion. The Funds may also invest in Eurodollar certificates
of deposit, which are U.S. dollar-denominated certificates of deposit issued by
branches of foreign and domestic banks located outside the United States, and
Yankee certificates of deposit, which are certificates of deposit issued by a
U.S. branch of a foreign bank denominated in U.S. dollars and held in the United
States. The International Equity Index Fund may also invest in obligations
(including banker's acceptances and certificates of deposit) denominated in
foreign currencies (see "Foreign Investments" herein).
Time deposits are interest-bearing non-negotiable deposits at a bank or
a savings and loan association that have a specific maturity date. Demand
deposits are funds deposited in a commercial bank or a savings and loan
association which, without prior notice to the bank, may be withdrawn generally
by negotiable draft. Time and demand deposits will be maintained only at banks
or savings and loan associations from which a Fund could purchase certificates
of deposit.
Commercial Paper
Commercial paper consists of unsecured promissory notes issued by
corporations. Except as noted below with respect to variable amount master
demand notes, issues of commercial paper normally have maturities of less than
nine months and fixed rates of return.
The Limited Volatility Bond Fund may purchase commercial paper
consisting of issues rated at the time of purchase in the highest rating
category by at least one NRSRO (such as A-1 by Standard & Poor's Corporation
("S&P"), P-1 by Moody's Investor Service, Inc. ("Moody's") or F-1 by Fitch
Investors Services ("Fitch")) or if unrated, determined by Banc One Advisors to
be of comparable quality. The Asset Allocation Fund, the Equity Funds other than
the International Equity Index Fund, the Municipal Bond Funds, the Income Bond
Fund, the Intermediate Bond Fund, and the Ultra Short-Term Income Fund may
purchase commercial paper consisting of issues rated at the time of purchase in
the highest or second highest rating category by at least one NRSRO (such as A-2
or better by S&P, P-2 or better by Moody's or F-2 or better by Fitch) or if
unrated, determined by Banc One Advisors to be of comparable quality. The Income
Fund may purchase commercial paper consisting of issues rated at the time of
purchase in all rating categories by at least one NRSRO, or, if unrated,
determined by Banc One Advisors to be of comparable quality.
Repurchase Agreements
Securities held by each Fund other than the Treasury Only Money Market
Fund and the Treasury & Agency Fund may be subject to repurchase agreements.
Under the terms of a repurchase agreement, a Fund would acquire securities from
member banks of the Federal Deposit Insurance Corporation (or in the case of the
International Equity Index Fund, such banks or foreign banks) with total assets
in excess of $1 billion (or in the case of the International Equity Index Fund,
the equivalent of $1 billion) and registered broker-dealers (or in the case of
the International Equity Index Fund, broker-dealers which may or may not be
registered) which Banc One Advisors deems creditworthy under guidelines approved
by the Board of Trustees, subject to the seller's agreement to repurchase such
securities at a mutually agreed-upon date and price. The repurchase price would
generally equal the price paid by the Fund plus interest negotiated on the basis
of current short-term rates, which may be more or less than the rate on the
underlying portfolio securities. The seller under a repurchase agreement will be
required to maintain the value of collateral held pursuant to the agreement at
not less than the repurchase price (including accrued interest). If the seller
were to default on its repurchase obligation or become insolvent, the Fund
holding such obligation would suffer a loss to the extent that the proceeds from
a sale of the underlying portfolio securities were less than the repurchase
price under the agreement, or to the extent that the
8
<PAGE> 106
disposition of such securities by the Fund were delayed pending court action.
Additionally, there is no controlling legal precedent under U.S. law and there
may be no controlling legal precedents under the laws of certain foreign
jurisdictions confirming that a Fund would be entitled, as against a claim by
such seller or its receiver or trustee in bankruptcy, to retain the underlying
securities, although (with respect to repurchase agreements subject to U.S. law)
the Board of Trustees of the Trust believes that, under the regular procedures
normally in effect for custody of a Fund's securities subject to repurchase
agreements and under federal laws, a court of competent jurisdiction would rule
in favor of the Trust if presented with the question. Securities subject to
repurchase agreements will be held by the Trust's custodian or another qualified
custodian or in the Federal Reserve/Treasury book-entry system. Although there
is no current intention to do so, the International Equity Index Fund reserves
the right in the future to enter into repurchase agreements. Repurchase
agreements are considered by the Securities and Exchange Commission to be loans
by a Fund under the 1940 Act.
Reverse Repurchase Agreements
Each of the Funds other than the Treasury Only Money Market Fund, the
Treasury & Agency Fund, the Ohio Municipal Money Market Fund and the Funds of
Funds may borrow funds for temporary purposes by entering into reverse
repurchase agreements, although the International Equity Index Fund has no
current intention to do so. 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
would enter into reverse repurchase agreements only to avoid otherwise selling
securities during unfavorable market conditions to meet redemptions. At the time
a Fund entered into a reverse repurchase agreement, it would place in a
segregated custodial account assets, such as liquid high grade debt securities
consistent with the Fund's investment restrictions and having a value equal to
the repurchase price (including accrued interest), and would subsequently
monitor the account to ensure that such equivalent value was 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 the Fund is obligated to
repurchase the securities. Reverse repurchase agreements are considered by the
Securities and Exchange Commission to be borrowings by a Fund under the 1940
Act.
Government Securities
With the exception of the U.S. Treasury Securities Money Market Fund,
the Treasury Money Market Fund and the Treasury Only Money Market Fund, which
will invest only in obligations issued or guaranteed by the U.S. Treasury, each
of the Funds may invest in obligations issued or guaranteed by agencies and
instrumentalities of the U.S. government. The Treasury & Agency Fund also may
invest in U.S. Treasury obligations. Obligations of certain agencies and
instrumentalities of the U.S. government are supported by the full faith and
credit of the U.S. Treasury; others are supported by the right of the issuer to
borrow from the Treasury; others are supported by the discretionary authority of
the U.S. government to purchase the agency's obligations; and still others are
supported only by the credit of the instrumentality. No assurance can be given
that the U.S. government would provide financial support to U.S.
government-sponsored agencies or instrumentalities if it is not obligated to do
so by law. A Fund will invest in the obligations of such agencies or
instrumentalities only when Banc One Advisors or the Investment Sub-Advisor
("Sub-Advisor") believes that the credit risk with respect thereto is minimal.
For information on mortgage-related securities issued by certain agencies or
instrumentalities of the U.S. government, see "Investment Objectives and
Policies--Mortgage-related Securities" in this Statement of Additional
Information.
9
<PAGE> 107
Futures and Options Trading
Futures Contracts. The Equity Funds and the Bond Funds, except the
Limited Volatility Bond Fund and the Treasury & Agency Fund, may enter into
futures contracts, options, options on futures contracts and stock index futures
contracts and options thereon for the purposes of remaining fully invested ,
reducing transaction costs, or managing interest rate risk. Futures contracts
provide for the future sale by one party and purchase by another party of a
specified amount of a specific security, class of securities, or an index at a
specified future time and at a specified price. A stock index futures contract
is a bilateral agreement pursuant to which two parties agree to take or make
delivery of an amount of cash equal to a specified dollar amount times the
difference between the stock index value at the close of trading of the
contracts and the price at which the futures contract is originally struck.
Futures contracts which are standardized as to maturity date and underlying
financial instrument are traded on national futures exchanges. Futures exchanges
and trading are regulated under the Commodity Exchange Act by the Commodity
Futures Trading Commission ("CFTC"), a U.S. government agency.
Although most futures contracts by their terms call for actual delivery
and acceptance of the underlying securities, in most cases the contracts are
closed out before the settlement date without the making or taking of delivery.
Closing out an open futures position is done by taking an opposite position
("buying" a contract which has previously been "sold," or "selling" a contract
previously purchased) in an identical contract to terminate the position. A
futures contract on a securities index is an agreement obligating either party
to pay, and entitling the other party to receive, while the contract is
outstanding, cash payments based on the level of a specified securities index.
The acquisition of put and call options on futures contracts will, respectively,
give a Fund the right (but not the obligation), for a specified price, to sell
or to purchase the underlying futures contract, upon exercise of the option, at
any time during the option period. Brokerage commissions are incurred when a
futures contract is bought or sold.
When making future trades, the Funds are required to make a good faith
margin deposit in cash or government securities with a broker or custodian to
initiate and maintain open positions in futures contracts. A margin deposit is
intended to assure completion of the contract (delivery or acceptance of the
underlying security) if it is not terminated prior to the specified delivery
date. Minimal initial margin requirements are established by the futures
exchange and may be changed. Brokers may establish deposit requirements which
are higher than the exchange minimums. Initial margin deposits on futures
contracts are customarily set at levels much lower than the prices at which the
underlying securities are purchased and sold, typically ranging upward from less
than 5% of the value of the contract being traded.
After a futures contract position is opened, the value of the contract
is marked to market daily. If the futures contract price changes to the extent
that the margin on deposit does not satisfy margin requirements, payment of
additional "variation" margin will be required. Conversely, change in the
contract value may reduce the required margin, resulting in a repayment of
excess margin to the contract holder. Variation margin payments are made to and
from the futures broker for as long as the contract remains open. The Funds
expect to earn interest income on their margin deposits.
Traders in futures contracts may be broadly classified as either
"hedgers" or "speculators." Hedgers use the futures markets primarily to offset
unfavorable changes in the value of securities otherwise held for investment
purposes or expected to be acquired by them. Speculators are less inclined to
own the securities underlying the futures contracts which they trade, and use
futures contracts with the expectation of realizing profits from fluctuations in
the prices of underlying securities. The Funds intend to enter into futures
contracts, options on futures contracts, index futures and options thereon that
are traded on an exchange regulated by the CFTC if, to the extent that such
futures and options are not for "bona fide hedging purposes" (as defined by the
CFTC), the aggregate initial margin and premiums on such positions (excluding
the amount by which options are in the money) do not exceed 5% of the Fund's
total assets
10
<PAGE> 108
at current value. A Fund, however, may invest more than such amount for bona
fide hedging purposes, and also may invest more than such amount if it obtains
authority to do so from the CFTC without rendering the fund a commodity pool
operator or adversely affecting its status as an investment company for federal
securities laws or income tax purposes.
A Fund may buy and sell futures contracts and related options to manage
its exposure to changing interest rates and security prices. When interest rates
are expected to rise or market values of portfolio securities are expected to
fall, a Fund can seek through the sale of futures contracts to offset a decline
in the value of its portfolio securities. When interest rates are expected to
fall or market values are expected to rise, a Fund, through the purchase of such
contracts, can attempt to secure better rates or prices for the Fund than might
later be available in the market when it effects anticipated purchases.
Although techniques other than the sale and purchase of futures
contracts could be used to control the Funds' exposure to market fluctuations,
the use of futures contracts may be a more effective means of managing this
exposure. While the Funds will incur commission expenses in both opening and
closing out futures positions, these costs may be lower than transaction costs
that would be incurred in the purchase and sale of the underlying securities.
A Fund's ability to effectively utilize futures trading depends on
several factors. First, it is possible that there will not be a perfect price
correlation between the futures contracts and their underlying reference
security or index. Second, it is possible that a lack of liquidity for futures
contracts could exist in the secondary market, resulting in an inability to
close a futures position prior to its maturity date. Third, the purchase of a
futures contract involves the risk that a Fund could lose more than the original
margin deposit required to initiate a futures transaction.
Restrictions on the Use of Futures Contracts. None of the Funds will
enter into futures contract transactions for purposes other than bona fide
hedging purposes to the extent that, immediately thereafter, the sum of its
initial margin deposits and premiums on open contracts exceeds 5% of the market
value of the respective Fund's total assets. The Funds of Funds will not enter
into futures contract transactions, however, the One Group mutual funds in which
they invest may do so as described herein. In addition, none of the Equity Funds
will enter into futures contracts to the extent that the value of the futures
contracts held would exceed 25% of the respective Fund's total assets. Futures
transactions will be limited to the extent necessary to maintain each Fund's
qualification as a regulated investment company.
The Funds have undertaken to restrict their futures contract trading as
follows: first, the Funds will not engage in transactions in futures contracts
for speculative purposes; second, the Funds will not market themselves to the
public as commodity pools or otherwise as vehicles for trading in the
commodities futures or commodity options markets; third, the Funds will disclose
to all prospective Shareholders the purpose of and limitations on their
commodity futures trading; fourth, the Funds will submit to the CFTC special
calls for information. Accordingly, registration as a commodities pool operator
with the CFTC is not required.
In addition to the margin restrictions discussed above, transactions in
futures contracts may involve the segregation of funds pursuant to requirements
imposed by the Securities and Exchange Commission. Under those requirements,
where a Fund has a long position in a futures contract, it may be required to
establish a segregated account (not with a futures commission merchant or
broker) containing cash or certain liquid assets equal to the purchase price of
the contract (less any margin on deposit). For a short position in futures or
forward contracts held by a Fund, those requirements may mandate the
establishment of a segregated account (not with a futures commission merchant or
broker) with cash or certain liquid assets that, when added to the amounts
deposited as margin, equal the market value of the instruments underlying the
futures contracts (but are not less than the price at which the short positions
were
11
<PAGE> 109
established). However, segregation of assets is not required if a Fund "covers"
a long position. For example, instead of segregating assets, a Fund, when
holding a long position in a futures contract, could purchase a put option on
the same futures contract with a strike price as high or higher than the price
of the contract held by the Fund. In addition, where a Fund takes short
positions, or engages in sales of call options, it need not segregate assets if
it "covers" these positions. For example, where a Fund holds a short position in
a futures contract, it may cover by owning the instruments underlying the
contract. The Funds may also cover such a position by holding a call option
permitting it to purchase the same futures contract at a price no higher than
the price at which the short position was established. Where a Fund sells a call
option on a futures contract, it may cover either by entering into a long
position in the same contract at a price no higher than the strike price of the
call option or by owning the instruments underlying the futures contract. A Fund
could also cover this position by holding a separate call option permitting it
to purchase the same futures contract at a price no higher than the strike price
of the call option sold by the Fund.
The Fund also may engage in straddles and spreads. In a straddle
transaction, the Fund either buys a call and a put or sells a call and a put on
the same security. In a spread, the Fund purchases and sells a call or a put.
The Fund will sell a straddle when Banc One Advisors believes the price of a
security will be stable. The Fund will receive a premium on the sale of the put
and the call. A spread permits the Fund to make a hedged investment that the
price of a security will increase or decline.
In addition, the extent to which a Fund may enter into transactions
involving futures contracts may be limited by the Internal Revenue Code's
requirements for qualification as a registered investment company and the
Trust's intention to qualify as such.
Risk Factors in Futures Transactions. Positions in futures contracts
may be closed out only on an exchange which provides a secondary market for such
futures. However, there can be no assurance that a liquid secondary market will
exist for any particular futures contract at any specific time. Thus, it may not
be possible to close a futures position. In the event of adverse price
movements, a Fund would continue to be required to make daily cash payments to
maintain the required margin. In such situations, if a Fund has insufficient
cash, it may have to sell portfolio securities to meet daily margin requirements
at a time when it may be disadvantageous to do so. In addition, a Fund may be
required to make delivery of the instruments underlying futures contracts it
holds. The inability to close options and futures positions also could have an
adverse impact on the ability to effectively hedge them. The Funds will minimize
the risk that they will be unable to close out a futures contract by only
entering into futures contracts which are traded on national futures exchanges
and for which there appears to be a liquid secondary market.
The risk of loss in trading futures contracts in some strategies can be
substantial, due both to the low margin deposits required, and the extremely
high degree of leverage involved in futures pricing. Because the deposit
requirements in the futures markets are less onerous than margin requirements in
the securities market, there may be increased participation by speculators in
the futures market which may also cause temporary price distortions. A
relatively small price movement in a futures contract may result in immediate
and substantial loss (as well as gain) to the investor. For example, if at the
time of purchase, 10% of the value of the futures contract is deposited as
margin, a subsequent 10% decrease in the value of the futures contract would
result in a total loss of the margin deposit, before any deduction for the
transaction costs, if the account were then closed out. A 15% decrease would
result in a loss equal to 150% of the original margin deposit if the contract
were closed out. Thus, a purchase or sale of a futures contract may result in
losses in excess of the amount invested in the contract. However, because the
futures strategies engaged in by the Funds are only for risk management
purposes, Banc One Advisors and the Sub-Advisor do not believe that the Funds
are subject to the risks of loss frequently associated with futures
transactions. Each Fund would presumably have sustained comparable losses
12
<PAGE> 110
if, instead of the futures contract, it had invested in the underlying financial
instrument and sold it after the decline.
Utilization of futures transactions by a Fund does involve the risk of
imperfect or no correlation where the securities underlying futures contracts
have different maturities than the portfolio securities being hedged. It is also
possible that a Fund could both lose money on futures contracts and also
experience a decline in value of its portfolio securities. There is also the
risk of loss by a Fund of margin deposits in the event of bankruptcy of a broker
with whom the Fund has an open position in a futures contract or related option.
Most futures exchanges limit the amount of fluctuation permitted in
futures contract prices during a single trading day. The daily limit establishes
the maximum amount that the price of a futures contract may vary either up or
down from the previous day's settlement price at the end of a trading session.
Once the daily limit has been reached in a particular type of contract, no
trades may be made on that day at a price beyond that limit. The daily limit
governs only price movement during a particular trading day and therefore does
not limit potential losses, because the limit may prevent the liquidation of
unfavorable positions. Futures contract prices have occasionally moved to the
daily limit for several consecutive trading days with little or no trading,
thereby preventing prompt liquidation of future positions and subjecting some
futures traders to substantial losses.
Some futures strategies, including selling futures, buying puts and
writing covered calls, may reduce the Fund's exposure to price fluctuations.
Other strategies, including buying futures, and buying calls, tend to increase
market exposure. Futures and options may be combined with each other in order to
adjust the risk and return characteristics of the overall portfolio. The Fund
expects to enter into these transactions to manage a return or spread on a
particular investment or portion of its assets, to protect against any increase
in the price of securities the Fund anticipates purchasing at a later date, or
for other risk management strategies.
Options Contracts. Banc One Advisors or the Sub-Advisor of the Equity
and Bond Funds, except the Limited Volatility Bond Fund, may use trading of
options on securities or futures contracts as a hedging device. An option on a
futures contract gives the purchaser of the option the right (but not the
obligation) to take a position at a specified price (the "striking," "strike" or
"exercise" price) in the underlying futures contract or security. A "call"
option gives the purchaser the right to take a long position in the underlying
futures contract or security, and the purchaser of a "put" option acquires the
right to take a short position in the underlying futures contract or security.
The purchase price of an option is referred to as its "premium." The seller (or
"writer") of an option is obligated to take a futures or securities position at
a specified price if the option is exercised. In the case of a call option, the
seller must stand ready to take a short position in the underlying futures
contract or security at the strike price if the option is exercised. A seller of
a put option, on the other hand, stands ready to take a long position in the
underlying futures contract or security at the strike price if the option is
exercised. A "naked" option refers to an option written by a party which does
not possess the underlying futures contract or security.
A "covered" option refers to an option written by a party which does
possess the underlying position. The initial purchase (sale) of an option is an
"opening transaction." In order to close out an option position, the Fund may
enter into a "closing transaction," the sale (purchase) of an option contract on
the same security with the same exercise price and expiration date as the option
contract originally opened.
A call option on a futures contract or security is said to be
"in-the-money" if the strike price is below current market levels. Similarly, a
put option on a futures contract or security is said to be "out-of-the-money" if
the strike price is below current market levels.
13
<PAGE> 111
Options have limited life spans, usually tied to the delivery or
settlement date of the underlying futures contract or security. Some options,
however, expire significantly in advance of such dates. An option that is
"out-of-the-money" and not offset by the time it expires becomes worthless. On
certain exchanges "in-the-money" options are automatically exercised on their
expiration date, but on others unexercised options simply become worthless after
their expiration date. Options usually trade at a premium (referred to as the
"time value" of the option) above their intrinsic value (the difference between
the market price for the underlying futures contract or equity security and the
strike price). As an option nears its expiration date, the market value and the
intrinsic value move into parity as the time value diminishes.
The Funds, other than the Limited Volatility Bond Fund may enter into
over-the-counter option transactions. There will be an active over-the-counter
market for such options which will establish their pricing and liquidity.
Broker/Dealers with whom the Trust will enter into such option transactions
shall have a minimum net worth of $20,000,000. Each Fund will limit the writing
of put and call options to 25% of its net assets.
Increased market volatility generally increases the value of options by
increasing the probability of favorable market swings, putting outstanding
options "in-the-money." Although purchasing options is a limited risk trading
approach, significant losses can be incurred by doing so.
Covered Calls
Each Equity Fund and Bond Fund, (except the Limited Volatility Bond
Fund and the Treasury & Agency Fund), and the Ohio Municipal Bond Fund may write
(sell) only "covered" call options and purchase options to close out options
previously written by the Fund. The Funds' purpose in writing covered call
options is to generate additional premium income. This premium income will serve
to enhance a Fund's total return and will reduce the effect of any price decline
of the security involved in the option. Although the International Equity Index
Fund has no current intention to write such options, it reserves the right to do
so from time to time when such activity will further its investment objective.
Covered call options will generally be written on securities which, in the
opinion of Banc One Advisors or the Sub-Advisor, are not expected to make any
major price moves in the near future but which, over the long term, are deemed
to be attractive investments for the Fund.
A call option gives the holder (buyer) the "right to purchase" a
security at a specified price (the exercise price) at any time until a certain
date (the expiration date). So long as the obligation of the writer of a call
option continues, the writer may be assigned an exercise notice by the
broker-dealer through whom such option was sold, requiring the writer to deliver
the underlying security against payment of the exercise price. This obligation
terminates upon the expiration of the call option, or such earlier time at which
the writer effects a closing purchase transaction by repurchasing an option
identical to that previously sold. To secure the writer's obligation to deliver
the underlying security in the case of a call option, subject to the rules of
the Options Clearing Corporation, a writer is required to deposit in escrow the
underlying security or other assets in accordance with such rules. The Funds
will write only covered call options. This means that a Fund will only write a
call option on a security which a Fund already owns. (In order to comply with
the requirements of the securities laws in several states, a Fund will not write
a covered call option if, as a result, the aggregate market value of all
portfolio securities covering call options or subject to put options exceeds 25%
of the market value of the Fund's net assets.)
Fund securities on which call options may be written will be purchased
solely on the basis of investment considerations consistent with each Fund's
investment objectives. The writing of covered call options is a conservative
investment technique believed to involve relatively little risk (in contrast to
the writing of naked or uncovered options, which a Fund will not do), but
capable of enhancing the Fund's total return. When writing a covered call
option, a Fund, in return for the premium, gives
14
<PAGE> 112
up the opportunity for profit from a price increase in the underlying security
above the exercise price, but conversely retains the risk of loss should the
price of the security decline. Unlike one who owns securities not subject to an
option, a Fund has no control over when it may be required to sell the
underlying securities, since it may be assigned an exercise notice at any time
prior to the expiration of its obligation as a writer. Thus, the security could
be "called away" at a price substantially below the fair market value of the
security. If a call option which a Fund has written expires, a Fund will realize
a gain in the amount of the premium; however, such gain may be offset by a
decline in the market value of the underlying security during the option period.
If the call option is exercised, a Fund will realize a gain or loss from the
sale of the underlying security. The security covering the call will be
maintained in a segregated account of the Fund's custodian. The Funds do not
consider a security covered by a call to be "pledged" as that term is used in
each Fund's policy which limits the pledging or mortgaging of its assets.
The premium received is the market value of an option. The premium each
Fund will receive from writing a call option will reflect, among other things,
the current market price of the underlying security, the relationship of the
exercise price to such market price, the historical price volatility of the
underlying security, and the length of the option period. Once the decision to
write a call option has been made, the Fund's Advisor or Sub-Advisor, in
determining whether a particular call option should be written on a particular
security, will consider the reasonableness of the anticipated premium and the
likelihood that a liquid secondary market will exist for those options. The
premium received by a Fund for writing covered call options will be recorded as
a liability in the Trust's statement of assets and liabilities. This liability
will be adjusted daily to the option's current market value, which will be the
latest sale price at the time at which the net asset value per Share of the Fund
is computed (close of the New York Stock Exchange), or, in the absence of such
sale, the latest asked price. The liability will be extinguished upon expiration
of the option, the purchase of an identical option in the closing transaction,
or delivery of the underlying security upon the exercise of the option.
Generally, a Fund, in order to avoid the exercise of an option sold by
it, will be able to cancel its obligation under the option by entering into a
closing purchase transaction, if available, unless selling (in the case of a
call option) or purchasing (in the case of a put option) the underlying
securities is determined to be in a Fund's interest. A closing purchase
transaction consists of a Fund purchasing an option having the same terms as the
option sold by a Fund, and has the effect of cancelling a Fund's position as a
seller. The premium which a Fund will pay in executing a closing purchase
transaction may be higher (or lower) than the premium received when the option
was sold, depending in large part upon the relative price of the underlying
security at the time of each transaction. To the extent options sold by a Fund
are exercised and a Fund delivers securities to the holder of a call option, a
Fund's turnover rate will increase, which would cause a Fund to incur additional
brokerage expenses.
Closing transactions will be effected in order to realize a profit on
an outstanding call option, to prevent an underlying security from being called,
or to permit the sale of the underlying security. Furthermore, effecting a
closing transaction will permit a Fund to write another call option on the
underlying security with either a different exercise price or expiration date or
both. If a Fund desires to sell a particular security from its portfolio on
which it has written a call option it will seek to effect a closing transaction
prior to, or concurrently with, the sale of the security. There is, of course,
no assurance that a Fund will be able to effect such closing transactions at a
favorable price. If a Fund cannot enter into such a transaction, it may be
required to hold a security that it might otherwise have sold, in which case it
would continue to be at market risk on the security. This could result in higher
transaction costs. A Fund will pay transaction costs in connection with the
writing of options to close out previously written options. Such transaction
costs are normally higher than those applicable to purchases and sales of
portfolio securities.
Call options written by a Fund will normally have expiration dates of
less than nine months from the date written. The exercise price of the options
may be below,
15
<PAGE> 113
equal to, or above the current market values of the underlying securities at the
time the options are written. From time to time, a Fund may purchase an
underlying security for delivery in accordance with an exercise notice of a call
option assigned to it, rather than delivering such security from its portfolio.
In such cases, additional costs will be incurred.
A Fund will realize a profit or loss from a closing purchase
transaction if the cost of the transaction is less or more than the premium
received from the writing of the option. Because increases in the market price
of a call option will generally reflect increases in the market price of the
underlying security, any loss resulting from the repurchase of a call option is
likely to be offset in whole or in part by appreciation of the underlying
security owned by the Fund.
Puts
Each Bond Fund, except the Limited Volatility Bond Fund and the
Treasury & Agency Fund, and each Equity Fund may purchase put options to protect
its portfolio holdings in an underlying security against a decline in market
value. Such hedge protection is provided during the life of the put option since
the Fund, as holder of the put option, is able to sell the underlying security
at the put exercise price regardless of any decline in the underlying security's
market price. For a put option to be profitable, the market price of the
underlying security must decline sufficiently below the exercise price to cover
the premium and transaction costs. By using put options in this manner, the Fund
will reduce any profit it might otherwise have realized from appreciation of the
underlying security by the premium paid for the put option and by transaction
cost. However, any loss of premium may be offset by an increase in the value of
the Fund's securities.
Each Bond and Equity Fund, except the Treasury & Agency Fund, may
write secured puts. For the secured put writer, substantial depreciation in the
value of the underlying security would result in the security being "put to" the
writer at the strike price of the option which may be substantially in excess of
the fair market value of the security. If a secured put option expires
unexercised, the writer realizes a gain in the amount of the premium.
Purchasing Call Options
Each Bond Fund, except the Limited Volatility Bond Fund and the
Treasury & Agency Fund, and each Equity Fund may purchase call options to hedge
against an increase in the price of securities that the Fund wants ultimately to
buy. Such hedge protection is provided during the life of the call option since
the Fund, as holder of the call option, is able to buy the underlying security
at the exercise price regardless of any increase in the underlying security's
market price. In order for a call option to be profitable, the market price of
the underlying security must rise sufficiently above the exercise price to cover
the premium and transaction costs. These costs will reduce any profit the Fund
might have realized had it bought the underlying security at the time it
purchased the call option. In the event that paying premiums for a call option,
together with a price movement in the underlying security, is such that exercise
of the option would not be profitable to the Fund, loss of the premium may be
offset by a decrease in the acquisition cost of securities by the Fund.
Risk Factors in Options Transactions
The successful use of the Bond Funds and the Equity Funds' options
strategies depends on the ability of Banc One Advisors or, in the case of the
International Equity Index Fund, the Sub-Advisor, to assess interest rate and
market movements correctly and to accurately calculate the fair price of the
option.
When it purchases an option, a Fund runs the risk that it will lose its
entire investment in the option in a relatively short period of time, unless the
Fund exercises the option or enters into a closing sale transaction with respect
to the option during the life of the option. If the price of the underlying
security does not rise (in the case of a call) or fall (in the case of a put) to
an extent sufficient to cover the option premium and transaction costs, a Fund
will lose part or all of its
16
<PAGE> 114
investment in the option. This contrasts with an investment by a Fund in the
underlying securities, since the Fund may continue to hold its investment in
those securities notwithstanding the lack of a change in price of those
securities.
The effective use of options also depends on a Fund's ability to
terminate option positions at times when Banc One Advisors or, in the case of
the International Equity Index Fund, the Sub-Advisor, deems it desirable to do
so. A Fund will take an option position only if Banc One Advisors or, in the
case of the International Equity Index Fund, the Sub-Advisor, believes there is
a liquid secondary market for the option, however, there is no assurance that a
Fund will be able to effect closing transactions at any particular time or at an
acceptable price.
If a secondary trading market in options were to become unavailable, a
Fund could no longer engage in closing transactions. Lack of investor interest
might adversely affect the liquidity of the market for particular options or
series of options. A marketplace may discontinue trading of a particular option
or options generally. In addition, a market could become temporarily unavailable
if unusual events, such as volume in excess of trading or clearing capability,
were to interrupt normal market operations. A marketplace may at times find it
necessary to impose restrictions on particular types of options transactions,
which may limit a Fund's ability to realize its profits or limit its losses.
Disruptions in the markets for the securities underlying options
purchased or sold by a Fund could result in losses on the options. If trading is
interrupted in an underlying security, the trading of options on that security
is normally halted as well. As a result, a Fund as purchaser or writer of an
option will be unable to close out its positions until option trading resumes,
and it may be faced with losses if trading in the security reopens at a
substantially different price. In addition, the Options Clearing Corporation
("OCC") or other options markets may impose exercise restrictions. If a
prohibition on exercise is imposed at the time when trading in the option has
also been halted, a Fund as purchaser or writer of an option will be locked into
its position until one of the two restrictions has been lifted. If a prohibition
on exercise remains in effect until an option owned by a Fund has expired, the
Fund could lose the entire value of its option.
Special risks are presented by internationally-traded options. Because
of time differences between the United States and the various foreign countries,
and because different holidays are observed in different countries, foreign
option markets may be open for trading during hours or on days when U.S. markets
are closed. As a result, option premiums may not reflect the current prices of
the underlying interest in the United States.
Mortgage-related Securities
Each of the Money Market Funds (other than the U.S. Treasury Securities
Money Market Fund), the Institutional Money Market Funds (other than the
Treasury Money Market Fund and Treasury Only Money Market Fund) the Bond Funds
and the Asset Allocation Fund may, consistent with its investment objective and
policies, invest in mortgage-related securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities.
Mortgage-related securities, for purposes of the Trust's Prospectuses
and this Statement of Additional Information, represent pools of mortgage loans
assembled for sale to investors by various governmental agencies such as the
Government National Mortgage Association ("Ginnie Mae") and government-related
organizations such as the Federal National Mortgage Association ("Fannie Mae")
and the Federal Home Loan Mortgage Corporation ("Freddie Mac"), as well as by
nongovernmental issuers such as commercial banks, savings and loan institutions,
mortgage bankers, and private mortgage insurance companies. Such
non-governmental mortgage securities cannot be treated as U.S. government
securities for purposes of investment policies. The Government Bond, the
Government Money Market Funds and the Treasury & Agency Fund may only invest in
mortgage-related securities issued or guaranteed by the U.S. government, or its
agencies or instrumentalities. The other
17
<PAGE> 115
Funds listed above also may invest in mortgage-backed securities issued by
non-government entities, which Consist of Collateralized Mortgage Obligations
("CMOs") and Real Estate Mortgage Investment Conduits ("REMICs") that are rated
in one of the four highest rating categories by at least one NRSRO at the time
of investment or, if unrated, determined by Banc One Advisors to be of
comparable quality. The Funds, including the Government Bond and Government
Money Market Funds, also may invest in multiple class securities issued by U.S.
government agencies and instrumentalities such as Fannie Mae, Freddie Mac and
Ginnie Mae. The Funds, except the Government Bond, Government Money Market
Funds and the Treasury & Agency Fund may invest in multiple class securities
issued by private issuers including guaranteed CMOs and REMIC pass-through or
participation certificates, when consistent with a Fund's investment objective,
policies and limitations. A REMIC is a CMO that qualifies for special tax
treatment under the code and invests in certain mortgages principally secured by
interests in real property and other permitted investments.
CMOs and guaranteed REMIC pass-through certificates ("REMIC
Certificates") issued by Fannie Mae, Freddie Mac, Ginnie Mae and private issuers
are types of multiple class pass-through securities. Investors may purchase
beneficial interests in REMICs, which are known as "regular" interests or
"residual" interests. The Funds do not currently intend to purchase residual
interests in REMICs. The REMIC Certificates represent beneficial ownership
interests in a REMIC Trust, generally consisting of mortgage loans or Fannie
Mae, Freddie Mac or Ginnie Mae guaranteed mortgage pass-through certificates
(the "Mortgage Assets"). The obligations of Fannie Mae, Freddie Mac or Ginnie
Mae under their respective guaranty of the REMIC Certificates are obligations
solely of Fannie Mae, Freddie Mac or Ginnie Mae, respectively.
Fannie Mae REMIC Certificates are issued and guaranteed as to timely
distribution of principal and interest by Fannie Mae. In addition, Fannie Mae
will be obligated to distribute the principal balance of each class of REMIC
Certificates in full, whether or not sufficient funds are otherwise available.
For Freddie Mac REMIC Certificates, Freddie Mac guarantees the timely
payment of interest, and also guarantees the payment of principal as payments
are required to be made on the underlying mortgage participation certificates
("PCS"). PCS represent undivided interests in specified residential mortgages or
participation therein purchased by Freddie Mac and placed in a PC pool. With
respect to principal payments on PCS, Freddie Mac generally guarantees ultimate
collection of all principal of the related mortgage loans without offset or
deduction. Freddie Mac also guarantees timely payment of principal on certain
PCS referred to as "Gold PCS."
Ginnie Mae REMIC Certificates guarantee the full and timely payment of
interest and principal on each class of securities (in accordance with the terms
of those classes as specified in the related offering circular supplement). The
Ginnie Mae guarantee is backed by the full faith and credit of the United States
of America.
REMIC Certificates issued by Fannie Mae, Freddie Mac and Ginnie Mae are
treated as U.S. government securities for purposes of investment policies. CMOs
and REMIC Certificates are issued in multiple classes. Each class of CMOs or
REMIC Certificates, often referred to as a "tranche," is issued at a specific
adjustable or fixed interest rate and must be fully retired no later than its
final distribution date. Principal prepayments on the mortgage loans or the
Mortgage Assets underlying the CMOs or REMIC Certificates may cause some or all
of the classes of CMOs or REMIC Certificates to be retired substantially earlier
than their final distribution dates. Generally, interest is paid or accrues on
all classes of CMOs or REMIC Certificates on a monthly basis.
The principal of and interest on the Mortgage Assets may be allocated
among the several classes of CMOs or REMIC Certificates in various ways. In
certain structures (known as "sequential pay" CMOs or REMIC Certificates),
payments of principal, including any principal prepayments, on the Mortgage
Assets generally are applied to the classes of CMOs or REMIC Certificates in the
order of their respective final distribution dates. Thus, no payment of
principal will be made on any class of
18
<PAGE> 116
sequential pay CMOs or REMIC Certificates until all other classes having an
earlier final distribution date have been paid in full.
Additional structures of CMOs and REMIC Certificates include, among
others, "parallel pay" CMOs and REMIC Certificates. Parallel pay CMOs or REMIC
Certificates are those which are structured to apply principal payments and
prepayments of the Mortgage Assets to two or more classes concurrently on a
proportionate or disproportionate basis. These simultaneous payments are taken
into account in calculating the final distribution date of each class.
A wide variety of REMIC Certificates may be issued in the parallel pay
or sequential pay structures. These securities include accrual certificates
(also know as "Z-Bonds"), which only accrue interest at a specified rate until
all other certificates having an earlier final distribution date have been
retired and are converted thereafter to an interest-paying security, and planned
amortization class ("PAC") certificates, which are parallel pay REMIC
Certificates which generally require that specified amounts of principal be
applied on each payment date to one or more classes of REMIC Certificates (the
"PAC Certificates"), even though all other principal payments and prepayments of
the Mortgage Assets are then required to be applied to one or more other classes
of the certificates. The scheduled principal payments for the PAC Certificates
generally have the highest priority on each payment date after interest due has
been paid to all classes entitled to receive interest currently. Shortfalls, if
any, are added to the amount of principal payable on the next payment date. The
PAC Certificate payment schedule is taken into account in calculating the final
distribution date of each class of PAC. In order to create PAC tranches, one or
more tranches generally must be created that absorb most of the volatility in
the underlying Mortgage Assets. These tranches tend to have market prices and
yields that are much more volatile than the PAC classes.
The Z-Bonds in which the Funds may invest may bear the same non-credit-
related risks as do other types of Z-Bonds. Z-Bonds in which the Fund may invest
will not include residual interest.
There can be no assurance that the United States government would
provide financial support to Fannie Mae, Freddie Mac or Ginnie Mae if necessary
in the future.
Although certain mortgage-related securities are guaranteed by a third
party or otherwise similarly secured, the market value of the security, which
may fluctuate, is not so secured. If a Fund of the Trust purchases a
mortgage-related security at a premium, that portion may be lost if there is a
decline in the market value of the security whether resulting from changes in
interest rates or prepayments in the underlying mortgage collateral. As with
other interest-bearing securities, the prices of such securities are inversely
affected by changes in interest rates. However, though the value of a
mortgage-related security may decline when interest rates rise, the converse is
not necessarily true since in periods of declining interest rates the mortgages
underlying the securities are prone to prepayment. For this and other reasons, a
mortgage-related security's stated maturity may be shortened by unscheduled
prepayments on the underlying mortgages and, therefore, it is not possible to
predict accurately the security's return to the Trust's Funds. In addition,
regular payments received in respect of mortgage-related securities include both
interest and principal. No assurance can be given as to the return the Funds of
the Trust will receive when these amounts are reinvested.
The market value of the Fund's adjustable rate Mortgage-Backed
Securities may be adversely affected if interest rates increase faster than the
rates of interest payable on such securities or by the adjustable rate mortgage
loans underlying such securities. Furthermore, adjustable rate Mortgage-Backed
Securities or the mortgage loans underlying such securities may contain
provisions limiting the amount by which rates may be adjusted upward and
downward and may limit the amount by which monthly payments may be increased or
decreased to accommodate upward and downward adjustments in interest rates.
19
<PAGE> 117
Certain adjustable rate mortgage loans may provide for periodic
adjustments of scheduled payments in order to amortize fully the mortgage loan
by its stated maturity. Other adjustable rate mortgage loans may permit their
stated maturity to be extended or shortened in accordance with the portion of
each payment that is applied to interest as affected by the periodic interest
rate adjustments.
Although having less risk of decline during periods of rising interest
rates, adjustable rate Mortgage-Backed Securities have less potential for
capital appreciation than fixed rate Mortgage-Backed Securities because their
coupon rates will decline in response to market interest rate declines. The
market value of fixed rate Mortgage-Backed Securities may be adversely affected
as a result of increases in interest rates and, because of the risk of
unscheduled principal prepayments, may benefit less than other fixed rate
securities of similar maturity from declining interest rates. Finally, to the
extent Mortgage-Backed Securities are purchased at a premium, mortgage
foreclosures and unscheduled principal prepayments may result in some loss of
the Fund's principal investment to the extent of the premium paid. On the other
hand, if such securities are purchased at a discount, both a scheduled payment
of principal and an unscheduled prepayment of principal will increase current
and total returns and will accelerate the recognition of income.
The Bond and Asset Allocation Funds may invest in mortgage-related
securities which are collateralized mortgage obligations structured on pools of
mortgage pass-through certificates or mortgage loans. Collateralized mortgage
obligations will be purchased only if rated in the four highest rating
categories by a nationally recognized rating organization such as Moody's or
S&P.
There are a number of important differences among the agencies and
instrumentalities of the U.S. government that issue mortgage-related securities
and among the securities that they issue. Mortgage-related securities issued by
Ginnie Mae include Ginnie Mae Mortgage Pass-Through Certificates which are
guaranteed as to the timely payment of principal and interest by Ginnie Mae and
such guarantee is backed by the full faith and credit of the United States.
Ginnie Mae is a wholly-owned U.S. government corporation within the Department
of Housing and Urban Development. Ginnie Mae certificates also are supported by
the authority of Ginnie Mae to borrow funds from the U.S. Treasury to make
payments under its guarantee. Mortgage-related securities issued by Fannie Mae
include Fannie Mae Guaranteed Mortgage Pass-Through Certificates which are
solely the obligations of Fannie Mae and are not backed by or entitled to the
full faith and credit of the United States. Fannie Mae is a government-sponsored
organization owned entirely by private stock-holders. Fannie Mae Certificates
are guaranteed as to timely payment of the principal and interest by Fannie Mae.
Mortgage-related securities issued by Freddie Mac include Freddie Mac Mortgage
Participation Certificates. Freddie Mac is a corporate instrumentality of the
United States, created pursuant to an Act of Congress, which is owned entirely
by Federal Home Loan Banks. Freddie Mac Certificates are not guaranteed by the
United States or by any Federal Home Loan Banks and do not constitute a debt or
obligation of the United States or of any Federal Home Loan Bank. Freddie Mac
Certificates entitle the holder to timely payment of interest, which is
guaranteed by Freddie Mac. Freddie Mac guarantees either ultimate collection or
timely payment of all principal payments on the underlying mortgage loans. When
Freddie Mac does not guarantee timely payment of principal, Freddie Mac may
remit the amount due on account of its guarantee of ultimate payment of
principal at any time after default on an underlying mortgage, but in no event
later than one year after it becomes payable.
The Funds may enter into mortgage "dollar rolls" in which the Funds
sell securities for delivery in the current month and simultaneously contract
with the same counterparty to repurchase similar (same type, coupon and
maturity) but not identical securities on a specified future date. When a Fund
enters into mortgage dollar rolls, the Fund will hold and maintain a segregated
account until the settlement date, cash or liquid, high grade debt securities in
an amount equal to the forward purchase price. The benefits derived from the use
of mortgage dollar rolls may depend upon Banc One Advisors' ability to predict
correctly mortgage prepayments and interest rates. There is no assurance that
mortgage dollar rolls can be successfully employed.
20
<PAGE> 118
The Funds currently intend to enter into mortgage dollar rolls that are
accounted for as a financing.
For purposes of diversification and investment limitations, mortgage
dollar rolls are considered to be mortgage-backed securities.
Yield, Market Value and Risk Considerations of Mortgage-Backed
Securities
The Bond Funds and the Asset Allocation Fund may invest in certain
Mortgage-Backed Securities, such as Interest Only Stripped Mortgage-Backed
Securities, that are extremely sensitive to changes in prepayments and interest
rates. Even though such securities have been guaranteed by an agency or
instrumentality of the U.S. government, under certain interest rate or
prepayment rate scenarios, the Funds may fail to fully recover their investment
in such securities.
The yield characteristics of Mortgage-Backed Securities differ from
those of traditional fixed income securities. The major differences typically
include more frequent interest and principal payments, usually monthly, and the
possibility that prepayments of principal may be made at any time. Prepayment
rates are influenced by changes in current interest rates and a variety of
economic, geographic, social and other factors and cannot be predicted with
certainty. As with fixed rate mortgage loans, adjustable rate mortgage loans may
be subject to a greater prepayment rate in a declining interest rate
environment. The yields to maturity of the Mortgage-Backed Securities in which
the Trust invests will be affected by the actual rate of payment (including
prepayments) of principal of the underlying mortgage loans. The mortgage loans
underlying such securities generally may be prepaid at any time without penalty.
In a fluctuating interest rate environment, a predominant factor affecting the
prepayment rate on a pool of mortgage loans is the difference between the
interest rates on the mortgage loans and prevailing mortgage loan interest rates
(giving consideration to the cost of any refinancing). In general, if mortgage
loan interest rates fall sufficiently below the interest rates on fixed rate
mortgage loans underlying mortgage pass-through securities, the rate of
prepayment would be expected to increase. Conversely, if mortgage loan interest
rates rise above the interest rates on the fixed rate mortgage loans underlying
the mortgage pass-through securities, the rate of prepayment may be expected to
decrease.
In general, changes in both prepayment rates and interest rates will
change the yield on Mortgage-Backed Securities. The rate of principal
prepayments with respect to adjustable rate mortgage loans ("ARMs") has
fluctuated in recent years. As is the case with fixed mortgage loans, ARMs may
be subject to a greater rate of principal prepayments in a declining interest
rate environment. For example, if prevailing interest rates fall significantly,
ARMs could be subject to higher prepayment rates than if prevailing interest
rates remain constant because the availability of fixed rate mortgage loans at
competitive interest rates may encourage mortgagors to refinance their ARMs to
"lock-in" a lower fixed interest rate. Conversely, if prevailing interest rates
rise significantly, ARMs may prepay at lower rates than if prevailing rates
remain at or below those in effect at the time such ARMs were originated. As
with fixed rate mortgages, there can be no certainty as to the rate of
prepayments on the ARMs in either stable or changing interest rate environments.
In addition, there can be no certainty as to whether increases in the principal
balances of the ARMs due to the addition of deferred interest may result in a
default rate higher than that on ARMs that do not provide for negative
amortization. Other factors affecting prepayment of ARMs include changes in
mortgagors' housing needs, job transfers, unemployment, mortgagors' net equity
in the mortgage properties and servicing decisions.
Foreign Investments
The International Equity Index Fund will invest primarily in, and the
Prime Money Market Fund, the Institutional Prime Money Market Fund, the Asset
Allocation Fund, the remaining Equity Funds (other than the Equity Index Fund),
the Income Bond Fund, the Limited Volatility Bond Fund, the Intermediate Bond
Fund, the Income Fund and the Ultra Short-Term Income Fund, subject to their
respective investment objectives and policies,
21
<PAGE> 119
may also invest in certain obligations or securities of foreign issuers.
Possible investments include equity securities of foreign entities, obligations
of foreign branches of U.S. banks and of foreign banks, including, without
limitation, European Certificates of Deposit, European Time Deposits, European
Banker's Acceptances, Canadian Time Deposits and Yankee Certificates of
Deposits, and investments in Canadian Commercial Paper, foreign securities and
Europaper (as those terms are defined in the relevant Prospectuses of the
Trust). Securities of foreign issuers may include sponsored and unsponsored
American Depository Receipts ("ADRs"). Sponsored ADRs are listed on the New York
Stock Exchange; unsponsored ADRs are not. Therefore, there may be less
information available about the issuers of unsponsored ADRs than the issuers of
sponsored ADRs. Unsponsored ADRs are restricted securities. These instruments
may subject a Fund to investment risks that differ in some respects from those
related to investments in obligations of U.S. domestic issuers. Such risks
include future adverse political and economic developments, the possible
imposition of withholding taxes on interest or other income, possible seizure,
nationalization or expropriation of foreign deposits, the possible establishment
of exchange controls or taxation at the source, greater fluctuations in value
due to changes in exchange rates, or the adoption of other foreign governmental
restrictions which might adversely affect the payment of principal and interest
on such obligations. Such investments may also entail higher custodial fees and
sales commissions than domestic investments. Foreign issuers of securities or
obligations are often subject to accounting treatment and engage in business
practices different from those respecting domestic issuers of similar securities
or obligations. Foreign branches of U.S. banks and foreign banks may be subject
to less stringent reserve requirements than those applicable to domestic
branches of U.S. banks. Investments in all types of foreign obligations or
securities will not exceed 25% of the net assets of the Asset Allocation Fund,
the Equity Funds (with the exception of the International Equity Index Fund) and
the Income Bond and Limited Volatility Bond Funds.
By investing in foreign securities, the International Equity Index Fund
attempts to take advantage of differences between both economic trends and the
performance of securities markets in the various countries, regions and
geographic areas as prescribed by the Fund's investment objective and policies.
During certain periods the investment return on securities in some or all
countries may exceed the return on similar investments in the United States,
while at other times the investment return may be less than that on similar U.S.
securities. Shares of the International Equity Index Fund, when included in
appropriate amounts in a portfolio otherwise consisting of domestic securities,
will provide a source of increased diversification. The International Equity
Index Fund itself seeks increased diversification by combining securities from
various countries and geographic areas that offer different investment
opportunities and are affected by different economic trends. The international
investments of the International Equity Index Fund may reduce the effect that
events in any one country or geographic area will have on its investment
holdings. Of course, negative movement by one of a Fund's investments in one
foreign market represented in its portfolio may offset potential gains from the
Fund's investments in another country's markets.
PERCS*
The Equity Funds may invest in Preferred Equity Redemption Cumulative
Stock ("PERCS") which is a form of convertible preferred stock that actually has
more of an equity component than it does fixed income characteristics. These
instruments permit companies to raise capital via a surrogate for common equity.
PERCS are preferred stock which convert to common stock after a specified period
of time, usually three years, and are considered the equivalent of equity by the
ratings agencies. Issuers pay holders a substantially higher dividend yield than
that on the underlying common, and in exchange, the holder's appreciation is
capped, usually at about 30 percent. PERCS are callable at any time. The PERC is
mandatorily convertible into common stock, but is callable at any time at an
initial call price that reflects a substantial premium to the stock's issue
price. PERCS offer a higher dividend than that available on the common stock,
but in exchange the investors agree to the company placing a cap on the
potential price appreciation. The call price declines daily in an amount that
reflects
22
<PAGE> 120
the incremental dividend that holders enjoy. PERCS are listed on an exchange
where the common stock is listed.
*PERCS are a registered trademark of Morgan Stanley, which does not sponsor and
is in no way affiliated with The One Group.
When-Issued Securities
As discussed in the Prospectuses, each Fund, except the Treasury Money
Market Fund, the Funds of Funds and the Treasury & Agency Fund, may purchase
securities on a "when-issued" basis. When a Fund agrees to purchase securities,
the Fund's custodian will set aside cash or liquid portfolio securities equal to
the amount of the commitment in a separate account. Normally, the custodian will
set aside portfolio securities to satisfy a purchase commitment. In such a case,
a Fund may be required subsequently to place additional assets in the separate
account in order to assure that the value of the account remains equal to the
amount of the Fund's commitment. It may be expected that a Fund's net assets
will fluctuate to a greater degree when it sets aside portfolio securities to
cover such purchase commitments than when it sets aside cash. No Fund intends to
purchase "when-issued" securities for speculative purposes but only for the
purpose of acquiring portfolio securities. Because a Fund will set aside cash or
liquid portfolio securities to satisfy its purchase commitments in the manner
described, the Fund's liquidity and the ability of Banc One Advisors and the
Sub-Advisor to manage the Fund might, as described in the Prospectuses, be
affected in the event its commitments to purchase when-issued securities ever
exceeded 40% of the value of its assets. Commitments to purchase when-issued
securities will not, under normal market conditions, exceed 25% of a Fund's
total assets, and a commitment will not exceed 90 days. A Fund may dispose of a
when-issued security or forward commitment prior to settlement if Banc One
Advisors deems it appropriate to do so.
When a Fund engages in "when-issued" transactions, it relies on the
seller to consummate the trade. Failure of the seller to do so may result in the
Fund's incurring a loss or missing the opportunity to obtain a price considered
to be advantageous.
Securities Lending
Each of the Funds, except the Funds of Funds, may lend up to 33% of its
portfolio securities to broker-dealers, banks or institutional borrowers of
securities. A Fund must receive a minimum of 100% collateral in the form of
cash, U.S. government securities, shares of an investment trust or shares of an
investment company or any combination of such cash and securities. This
collateral must be valued daily and should the market value of the loaned
securities increase, the borrower must furnish additional collateral to the
Fund. During the time portfolio securities are on loan, the borrower will pay
the Fund any dividends or interest paid on such securities. Loans will be
subject to termination by a Fund or the borrower at any time and are therefore
not considered to be illiquid investments. While a Fund will not have the right
to vote securities on loan, it intends to terminate the loan and regain the
right to vote if that is considered important with respect to the investment. A
Fund will only enter into loan arrangements with broker-dealers, banks or other
institutions which Banc One Advisors has determined are creditworthy under
guidelines established by the Trust's Board of Trustees and when, in the
judgement of Banc One Advisors, the consideration that can be earned currently
from such securities loans justifies the attendant risk.
Index Investing by the Equity Index and International Equity Index
Funds
It is anticipated that the indexing approach that will be employed by
the Equity Index Fund will be an effective method of substantially duplicating
percentage changes in the S&P 500 Index (the "Index"). It is a reasonable
expectation that there will be a close correlation between the Fund's
performance and that of the Index in both rising and falling markets. The Fund
will attempt to achieve a correlation between the performance of its portfolio
and that of the Index of at least 0.95, without taking into account expenses. A
correlation of 1.00 would indicate perfect correlation, which would be achieved
when the Fund's net asset value, including the value of its dividend
23
<PAGE> 121
and capital gains distributions, increases or decreases in exact proportion to
changes in the Index. The Fund's ability to correlate its performance with the
Index, however, may be affected by, among other things, changes in securities
markets, the manner in which the Index is calculated by Standard & Poor's
Corporation ("S&P") and the timing of purchases and redemptions. In the future,
the Trustees of the Trust, subject to the approval of Shareholders, may select
another index if such a standard of comparison is deemed to be more
representative of the performance of common stocks.
S&P chooses the stocks to be included in the Index largely on a
statistical basis. Inclusion of a stock in the Index in no way implies an
opinion by S&P as to its attractiveness as an investment. The Index is
determined, composed and calculated by S&P without regard to the Equity Index
Fund. S&P is neither a sponsor of, nor in any way affiliated with the Equity
Index Fund, and S&P makes no representation or warranty, expressed or implied on
the advisability of investing in the Equity Index Fund or as to the ability of
the Index to track general stock market performance, and S&P disclaims all
warranties of merchantability or fitness for a particular purpose or use with
respect to the Index or any data included therein. "Standard and Poor's 500" is
a service mark of S&P.
The weightings of stocks in the Index are based on each stock's
relative total market value, i.e., market price per share times the number of
Shares outstanding. Because of this weighting, approximately 50% of the Index is
currently composed of the 50 largest companies in the Index, and the Index
currently represents over 65% of the market value of all U.S. common stocks
listed on the New York Stock Exchange. Typically, companies included in the
Index are the largest and most dominant firms in their respective industries.
Banc One Advisors generally selects stocks for the Equity Index Fund in
the order of their weightings in the Index beginning with the heaviest weighted
stocks. The percentage of the Equity Index Fund's assets to be invested in each
stock is approximately the same as the percentage it represents in the Index. No
attempt is made to manage the Equity Index Fund in the traditional sense using
economic, financial and market analysis. The Equity Index Fund is managed using
a computer program to determine which stocks are to be purchased and sold to
replicate the Index to the extent feasible. From time to time, administrative
adjustments may be made in the Fund because of changes in the composition of the
Index, but such changes should be infrequent.
It is anticipated that the indexing approach that will be employed by
the International Equity Index Fund will be an effective method of substantially
duplicating percentage changes in the GDP weighted MSCI EAFE Index (the
"International Index"). The Fund will attempt to achieve a correlation between
the performance of its portfolio and that of the International Index of at least
0.95, without taking into account expenses. It is a reasonable expectation that
there will be a close correlation between the Fund's performance and that of the
International Index in both rising and falling markets. A correlation of 1.00
would indicate perfect correlation, which would be achieved when the Fund's net
asset value, including the value of its dividend and capital gains
distributions, increases or decreases in exact proportion to changes in the
International Index. The Fund's ability to correlate its performance with the
International Index, however, may be affected by, among other things, changes in
securities markets, the manner in which the International Index is calculated by
Morgan Stanley International ("MSCI") and the timing of purchases and
redemptions. In the future, the Trustees of the Trust, subject to the approval
of Shareholders, may select another index if such a standard of comparison is
deemed to be more representative of the performance of common stocks.
MSCI computes and publishes the International Index. MSCI also computes
the country weights which are established based on annual GDP data. Gross
Domestic Product is defined as a country's Gross National Product, or total
output of goods and services, adjusted by the following two factors: net labor
income (labor income of domestic residents working abroad less labor income of
foreigners working domestically) plus net interest income (interest income
earned from foreign investments less interest income earned from domestic
investments by foreigners). Country weights are thus
24
<PAGE> 122
established in proportion to the size of their economies as measured by Gross
Domestic Product, which results in a more uniform distribution of capital across
the EAFE markets than if capitalization weights were used as the basis. The
country weights within the International Index are systematically rebalanced
annually to the most recent GDP weights.
MSCI chooses the stocks to be included in the International Index
largely on a statistical basis. Inclusion of a stock in the International Index
in no way implies an opinion by MSCI as to its attractiveness as an investment.
The International Index is determined, composed and calculated by MSCI without
regard to the International Equity Index Fund. MSCI is neither a sponsor of, nor
in any way affiliated with the International Equity Index Fund, and MSCI makes
no representation or warranty, expressed or implied on the advisability of
investing in the International Equity Index Fund or as to the ability of the
International Index to track general stock market performance, and MSCI
disclaims all warranties of merchantability or fitness for a particular purpose
or use with respect to the International Index or any data included therein.
"MSCI EAFE Index" is a service mark of MSCI.
Foreign Currency Transactions
Banc One Advisors or the Sub-Advisor of the International Equity Index
Fund may, if it so chooses, engage in Foreign Currency Transactions, as
discussed below.
Transaction Hedging. When a Fund engages in transaction hedging, it
enters into foreign currency transactions with respect to specific receivables
or payables of the Fund generally arising in connection with the purchase or
sale of its portfolio securities. The International Equity Index Fund will
engage in transaction hedging when it desires to "lock in" the U.S. dollar price
of a security it has agreed to purchase or sell, or the U.S. dollar equivalent
of a dividend or interest payment in a foreign currency. By transaction hedging,
the International Equity Index Fund will attempt to protect itself against a
possible loss resulting from an adverse change in the relationship between the
U.S. dollar and the applicable foreign currency during the period between the
date on which the security is purchased or sold, or on which the dividend or
interest payment is declared, and the date on which such payments are made or
received.
The International Equity Index Fund may purchase or sell a foreign
currency on a spot (or cash) basis at the prevailing spot rate in connection
with the settlement of transactions in portfolio securities denominated in that
foreign currency. The Fund may also enter into contracts to purchase or sell
foreign currencies at a future date ("forward contracts"). Although there is no
current intention to do so, the International Equity Index Fund reserves the
right to purchase and sell foreign currency futures contracts traded in the
United States and subject to regulation by the CFTC.
For transaction hedging purposes the International Equity Index Fund
may also purchase U.S. exchange-listed call and put options on foreign currency
futures contracts and on foreign currencies. A put option on a futures contract
gives the Fund the right to assume a short position in the futures contract
until expiration of the option. A put option on currency gives the Fund the
right to sell a currency at an exercise price until the expiration of the
option. A call option on a futures contract gives the Fund the right to assume a
long position in the futures contract until the expiration of the option. A call
option on currency gives the Fund the right to purchase a currency at the
exercise price until the expiration of the option.
Position Hedging. When it engages in position hedging, the
International Equity Index Fund enters into foreign currency exchange
transactions to protect against a decline in the values of the foreign
currencies in which its portfolio securities are denominated (or an increase in
the value of currency for securities which Banc One Advisors or the Sub-Advisor
expects to purchase, when the Fund holds cash or short-term investments). In
connection with the position hedging, the Fund may purchase or sell foreign
currency forward contracts or foreign currency on a spot basis. The
25
<PAGE> 123
International Equity Index Fund may purchase U.S. exchange-listed put or call
options on foreign currency and foreign currency futures contracts and buy or
sell foreign currency futures contracts traded in the United States and subject
to regulation by the CFTC, although the International Equity Index Fund has no
current intention to do so.
The precise matching of the amounts of foreign currency exchange
transactions and the value of the portfolio securities involved will not
generally be possible since the future value of such securities in foreign
currencies will change as a consequence of market movements in the value of
those securities between the dates the currency exchange transactions are
entered into and the dates they mature.
It is impossible to forecast with precision the market value of
portfolio securities at the expiration or maturity of a forward contract or
futures contract. Accordingly, it may be necessary for the Fund to purchase
additional foreign currency on the spot market (and bear the expense of such
purchase) if the market value of the security or securities being hedged is less
than the amount of foreign currency the Fund is obligated to deliver and if a
decision is made to sell the security or securities and make delivery of the
foreign currency. Conversely, it may be necessary to sell on the spot market
some of the foreign currency received upon the sale of the portfolio security or
securities if the market value of such security or securities exceeds the amount
of foreign currency the Fund is obligated to deliver.
Although the Fund has no current intention to do so, the International
Equity Index Fund may write covered call options on up to 100% of the currencies
in its portfolio to offset some of the costs of hedging against fluctuations in
currency exchange rates.
Transaction and position hedging do not eliminate fluctuations in the
underlying prices of the securities which the International Equity Index Fund
owns or expects to purchase or sell. They simply establish a rate of exchange
which one can achieve at some future point in time. Additionally, although these
techniques tend to minimize the risk of loss due to a decline in the value of
the hedged currency, they tend to limit any potential gain which might result
from the increase in the value of such currency.
Currency Forward and Futures Contracts. A forward foreign currency
exchange contract involves 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 as agreed by the parties, at a price set at the time of the contract.
In the case of a cancellable forward contract, the holder has the unilateral
right to cancel the contract at maturity by paying a specified fee. The
contracts are traded in the interbank market conducted directly between currency
traders (usually large commercial banks) and their customers. A forward contract
generally has no deposit requirement, and no commissions are charged at any
stage for trades. A foreign currency futures contract is a standardized contract
for the future delivery of a specified amount of a foreign currency at a future
date at a price set at the time of the contract. Foreign currency futures
contracts traded in the United States are designed by and traded on exchanges
regulated by the CFTC, such as the New York Mercantile Exchange. The
International Equity Index Fund would enter into foreign currency futures
contracts solely for bona fide hedging or other appropriate risk management
purposes as defined in CFTC regulations.
Forward foreign currency exchange contracts differ from foreign
currency futures contracts in certain respects. For example, the maturity date
of a forward contract may be any fixed number of days from the date of the
contract agreed upon by the parties, rather than a predetermined date in a given
month. Forward contracts may be in any amounts agreed upon by the parties rather
than predetermined amounts. Also, forward foreign exchange contracts are entered
into directly between currency traders so that no intermediary is required. A
forward contract generally requires no margin or other deposit.
At the maturity of a forward or futures contract, the Fund may either
accept or make delivery of the currency specified in the contract, or at or
prior to maturity
26
<PAGE> 124
enter into a closing transaction involving the purchase or sale of an offsetting
contract. Closing transactions with respect to forward contracts are usually
effected with the currency trader who is a party to the original forward
contract. Closing transactions with respect to futures contracts are effected on
a commodities exchange; a clearing corporation associated with the exchange
assumes responsibility for closing out such contracts.
Positions in the foreign currency futures contracts may be closed out
only on an exchange or board of trade which provides a secondary market in such
contracts. Although the International Equity Index Fund intends to purchase or
sell foreign currency futures contracts only on exchanges or boards of trade
where there appears to be an active secondary market, there is no assurance that
a secondary market on an exchange or board of trade will exist for any
particular contract or at any particular time. In such event, it may not be
possible to close a futures position and, in the event of adverse price
movements, the Fund would continue to be required to make daily cash payments of
variation margin.
General Characteristics of Currency Futures Contracts
When a Fund purchases or sells a futures contract, it is required to
deposit with its custodian an amount of cash or U.S. Treasury bills known as
"initial margin." The nature of initial margin is different from that of margin
in security transactions in that it does not involve borrowing money to finance
transactions. Rather, initial margin is similar to a performance bond or good
faith deposit that is returned to the Fund upon termination of the contract,
assuming the Fund satisfies its contractual obligation.
Subsequent payments to and from the broker occur on a daily basis in a
process known as "marking to market." These payments are called "variation
margin" and are made as the value of the underlying futures contract fluctuates.
For example, when a Fund sells a futures contract and the price of the
underlying currency rises above the delivery price, the Fund's position declines
in value. The Fund then pays a broker a variation margin payment equal to the
difference between the delivery price of the futures contract and the market
price of the currency underlying the futures contract. Conversely, if the price
of the underlying currency falls below the delivery price of the contract, the
Fund's futures position increases in value. The broker then must make a
variation margin payment equal to the difference between the delivery price of
the futures contract and the market price of the currency underlying the futures
contract.
When a Fund terminates a position in a futures contract, a final
determination of variation margin is made, additional cash is paid by or to the
Fund, and the Fund realizes a loss or gain. Such closing transactions involve
additional commission costs.
In addition to the margin requirements discussed above, transactions in
currency futures contracts may involve the segregation of funds pursuant to
requirements imposed by the Securities and Exchange Commission. Under those
requirements, where a Fund has a long position in a futures or forward contract,
it may be required to establish a segregated account (not with a futures
commission merchant or broker) containing cash or certain liquid assets equal to
the purchase price of the contract (less any margin on deposit). For a short
position in futures or forward contracts held by a Fund, those requirements may
mandate the establishment of a segregated account (not with a futures commission
merchant or broker) with cash or certain liquid assets that, when added to the
amounts deposited as margin, equal the market value of the instruments or
currency underlying the futures or forward contracts (but are not less than the
price at which the short positions were established). However, segregation of
assets is not required if the Fund "covers" a long position. For example,
instead of segregating assets, a Fund, when holding a long position in a futures
or forward contract, could purchase a put option on the same futures or forward
contract with a strike price as high or higher than the price of the contract
held by the Fund. In addition, where a Fund takes short positions, or engages in
sales of call options, it need not segregate assets if it "covers" these
positions. For example, where a Fund holds a short position in a futures or
forward contract, it may cover by owning the instruments or currency
27
<PAGE> 125
underlying the contract. A Fund may also cover such a position by holding a call
option permitting it to purchase the same futures or forward contract at a price
no higher than the price at which the short position was established. Where a
Fund sells a call option on a futures or forward contract, it may cover either
by entering into a long position in the same contract at a price no higher than
the strike price of the call option or by owning the instruments or currency
underlying the futures or forward contract. The Fund could also cover this
position by holding a separate call option permitting it to purchase the same
futures or forward contract at a price no higher than the strike price of the
call option sold by the Fund.
Foreign Currency Options. The International Equity Index Fund may
purchase U.S. exchange-listed call and put options on foreign currencies. Such
options on foreign currencies operate similarly to options on securities.
Options on foreign currencies are affected by all of those factors which
influence foreign exchange rates and investments generally.
The value of a foreign currency option is dependent upon the value of
the foreign currency and the U.S. dollar, and may have no relationship to the
investment merits of a foreign security. Because foreign currency transactions
occurring in the interbank market involve substantially larger amounts than
those that may be involved in the use of foreign currency options, investors may
be disadvantaged by having to deal in an odd lot market (generally consisting of
transactions of less than $1 million) for the underlying foreign currencies at
prices that are less favorable than for round lots.
There is no systematic reporting of last sale information for foreign
currencies and there is no regulatory requirement that quotations available
through dealer or other market sources be firm or revised on a timely basis.
Available quotation information is generally representative of very large
transactions in the interbank market and thus may not reflect relatively smaller
transactions (less than $1 million) where rates may be less favorable. The
interbank market in foreign currencies is a global, around-the-clock market. To
the extent that the U.S. options markets are closed while the markets for the
underlying currencies remain open, significant price and rate movements may take
place in the underlying markets that cannot be reflected in the options market.
Foreign Currency Conversion. Although foreign exchange dealers do not
charge a fee for currency conversion, they do realize a profit based on the
difference (the "spread") between prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign currency to a
Fund at one rate, while offering a lesser rate of exchange should the Fund
desire to resell that currency to the dealer.
Variable and Floating Rate Notes
Variable amount master demand notes, in which the Prime Money Market
Fund, the Tax Exempt Money Market Fund, the Institutional Prime Money Market
Fund, the Bond Funds, and the Equity Funds 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.
Because master demand notes are direct lending arrangements between a Fund and
the issuer, they are not normally traded. Although there is no secondary market
in the notes, a 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 commercial paper. Banc One Advisers or the Sub-Advisor
will consider the earning power, cash flow, and other liquidity ratios of the
issuers of such notes and will continuously monitor their financial status and
ability to meet payment on demand. In determining average weighted portfolio
maturity, a variable amount master demand note will be deemed to have a maturity
equal to the period of time remaining until the principal amount can be
recovered from the issuer through demand.
28
<PAGE> 126
As described in the Prospectuses of the Bond Funds, the Equity Funds,
the Tax-Free Funds, the Ohio Municipal Money Market, the Municipal Money Market,
the Institutional Prime Money Market and the Government Money Market Funds,
subject to their investment objective policies and restrictions, each such Fund
(other than the Equity Index Fund) may acquire variable and floating rate notes.
A variable rate note is one whose terms provide for the adjustment of its
interest rate on set dates and which, upon such adjustment, can reasonably be
expected to have a market value that approximates its par value. A floating rate
note is one whose terms provide for the adjustment of its interest rate whenever
a specified interest rate changes and which, at any time, can reasonably be
expected to have a market value that approximates its par value. Such notes are
frequently not rated by credit rating agencies; however, unrated variable and
floating rate notes purchased by a Fund will be determined by Banc One Advisors
or the Sub-Advisor under guidelines established by the Trust's Board of Trustees
to be of comparable quality at the time of purchase to rated instruments
eligible for purchase under the Fund's investment policies. In making such
determinations, Banc One Advisors or the Sub-Advisor will consider the earning
power, cash flow and other liquidity ratios of the issuers of such notes (such
issuers include financial, merchandising, bank holding and other companies) and
will continuously monitor their financial condition. Although there may be no
active secondary market with respect to a particular variable or floating rate
note purchased by a Fund, the Fund may re-sell the note at any time to a third
party. The absence of such an active secondary market, however, could make it
difficult for the Fund to dispose of the variable or floating rate note involved
in the event the issuer of the note defaulted on its payment obligations, and
the Fund could, for this or other reasons, suffer a loss to the extent of the
default. Variable or floating rate notes may be secured by bank letters of
credit. A Fund will purchase a variable or floating rate instrument to
facilitate portfolio liquidity or to permit investment of the Fund's assets at a
favorable rate of return.
Variable or floating rate notes with stated maturities of more than 397
days may, under the Securities and Exchange Commission's amortized cost rule,
Rule 2a-7 under the 1940 Act, be deemed to have shorter maturities as follows:
(1) Adjustable Rate Government Securities. A Government Security which
is a Variable Rate Security where the variable rate of interest is readjusted no
less frequently than every 762 days shall be deemed to have a maturity equal to
the period remaining until the next readjustment of the interest rate. A
Government Security which is a Floating Rate Security shall be deemed to have a
remaining maturity of one day.
(2) Short-Term Variable Rate Securities. A Variable Rate Security, the
principal amount of which, in accordance with the terms of the security, must
unconditionally be paid in 397 calendar days or less shall be deemed to have
maturity equal to the earlier of the period remaining until the next
readjustment of the interest rate or the period remaining until the principal
amount can be recovered through demand.
(3) Long-Term Variable Rate Securities. A Variable Rate Security, the
principal amount of which is scheduled to be paid in more than 397 days, that is
subject to a Demand Feature shall be deemed to have a maturity equal to the
longer of the period remaining until the next readjustment of the interest rate
or the period remaining until the principal amount can be recovered through
demand.
(4) Short-Term Floating Rate Securities. A Floating Rate Security, the
principal amount of which, in accordance with the terms of the security, must
unconditionally be paid in 397 calendar days or less shall be deemed to have a
maturity of one day.
(5) Long-Term Floating Rate Securities. A Floating Rate Security, the
principal amount of which is scheduled to be paid in more than 397 days, that is
subject to a demand feature, shall be deemed to have a maturity equal to the
period remaining until the principal amount can be recovered through demand.
As used above, a note is "subject to a demand feature" where the Fund
is entitled to receive the principal amount of the note either at any time on no
more than thirty
29
<PAGE> 127
days' notice or at specified intervals not exceeding 397 calendar days and upon
no more than 30 days notice.
Variable and floating rate notes for which no readily available market
exists will be purchased in an amount which, together with securities with legal
or contractual restrictions on resale or for which no readily available market
exists (including repurchase agreements providing for settlement more than seven
days after notice), exceeds 10% (with respect to the Money Market and
Institutional Money Market Funds) or 15% (with respect to all Funds other than
the Money Market and Institutional Money Market Funds) of the Fund's net assets
only if such notes are subject to a demand feature that will permit the Fund to
demand payment of the principal within seven days after demand by the Fund.
There is no limit on the extent to which a Fund may purchase demand notes that
are not illiquid. If not rated, such instruments must be found by Banc One
Advisors or the Sub-Advisor, under guidelines established by the Trust's Board
of Trustees, to be of comparable quality to instruments that are rated high
quality. A rating may be relied upon only if it is provided by a nationally
recognized statistical rating organization that is not affiliated with the
issuer or guarantor of the instruments. For a description of the rating symbols
of S&P, Moody's, and Fitch used in this paragraph, see the Appendix. The above
Funds may also invest in Canadian Commercial Paper which is commercial paper
issued by a Canadian corporation or a Canadian counterpart of a U.S. corporation
and in Europaper which is U.S. dollar denominated commercial paper of a foreign
issuer.
Municipal Securities
As a matter of fundamental policy, under normal market conditions, at
least 80% of the total assets of each of the Municipal Money Market Fund, the
Ohio Municipal Money Market Fund, the Municipal Income Fund, the Intermediate
Tax-Free Bond Fund, the Ohio Municipal Bond Fund, the Texas Tax-Free Bond Fund,
the Kentucky Municipal Bond Fund, the Louisiana Municipal Bond Fund, the West
Virginia Municipal Bond Fund, the Arizona Municipal Bond Fund, and the Tax
Exempt Money Market Fund will be invested in Municipal Securities. Each of the
Prime Money Market, Asset Allocation, Income Bond, Limited Volatility Bond,
Intermediate Bond, Ultra Short-Term Income and Income Funds may also invest in
Municipal Securities if Banc One Advisors determines that such Municipal
Securities offer attractive yields. Municipal Securities are issued to obtain
funds for various public purposes, including the construction of a wide range of
public facilities such as bridges, highways, roads, schools, water and sewer
works, and other utilities. Other public purposes for which Municipal Securities
may be issued include refunding outstanding obligations, obtaining funds for
general operating expenses and obtaining funds to lend to other public
institutions and facilities. In addition, certain debt obligations known as
"private activity bonds" may be issued by or on behalf of municipalities and
public authorities to obtain funds to provide certain water, sewage and solid
waste facilities, qualified residential rental projects, certain local electric,
gas and other heating or cooling facilities, qualified hazardous waste
facilities, high-speed intercity rail facilities, governmentally-owned airports,
docks and wharves and mass commuting facilities, certain qualified mortgages,
student loan and redevelopment bonds and bonds used for certain organizations
exempt from federal income taxation. Certain debt obligations known as
"industrial development bonds" under prior federal tax law may have been issued
by or on behalf of public authorities to obtain funds to provide certain
privately operated housing facilities, sports facilities, industrial parks,
convention or trade show facilities, airport, mass transit, port or parking
facilities, air or water pollution control facilities, sewage or solid waste
disposal facilities, and certain facilities for water supply. Other private
activity bonds and industrial development bonds issued to fund the construction,
improvement, equipment or repair of privately-operated industrial, distribution,
research, or commercial facilities may also be Municipal Securities, but the
size of such issues is limited under current and prior federal tax law. The
aggregate amount of most private activity bonds and industrial development bonds
is limited (except in the case of certain types of facilities) under federal tax
law by an annual "volume cap." The volume cap limits the annual aggregate
principal amount of such obligations issued by or on behalf of all governmental
instrumentalities in the state. The Tax-Free Funds may not be a desirable
investment for "substantial users" of
30
<PAGE> 128
facilities financed by private activity bonds or industrial development bonds or
for "related persons" of substantial users.
Private activity bonds that are issued by or on behalf of public
authorities to finance various privately-operated facilities are included within
the term "Municipal Securities" as used in the Prospectuses of the Tax-Free
Funds (other than the Ohio Municipal Money Market, Ohio Municipal Bond and
Municipal Money Market Funds) and in this Statement of Additional Information
with respect to such Funds only if the interest paid thereon is both exempt from
federal income tax and not treated as a preference item for individuals for
purposes of the federal alternative minimum tax. Private activity bonds that are
subject to federal income tax and are treated as a preference item for
individuals for purposes of the federal alternative minimum tax are included
within the term Taxable Obligations as used in the Prospectuses of the Tax-Free
Funds (other than the Ohio Municipal Money Market Fund, the Ohio Municipal Bond
Fund and Municipal Money Market Fund). As used in the Prospectuses of the Ohio
Municipal Money Market Fund, the Ohio Municipal Bond Fund and the Municipal
Money Market Fund and in this Statement of Additional Information with respect
to such Funds, the term Municipal Securities includes private activity bonds
that are issued by or on behalf of public authorities to finance privately
operated facilities only if the interest paid thereon is exempt from federal
income tax (other than the Federal alternative minimum tax). Private activity
bonds that are subject to federal income tax are included within the term
Taxable Obligations as used in the Prospectuses of the Ohio Municipal Money
Market Fund, the Ohio Municipal Bond Fund, and the Municipal Money Market Fund.
The two principal classifications of Municipal Securities consist of
"general obligation" and "limited" (or revenue) issues. General obligation bonds
are obligations involving the credit of an issuer possessing taxing power and
are payable from the issuer's general unrestricted revenues and not from any
particular fund or source. The characteristics and method of enforcement of
general obligation bonds vary according to the law applicable to the particular
issuer, and payment may be dependent upon appropriation by the issuer's
legislative body. Limited obligation bonds 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 or other specific revenue source. Private
activity bonds and industrial development bonds generally are revenue bonds and
thus not payable from the unrestricted revenues of the issuer. The credit and
quality of such bonds is generally related to the credit of the bank selected to
provide the letter of credit underlying the bond. Payment of principal of and
interest on industrial development revenue bonds is the responsibility of the
corporate user (and any guarantor).
The Funds may also acquire "moral obligation" issues, which are
normally issued by special purpose authorities, and in other tax-exempt
investments including pollution control bonds and tax-exempt commercial paper.
Each Fund may purchase short-term tax-exempt General Obligations Notes, Tax
Anticipation Notes, Bond Anticipation Notes, Revenue Anticipation Notes, Project
Notes, and other forms of short-term tax-exempt loans. Such notes are issued
with a short-term maturity in anticipation of the receipt of tax funds, the
proceeds of bond placements, or other revenues. Project Notes are issued by a
state or local housing agency and are sold by the Department of Housing and
Urban Development. While the issuing agency has the primary obligation with
respect to its Project Notes, they are also secured by the full faith and credit
of the United States through agreements with the issuing authority which provide
that, if required, the federal government will lend the issuer an amount equal
to the principal of and interest on the Project Notes.
There are, of course, variations in the quality of Municipal
Securities, both within a particular classification and between classifications,
and the yields on Municipal Securities depend upon a variety of factors,
including general money market conditions, the financial condition of the
issuer, general conditions of the municipal bond market, the size of a
particular offering, the maturity of the obligations, and the rating of the
issue. The ratings of Moody's and S&P represent their opinions as to the quality
of Municipal Securities. It should be emphasized, however, that ratings are
31
<PAGE> 129
general and are not absolute standards of quality, and Municipal Securities with
the same maturity, interest rate and rating may have different yields while
Municipal Securities of the same maturity and interest rate with different
ratings may have the same yield. Subsequent to its purchase by a Fund, an issue
of Municipal Securities may cease to be rated or its rating may be reduced below
the minimum rating required for purchase by the Fund. Banc One Advisors will
consider such an event in determining whether the Fund should continue to hold
the obligations.
Municipal securities may include obligations of municipal housing
authorities and single-family mortgage revenue bonds. Weaknesses in Federal
housing subsidy programs and their administration may result in a decrease of
subsidies available for payment of principal and interest on housing authority
bonds. Economic developments, including fluctuations in interest rates and
increasing construction and operating costs, may also adversely impact revenues
of housing authorities. In the case of some housing authorities, inability to
obtain additional financing could also reduce revenues available to pay existing
obligations. Single-family mortgage revenue bonds are subject to extraordinary
mandatory redemption at par in whole or in part from the proceeds derived from
prepayments of underlying mortgage loans and also from the unused proceeds of
the issue within a stated period which may be within a year from the date of
issue.
Municipal leases are obligations issued by state and local governments
or authorities to finance the acquisition of equipment and facilities and may be
considered to be illiquid. They may take the form of a lease, an installment
purchase contract, a conditional sales contract, or a participation interest in
any of the above. Each Fund will limit its investment in municipal leases to no
more than 5% of its total assets. The Board of Trustees is responsible for
determining the credit quality of unrated municipal leases, on an ongoing basis,
including an assessment of the likelihood that the lease will not be cancelled.
The exclusion from gross income for Federal income tax purposes for
certain housing authority bonds depends on qualification under relevant
provisions of the Code and on other provisions of Federal law. These provisions
of Federal law contain certain ongoing requirements relating to the cost and
location of the residences financed with the proceeds of the single-family
mortgage bonds and the income levels of tenants of the rental projects financed
with the proceeds of the multi-family housing bonds. While the issuers of the
bonds, and other parties, including the originators and servicers of the
single-family mortgages and the owners of the rental projects financed with the
multi-family housing bonds, covenant to meet these ongoing requirements and
generally agree to institute procedures designed to insure that these
requirements will be consistently met, there is no assurance that the
requirements will be consistently met. The failure to meet these requirements
could cause the interest on the bonds to become taxable, possibly retroactively
from the date of issuance, thereby reducing the value of the bonds and
subjecting Shareholders to unanticipated tax liabilities and possibly requiring
a Fund to sell the bonds at the reduced value. Furthermore, any failure to meet
these ongoing requirements might constitute an event of default under the
applicable mortgage or permit the holder to accelerate payment of the bond or
require the issuer to redeem the bond. In any event, where the mortgage is
insured by the Federal Housing Administration ("FHA"), the consent of the FHA
may be required before insurance proceeds would become payable to redeem the
mortgage subsidy bonds.
Information about the financial condition of issuers of Municipal
Securities may be less available than about corporations having a class of
securities registered under the Securities Exchange Act of 1934.
An issuer's obligations under its Municipal Securities are subject to
the provisions of bankruptcy, insolvency, and other laws affecting the rights
and remedies of creditors, such as the federal bankruptcy code, and laws, if
any, which may be enacted by Congress or state legislatures extending the time
for payment of principal or interest, or both, or imposing other constraints
upon the enforcement of such obligations. The power or ability of an issuer to
meet its obligations for the payment of interest on and principal of its
Municipal Securities may be materially adversely affected by litigation or other
conditions.
32
<PAGE> 130
Such litigation or conditions may from time to time have the effect of
introducing uncertainties in the market for tax-exempt obligations or certain
segments thereof, or may materially affect the credit risk with respect to
particular bonds or notes. Adverse economic, business, legal or political
developments might affect all or a substantial portion of a Fund's Municipal
Securities in the same manner.
From time to time, proposals have been introduced before Congress for
the purpose of restricting or eliminating the federal income tax exemption for
interest on tax exempt bonds, and similar proposals may be introduced in the
future. A recent decision of the United States Supreme Court has held that
Congress has the constitutional authority to enact such legislation. It is not
possible to determine what effect the adoption of such proposals could have on
(i) the availability of Municipal Securities for investment by the Funds, and
(ii) the value of the investment portfolios of the Funds.
The Internal Revenue Code of 1986, as amended (the "Code") imposes
certain continuing requirements on issuers of tax-exempt bonds regarding the
use, expenditure and investment of bond proceeds and the payment of rebates to
the United States of America. Failure by the issuer to comply subsequent to the
issuance of tax-exempt bonds with certain of these requirements could cause
interest on the bonds to become includable in gross income retroactive to the
date of issuance.
The Funds may invest in Municipal Securities either by purchasing them
directly or by purchasing certificates of accrual or similar instruments
evidencing direct ownership of interest payments or principal payments, or both,
on Municipal Securities, provided that, in the opinion of counsel to the initial
seller of each such certificate or instrument, any discount accruing on such
certificate or instrument that is purchased at a yield not greater than the
coupon rate of interest on the related Municipal Securities will to the same
extent as interest on such Municipal Securities be exempt from federal income
tax and state income tax (where applicable) and not treated as a preference item
for individuals for purposes of the federal alternative minimum tax. The Funds
may also invest in Municipal Securities by purchasing from banks participation
interests in all or part of specific holdings of Municipal Securities. Such
participation may be backed in whole or in part by an irrevocable letter of
credit or guarantee of the selling bank. The selling bank may receive a fee from
a Fund in connection with the arrangement. A Fund will not purchase
participation interests unless it receives an opinion of counsel or a ruling of
the Internal Revenue Service that interest earned by it on Municipal Securities
in which it holds such participation interest is exempt from federal income tax
and state income tax (where applicable) and not treated as a preference item for
individuals for purposes of the federal alternative minimum tax.
Demand Features
The Funds (except the Funds of Funds and the Treasury & Agency Fund)
may acquire securities that are subject to puts and standby commitments ("demand
features") to purchase the securities at their principal amount (usually with
accrued interest) within a fixed period (usually seven days) following a demand
by the Fund. The demand feature may be issued by the issuer of the underlying
securities, a dealer in the securities or by another third party, and may not be
transferred separately from the underlying security. The underlying securities
subject to a put may be sold at any time at market rates. The Funds expect that
they will acquire puts only where the puts are available without the payment of
any direct or indirect consideration. However, if advisable or necessary, 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.
Under a "stand-by commitment," a dealer would agree to purchase, at a
Fund's option, specified municipal securities at a specified price. A Fund will
acquire these commitments solely to facilitate portfolio liquidity and does not
intend to exercise its rights thereunder for trading purposes. Stand-by
commitments may also be referred to as put options. A Fund will generally limit
its investments in stand-by commitments to 25% of its total assets.
33
<PAGE> 131
Swaps, Caps and Floors
All of the Bond Funds (except the Limited Volatility Bond Fund and the
Treasury & Agency Fund) and the fixed income portion of the Asset Allocation
Fund may enter into swaps, caps, and floors on various securities (such as U.S.
government securities), securities indexes, interest rates, prepayment rates,
foreign currencies or other financial instruments or indexes, in order to
protect the value of the Fund from interest rate fluctuations and to hedge
against fluctuations in the floating rate market in which the Fund's investments
are traded, for both hedging and non-hedging purposes. While swaps, caps, and
floors (sometimes hereinafter collectively referred to as "swap contracts") are
different from futures contracts (and options on futures contracts) in that swap
contracts are individually negotiated with specific counterparties, the Funds
will use swap contracts for purposes similar to the purposes for which they use
options, futures, and options on futures. Those uses of swap contracts (i.e.,
risk management and hedging) present the Funds with risks and opportunities
similar to those associated with options contracts, futures contracts, and
options on futures. See "Futures Contracts and Related Options;" and "Options."
The Funds may enter into these transactions to manage their exposure to
changing interest rates and other market factors. Some transactions may reduce
each Fund's exposure to market fluctuations while others may tend to increase
market exposure.
Swap contracts typically involve an exchange of obligations by two
sophisticated parties. For example, in an interest rate swap, the Fund may
exchange with another party their respective rights to receive interest, such as
an exchange of fixed rate payments for floating rate payments. Currency swaps
involve the exchange of respective rights to make or receive payments in
specified currencies. Mortgage swaps are similar to interest rate swaps in that
they represent commitments to pay and receive interest. The notional principal
amount, however, is tied to a reference pool or pools of mortgages.
Caps and floors are variations on swaps. The purchase of a cap entitles
the purchaser to receive a principal amount from the party selling the cap to
the extent that a specified index exceeds a predetermined interest rate or
amount. The purchase of an interest rate floor entitles the purchaser to receive
payments on a notional principal amount from the party selling the floor to the
extent that a specified index falls below a predetermined interest rate or
amount. Caps and floors are similar in many respects to over-the-counter options
transactions, and may involve investment risks that are similar to those
associated with options transactions and options on futures contracts.
Because swap contracts are individually negotiated, they remain the
obligation of the respective counterparties, and there is a risk that a
counterparty will be unable to meet its obligations under a particular swap
contract. If a counterparty defaults on a swap contract with a Fund, the Fund
may suffer a loss. To address this risk, each Fund will usually enter into
interest rate swaps on a net basis, which means that the two payment streams
(one from the Fund to the counterparty, one to the Fund from the counterparty)
are netted out, with the Fund receiving or paying, as the case may be, only the
net amount of the two payments. Interest rate swaps do not involve the delivery
of securities, other underlying assets, or principal, except for the purposes of
collateralization as discussed below. Accordingly, the risk of loss with respect
to interest rate swaps entered into on a net basis would be limited to the net
amount of the interest payments that the Fund is contractually obligated to
make. If the other party to an interest rate swap defaults, the Fund's risk of
loss consists of the net amount of interest payments that a Fund is
contractually entitled to receive. In addition, the Fund may incur a market
value adjustment on securities held upon the early termination of the swap. To
protect against losses related to counterparty default, the Funds may enter into
swaps that require transfers of collateral for changes in market value. In
contrast, currency swaps and other types of swaps may involve the delivery of
the entire principal value of one designated currency or financial instrument in
exchange for the other designated currency or financial
34
<PAGE> 132
instrument. Therefore, the entire principal value of such swaps may be subject
to the risk that the other party will default on its contractual delivery
obligations.
In addition, because swap contracts are individually negotiated and
ordinarily non-transferable, there also may be circumstances in which it would
be impossible for a Fund to close out its obligations under the swap contract
prior to its maturity. Under such circumstances, the Fund might be able to
negotiate another swap contract with a different counterparty to offset the risk
associated with the first swap contract. Unless the Fund is able to negotiate
such an offsetting swap contract, however, the Fund could be subject to
continued adverse developments, even after Banc One Advisors has determined that
it would be prudent to close out or offset the first swap contract.
The Funds will not enter into any mortgage swap, interest rate swap,
cap or floor transaction unless the unsecured commercial paper, senior debt, or
the claims paying ability of the other party thereto is rated in one of the top
two rating categories by at least one NRSRO, or if unrated, determined by Banc
One Advisors to be of comparable quality.
The use of swaps involves investment techniques and risks different
from and potentially greater than those associated with ordinary Fund securities
transactions. If Banc One Advisors is incorrect in its expectations of market
values, interest rates, or currency exchange rates, the investment performance
of the Funds would be less favorable than it would have been if this investment
technique were not used.
The Staff of the Securities and Exchange Commission is presently
considering its position with respect to swaps, caps and floors as senior
securities. Pending a determination by the Staff, the Funds will either treat
swaps, caps and floors as being subject to their senior securities restrictions
or will refrain from engaging in swaps, caps and floors. Once the Staff has
expressed a position with respect to swaps, caps and floors, the Funds intend to
engage in swaps, caps and floors, if at all, in a manner consistent with such
position. To the extent the net amount of an interest rate or mortgage swap is
held in a segregated account, consisting of cash or liquid, high grade debt
securities, the Funds and Banc One Advisors believe that swaps do not constitute
senior securities under the Investment Company Act of 1940 and, accordingly,
will not treat them as being subject to each Fund's borrowing restrictions. The
net amount of the excess, if any, of each Fund's obligations over its
entitlements with respect to each interest rate swap will be accrued on a daily
basis and an amount of cash or liquid securities having an aggregate net asset
value at least equal to the accrued excess will be maintained in a segregated
account by the Funds' Custodian.
Structured Instruments
All of the Bond Funds (except the Limited Volatility Bond Fund and the
Treasury & Agency Fund) and the fixed income portion of the Asset Allocation
Fund may invest, from time to time, in one or more structured instruments.
Structured instruments are debt securities issued by agencies of the U.S.
government (such as Ginnie Mae, Fannie Mae, and Freddie Mac), banks,
corporations, and other business entities whose interest and/or principal
payments are indexed to certain specific foreign currency exchange rates,
interest rates, or one or more other reference indexes. Structured instruments
frequently are assembled in the form of medium-term notes, but a variety of
forms are available and may be used in particular circumstances.
The terms of such structured instruments provide that their principal
and/or interest payments are adjusted upwards or downwards to reflect changes in
the reference index while the structured instruments are outstanding. In
addition, the reference index may be used in determining when the principal is
redeemed. As a result, the interest and/or principal payments that may be made
on a structured product may vary widely, depending on a variety of factors,
including the volatility of the reference index and the effect of changes in the
reference index on principal and/or interest payment.
35
<PAGE> 133
While structured instruments may offer the potential for a favorable
rate of return from time to time, they also entail certain risks. Structured
instruments may be less liquid than other debt securities, and the price of
structured instruments may be more volatile. If the value of the reference index
changes in a manner other than that expected by Banc One Advisors, principal
and/or interest payments on the structured instrument may be substantially less
than expected. The Funds will invest only in structured securities that are
consistent with each Fund's investment objective, policies and restrictions and
Banc One Advisors' outlook on market conditions. In some cases, depending on the
terms of the reference index, a structured instrument may provide that the
principal and/or interest payments may be adjusted below zero; however, the
Funds will not invest in structured instruments if the terms of the structured
instrument provide that the Funds may be obligated to pay more than their
initial investment in the structured instrument, or to repay any interest or
principal that has already been collected or paid back. Structured instruments
that are registered under the federal securities laws may be treated as liquid.
In addition, many structured instruments may not be registered under the federal
securities laws. In that event, a Fund's ability to resell such a structured
instrument may be more limited than its ability to resell other Fund securities.
The Funds will treat such instruments as illiquid, and will limit their
investments in such instruments to no more than 15% of each Fund's net assets,
when combined with all other illiquid investments of each Fund. In addition,
although structured instruments may be sold in the form of a corporate debt
obligation, they may not have some of the protection against counterparty
default that may be available with respect to publicly traded debt securities
(i.e., the existence of a trust indenture). In that respect, the risks of
default associated with structured instruments may be similar to those
associated with swap contracts. See "Swaps, Caps and Floors."
New Financial Products
New options and futures contracts and other financial products, and
various combinations thereof, continue to be developed and all of the Bond Funds
(except the Limited Volatility Bond Fund and the Treasury & Agency Fund) and the
fixed income portion of the Asset Allocation Fund may invest in any such
options, contracts and products as may be developed to the extent consistent
with each Fund's investment objective, policies and restrictions and the
regulatory requirements applicable to investment companies.
These various products may be used to adjust the risk and return
characteristics of each Fund's investments. These various products may increase
or decrease exposure to security prices, interest rates, commodity prices, or
other factors that affect security values, regardless of the issuer's credit
risk. If market conditions do not perform consistent with expectations, the
performance of each Fund would be less favorable than it would have been if
these products were not used. In addition, losses may occur if counterparties
involved in transactions do not perform as promised. These products may expose
the Fund to potentially greater return as well as potentially greater risk of
loss than more traditional fixed income investments.
Restricted Securities
Each of the Equity Funds (except the Equity Index Fund and the
International Equity Index Fund), each of the Bond Funds (except the Ohio
Municipal Bond Fund and the Treasury & Agency Fund) and each of the Money Market
Funds may invest in commercial paper issued in reliance on the exemption from
registration afforded by Section 4(2) of the Securities Act of 1933 and other
restricted securities. Section 4(2) commercial paper is restricted as to
disposition under federal securities law and is generally sold to institutional
investors, such as the Funds, who agree that they are purchasing the paper for
investment purposes and not with a view to public distribution. Any resale by
the purchaser must be in an exempt transaction. Section 4(2) commercial paper is
normally resold to other institutional investors like the Funds through or with
the assistance of the issuer or investment dealers who make a market in Section
4(2) commercial paper, thus providing liquidity. The Funds believe that Section
4(2) commercial paper and possibly certain other restricted securities which
meet the criteria for liquidity established by the Trustees are quite liquid.
The Funds intend, therefore, to treat the
36
<PAGE> 134
restricted securities which meet the criteria for liquidity established by the
Trustees, including Section 4(2) commercial paper, as determined by the Funds'
Advisor, as liquid and not subject to the investment limitation applicable to
illiquid securities.
The ability of the Trustees to determine the liquidity of certain
restricted securities is permitted under a Securities and Exchange Commission
("SEC") Staff position set forth in the adopting release for Rule 144A under the
Securities Act of 1933 (the "Rule"). The Rule is a nonexclusive safe-harbor for
certain secondary market transactions involving securities subject to
restrictions on resale under federal securities laws. The Rule provides an
exemption from registration for resales of otherwise restricted securities to
qualified institutional buyers. The Rule was expected to further enhance the
liquidity of the secondary market for securities eligible for resale under Rule
144A. The Funds believe that the Staff of the SEC has left the question of
determining the liquidity of all restricted securities to the Trustees. The
Trustees have directed Banc One Advisors to consider the following criteria in
determining the liquidity of certain restricted securities:
- the frequency of trades and quotes for the security;
- the number of dealers willing to purchase or sell the security
and the number of other potential buyers;
- dealer undertakings to make a market in the security; and
- the nature of the security and the nature of the marketplace
trades.
Certain Section 4(2) commercial paper programs cannot rely on Rule 144a
because, among other things, they were established before the adoption of the
rule. However, the Trustees may determine for purposes of the Trust's liquidity
requirements that an issue of 4(2) commercial paper is liquid if the following
conditions, which are set forth in a 1994 SEC no-action letter, are met:
- The 4(2) paper must not be traded flat or in default as to
principal or interest;
- The 4(2) paper must be rated in one of the two highest rating
categories by a least two nationally recognized statistical
rating organizations ("NRSROs"), or if only one NRSRO rates
the security, by that NRSRO, or if unrated, is determined by
Banc One Advisors to be of equivalent quality; and
- Banc One Advisors must consider the trading market for the
specific security, taking into account all relevant factors,
including but not limited, to whether the paper is the subject
of a commercial paper program that is administered by an
issuing and paying agent bank and for which there exists a
dealer willing to make a market in that paper, or is
administered by a direct issuer pursuant to a direct placement
program; and
- Banc One Advisors shall monitor the liquidity of the 4(2)
commercial paper purchased and shall report to the Board of
Trustees promptly if any such securities are no longer
determined to be liquid if such determination causes a fund to
hold more than 15% (10% for Money Market Funds) of its total
assets in illiquid securities in order for the Board of
Trustees to consider what action, if any, should be taken on
behalf of The One Group, unless Banc One Advisors is able to
dispose of illiquid assets in an orderly manner in an amount
that reduces the Fund's holdings of illiquid assets to less
than 15% (10% for Money Market Funds) of its total assets; and
37
<PAGE> 135
- Banc One Advisors shall report to the Board of Trustees on the
appropriateness of the purchase and retention of liquid
restricted securities under these Guidelines no less
frequently that quarterly.
High Yield Securities
The Income Fund and the Income Bond Fund may invest in high yield
securities. High yield bonds are securities that are rated below investment
grade by the primary rating agencies (BB or lower by S&P and BA or lower by
Moody's). Other terms used to describe such securities include "lower rated
bonds", "non-investment grade bonds" and "junk bonds". Generally, lower rated
debt securities provide a higher yield than higher rated debt securities of
similar maturity, but are subject to a greater degree of risk with respect to
the ability of the issuer to meet its principal and interest obligations.
Issuers of high yield securities may not be as strong financially as those
issuing higher rated securities. These securities are regarded as predominately
speculative. The market value of high yield securities may fluctuate more than
the market value of higher rated securities, since high yield securities tend to
reflect short-term corporate and market developments to a greater extent than
higher rated securities, which fluctuate primarily in response to the general
level of interest rates, assuming that there has been no change in the
fundamental quality of such securities. The market prices of fixed income
securities generally fall when interest rates rise. Conversely, the market
prices of fixed-income securities generally rise when interest rates fall.
Additional risks of high yield securities include limited liquidity and
secondary market support. As a result, the prices of high yield securities may
decline rapidly in the event that a significant number of holders decide to
sell. Changes in expectations regarding an individual issuer, an industry or
high yield securities generally could reduce market liquidity for such
securities and make their sale by the Funds more difficult, at least in the
absence of price concessions. Reduced liquidity also could adversely affect the
Funds' ability to accurately value high yield securities. Issuers of high yield
securities also are more vulnerable to real or perceived economic changes (for
instance, an economic downturn or prolonged period of rising interest rates),
political changes or adverse developments specific to the issuer. Adverse
economic, political or other developments may impair the issuer's ability to
service principal and interest obligations, to meet projected business goals and
to obtain additional financing, particularly if the issuer is highly leveraged.
In the event of a default, the Funds would experience a reduction of their
income and could expect a decline in the market value of the defaulted
securities.
Further, proposed new laws may have a possible negative impact on the
market for high yield bonds. As an example, legislation requires
federally-insured savings and loan associations to divest their investments in
high yield bonds. New legislation, if enacted, could have a material negative
effect on a Fund's net asset value and investment practices.
Finally, the market prices of high-yield securities structured as zero
coupon or pay-in-kind securities are generally affected to a greater extent by
interest rate changes and tend to be more volatile than securities which pay
interest periodically. In addition, zero coupon, pay-in-kind and delayed
interest bonds often do not pay interest until maturity. However, a Fund must
recognize a computed amount of interest income and pay dividends to shareholders
even though it has received no cash. In some instances, the Funds may have to
sell securities to have sufficient cash to pay the dividends.
The high yield securities in which the Funds may invest include the
following:
-- Straight fixed-income debt securities. These include bonds and other
debt obligations which bear a fixed or variable rate of interest
payable at regular intervals and have a fixed or resettable maturity
date. The particular terms of such securities vary and may include
features such as call provisions and sinking funds.
38
<PAGE> 136
-- Zero-coupon debt securities. These bear no interest obligation but
are issued at a discount from their value at maturity. When held to
maturity, their entire return equals the difference between their issue
price and their maturity value.
-- Zero-fixed-coupon debt securities. These are zero-coupon debt
securities which convert on a specified date to interest-bearing debt
securities.
Ohio Municipal Securities
As used in the Trust's Prospectuses and this Statement of Additional
Information, the term "Ohio Municipal Securities" refers to debt securities
which (i) are issued by or on behalf of the State of Ohio or its respective
authorities, agencies, instrumentalities, and political subdivisions, and (ii)
produce interest which, in the opinion of issuer's counsel at the time of
issuance, is exempt from both federal income tax, and Ohio personal income tax.
RISK FACTORS REGARDING INVESTMENTS IN OHIO MUNICIPAL SECURITIES
The economy of Ohio, while becoming increasingly diversified and
increasingly reliant on the service sector, continues to rely in significant
part on durable goods manufacturing, which is largely concentrated in motor
vehicles and equipment, steel, rubber products and household appliances. As a
result, general economic activity in Ohio, as in many other industrial states,
tends to be more cyclical than in some other states and in the nation as a
whole. Agriculture also is an important segment of the Ohio economy, and the
state has instituted several programs to provide financial assistance to
farmers. Although revenue obligations of the state or its political subdivisions
may be payable from a specific source or project, and general obligation debt
may be payable from a specific tax, there can be no assurance that future
economic difficulties and the resulting impact on state and local government
finances will not adversely affect the market value of the Ohio Municipal
Securities in the Funds of the Trust or the ability of the respective obligators
to make timely payment of interest and principal on such obligations.
Since the Ohio Municipal Bond Fund and Ohio Municipal Money Market Fund
invest primarily in Ohio Municipal Securities, the value of each Fund's Shares
may be especially affected by factors pertaining to the economy of Ohio and
other factors specifically affecting the ability of issuers of Ohio Municipal
Securities to meet their obligations. As a result, the value of the Shares of
the Ohio Municipal Bond Fund and the Ohio Municipal Money Market Fund may
fluctuate more widely than the value of Shares of a portfolio investing in
securities relating to a number of different states. The ability of Ohio state,
county, or local governments to meet their obligations will depend primarily on
the availability of tax and other revenues to those governments and on their
fiscal conditions generally. The amounts of tax and other revenues available to
issuers of Ohio Municipal Securities may be affected from time to time by
economic, political and demographic conditions within the state. In addition,
constitutional or statutory restrictions may limit a government's power to raise
revenues or increase taxes. The availability of federal, state, and local aid to
issuers of Ohio Municipal Securities may also affect their ability to meet their
obligations. Payments of principal and interest on limited obligation securities
will depend on the economic condition of the facility or specific revenue source
from whose revenues the payments will be made, which in turn could be affected
by economic, political, and demographic conditions in the state. Any reduction
in the actual or perceived ability to meet obligations on the part of either an
issuer of an Ohio Municipal Security or a provider of credit enhancement for
such Ohio Municipal Security (including a reduction in the rating of its
outstanding securities) would likely affect adversely the market value and
marketability of that Ohio Municipal Security and could adversely affect the
values of other Ohio Municipal Securities as well.
West Virginia Municipal Securities
As used in the Prospectus and this Statement of Additional Information,
the term "West Virginia Municipal Securities" refers to debt securities which
are issued by or
39
<PAGE> 137
on behalf of West Virginia or its respective authorities, agencies,
instrumentalities and political subdivisions and which produce interest which,
in the opinion of counsel for the issuer, is exempt from federal income tax, and
is exempt from West Virginia personal income tax.
RISK FACTORS REGARDING INVESTMENTS IN WEST VIRGINIA MUNICIPAL SECURITIES
West Virginia's economy is dependent upon the coal mining industry. A
reduction in the demand for certain types of coal and increasing governmental
regulation affecting production and usage of coal has had an adverse impact upon
the industry and upon the economy of the state. Notwithstanding the importance
of the coal mining industry to the West Virginia economy, over the course of the
past few years, West Virginia's economy has benefitted from a developing tourism
industry. Tourism directly and indirectly accounts for a material portion of the
West Virginia economy.
In 1989, state taxes were substantially increased by applying sales,
service and use taxes to a vast number of consumer and industrial products and
services that were previously exempt from such tax. In 1993, the state's
gasoline tax was substantially increased. In 1994, full implementation of a
reappraisal of real property for ad valorem tax purposes took effect.
The increase in taxes in recent years and other measures have helped to
bring governmental expenses in line with income; and, at the end of its three
most recent fiscal years, state government has reported a surplus. However, as
in many other states, the state, local governments and school boards continue to
struggle to produce sufficient revenues to fund operations and support public
education.
West Virginia led the nation in unemployment from July, 1991 through
August, 1993. Since then West Virginia's unemployment rate has dropped
significantly, but the state still has one of the highest unemployment rates in
the nation. Although the seasonally adjusted rate in West Virginia declined
slightly from 7.7% in June, 1995 to 7.3% in June, 1996, West Virginia's
unemployment rate is still well above the 5.3% national rate for June, 1996.
Relatively high unemployment continues to reflect weakness in the West Virginia
economy.
Kentucky Municipal Securities
As used in the Prospectus and this Statement of Additional Information,
the term "Kentucky Municipal Securities" refers to debt securities which are
issued by or on behalf of Kentucky or its respective authorities, agencies,
instrumentalities and political subdivisions and which produce interest which,
in the opinion of counsel for the issuer, is exempt from federal income tax, and
is exempt from Kentucky personal income tax.
RISK FACTORS REGARDING INVESTMENTS IN KENTUCKY MUNICIPAL SECURITIES
As of May 31, 1996, Kentucky had an unemployment rate of 4.9%, which
was below the national average of 5.3%. For calendar year 1995, Kentucky's per
capita income ranked 43rd in the nation and was 82% of the national average. The
most current audited financial statements for Kentucky indicated a surplus of
funds in the General Fund of $389,864,000 as of June 30, 1995, which was
$299,295,000 above the budgeted balance.
Unlike the municipal securities of most states, nearly all Kentucky
Municipal Securities are not general obligations of the issuer; rather, payment
depends on revenues generated by the property financed by the securities.
Texas Municipal Securities
As used in the Prospectus and this Statement of Additional Information,
the term "Texas Municipal Securities" refers to debt securities which are issued
by or on behalf of Texas or its respective authorities, agencies,
instrumentalities and political
40
<PAGE> 138
subdivisions and which produce interest which, in the opinion of counsel for the
issuer, is exempt from federal income tax .
RISK FACTORS REGARDING INVESTMENTS IN TEXAS MUNICIPAL SECURITIES
Because the Fund invests primarily in obligations issued by Texas
entities, the Fund's performance is partially dependent upon economic conditions
within the State of Texas generally and upon the economic condition of issuing
governments and their instrumentalities in particular. In the late 1980's,
weakness in the oil and gas related and agricultural sectors of the Texas
economy adversely affected consumer spending, financial institutions, utility
demand, and real estate values within the state. Consequently, the state and
many of its local governments had to increase sales, utilities, and ad valorem
tax rates in order to maintain revenue yields. In the past two years, however,
in contrast to the national economy, business activity in Texas has
strengthened, with employment growth occurring in most sectors. In addition,
Texas' major financial institutions have been recapitalized and bank failures
have generally ceased.
Arizona Municipal Securities
As used in the Prospectus and this Statement of Additional Information,
the term "Arizona Municipal Securities" refers to debt securities which are
issued by or on behalf of Arizona or its respective authorities, agencies,
instrumentalities and political subdivisions and which produce interest which,
in the opinion of counsel for the issuer, is exempt from federal income tax .
RISK FACTORS REGARDING INVESTMENTS IN ARIZONA MUNICIPAL SECURITIES
Arizona's outlook remains uncertain as long as the state does not adopt
a plan regarding long term matching of revenues and expenditures, especially for
education, health care and corrections. Arizona's growth continues to out pace
national averages, for example: (i) the state's 35% population growth during the
1980's was the third fastest rate in the nation, next to Alaska and Nevada; (ii)
Arizona's current population growth is over 2% per year, about twice the
national average; and (iii) the state's unemployment rate currently is 4.5%.
Nonetheless, growth has been expensive for Arizona. During the
high-growth 1980's, combined per capita state and local expenditures climbed to
about 105% of the U.S. average from about 95%, according to data from the
Advisory Commission on Intergovernmental Relations. Between fiscal 1985 and
1990, the state managed five successive years of shortfalls with internal
borrowing, tax accelerations, one-time adjustments, and budget cuts. Since 1991,
the state's budget has been balanced. Although the Arizona State debt limit is
$350,000, and, by its Constitution, Arizona is a "pay as you go" State, the
State finances many capital improvements through revenue bonds, special tax
bonds or lease purchase arrangements, which are not treated as "debts", but
which greatly reduce the pressure on the State's annual budget. For example, the
Arizona Department of Transportation issues bonds supported by excise taxes on
fuel for propulsion of motor vehicles, the State's universities and community
colleges are funded in part through revenue bonds payable solely from tuitions
and student fees, and the State itself, from time to time, finances facilities
through annually renewable lease-purchase agreements. The various political
subdivisions of the state have differing debt limits, and their debts are not
aggregated into the State's debt limit.
In addition, local conditions may materially effect any given issue or
issuer. Such conditions include, without limitation, (1) acts of God (such as
flooding or droughts), (2) mismanagement or bankruptcy of large tax payers or
users of an issuer's services or conduit borrowers who may be the true obligors
of a tax exempt issue, or who may bear a disproportionate share of the taxes,
special assessments or revenues supporting securities issued by an issuer, (3)
environmental enforcement actions instituted by the State or federal government,
(4) mismanagement of the issuer's affairs, (5) damage claims which exceed
insurance coverage or self-insurance reserves
41
<PAGE> 139
(neither the State of Arizona nor its political subdivisions enjoy sovereign
immunity from damage claims), or (6) issuer bankruptcy.
In addition, Arizona's continued population growth depends to some
extent on its ability to manage its water resources, as the State is
predominantly arid. Specifically, the great bulk of Arizona's population, and
the area wherein most future growth is expected to occur, is located in three
central Arizona counties, i.e. Maricopa (including the greater Phoenix
metropolitan area), Pima (including the Tucson metropolitan area), and Pinal
Counties.
To a great extent continued growth in these counties will depend on
continued importation of water from the Colorado River. This is accomplished
through the Central Arizona Project, a federal water reclamation project, a
major portion (2 to 2.5 billion dollars) of which must be repaid through water
sales to, and taxes levied on, the water users in such counties. The actual
amount to be repaid is now the subject of litigation, which can be expected to
continue for several years. Construction of the Central Arizona Project was
declared to be substantially complete in October of 1993.
Arizona's share of Colorado River water, although adjudicated by the
U.S. Supreme Court, is, to some extent, sought by the States of California and
Nevada who have expressed interest in gaining access to that portion of
Arizona's share not being put to beneficial use within the State. Arizona demand
for Central Arizona Project water is currently in the range of 35 to 40% of
Project capacity. The long range success of either California or Nevada's
position cannot be determined at this time.
There is litigation pending in Arizona which could have material
effects on the value of school district bonds. In the Roosevelt Elementary
School District case, plaintiffs have alleged a failure on behalf of the State
to ensure that school facilities in districts with lower assessed valuations are
properly capitalized, in line with uniformly applied objective standards. The
Arizona Supreme Court ruled that Arizona's statutory financing scheme for public
education is not in compliance with the Arizona Constitution.
In 1996, the Arizona Legislature adopted legislation appropriating
additional state funding for school districts. It is unclear whether, when or in
what form the Arizona Legislature may further respond to the Court's direction
in Roosevelt to enact appropriate school budget and finance laws, nor can any
assurance be given that the Supreme Court will approve any such legislative
response or that the Supreme Court will not take further action in this matter,
either before or after any legislative response. The effect of any such
legislative or judicial action cannot be determined at this time, but such
action may have future material effects on the financial operations of Arizona
School Districts.
In the Creighton Elementary School District case, taxpayers within
Creighton Elementary School District No. 14 of Maricopa County, Arizona (the
"Creighton District"), brought suit in the Superior Court of Maricopa County
against the Creighton District on the basis that the outstanding principal
amount of bonds previously issued by the Creighton District, together with
premium received in connection with the issuance of such bonds, should be
treated as debt for constitutional and statutory debt limit purposes. The
plaintiffs sought to enjoin the issuance of additional bonds, arguing that
accumulated initial issue premium should be treated as debt for constitutional
debt limit purposes. This premium, associated with the issuance of prior
Creighton District Bonds, if counted as debt, would, plaintiffs contended, cause
the bonds sought to be issued to exceed the Creighton District's debt limit. On
April 18, 1996, the Court entered a judgment in favor of the taxpayers,
enjoining the issuance of additional Creighton District Bonds. In a subsequent
minute entry, the court stated that the premium to be treated as debt is
determined on the amount the underwriter paid to the Creighton District for the
bonds in question and not on the price for which the underwriter resold such
bonds. In addition, the court has also subsequently stated that the premium
treated as debt attributable to each maturity is retired upon the payment of the
principal amount of the applicable maturity. It is not clear if, pursuant to the
judgment against the Creighton District, all or part of any premium received by
the
42
<PAGE> 140
Creighton District is subject to constitutional and statutory requirements other
than debt limits, such as the requirement for voter authorization. The judgment
was not appealed by the Creighton District. Many school districts in Arizona
have outstanding obligations (i.e. obligations, wherein large initial issue
premiums were received) similar to that of the Creighton District.
Notwithstanding such litigation, issuer's counsel, representing school
districts has or will issue an unqualified opinion with respect to the validity,
enforceability and tax-exempt status of School District Bonds before such Bonds
are acquired by the fund. The standard of certainty applicable to such opinion
is that it would be unreasonable for a court to hold to the contrary to matters
addressed therein.
The Arizona Legislature has passed legislation with respect to the
treatment of premium and debt (the "Act"). Under the Act, the outstanding
indebtedness of a jurisdiction is equal to the total principal amount of all
bonds outstanding at the time of calculation. Under this legislation, premium is
not counted as debt, but the amount of premium permitted for bonds issued after
the Act's enactment is limited to the greater of 2% of the par value of the bond
issue or $100,000. The Act further validated all then outstanding general
obligation and general obligation refunding Bonds which might have been subject
to challenge after the Creighton ruling.
It is not known whether the Act will be challenged in court or whether,
if challenged, all or any portion of the act would be upheld in a court.
Louisiana Municipal Securities
As used in the Prospectus and this Statement of Additional Information,
the term "Louisiana Municipal Securities" refers to debt securities which are
issued by or on behalf of Louisiana or its respective authorities, agencies,
instrumentalities and political subdivisions and which produce interest which,
in the opinion of counsel for the issuer, is exempt from federal income tax .
RISK FACTORS REGARDING INVESTMENTS IN LOUISIANA MUNICIPAL SECURITIES
Louisiana's general obligation bonds are currently rated Baa1 by
Moody's Investors Service, Inc. ("Moody's") and A minus by Standard and Poor's
Rating Group ("S&P"). Louisiana's ratings reflect an ongoing recovery process
from the severe financial problems which developed after oil prices declined in
the mid-to-late 1980's. Also, both rating agencies have commended the State for
enacting constitutional reforms in the Fall of 1993 that curb borrowing and
require that non-recurring revenues be applied to debt reduction. However,
Louisiana remains one of the weakest states in terms of its credit fundamentals.
While ratings of individual cities, parishes, agencies and special districts
vary, most Louisiana issuers have been affected to some degree by Louisiana's
economy.
Through the oil boom of the late 1970s and early 1980s, Louisiana's
labor force and employment grew steadily, as did its financial position. By June
30, 1981, the General Fund had run several years of operating surpluses,
bringing the ending fund balance to $839.5 million, a sizeable 16% of operating
expenditures. When the oil industry weakened, economic growth slowed and
operating deficits occurred, Louisiana's undesignated General Fund deficit
reached $512 million in fiscal 1988 (ended June 30) and the fund balance was a
negative $377 million.
To address its deficits, Louisiana created the Louisiana Recovery
District in 1988, which sold $979 million revenue bonds secured by (i) the
revenues derived from the Recovery District's 1% statewide sales and use tax,
and (ii) all funds and accounts held under the Recovery District's general bond
resolution and all investment earnings on such funds and accounts. As of
December 31, 1994, the principal amount of all these bonds (including bonds
issued to defease certain portions of the original bond issue) was $486,795
million. Article VI, Section 30.1 of the State Constitution, effective November
3, 1994, prohibits the Recovery District from issuing additional bonds except
43
<PAGE> 141
to refund bonds at a lower effective interest rate. All bonds of the Recovery
District have been retired.
During the period from fiscal year 1990-91 through fiscal year 1994-95,
the state experienced operating budget surpluses in four of the five fiscal
years. The table below sets forth in summary fashion the condition of the
State's General Fund from fiscal years 1990-91 through 1994-95.
<TABLE>
<CAPTION>
1994-95(1) 1993-94 1992-93 1991-92(2) 1990-91
---------- ------- ------- ---------- -------
<S> <C> <C> <C> <C> <C>
Total Revenue $ 10,515,148 $10,674,052 $10,655,246 $ 8,743,623 $ 7,603,457
Total Expenditures 10,721,280 10,570,658 10,344,339 9,249,014 7,917,823
Net Other Financing Sources 24,607 25,698 8,501 18,960 0
Excess (Deficiency) of Revenues and
Other Sources Over Expenditures
and Other Uses (181,525) 129,102 319,408 (485,431) (314,366)
Beginning Fund Balance 594,920 457,909 50,013 535,906 841,428
Fund Balance Adjustments 13,764 7,909 88,488 538 8,844
Ending Fund Balance 427,159 594,920 457,909 50,013 535,906
Undesignated Fund Balance 145,689 212,941 101,138 (83,342) 417,983
</TABLE>
Note: For purposes of this comparison, transfers have been reclassified as
revenue/expenditure
(1) Approximately $106 million in beginning undesignated fund balance was
utilized to defease future debt service attributable to fiscal year
1995-96 as described below.
(2) Included in fiscal year 1992-93 are the Office of Risk Management and
State Employees Group Benefits. The fund balance in fiscal year
1991-1992 was not restated to reflect this change.
Fiscal year 1989-90 ended with a small operating surplus of $47
million, which included $13 million of adjustments. This $47 million, when added
to the $655 million balance from the prior fiscal year, brought the accumulated
surplus to $702 million as of June 30, 1990.
Approximately $284 million of the 1989-90 surplus was ultimately used
to fund the fiscal year 1990-91 budget. As a result, the State ended the 1990-91
fiscal year with an accumulated General Fund surplus of $417.98 million.
Upon the actual completion of the fiscal year 1991-1992, it was learned
that the State's General Fund actually ended fiscal year 1991-92 with an
undesignated fund balance deficit of $83 million. This shortfall was eliminated
within the 1992-93 budgetary fiscal cycle by utilizing a set aside against the
total balance available for appropriations, resulting from the official
projections of the Revenue Estimating Conference, prior to any budget adjustment
approval submitted to the Joint Legislative Committee on the Budget.
The State ended the fiscal year 1992-93 with a positive undesignated
fund balance in its General Fund of $101 million. During 1994, $30.6 million of
the surplus funds were utilized to cover known shortfalls in current year
program operations. As noted in the table above, the State ended the fiscal year
1993-94 with an operating surplus of $129 million dollars. This amount together
with the prior year fund balance of $101 million and reserve changes left an all
unreserved-undesignated balance in the General Fund of $212.9 million.
The State began fiscal year 1994-95 with a General Fund balance of $594
million. At the time the projections of the Revenue Estimating Conference for
fiscal year 1993-94 were published, the undesignated fund balance was reflected
at $212 million. Subsequent to publication, it was determinate that $106 million
of the $212 million
44
<PAGE> 142
was, in fact, designated for other mandated purposes and was not available for
general operating purposes. The remaining $106 million was subsequently utilized
prior to June 30, 1995, to structure a current portfolio that was utilized to
defease a portion of the State's fiscal year 1994-95 general obligation debt
service requirement, which freed an equivalent amount of projected general fund
revenues for fiscal year 1994-95 to be utilized to cover normal operating costs.
The State's General Fund has an operating loss (on a generally accepted
accounting principles basis) of $181 million in fiscal year 1994-95 (on a
budgetary basis, this balance would be reduced by those fund balances utilized
to structure the aforementioned portfolio). As a result of operations and
inventory valuation changes, the State General Fund balance, as of June 30,
1996, declined to $427 million, of which $145 million was undesignated or
reserved for a future purpose.
The current general fund expenditure authorizations necessary to
continue all existing programs through fiscal year 1995-96 is approximately
$4,912 million, inclusive of currently known supplemental appropriations needs.
The revenue estimating conference has adopted its revised estimate of revenues
for fiscal year 1995-96 in the amount of $4,970.7 million. In addition, General
Fund revenues of $18.6 million were carried forward from fiscal year 1994-95,
making a total of $4,989.3 million available for General Fund expenditures in
fiscal year 1995-96. The $76.8 million balance between available revenues and
projected expenditures is available for unanticipated supplemental needs or
retirement of debt.
The State's budget projections may also be impacted by certain matters
relating to the Medicaid program. In fiscal year 1995-96, the State has dealt
with a Medicaid revenue shortfall by reducing disproportionate share payments to
health care providers, implementing budget cuts of approximately $300 million in
the Medicaid program. Proposed changes in the design of the Medicaid program at
the federal level (i.e. elimination of "Medicaid" and adoption of "Medigrant")
may cause the State to make additional modifications to its Medicaid program in
order to continue to provide necessary medical services to the indigent
population of the State in future years. The State submitted a Section 1115
Waiver to the U.S. Department of Health and Human Services ("DHHS") on December
31, 1994, and subsequently amended the waiver to include public health
maintenance organizations. The proposed funding in the amended waiver was
unacceptable to DHHS. Currently, the waiver application is in a pending status
and the State is working with DHHS to achieve an acceptable funding mechanism.
In 1996, the Louisiana Legislature passed a "local option" bill which
will permit voters in each parish to decide at the general election to be held
November 1996 whether, and in what forms, gaming will be permitted in their
parish. Each form of gaming will be considered separately in each parish. If the
voters decide to prohibit a form of gaming in a parish, those currently holding
licenses for that form of gaming will be permitted to continue operations only
until the license expires; provided, however, video draw poker devices, which
are licensed for one-year time periods, will be permitted to be renewed only two
more times. The Louisiana Lottery and the Powerball Lottery, which are permitted
by the State Constitution, will not be included in the referendum. It cannot be
predicted whether any particular form of gaming will be prohibited in any or all
of the parishes and to what extent the revenues of the State will be affected.
If all forms of gaming are rejected in every parish of the State, however, the
impact on the State budget will be gradual, as the "local option" bill provides
for a "phasing out" of gaming as described above.
Economically, Louisiana will continue to be affected by world energy
markets. Approximately 15% of the nation's crude oil and approximately 28% of
its natural gas are produced in Louisiana. In the past the State has estimated
that up to 25% of its economy is directly or indirectly related to energy. This
is despite the fact that only 5.5% of employment is in oil and gas extraction,
chemicals and allied products and petroleum refining. Oil and oil related jobs
also tend to be at relatively high wages, magnifying their economic effect.
Similarly, although severance taxes and royalties accounted for almost 4.3% of
operating revenues for fiscal year 1993-1994, compared with almost 25% ten years
ago, energy related activity affects individual and corporate
45
<PAGE> 143
taxes, which together with sales taxes account for 21.3% of general revenues.
Unemployment declined in Louisiana from 12% in 1987 to 6.2% in 1990. This was
due in part to increased employment but also to out-migration of population and
a decline in labor force. Louisiana's jobless rate has since risen to 7.4% as of
December 31, 1994. The comparable national unemployment rate was 6.8%. In
addition to oil and gas, major contributors to Louisiana's economy include
chemical production, shipping, agriculture and tourism.
Louisiana's debt burden is well above that of other states, while
wealth and income indicators are below the national average. In 1993, for
example, the most recent year for which data is available, Louisiana's per
capita personal income was 80% of the United States average. According to
Moody's, Louisiana's State-level tax supported debt is the sixth highest as a
percentage of personal income and eighth highest on a per-capita basis.
Municipal obligations are subject to the provisions of bankruptcy,
insolvency and other laws affecting the rights and remedies of creditors, such
as the Federal Bankruptcy Code, and laws, if any, which may be enacted by
Congress or State legislatures extending the time for payment of principal or
interest, or both, or imposing other constraints upon enforcement of such
obligations or upon municipalities to levy taxes. There is also the possibility
that as a result of litigation or other conditions the power or ability of any
one or more issuers to pay when due principal or interest on its or their
municipal obligations may be materially affected.
INVESTMENT RESTRICTIONS
Unless otherwise specifically noted, the following investment
restrictions may be changed with respect to a particular Fund only by a vote of
a majority of the outstanding Shares of that Fund. See "ADDITIONAL INFORMATION--
Miscellaneous" in this Statement of Additional Information.
None of the Funds may:
1. Purchase securities on margin, sell securities short, or participate
in a joint or joint and several basis in any securities trading account, except,
in the case of the Municipal Bond Funds, for use of short-term credit necessary
for clearance of purchases of portfolio securities.
2. Underwrite the securities of other issuers except to the extent that
a Fund may be deemed to be an underwriter under certain securities laws in the
disposition of "restricted securities."
3. Purchase or sell commodities or commodity contracts (including
futures contracts), except that for bona fide hedging and other permissible
purposes: (i) the Equity, Bond and International Equity Index Funds may purchase
or sell financial futures contracts and (except for the Treasury & Agency Fund)
may purchase call or put options on financial futures contracts, and (ii) the
International Equity Index Fund may purchase or sell foreign currency futures
contracts and foreign currency forward contacts, and may purchase put or call
options on foreign currency futures contracts and on foreign currencies on
appropriate U.S. exchanges, and may purchase or sell foreign currency on a spot
basis.
4. Except for the Treasury & Agency Fund, Purchase participation or
other direct interests in oil, gas or mineral exploration or development
programs (although investments by all Funds other than the U.S. Treasury
Securities Money Market, Treasury Money Market, Treasury Only Money Market and
Government Money Market Funds in marketable securities of companies engaged in
such activities are not hereby precluded).
5. Invest in any issuer for purposes of exercising control or
management.
6. Purchase securities of other investment companies except as
permitted by the 1940 Act and rules, regulations and applicable exemptive relief
thereunder.
46
<PAGE> 144
7. Purchase or sell real estate (however, each Fund except the Money
Market Funds may, to the extent appropriate to its investment objective,
purchase securities secured by real estate or interests therein or securities
issued by companies investing in real estate or interests therein).
8. Borrow money or issue senior securities, except that each Fund may
borrow from banks or enter into reverse repurchase agreements for temporary
purposes in amounts up to 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 the Fund's total assets at
the time of its borrowing. A Fund will not purchase securities while its
borrowings (including reverse repurchase agreements) in excess of 5% of its
total assets are outstanding.
In addition, the U.S. Treasury Securities Money Market, the Prime Money
Market and the Institutional Money Market Funds may not:
1. Buy common stocks or voting securities.
In addition, the U.S. Treasury Securities Money Market, the Prime Money
Market, and the Government Money Market Funds may not:
1. Buy State, municipal, or private activity bonds.
The following investment restrictions are non-fundamental except as
noted otherwise and therefore can be changed by the Board of Trustees without
prior shareholder approval.
No Fund may:
1. Purchase or retain securities of any issuer if the officers or
Trustees of the Trust or the officers or directors of its Advisor owning
beneficially more than one-half of 1% of the securities of such issuer together
own beneficially more than 5% of such securities.
2. Invest more than 5% of a Fund's total assets in the securities of
issuers which together with any predecessors have a record of less than three
years continuous operation. (This restriction shall not apply to investments in
asset-backed securities and other mutual funds authorized for purchase by such
Fund, as described in its Prospectus. For purposes of this restriction, an
"Asset-Backed Security" means a debt obligation issued by a limited-purpose
entity whose primary business activity is acquiring and holding financial
assets.) (This restriction is fundamental with respect to the Ohio Municipal
Money Market Fund.)
3. Invest in illiquid securities in an amount exceeding, in the
aggregate 15% of the Fund's net assets (10% of net assets for a Fund that is a
Money Market Fund). An illiquid security is a security which cannot be disposed
of promptly (within seven days) and in the usual course of business without a
loss, and includes repurchase agreements maturing in excess of seven days, time
deposits with a withdrawal penalty, non-negotiable instruments and instruments
for which no market exists. (This restriction is fundamental with respect to the
Ohio Municipal Money Market Fund.)
The Equity Funds, the Municipal Bond Funds, and the Institutional Money
Market Funds may not:
1. Acquire securities that are subject to restrictions on resale
because they are not registered under the Securities Act of 1933, if
such investment would exceed 5% of the Fund's total assets.
Each of the Asset Allocation and Intermediate Bond Funds may not:
47
<PAGE> 145
1. Invest more than 15% of its net assets in securities with legal or
contractual restrictions on resale. However, this restriction shall not
apply to securities eligible for resale to institutional buyers under
Rule 144A of the Securities and Exchange Commission or to securities
that become a part of the Fund's assets through merger, exchange or
recapitalization involving securities already held in a Fund.
None of the Money Market Funds or Institutional Money Market Funds may:
1. Write or purchase call options.
2. Write or purchase put options except that each of the Ohio Municipal
Money Market, Municipal Money Market and Tax-Exempt Money Market Funds
may acquire puts with respect to Municipal Securities in its portfolio
and sell those puts in conjunction with a sale of those Municipal
Securities.
The Municipal Income Fund, Ohio Municipal Money Market Fund, Municipal Money
Market Fund and the Tax-Exempt Money Market Fund may not:
1. Write or sell puts, calls, straddles, spreads or combinations
thereof except that a Fund may acquire puts with respect to Municipal
Securities in its portfolio and sell those puts in conjunction with a
sale of those Municipal Securities.
PORTFOLIO TURNOVER
The portfolio turnover rate for each Fund is calculated by dividing the
lesser of purchases or sales of portfolio securities for the year by the monthly
average value of the portfolio securities. The calculation excludes all
securities whose maturities at the time of acquisition were one year or less.
Thus, for regulatory purposes, the portfolio turnovers with respect to the Money
Market Funds were zero for the period from the commencement of their respective
operations to June 30, 1996 and are expected to remain zero, and the portfolio
turnover rate with respect to the Institutional Money Market Funds is expected
to be zero.
The portfolio turnover rates of the Funds for the fiscal years ended
June 30, 1996 and 1995 were as follows:
THE ONE GROUP PORTFOLIO TURNOVER
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
--------------------------
FUND 1996 1995
---- ---- ----
<S> <C> <C>
U.S. Treasury Securities Money Market 0%** 0%**
Prime Money Market 0%** 0%**
Municipal Money Market 0%** 0%**
Ohio Municipal Money Market 0%** 0%**
Income Equity 14.92% 4.03%
Disciplined Value 90.55% 176.66%
Growth Opportunities 435.30% 132.63%
Equity Index 9.08% 2.71%
Large Company Value 186.84% 203.13%
Asset Allocation 73.38% 115.36%
International Equity Index 6.28% 4.67%
Large Company Growth 35.51% 14.22%
Income Bond 95.52% 262.25%
Limited Volatility Bond 75.20% 76.43%
Intermediate Tax-Free Bond 111.58% 199.76%
Municipal Income 83.17% 66.02%
Ohio Municipal Bond 24.61% 77.69%
Government Bond 62.70% 106.14%
</TABLE>
48
<PAGE> 146
<TABLE>
<S> <C> <C>
Ultra Short-Term Income 67.65% 2.91%
Intermediate Bond 101.06% 99.71%***
Treasury Only Money Market 0%** 0%**
Government Money Market 0%** 0%**
Kentucky Municipal Bond 16.78% 19.75%****
Institutional Prime Money Market NA* NA*
Treasury Money Market NA* NA*
Tax-Exempt Money Market NA* NA*
Arizona Municipal Bond NA* NA*
Texas Tax-Free Bond NA* NA*
W. Virginia Municipal Bond NA* NA*
Louisiana Municipal Bond 16.72%++ 28%+
Value Growth 65.21%++ 77%+
Gulf South Growth 59.57%++ 65%+
Investor Growth NA* NA*
Investor Growth & Income NA* NA*
Investor Aggressive Growth NA* NA*
Investor Conservative Growth NA* NA*
Investor Balanced NA* NA*
Investor Fixed Income NA* NA*
Income NA* NA*
</TABLE>
* As of June 30, 1996, the Fund had not commenced operations.
** Turnover rate is not applicable to money market funds.
*** Portfolio turnover rate for the period from November 1, 1994 to June 30,
1995.
**** Portfolio turnover rate for the period from January 20, 1995 to June 30,
1995 for Class A and Fiduciary Class shares and from March 16, 1995
(commencement of operations) to June 30, 1995 for Class B shares. For the
period from February 1, 1994 to January 19, 1995 the portfolio turnover
rate was 10.00% and for the period from March 12, 1993 to January 31, 1994
the portfolio turnover rate was 5.00%.
+ Portfolio turnover rate for the fiscal year ended November 30, 1995.
++ Portfolio turnover rate for the period December 1, 1995 to June 30, 1996.
The high portfolio turnover rates for the fiscal year ended June 30,
1996 for the Growth Opportunities Fund, Large Company Value Fund, Intermediate
Tax-Free Bond, and Intermediate Bond Fund resulted from various factors,
including some or all of the following: investment strategies, decreasing
interest rates, unusually high market volatility and significant growth of the
Funds. In addition, portfolio turnover in the Growth Opportunities Fund in 1996
also was higher than normal due to the conversion to a new benchmark
representing a mixture of mid-cap and small-cap stocks. This coincides with the
name change of the Fund from the Small Growth Fund to the Growth Opportunities
Fund. Portfolio turnover may vary greatly from year to year as well as within a
particular year, and may also be affected by cash requirements for redemptions
of Shares and by requirements which enable the Trust to receive certain
favorable tax treatments. Portfolio turnover will not be a limiting factor in
making portfolio decisions.
ADDITIONAL TAX INFORMATION CONCERNING ALL FUNDS OF THE TRUST
It is the policy of each Fund of the Trust to meet the requirements
necessary to qualify as a "regulated investment company" under Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code"). By following such
policy, each Fund expects to eliminate or reduce to a nominal amount the federal
income taxes to which it may be subject.
In order to qualify as a regulated investment company, each Fund of the
Trust must, among other things, (1) derive at least 90% of its gross income from
dividends, interest, payments with respect to securities loans, and gains from
the sale or other disposition of stock or securities, foreign currencies or
other income (including gains from options, futures or forward contracts)
derived with respect to its business of
49
<PAGE> 147
investing in stock, securities or currencies, (2) derive less than 30% of its
gross income from the sale or other disposition of stock, securities, options,
futures, forward contracts, and certain foreign currencies (or certain options,
futures, or forward contracts on foreign currencies) held for less than three
months, and (3) diversify its holdings so that at the end of each quarter of its
taxable year (i) at least 50% of the market value of the Fund's assets is
represented by cash or cash items, United States government securities,
securities of other regulated investment companies, and other securities
limited, in respect of any one issuer, to an amount not greater than 5% of the
value of the Fund's assets and 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of its assets is invested in the
securities of any one issuer (other than United States government securities or
the securities of other regulated investment companies) or of two or more
issuers that the Fund controls and that are engaged in the same, similar, or
related trades or businesses. These requirements may restrict the degree to
which the Fund may engage in short-term trading and limit the range of the
Fund's investments. If a Fund of the Trust qualifies as a regulated investment
company, it will not be subject to federal income tax on the part of its income
distributed to Shareholders, provided the Fund distributes during its taxable
year at least (a) 90% of its taxable net investment income (very generally,
dividends, interest, certain other income, and the excess, if any, of net
short-term capital gain over net long-term loss), and (b) 90% of the excess of
(i) its tax-exempt interest income (if any) less (ii) certain deductions
attributable to that income. Each Fund of the Trust intends to make sufficient
distributions to Shareholders to qualify for this special tax treatment.
If a Fund failed to qualify as a regulated investment company receiving
special tax treatment in any taxable year, the Fund would be subject to tax on
its taxable income at corporate rates, and all distributions from earnings and
profits, including any distributions of net tax-exempt income and net long-term
capital gains, would be taxable to Shareholders as ordinary income. In addition,
the Fund could be required to recognize unrealized gains, pay substantial taxes
and interest and make substantial distributions before requalifying as a
regulated investment company and being accorded special tax treatment.
Regulated investment companies that do not distribute in each calendar
year (regardless of whether they otherwise have a non-calendar taxable year) an
amount equal to 98% of their "ordinary income" (as defined) for the calendar
year, plus 98% of their capital gain net income (as defined) for the one-year
period ending on October 31 of such calendar year, plus any undistributed
amounts from the previous year are subject to a non-deductible excise tax equal
to 4% of the undistributed amounts. For purposes of the excise tax, a Fund is
treated as having distributed any amount on which it is subject to income tax
for any taxable year ending in such calendar year. Each Fund of the Trust
intends to make sufficient distributions to avoid liability for the excise tax.
Shareholders of the Funds will generally pay federal income tax on
distributions received from the Funds. Dividends that are attributable to a
Fund's net investment income will be taxed to shareholders as ordinary income.
Distributions of net capital gain that are designated by a Fund as capital gain
dividends will generally be taxable to a Shareholder receiving such
distributions as long-term capital gain regardless of how long the Shareholder
has held its shares. Distributions in excess of a Fund's current and accumulated
"earnings and profits" will be treated by a Shareholder receiving such
distributions as a return of capital to the extent of such Shareholder's basis
in its Shares in the Fund, and thereafter as capital gain. A return of capital
is not taxable, but reduces a Shareholder's basis in its shares. Shareholders
not subject to tax on their income generally will not be required to pay tax on
amounts distributed to them. The sale, exchange or redemption of Fund shares by
a Shareholder may give rise to a taxable gain or loss to that Shareholder. In
general, any gain or loss realized upon a taxable disposition of shares will be
treated as long-term capital gain or loss if the Shareholder has held the shares
for more than 12 months, and otherwise as short-term capital gain or loss.
However, if a Shareholder sells shares at a loss within six months of purchase,
any loss will be disallowed for Federal income tax purposes to the extent of any
exempt-interest dividends received on such shares.
50
<PAGE> 148
In addition, any loss (not already disallowed as provided in the preceding
sentence) realized upon a taxable disposition of shares held for six months or
less will be treated as long-term to the extent of any long-term capital gain
distributions received by the Shareholder with respect to the shares. All or a
portion of any loss realized upon a taxable disposition of Fund shares will be
disallowed if other Fund shares are purchased within 30 days before or after the
disposition. In such a case, the basis of the newly purchased shares will be
adjusted to reflect the disallowed loss.
Certain investment and hedging activities of the Funds, including
transactions in options, futures contracts, hedging transactions, forward
contracts, straddles, foreign currencies, and foreign securities will be subject
to special tax rules. In a given case, these rules may accelerate income to the
Fund, defer losses to the Fund, cause adjustments in the holding periods of the
Fund's securities, convert short-term capital losses into long-term capital
losses, or otherwise affect the character of the Fund's income. These rules
could therefore affect the amount, timing and character of distributions to
Shareholders and cause differences between a Fund's book income and taxable
income. Income earned as a result of these transactions would, in general, not
be eligible for the dividends-received deduction or for treatment as
exempt-interest dividends when distributed to Shareholders. The Fund will
endeavor to make any available elections pertaining to such transactions in a
manner believed to be in the best interest of the Fund.
Certain securities purchased by the Funds (such as STRIPS, CUBES, TRS,
TIGRS, and CATS), as defined in the Description of Permitted Investments in the
Funds' Prospectuses, are sold at original issue discount and thus do not make
periodic cash interest payments. Similarly, zero-coupon bonds do not make
periodic interest payments. A Fund will be required to include as part of its
current income for tax purposes 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 substantially all of its net
investment income to its Shareholders (including such imputed interest), the
Fund may have to sell portfolio securities in order to generate the cash
necessary for the required distributions. Such sales may occur at a time when
Banc One Advisors would not have chosen to sell such securities and may result
in a taxable gain or loss.
A Fund will be required in certain cases to withhold and remit to the
United States Treasury 31% of taxable dividends or of gross proceeds from
redemptions paid to any individual Shareholder who has provided to the Fund
either an incorrect tax identification number or no number at all, or who is
subject to withholding by the Internal Revenue Service for failure properly to
report payments of interest or dividends. This withholding, known as backup
withholding, is not an additional tax, and any amounts withheld may be credited
against the Shareholder's ultimate U.S. tax liability.
The foregoing is only a summary of some of the important federal tax
considerations generally affecting purchasers of Shares of a Fund of the Trust.
Further tax information regarding the Tax-Free Funds and the International
Equity Index Fund is included in following sections of this Statement of
Additional Information. No attempt is made to present herein a complete
explanation of the federal income tax treatment of each Fund or its
Shareholders, and this discussion is not intended as a substitute for careful
tax planning. Accordingly, prospective purchasers of Shares of a Fund are urged
to consult their tax advisors with specific reference to their own tax
situation, including the potential application of state, local and (if
applicable) foreign taxes.
The foregoing discussion and the discussion below regarding the
Tax-Free Funds and the International Equity Index Fund are based on tax laws and
regulations which are in effect on the date of this Statement of Additional
Information; such laws and regulations may be changed by legislative, judicial
or administrative action, and such changes may be retroactive.
51
<PAGE> 149
ADDITIONAL TAX INFORMATION CONCERNING THE TAX-FREE FUNDS
The Code permits a regulated investment company which has invested, at
the close of each quarter of its taxable year, at least 50% of its assets in
tax-free Municipal Securities and other securities the interest on which is
exempt from the regular federal income tax to pay exempt-interest dividends to
its Shareholders.
The policy of each Tax-Free Fund is to distribute each year as
exempt-interest dividends substantially all the Fund's net exempt interest
income. An exempt-interest dividend is any dividend or part thereof (other than
a capital gain dividend) paid by a Tax-Free Fund and designated as an
exempt-interest dividend in a written notice mailed to Shareholders after the
close of the Fund's taxable year, which does not exceed, in the aggregate, the
net interest income from Municipal Securities and other securities the interest
on which is exempt from the regular federal income tax received by the Fund
during the taxable year. The percentage of the total dividends paid for any
taxable year which qualifies as federal exempt-interest dividends will be the
same for all Shareholders receiving dividends from a Tax-Free Fund during such
year, regardless of the period for which the Shares were held.
Exempt-interest dividends may generally be treated by a Tax-Free Fund's
Shareholders as items of interest excludable from their gross income under
Section 103(a)(1) of the Code. However, each Shareholder of a Tax-Free Fund is
advised to consult his or her tax advisor with respect to whether such
Shareholder may be treated as a "substantial user" or a "related person" to such
user under Section 147(a) with respect to facilities financed through any of the
tax-exempt obligations held by the Fund. "Substantial user" is defined under
U.S. Treasury Regulations to include a non-exempt person who regularly uses a
part of such facilities in his trade or business and (a)(i) whose gross revenues
derived with respect to the facilities financed by the issuance of bonds are
more than 5% of the total revenues derived by all users of such facilities or
(ii) who occupies more than 5% of the usable area of the facility or (b) for
whom such facilities or a part thereof were specifically constructed,
reconstructed or acquired.
"Related persons" includes certain related natural persons, affiliated
corporations, partners and partnerships.
Dividends attributable to interest on certain private activity bonds
issued after August 7, 1986 must be included in alternative minimum taxable
income for purposes of determining liability (if any) for the alternative
minimum tax applicable to individuals and the alternative minimum tax applicable
to corporations. In the case of corporations, all tax-exempt interest dividends
will be taken into account in determining adjusted current earnings for the
purpose of computing the alternative minimum tax imposed on corporations (as
defined for federal income tax purposes).
Each Tax-Free Fund may at times purchase Municipal Securities (or other
securities the interest on which is exempt from the regular federal income tax)
at a discount from the price at which they were originally issued. For federal
income tax purposes, some or all of the market discount will be included in the
Fund's ordinary income and will be taxable to shareholders as such when it is
distributed to them.
Each Tax-Free Fund may acquire rights regarding specified portfolio
securities under puts. See "Puts." The policy of each Tax-Free Fund is to limit
its acquisition of puts to those under which the Fund will be treated for
federal income tax purposes as the owner of the Municipal Securities acquired
subject to the put and the interest on the Municipal Securities will be
tax-exempt to the Fund. Although the Internal Revenue Service has issued a
published ruling that provides some guidance regarding the tax consequences of
the purchase of puts, there is currently no guidance available from the Internal
Revenue Service that definitively establishes the tax consequences of many of
the types of puts that the Funds could acquire under the 1940 Act. Therefore,
although a Tax-Free Fund will only acquire a put after concluding that it will
have the tax consequences described above, the Internal Revenue Service could
reach a different conclusion from that of the Fund.
52
<PAGE> 150
The foregoing is only a summary of some of the important tax
considerations generally affecting purchasers of Shares of a Tax-Free Fund.
Additional tax information concerning all Funds of the Trust is contained in the
immediately preceding section of this Statement of Additional Information. No
attempt is made to present a complete explanation of the federal income tax
treatment of each Tax-Free Fund or its Shareholders, and this discussion is not
intended as a substitute for careful tax planning. Accordingly, prospective
purchasers of Shares of a Tax-Free Fund are urged to consult their tax advisors
with specific reference to their own tax situation, including the potential
application of state, local and foreign taxes.
ADDITIONAL TAX INFORMATION CONCERNING THE INTERNATIONAL EQUITY INDEX FUND
Transactions of the International Equity Index Fund in foreign
currencies, foreign currency denominated debt securities and certain foreign
currency options, future contracts and forward contracts (and similar
instruments) may result in ordinary income or loss to the Fund for federal
income tax purposes which will be taxable to the Shareholders as such when it is
distributed to them.
Gains from foreign currencies (including foreign currency options,
foreign currency futures and foreign currency forward contracts) will constitute
qualifying income for purposes of the 90% test only to the extent that they are
directly related to the trust's business of investing in stock or securities.
Investment by the International Equity Index Fund in certain "passive
foreign investment companies" could subject the Fund to a U.S. federal income
tax or other charge on proceeds from the sale of its investment in such a
company or other distributions from such a company, which tax cannot be
eliminated by making distributions to International Equity Index Fund
Shareholders. If the International Equity Index Fund elects to treat a passive
foreign investment company as a "qualified electing fund," different rules would
apply, although the International Equity Index Fund does not expect to make such
an election. Rather, the Fund intends to avoid such tax or other charge by
making an election to mark such investments to market annually.
FOREIGN TAX CREDIT
If more than 50% of the International Equity Index Fund's total assets
at year end consist of the debt and equity securities of foreign corporations,
the Fund intends to elect to permit its Shareholders who are U.S. citizens to
claim a foreign tax credit or deduction on their U.S. income tax returns for
their pro rata share of foreign taxes paid by the Fund. In that case,
Shareholders will be required to include in gross income their pro rata share of
foreign taxes paid by the Fund. Each Shareholder may then claim a foreign tax
credit or a tax deduction that would offset some or all of the increased tax
liability. Generally, a credit for foreign taxes is subject to the limitation
that it may not exceed the Shareholder's U.S. tax attributable to his or her
total foreign source taxable income. For this purpose, the source of the income
to the International Equity Index Fund flows through to the Fund's Shareholders.
Gains to the International Equity Index Fund from the sale of securities
generally will be treated as derived from U.S. sources and certain currency
fluctuation gains, including fluctuation gains from foreign currency denominated
debt securities, receivables and payables, will be treated as ordinary income
derived from U.S. sources. With limited exceptions, the foreign tax credit is
allowed to offset only 90% of the alternative minimum tax imposed on
corporations and individuals. Because of these limitations, Shareholders may be
unable to claim a credit for the full amount of their proportionate share of the
foreign taxes paid by the International Equity Index Fund.
The foregoing is only a general description of the treatment of foreign
source income or foreign taxes under the United States federal income tax laws.
Because the availability of a credit or deduction depends on the particular
circumstances of each Shareholder, Shareholders are advised to consult their own
tax advisors.
53
<PAGE> 151
VALUATION
VALUATION OF THE MONEY MARKET AND INSTITUTIONAL MONEY MARKET FUNDS
The Money Market and Institutional Money Market Funds have elected to
use the amortized cost method of valuation pursuant to Rule 2a-7 under the 1940
Act. This involves valuing an instrument at its cost initially and thereafter
assuming a constant amortization to maturity of any discounts or premium,
regardless of the impact of fluctuating interest rates on the market value of
the instrument. This method may result in periods during which value, as
determined by amortized cost, is higher or lower than the price each Fund would
receive if it sold the instrument. The value of securities in the Funds can be
expected to vary inversely with changes in prevailing interest rates.
Pursuant to Rule 2a-7, the Money Market and Institutional Money Market
Funds will maintain a dollar-weighted average portfolio maturity appropriate to
their objective of maintaining a stable net asset value per Share, provided that
no Fund will purchase any security with a remaining maturity of more than 397
days (securities subject to repurchase agreements and certain variable or
floating rate instruments may bear longer maturities) nor maintain a
dollar-weighted, average portfolio maturity which exceeds 90 days. The Trust's
Board of Trustees has also undertaken to establish procedures reasonably
designed, taking into account current market conditions and a Fund's investment
objective, to stabilize the net asset value per Share of the Money Market Funds
for purposes of sales and redemptions at $1.00. These procedures include review
by the Trustees, at such intervals as they deem appropriate, to determine the
extent, if any, to which the net asset value per Share of each Fund calculated
by using available market quotations deviates from $1.00 per Share. In the event
such deviation exceeds one half of one percent, the Rule requires that the Board
promptly consider what action, if any, should be initiated. If the Trustees
believe that the extent of any deviation from a Fund's $1.00 amortized cost
price per Share may result in material dilution or other unfair results to new
or existing investors, they will take such steps as they consider appropriate to
eliminate or reduce to the extent reasonably practicable any such dilution or
unfair results. These steps may include selling portfolio instruments prior to
maturity, shortening the average portfolio maturity, withholding or reducing
dividends, reducing the number of a Fund's outstanding Shares without monetary
consideration, or utilizing a net asset value per Share determined by using
available market quotations.
VALUATION OF THE EQUITY FUNDS, THE BOND FUNDS AND THE MUNICIPAL BOND FUNDS
Except as noted below, investments of the Asset Allocation Fund, Equity
Funds, Bond Funds, and Municipal Bond Funds of the Trust in securities the
principal market for which is a securities exchange are valued at their market
values based upon the latest available sales price or, absent such a price, by
reference to the latest available bid and asked prices in the principal market
in which such securities are normally traded. Except as noted below, investments
of the International Equity Index Fund in securities the principal market for
which is a securities exchange are valued at the closing mid-market price on
that exchange on the day of computation.
With regard to each of the above-mentioned Funds, securities the
principal market for which is not a securities exchange are valued at the mean
of their latest bid and ask quotations in such principal market. Securities and
other assets for which quotations either (1) are not readily available or (2) in
the case of the International Equity Index Fund are determined by that Fund's
Advisor or Sub-Advisor to not accurately reflect their value are valued at their
fair value as determined in good faith under consistently applied procedures
established by and under the general supervision of the Trustees of the Trust.
Short-term securities are valued at either amortized cost or original cost plus
accrued interest, which approximates current value. Mutual fund investments of
the Funds of Funds will be valued at the most recently calculated net asset
value.
54
<PAGE> 152
The value of a foreign security is determined in its national currency
as of the close of trading on the foreign exchange or other principal market on
which it is traded, which value is then converted into its U.S. dollar
equivalent at the foreign exchange closing mid-market rate reported in the
FINANCIAL TIMES as the closing rate for that date. When an occurrence subsequent
to the time a value of a foreign security was so established is likely to have
changed the value, then the fair value of those securities will be determined by
consideration of other factors by or under the direction of the Trustees of the
Trust or their delegates.
Securities for which market quotations are readily available will be
valued on the basis of quotations provided by dealers in such securities or
furnished by a pricing service. Securities for which market quotations are not
readily available and other assets will be valued at fair value using methods
determined in good faith by the Investment Advisor under the supervision of the
Trustees and may include yield equivalents or a pricing matrix.
ADDITIONAL INFORMATION REGARDING THE CALCULATION OF PER SHARE NET ASSET
VALUE
The net asset value of each Fund is determined and its Fiduciary Class,
Class A, Class B, Class C and Service Class Shares are priced as of the times
specified in each Fund's Prospectus. The net asset value per Share of each
Fund's Fiduciary Class, Class A, Class B, Class C and Service Class Shares is
calculated by determining the value of the respective Class's proportional
interest in the securities and other assets of the Fund, less (i) such Class's
proportional share of general liabilities and (ii) the liabilities allocable
only to such Class, and dividing such amount by the number of Shares of the
Class outstanding. The net asset value of a Fund's Fiduciary Class, Class A,
Class B, Class C and Service Class Shares may differ from each other due to the
expense of the Distribution and Shareholders Services Plan fee applicable to a
Fund's Class A, Class B, Class C and Service Class Shares.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
All of the classes of Shares in each Fund (other than Class A shares of
the Income Fund) are sold on a continuous basis by The One Group Services
Company (the "Distributor"), and the Distributor has agreed to use appropriate
efforts to solicit all purchase orders.
Fiduciary Class Shares in a Fund may be purchased, through procedures
established by the Distributor, by institutional investors, including affiliates
of BANC ONE CORPORATION and any bank, depository institution, insurance company,
pension plan or other organization authorized to act in fiduciary, advisory,
agency, custodial or similar capacities.
Class A, Class B and Class C Shares (except Class A shares of the
Income Fund) may be purchased by any investor that does not meet the purchase
eligibility criteria, described above, with respect to Fiduciary Shares. Class A
shares of the Income Fund may only be purchased in connection with investment
company consolidations and reorganizations. Class C Shares are available only to
investors in the Funds of Funds. In addition to purchasing Class A, Class B and
Class C Shares directly from the Distributor, an investor may purchase Class A,
Class B and Class C Shares through a financial institution, such as a bank,
savings and loan association, insurance company (each a "Shareholder Servicing
Agent") that has established a Shareholder servicing agreement with the
Distributor, or through a broker-dealer that has established a dealer agreement
with the Distributor. Questions concerning the eligibility requirements for each
class of the Trust's Shares may be directed to the Distributor at
1-800-480-4111.
Service Class Shares are available only in the Prime Money Market and
U.S. Treasury Securities Money Market Funds. This class of shares is available
to broker-dealers, other financial intermediaries, banks and other depository
institutions requiring special administrative and accounting services (E.G.,
sweep processing).
55
<PAGE> 153
As described in each Prospectus for each of the Equity and Bond Funds
and the Funds of Funds, and in the Multiple Class Plan, under certain
circumstances, Class A Shares of a Fund may be purchased free of the sales
charge applicable to such Class A Shares. No sales charge is imposed on Class A
Shares of the Funds: (i) issued through reinvestment of dividends and capital
gains distributions; (ii) acquired through the exercise of exchange privileges
where a comparable sales charge has been paid for exchanged Shares; (iii)
purchased by officers, directors or trustees, retirees and employees (and their
spouses and immediate family members) of the Trust, of BANC ONE CORPORATION and
its subsidiaries and affiliates, of the Distributor and its subsidiaries and
affiliates, of broker-dealers who have entered into a dealer agreement with the
Trust and their subsidiaries and affiliates, or of an investment sub-Advisor of
a Fund of the Trust and such sub-Advisor's subsidiaries and affiliates; (iv)
sold to affiliates of BANC ONE CORPORATION and certain accounts (other than
Individual Retirement Accounts) for which financial organizations, including any
bank, depository institution, insurance company, pension plan or other
organization are authorized to act in fiduciary, advisory, agency, custodial or
similar capacities, or purchased by investment Advisors, financial planners or
other intermediaries who have a dealer arrangement with the Distributor, who
place trades for their own accounts or for the accounts of their clients and who
charge a management, consulting or other fee for their services, as well as
clients of such investment Advisors, financial planners or other intermediaries
who place trades for their own accounts if the accounts are linked to the master
account of such investment Advisor, financial planner or other intermediary; (v)
purchased with proceeds from the recent redemption of Fiduciary Class Shares of
a Fund of the Trust or acquired in an exchange of Fiduciary Class Shares of a
Fund for Class A Shares of the same Fund; (vi) purchased with proceeds from the
recent redemption of Shares of a mutual fund (other than a Fund of the Trust)
for which a sales charge was paid; (vii) purchased in an Individual Retirement
Account with the proceeds of a distribution from an employee benefit plan,
provided that, at the time of distribution, the employee benefit plan had plan
assets invested in a Fund of the Trust; (viii) purchased with Trust assets; (ix)
purchased in accounts as to which a bank or broker-dealer charges an asset
allocation fee, provided the bank or broker-dealer has an agreement with the
Distributor; (x) directly purchased with the proceeds of a distribution on a
bond for which a BANC ONE CORPORATION affiliate bank or trust company is the
Trustee or Paying Agent; or (xi) purchased in connection with plans of
reorganization of a Fund, such as mergers, asset acquisitions and exchange
offers to which a Fund is a party.
An investor relying upon any of the categories of waivers of the sales
charge must qualify for such waiver in advance of the purchase with the
Distributor or the financial institution or intermediary through which Shares
are purchased by the investor.
The waiver of the sales charge under circumstances (v), (vi), and (vii)
above applies only if the purchase is made within 60 days of the redemption and
if conditions imposed by the Distributor are met. The waiver policy with respect
to the purchase of Shares through the use of proceeds from a recent redemption
or distribution as described in clauses (v), (vi), and (vii) above will not be
continued indefinitely and may be discontinued at any time without notice.
Investors should call the Distributor at 1-800-480-4111 to determine whether
they are eligible to purchase Shares without paying a sales charge through the
use of proceeds from a recent redemption or distribution as described above, and
to confirm continued availability of these waiver policies prior to initiating
the procedures described in clauses (v), (vi), and (vii).
Fiduciary Class Shareholders of a Fund may exchange their Shares for
Class A Shares of the same Fund or for Class A Shares or Fiduciary Class Shares
of another Fund of the Trust. Class A Shareholders may exchange their Shares for
Fiduciary Class Shares of a Fund or for Fiduciary Class or Class A Shares of
another Fund or the Trust, if the Shareholder is eligible to purchase such
Shares. If a Class A Shareholder of the Income Fund exchanges his or her Shares
within one year of receipt of the Shares, the Shareholder will be assessed a 2%
redemption fee. The exchange privilege may be exercised only in those states
where the Shares of the Fund or such other Fund may be legally sold. All
exchanges discussed herein are made at the net asset value of the
56
<PAGE> 154
exchanged Shares, except as provided below. The Trust does not impose a charge
for processing exchanges of Shares. If a Shareholder seeks to exchange Class A
Shares of a Fund that does not impose a sales charge for Class A Shares of a
Fund that does, or the Fund being exchanged into has a higher sales charge, the
Shareholder will be required to pay a sales charge in the amount equal to the
difference between the sales charge applicable to the Fund into which the Shares
are being exchanged and any sales charge previously paid for the exchanged
Shares, including any sales charges incurred on any earlier exchanges of the
Shares (unless such sales charge is otherwise waived as provided above). The
exchange of Fiduciary Class Shares for Class A Shares also will require payment
of the sales charge unless the sales charge is waived, as provided above. If a
Shareholder (no longer eligible to purchase Fiduciary Shares) purchases Class A
Shares of a Fund, the Shareholder will be subject to Distribution and
Shareholder Services Plan Fees.
Class B Shareholders of a Fund may exchange their Shares for Class B
Shares of any other Fund of the Trust on the basis of the net asset value of the
exchanged Class B Shares, without the payment of any Contingent Deferred Sales
Charge that might otherwise be due upon redemption of the outstanding Class B
Shares. The newly acquired Class B Shares will be subject to the higher
Contingent Deferred Sales Charge of either the Fund from which the Shares were
exchanged or the Fund into which the Shares were exchanged. With respect to
outstanding Class B Shares as to which previous exchanges have taken place,
"higher Contingent Deferred Sales Charge" shall mean the higher of the
Contingent Deferred Sales Charge applicable to either the Fund the Shares are
exchanging into or any other Fund from which the Shares previously have been
exchanged. For purposes of computing the Contingent Deferred Sales Charge that
may be payable upon a disposition of the newly acquired Class B Shares, the
holding period for outstanding Class B Shares of the Fund from which the
exchange was made is "tacked" to the holding period of the newly acquired Class
B Shares. For purposes of calculating the holding period applicable to the newly
acquired Class B Shares, the newly acquired Class B Shares shall be deemed to
have been issued on the date of receipt of the Shareholder's order to purchase
the outstanding Class B Shares of the Fund from which the initial exchange was
made.
Class C Shareholders may not exchange their Class C Shares for shares
of any other class nor may shares of any other class be exchanged for Class C
Shares.
Service Class Shareholders may not exchange their Service Class Shares
for Shares of any other class, nor may Shares of any other class be exchanged
for Service Class Shares.
Shares of the Institutional Money Market Funds may be purchased by
commercial and retail institutional investors, including affiliates of BANC ONE
CORPORATION, that have opened an account with the Transfer Agent either directly
or through a Shareholder Servicing Agent, by persons whose individual net worth,
or joint net worth with that person's spouse, at the time of his or her purchase
exceeds $1,000,000, or by persons whose individual annual income, or joint
annual income with that person's spouse, at the time of his or her purchase
exceeds $200,000.
The Trust may suspend the right of redemption or postpone the date of
payment for Shares during any period when (a) trading on the New York Stock
Exchange (the "Exchange") is restricted by applicable rules and regulations of
the Securities and Exchange Commission, (b) the Exchange is closed for other
than customary weekend and holiday closings, (c) the Securities and Exchange
Commission has by order permitted such suspension, or (d) an emergency exists as
determined by the Securities and Exchange Commission.
The Trust may redeem Shares involuntarily if redemption appears
appropriate in light of the Trust's responsibilities under the 1940 Act. (See
"Valuation of the Money Market and Institutional Money Market Funds and the
Municipal Money Market Fund" above.)
57
<PAGE> 155
MANAGEMENT OF THE TRUST
TRUSTEES & OFFICERS
Overall responsibility for management of the Trust rests with the Board
of Trustees of the Trust, who are elected by the Shareholders of the Trust.
There are currently four Trustees, all of whom are not "interested persons" of
the Trust within the meaning of that term under the 1940 Act. The Trustees, in
turn, elect the officers of the Trust to supervise actively its day-to-day
operations.
The Trustees of the Trust, their addresses, and principal occupations
during the past five years are set forth below.
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATION
NAME AND ADDRESS WITH THE TRUST DURING PAST 5 YEARS
- ---------------- -------------- -------------------
<S> <C> <C>
Peter C. Marshall Trustee From November, 1993 to present,
DCI Marketing, Inc. President, DCI Marketing, Inc.;
2727 W. Good Hope Road from 1992 to November, 1993, Vice
Milwaukee, WI 53209 President-Finance and Treasurer,
DCI Marketing, Inc.; from 1987
to August, 1992, has served as
an officer in the corporate
finance group of Blunt, Ellis &
Loewi and its successor
corporation, Kemper Securities,
Inc.
Charles I. Post Trustee From July, 1986 to present, has
7615 4th Avenue West been self-employed as a
Bradenton, FL 34209 consultant.
John S. Randall Trustee Since 1972, has been
1840 North Prospect Ave. self-employed as
Apt. 419 a management consultant.
Milwaukee, WI 53202
Frederick W. Ruebeck Trustee From June, 1988 to present, has
Eli Lilly & Company been Director of Investments, Eli
Lilly Corporate Center Lilly and Company.
307 East McCarty
Indianapolis, IN 46285
</TABLE>
The Trustees of the Trust receive fees and expenses for each meeting of
the Board of Trustees attended. No officer or employee of the Distributor
currently acts as a Trustee of the Trust.
The Compensation Table below sets forth the estimated total
compensation to the Trustees from the Trust and the operational funds of The One
Group for the Trust's fiscal year ended June 30, 1996.
58
<PAGE> 156
COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
PENSION OR
RETIREMENT
BENEFITS ESTIMATED TOTAL
AGGREGATE ACCRUED ANNUAL COMPENSATION
COMPENSATION AS PART BENEFITS FROM
NAME OF FROM THE OF FUND UPON THE FUND
PERSON, POSITION TRUST EXPENSES RETIREMENT COMPLEX(2)
---------------- ----- -------- ---------- ----------
<S> <C> <C> <C> <C>
Peter C. Marshall, $36,000 N/A N/A $39,000
Chairman
Charles I. Post, $33,500 N/A N/A $36,500
Trustee
John S. Randall, $33,500 N/A N/A $36,500
Trustee
Frederick W. Ruebeck, $33,500 N/A N/A $36,500
Trustee
</TABLE>
1 Figures are for the Trust's fiscal year ended June 30, 1996.
2 "Fund Complex" comprises the 26 operational funds of The One Group as
well as the 4 funds of The One Group(R) Investment Trust at June 30,
1996.
59
<PAGE> 157
The officers of the Trust receive no compensation directly from the
Trust for performing the duties of their offices. The officers of the Trust,
their addresses, and principal occupations during the past five years are shown
below.
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATION
NAME AND ADDRESS WITH THE TRUST DURING PAST 5 YEARS
- ---------------- -------------- -------------------
<S> <C> <C>
Mark Dillon President From 1993 to present, Vice-
The One Group Services President of BISYS Fund
Company Services, Inc. and President of
3435 Stelzer Road The One Group Services
Columbus, Ohio 43219 Company; from 1986 to 1993,
Vice-President of the Winsbury
Company
Mark Redman Vice President From June, 1995 to present,
BISYS Fund Services & Treasurer Vice President, The One Group
3435 Stelzer Road Services Company; from
Columbus, Ohio 43219 February 1989 to present,
employee of the Winsbury
Company
George O. Martinez Secretary From March 1995 to present,
BISYS Fund Services, Inc. Senior Vice President and
3435 Stelzer Road Director of Legal and
Columbus, OH 43219 Compliance Services, BISYS
Fund Services, Inc.; from June
1989 - March 1995, Vice
President and Associate
General Counsel, Alliance
Capital Management
Alaina J. Metz Assistant Secretary From June 1995 to present,
BISYS Fund Services, Inc. Chief Administrator,
3435 Stelzer Road Administration and Regulatory
Columbus, Ohio 43219 Services, BISYS Fund Services,
Inc.; from May 1989 - June 1995,
Supervisor, Mutual Fund Legal
Department, Alliance Capital
Management.
</TABLE>
60
<PAGE> 158
INVESTMENT ADVISOR
Banc One Investment Advisors Corporation
Investment advisory services to each of the Trust's Funds are provided
by Banc One Advisors. Banc One Advisors makes the investment decisions for the
assets of the Fund and continuously reviews, supervises and administers the
Fund's investment program, subject to the supervision of, and policies
established by, the Trustees of the Trust. The Trust's Shares are not sponsored,
endorsed or guaranteed by, and do not constitute obligations or deposits of any
bank affiliate of Banc One Advisors and are not insured by the FDIC or issued or
guaranteed by the U.S. government or any of its agencies.
Banc One Advisors is an indirect, wholly-owned subsidiary of BANC ONE
CORPORATION, a bank holding company incorporated in the state of Ohio. BANC ONE
CORPORATION has affiliate banking organizations in Arizona, Colorado, Illinois,
Indiana, Kentucky, Louisiana, Ohio, Oklahoma, Texas, Utah, West Virginia and
Wisconsin. In addition, BANC ONE CORPORATION has several affiliates that engage
in data processing, venture capital, investment and merchant banking, and other
diversified services including trust management, investment management,
brokerage, equipment leasing, mortgage banking, consumer finance, and insurance.
On a consolidated basis, BANC ONE CORPORATION had assets of over $101 billion as
of December 31, 1996.
Banc One Advisors represents a consolidation of the investment advisory
staffs of a number of bank affiliates of BANC ONE CORPORATION, which have
considerable experience in the management of open-end management investment
company portfolios, including The One Group (formerly, the Helmsman Fund) since
1985.
Prior to January 11, 1993, investment advisory services were provided
to the Income Equity, Disciplined Value, Growth Opportunities, and Large Company
Value Funds by Bank One, Milwaukee, NA ("Bank One, Milwaukee"). Prior to January
11, 1993, investment advisory services were provided to the Money Market Funds,
the Institutional Money Market Funds, the Bond Funds, and the Intermediate
Tax-Free Bond Fund by Bank One, Indianapolis, NA ("Bank One, Indianapolis").
Prior to January 11, 1993, investment advisory services were provided to the
International Equity Index, Equity Index, and the Ohio Municipal Bond Funds by
Bank One, Columbus, NA ("Bank One, Columbus"). Prior to January 11, 1993,
investment sub-advisory services were also provided to the Large Company Value
Fund by Bank One, Columbus. Prior to January, 1994, investment advisory services
were provided to the predecessor funds of Intermediate Bond Fund and Large
Company Growth Fund, Sun Eagle Intermediate Fixed Income Fund and Sun Eagle
Equity Growth Fund, respectively, by Bank One, Arizona, NA. Prior to January 20,
1995, investment advisory services were provided to the predecessor Fund of the
Kentucky Municipal Bond Fund, the Trademark Kentucky Municipal Bond Fund, by
Liberty National Bank and Trust Company of Kentucky. Prior to January 2, 1996,
investment advisory services were provided to the predecessor Funds of the
Louisiana Municipal Bond Fund, the Value Growth Fund, and the Gulf South Growth
Fund, formerly Paragon Louisiana Tax-Free Fund, Paragon Value Growth Fund and
Paragon Gulf South Growth Fund, by Premier Investment Advisors, LLP.
61
<PAGE> 159
During the fiscal years ended June 30, 1996, 1995 and 1994, the Funds
of the Trust paid the following investment advisory fees to Banc One Advisors
(except as noted above) and Banc One Advisors voluntarily waived investment
advisory fees as follows:
THE ONE GROUP ADVISORY--NET
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
--------------------------
1996 1995 1994
---- ---- ----
FUND NET WAIVED NET WAIVED NET WAIVED
- ---- --- ------ --- ------ --- ------
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury Securities
Money Market $3,335,123 $2,120,534 $2,258,214 $1,956,704 $1,605,856 $1,134,557
Prime Money Market $5,939,373 $2,662,726 $3,991,856 $2,887,240 $2,660,254 $2,092,557
Municipal Money Market $1,111,463 $ 930,328 $ 964,943 $ 834,690 $ 618,798 $ 489,886
Ohio Municipal Money Market $ 171,609 $ 114,565 $ 163,752 $ 112,517 $ 52,130 $ 103,823
Income Equity $1,809,128 $ 70,594 $1,466,342 $ 7,338 $1,467,442 $ 107,348
Disciplined Value $3,934,183 $ 61,237 $3,306,317 $ 0 $2,365,739 $ 151,852
Growth Opportunities $3,688,445 $ 54,262 $3,024,214 $ 6,973 $2,338,599 $ 141,253
Equity Index $ 238,008 $ 638,315 $ 167,195 $ 396,281 $ 281,951 $ 123,050
Large Company Value $3,763,553 $ 0 $1,730,555 $ 0 $ 993,450 $ 85,726
Asset Allocation $ 306,083 $ 92,023 $ 214,418 $ 68,226 $ 178,798 $ 84,284
International Equity Index $1,279,277 $ 91,958 $1,036,935 $ 0 $ 507,696 $ 0
Large Company Growth $5,235,736 $ 245,284 $2,515,585 $ 0 $ 318,079 $ 226,900
Income Bond $1,918,010 $1,135,461 $1,662,030 $1,317,284 $1,774,670 $1,543,297
Limited Volatility Bond $1,330,873 $1,450,516 $1,155,274 $1,393,194 $1,275,561 $1,428,366
Intermediate Tax-Free Bond $ 629,789 $ 769,809 $ 499,312 $ 699,036 $ 523,644 $ 599,746
Municipal Income $ 714,573 $ 387,167 $ 572,498 $ 246,244 $ 365,946 $ 166,864
Ohio Municipal Bond $ 257,158 $ 328,794 $ 299,400 $ 302,235 $ 328,834 $ 314,126
Government Bond $2,182,543 $ 70,159 $1,251,932 $ 38,861 $ 611,976 $ 21,496
Ultra Short-Term Income $ 29,293 $ 227,497 $ 277,435 $ 208,134 $ 848,254 $ 299,477
Intermediate Bond $ 612,348 $ 747,012 $ 239,603 $ 597,220 $ 0 $ 353,976
Treasury Only Money Market $ 287,729 $ 0 $ 181,522 $ 16,794 $ 82,477 $ 53,130
Government Money Market $ 612,362 $ 5,166 $ 478,342 $ 101,302 $ 129,862 $ 290,296
Kentucky Municipal Bond
(Trademark Kentucky Municipal Bond)** $ 108,684 $ 132,964 $ 53,481 $ 59,433 $ 263,106*** $ 8,528***
Institutional Prime Money Market NA* NA* NA* NA* NA* NA*
Treasury Money Market NA* NA* NA* NA* NA* NA*
Tax-Exempt Money Market NA* NA* NA* NA* NA* NA*
Arizona Municipal Bond NA* NA* NA* NA* NA* NA*
Texas Tax-Free Bond NA* NA* NA* NA* NA* NA*
W. Virginia Municipal Bond NA* NA* NA* NA* NA* NA*
Louisiana Municipal Bond $ 207,766++ $ 103,883++ $ 992,485+ $ 198,495+ $ 808,335+ $ 202,083+
Value Growth $ 400,112++ $ 51,948++ $1,281,345+ NA+ $1,154,672+ NA+
Gulf South Growth $ 184,391++ $ 25,531++ $ 582,482+ NA+ $ 523,002+ NA+
Income Fund NA* NA* NA* NA* NA* NA*
Investor Growth NA* NA* NA* NA* NA* NA*
Investor Growth & Income NA* NA* NA* NA* NA* NA*
Investor Aggressive Growth NA* NA* NA* NA* NA* NA*
Investor Conservative Growth NA* NA* NA* NA* NA* NA*
Investor Balanced NA* NA* NA* NA* NA* NA*
Investor Fixed Income NA* NA* NA* NA* NA* NA*
</TABLE>
62
<PAGE> 160
* As of June 30, 1996, the Fund had not commenced operations.
** In the fiscal year ended June 30, 1994, and from July 1, 1994 through
January 19, 1995, the Advisor was Liberty National Bank and Trust Company
of Kentucky.
*** Fees for the period from February 1, 1994 through January 19, 1995.
+ For fiscal years ended November 30, 1994 and 1995, the Advisor was Premier
Investment Advisors, LLC.
++ Fees for the period from December 31, 1995 to June 30, 1996.
All investment advisory services are provided to the Funds by Banc One
Advisors pursuant to an investment advisory agreement dated January 11, 1993
(the "Investment Advisory Agreement"). The Investment Advisory Agreement (and
the Sub-Investment Advisory Agreement described immediately following,
collectively, the "Advisory and Sub-Advisory Agreements") will continue in
effect as to a particular Fund from year to year, if such continuance is
approved at least annually by the Trust's Board of Trustees or by vote of a
majority of the outstanding Shares of such Fund (as defined under "ADDITIONAL
INFORMATION--Miscellaneous" in this Statement of Additional Information), and a
majority of the Trustees who are not parties to the respective investment
advisory agreements or interested persons (as defined in the Investment Company
Act of 1940) of any party to the respective investment advisory agreements by
votes cast in person at a meeting called for such purpose. The Advisory and
Sub-Advisory Agreements were renewed by the Trust's Board of Trustees at their
quarterly meeting on August 17, 1995. The Advisory and Sub-Advisory Agreements
are terminable as to a particular Fund at any time on 60 days' written notice
without penalty by the Trustees, by vote of a majority of the outstanding Shares
of that Fund, or by the Fund's Advisor or Sub-Advisor as the case may be. The
Advisory and Sub-Advisory Agreements also terminate automatically in the event
of any assignment, as defined in the 1940 Act.
The Advisory and Sub-Advisory Agreements each provide that the respective
Advisor or Sub-Advisor shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Trust in connection with the performance
of the respective investment advisory agreements, except a loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith, or gross
negligence on the part of Banc One Advisors or Sub-Advisor in the performance of
its duties, or from reckless disregard by it of its duties and obligations
thereunder.
Goldman Sachs Asset Management, formerly the investment Sub-Advisor to the
Ultra Short-Term Income Fund, received $417,950 in sub-advisory fees from Banc
One Advisors for the fiscal year ended June 30, 1994, $176,570 in sub-advisory
fees from Banc One Advisors for the fiscal year ended June 30, 1995 and $26,251
in sub-advisory fees from Banc One Advisors for the fiscal year ended June 30,
1996.
Independence International Associates, Inc.
Independence International Associates, Inc. ("Independence International")
serves as investment Sub-Advisor to the International Equity Index Fund pursuant
to an agreement with Banc One Advisors dated January 11, 1993. Independence
International is a wholly-owned subsidiary of John Hancock Asset Management,
Inc. and an indirect, wholly-owned subsidiary of John Hancock Mutual Life
Insurance Company. Boston International Advisors, Inc., the predecessor of
Independence International, received $113,644 in sub-advisory fees from Banc One
Advisors for the fiscal year ended June 30, 1994, $161,906 in sub-advisory fees
from Banc One Advisors for the fiscal year ended June 30, 1995 and $212,352 in
sub-advisory fees from Banc One Advisors for the fiscal year ended June 30,
1996.
63
<PAGE> 161
GLASS-STEAGALL ACT
In 1971 the United States Supreme Court held in INVESTMENT COMPANY
INSTITUTE V. CAMP that the federal statute commonly referred to as the
Glass-Steagall Act prohibits a national bank from operating a Fund for the
collective investment of managing agency accounts. Subsequently, the Board of
Governors of the Federal Reserve System (the "Board") issued a regulation and
interpretation to the effect that the Glass-Steagall Act and such decision: (a)
forbid a bank holding company registered under the Federal Bank Holding Company
Act of 1956 (the "Holding Company Act") or any non-bank affiliate thereof from
sponsoring, organizing, or controlling a registered, open-end investment company
continuously engaged in the issuance of its Shares, but (b) do not prohibit such
a holding company or affiliate from acting as investment Advisor, transfer
agent, and custodian to such an investment company. In 1981, the United States
Supreme Court held in BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM V.
INVESTMENT COMPANY INSTITUTE that the Board did not exceed its authority under
the Holding Company Act when it adopted its regulation and interpretation
authorizing bank holding companies and their non-bank affiliates to act as
investment Advisors to registered closed-end investment companies. In the BOARD
OF GOVERNORS case, the Supreme Court also stated that if a national bank
complied with the restrictions imposed by the Board in its regulation and
interpretation authorizing bank holding companies and their non-bank affiliates
to act as investment Advisors to investment companies, a national bank
performing investment advisory services for an investment company would not
violate the Glass-Steagall Act. In addition, state securities laws on this issue
may differ from the interpretations of federal law expressed herein and banks
and financial institutions may be required to register as dealers pursuant to
state law.
In the Investment Advisory Agreement with the Trust, Banc One Advisors has
represented to the Trust that it possesses the legal authority to perform the
investment advisory services contemplated by the agreement and described in the
Prospectuses and this Statement of Additional Information without violation of
applicable statutes and regulations. Future changes in either federal or state
statutes and regulations relating to the permissible activities of banks or bank
holding companies and the subsidiaries or affiliates of those entities, as well
as further judicial or administrative decisions or interpretations of present
and future statutes and regulations, could prevent or restrict Banc One Advisors
from continuing to perform such services for the Trust. Depending upon the
nature of any changes in the services which could be provided by Banc One
Advisors, the Board of Trustees of the Trust would review the Trust's
relationship with Banc One Advisors and consider taking all action necessary in
the circumstances.
Should future legislative, judicial, or administrative action prohibit or
restrict the proposed activities of BANC ONE CORPORATION subsidiary banks or
their correspondent banks in connection with customer purchases of Shares of the
Trust, these banks might be required to alter materially or discontinue the
services offered by them to customers. It is not anticipated, however, that any
change in the Trust's method of operations would affect its net asset value per
Share or result in financial losses to any customer.
PORTFOLIO TRANSACTIONS
Pursuant to the Advisory and Sub-Advisory Agreements, Banc One Advisors
and the Sub-Advisor determine, subject to the general supervision of the Board
of Trustees of the Trust and in accordance with each Fund's investment objective
and restrictions, which securities are to be purchased and sold by each such
Fund and which brokers are to be eligible to execute its portfolio transactions.
Purchases and sales of portfolio securities with respect to the Money Market
Funds, the Bond Funds, the Funds of Funds and (to a varying degree) the Asset
Allocation Fund usually are principal transactions in which portfolio securities
are purchased directly from the issuer or from an underwriter or market maker
for the securities. Purchases from underwriters of portfolio securities
generally include (but not in the case of mutual fund shares purchased by the
Funds of Funds) a commission or concession paid by the issuer to the
64
<PAGE> 162
underwriter and purchases from dealers serving as market makers may include the
spread between the bid and asked price. Transactions on stock exchanges (other
than certain foreign stock exchanges) involve the payment of negotiated
brokerage commissions. Transactions in the over-the-counter market are generally
principal transactions with dealers. With respect to the over-the-counter
market, the Trust, where possible, will deal directly with the dealers who make
a market in the securities involved except in those circumstances where better
price and execution are available elsewhere. While the Banc One Advisors
generally seeks competitive spreads or commissions, the Trust may not
necessarily pay the lowest spread or commission available on each transaction,
for reasons discussed below.
Allocation of transactions, including their frequency, to various dealers
is determined by Banc One Advisors and the Sub-Advisor with respect to the Funds
each serves based on their best judgment and in a manner deemed fair and
reasonable to Shareholders. The primary consideration is prompt execution of
orders in an effective manner at the most favorable price. Subject to this
consideration, dealers who provide supplemental investment research to Banc One
Advisors or the Sub-Advisor may receive orders for transactions by the Trust,
even if such dealers charge commissions in excess of the lowest rates available,
provided such commissions are reasonable in light of the value of brokerage and
research services received. Such research services may include, but are not be
limited to, analysis and reports concerning economic factors and trends,
industries, specific securities, and portfolio strategies. Information so
received is in addition to and not in lieu of services required to be performed
by Banc One Advisors or the Sub-Advisor and does not reduce the advisory fees
payable to Banc One Advisors or the Sub-Advisor. Such information may be useful
to Banc One Advisors or the Sub-Advisor in serving both the Trust and other
clients and, conversely, supplemental information obtained by the placement of
business of other clients may be useful to Banc One Advisors or the Sub-Advisor
in carrying out their obligations to the Trust. In the last fiscal year, Banc
One Advisors directed brokerage commissions to brokers who provided research
services to Banc One Advisors. Total compensation paid to such brokers amounted
to $2,845,760.00.
The Trust will not execute portfolio transactions through, acquire
portfolio securities issued by, make savings deposits in, or enter into
repurchase or reverse repurchase agreements with its Advisors or their
affiliates except as may be permitted under the 1940 Act, and will not give
preference to correspondents of BANC ONE CORPORATION subsidiary banks with
respect to such transactions, securities, savings deposits, repurchase
agreements, and reverse repurchase agreements.
During the Trust's fiscal year ended June 30, 1994, the Trust paid
brokerage commissions to Goldman Sachs Asset Management ("Goldman") for
brokerage services provided. The Asset Allocation Fund, Disciplined Value Fund,
Growth Opportunities Fund and Large Company Value Fund paid $419, $11,504,
$17,688 and $9,208 respectively, to Goldman in brokerage commissions.
During the Trust's fiscal year ended June 30, 1995, the Trust paid brokerage
commissions to Goldman for brokerage services provided.
<TABLE>
<CAPTION>
FUND COMMISSIONS PAID
---- ----------------
<S> <C>
Income Equity $ 700
Disciplined Value $81,124
Growth Opportunities $47,160
Large Company Value $47,640
Equity Index $ 6,741
Asset Allocation $ 6,677
Ultra Short-Term Income $ 531
Large Company Growth $ 3,381
</TABLE>
During the Trust's fiscal year ended June 30, 1996, the Trust paid
brokerage commissions to Goldman for brokerage services provided as follows:
65
<PAGE> 163
<TABLE>
<CAPTION>
FUND COMMISSIONS PAID
---- ----------------
<S> <C>
Income Equity $ 5,750
Disciplined Value $ 1,810
Growth Opportunities $11,714
Equity Index $42,243
Large Company Value $10,650
Asset Allocation $ 9,602
Gulf South Growth $ 2,265
Value Growth $ 1,647
</TABLE>
During the Trust's fiscal year ended June 30, 1996, the percentage of the
Trust's aggregate brokerage commissions paid to Goldman was 1.26% and the
percentage of the Trust's aggregate dollar amount of transactions involving the
payment of commissions effected through Goldman was 1.47%.
In the fiscal years ended June 30, 1996, 1995 and 1994, each of the Funds
of the Trust that paid brokerage commissions and the amounts paid for each year
were as follows:
THE ONE GROUP BROKERAGE COMMISSIONS
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
--------------------------
FUND 1996 1995 1994
- ---- ---- ---- ----
<S> <C> <C> <C>
Income Equity $ 96,204 $ 102,275 $129,736
Disciplined Value $ 613,774 $2,572,895 $615,999
Growth Opportunities $2,798,442 $1,242,481 $810,546
Equity Index $ 56,155 $ 21,858 $ 79,617
Large Company Value $2,126,632 $1,783,768 $539,937
Asset Allocation $ 61,678 $ 42,796 $ 34,662
International Equity Index $ 176,140 $ 223,386 $120,976
Large Company Growth $ 596,397 $ 442,672 $169,455
Ultra Short-Term Income $ 0 $ 531 $ 0
Gulf South Growth $ 43,039
Value Growth $ 224,373
</TABLE>
Investment decisions for each Fund of the Trust are made independently
from those for the other Funds or any other investment company or account
managed by Banc One Advisors or the Sub-Advisor. Any such other investment
company or account may also invest in the same securities as the Trust. When a
purchase or sale of the same security is made at substantially the same time on
behalf of a given Fund and another Fund, investment company or account (or, in
the case of the International Equity Index Fund, another account), the
transaction will be averaged as to price, and available investments allocated as
to amount, in a manner which Banc One Advisors or the Sub-Advisor of the given
Fund believes to be equitable to the Fund(s) and such other investment company
or account. In some instances, this investment procedure may adversely affect
the price paid or received by a Fund or the size of the position obtained by a
Fund. To the extent permitted by law, Banc One Advisors and the Sub-Advisor may
aggregate the securities to be sold or purchased by it for a Fund with those to
be sold or purchased by it for other Funds or for other investment companies or
accounts in order to obtain best execution. As provided by the Investment
Advisory and Sub-Advisory Agreements, in making investment recommendations for
the Trust, Banc One Advisors and the Sub-Advisor will not inquire or take into
consideration whether an issuer of securities proposed for purchase or sale by
the Trust is a customer of Banc One Advisors or the Sub-Advisor or their parents
or subsidiaries or affiliates and, in dealing with its commercial customers,
Banc One Advisors and the Sub-Advisor and their respective parent, subsidiaries,
and affiliates will not inquire or take into consideration whether securities of
such customers are held by the Trust.
66
<PAGE> 164
ADMINISTRATOR
The One Group Services Company serves as Administrator (the
"Administrator") to each Fund of the Trust pursuant to a Management and
Administration Agreement with the Trust (the "Administration Agreement"). The
Board of Trustees of the Trust approved The One Group Services Company as the
sole Administrator for each Fund beginning December 1, 1995. The Administrator
assists in supervising all operations of each Fund to which it serves as
Administrator (other than those performed under the respective investment
advisory agreements and Custodian and Transfer Agency Agreements for that Fund).
Under the Administration Agreement, the Administrator has agreed to price
the portfolio securities of each Fund it serves and to compute the net asset
value and net income of such Funds on a daily basis, to maintain office
facilities for the Trust, to maintain each such Fund's financial accounts and
records, and to furnish the Trust statistical and research data, data
processing, clerical, accounting, and bookkeeping services, and certain other
services required by the Trust with respect to each such Fund. The Administrator
prepares annual and semi-annual reports to the Securities and Exchange
Commission, prepares federal and State tax returns, prepares filings with State
securities commissions, and generally assists in all aspects of the Trust's
operations other than those performed under the investment advisory agreements,
and Custodian and Transfer Agency Agreements. Under the Administration
Agreement, the Administrator may delegate all or any part of its
responsibilities thereunder.
Banc One Advisors also serves as Sub-Administrator to each Fund of the
Trust, pursuant to an agreement between the Administrator and Banc One Advisors.
Pursuant to this agreement, Banc One Advisors performs many of the
Administrator's duties, for which Banc One Advisors receives a fee paid by the
Administrator.
The Trust paid fees for administrative services to 440 Financial and to
SEI Financial Management, previous Administrators of the Trust, to The Winsbury
Company, the prior Administrator to the predecessor funds of the Large Company
Growth and Intermediate Bond Funds, and to Federated Administrative Services,
the prior Administrator to the predecessor Fund of the Kentucky Municipal Bond
Fund, for the fiscal years ended June 30, 1996, 1995, and 1994 as follows:
67
<PAGE> 165
THE ONE GROUP ADMINISTRATOR--NET
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30, 1996
-------------------------------
THE ONE GROUP
SERVICES BANC ONE ADVISORS** 440***
FUND COMPANY NET WAIVED NET WAIVED NET WAIVED
- ---- ----------- ------ --- ------ --- ------
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury Securities Money Market $1,675,933 $23,824 $ 928,127 0 $ 881,386 $ 19,060
Prime Money Market $2,490,499 $ 0 $1,463,271 0 $1,611,838 $ 0
Municipal Money Market $ 504,611 $58,625 $ 340,160 0 $ 328,817 $ 82,052
Ohio Municipal Money Market $ 9,933 $87,195 $ 53,819 0 $ 22,276 $ 39,800
Income Equity $ 286,663 $ 0 $ 151,456 0 $ 136,804 $ 0
Disciplined Value $ 543,544 $ 0 $ 321,420 0 $ 357,658 $ 0
Growth Opportunities $ 511,634 $ 0 $ 301,050 0 $ 332,353 $ 0
Equity Index $ 219,301 $96,276 $ 165,797 0 $ 52,623 $119,116
Large Company Value $ 532,314 $ 0 $ 300,440 0 $ 283,851 $ 32,509
Asset Allocation $ 19,184 $48,482 $ 33,779 0 $ 22,718 $ 11,794
International Equity Index $ 307,633 $ 0 $ 171,529 0 $ 172,763 $ 0
Large Company Growth $ 778,543 $ 0 $ 441,303 0 $ 457,430 $ 0
(Sun Eagle: Equity Growth)
Income Bond $ 505,703 $ 0 $ 302,920 0 $ 343,646 $ 186
Limited Volatility Bond $ 471,594 $ 0 $ 275,961 0 $ 301,887 $ 0
Intermediate Tax-Free Bond $ 222,203 $ 0 $ 138,734 0 $ 167,244 $ 0
Municipal Income $ 210,905 $43,781 $ 142,512 0 $ 110,442 $ 43,233
Ohio Municipal Bond $ 81,876 $15,630 $ 57,825 0 $ 55,179 $ 11,740
Government Bond $ 544,937 $ 6,947 $ 297,480 0 $ 270,620 $ 12,171
Ultra Short-Term Income $ 0 $50,706 $ 28,274 $ 0 $ 35,162
Intermediate Bond (Sun Eagle:
Intermediate Fixed Income) $ 229,988 $ 0 $ 134,912 0 $ 148,161 $ 0
Treasury Only Money Market $ 113,945 $ 0 $ 179,830 0 $ 65,888 $ 0
Government Money Market $ 232,688 $ 0 $ 385,955 0 $ 153,141 $ 131
Institutional Prime Money Market NA* NA* NA NA* NA*
Treasury Money Market NA* NA* NA NA* NA*
Tax-Exempt Money Market NA* NA* NA NA* NA*
Arizona Municipal Bond NA* NA* NA NA* NA*
Kentucky Municipal Bond 38,104 $ 1,196 $ 23,883 0 $ 26,310 $ 2,256
Texas Tax-Free Bond NA* NA* NA NA* NA*
W. Virginia Municipal Bond NA* NA* NA NA* NA*
Louisiana Municipal Bond $ 86,078+ $ 0 $ 31,165+ 0 $ 0 $ 0
Value Growth $ 101,245+ $ 0 $ 36,656+ 0 $ 0 $ 0
Gulf South Growth $ 47,011+ $ 0 $ 17,021+ 0 $ 0 $ 0
Income NA* NA* NA* NA* NA* NA*
Investor Growth NA* NA* NA* NA* NA* NA*
Investor Growth & Income NA* NA* NA* NA* NA* NA*
Investor Aggressive Growth NA* NA* NA* NA* NA* NA*
Investor Conservative Growth NA* NA* NA* NA* NA* NA*
Investor Balanced NA* NA* NA* NA* NA* NA*
Investor Fixed Income NA* NA*
</TABLE>
* As of June 30, 1996, the Fund had not commenced operations.
** These are fees paid by The One Group Services Company to Banc One Advisors
pursuant to the Sub-Administration Agreement for the period from December
1, 1995 through June 30, 1996, and by 440 for the period June 30, 1995 to
December 1, 1995.
*** These are fees paid from July 1, 1995 through early November 30, 1995.
+ These fees are paid from March 26, 1996 through June 30, 1996.
68
<PAGE> 166
THE ONE GROUP ADMINISTRATOR--NET
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30, 1995
-------------------------------
440 ADVISOR** FEDERATED
FUND NET WAIVED NET WAIVED NET WAIVED
- ---- --- ------ --- ------ --- ------
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury Securities Money
Market $1,731,370 $ 122,233 $176,604 $ 0 NA NA
Prime Money Market $2,897,503 $111,313 $304,170 $0 NA NA
Municipal Money Market $ 699,142 $ 92,641 $ 75,012 $0 NA NA
Ohio Municipal Money Market $ 82,050 $ 61,415 $ 11,806 $0 NA NA
Income Equity $ 308,619 $ 0 $ 27,163 $0 NA NA
Disciplined Value $ 687,537 $ 0 $ 65,713 $0 NA NA
Growth Opportunities $ 631,524 $ 0 $ 59,053 $0 NA NA
Equity Index $ 90,704 $195,567 $ 30,329 $0 NA NA
Large Company Value $ 317,839 $ 27,527 $ 48,604 $0 NA NA
Asset Allocation $ 62,570 $ 4,439 $ 6,304 $0 NA NA
International Equity Index $ 285,929 $ 0 $ 31,831 $0 NA NA
Large Company Growth $ 495,980 $ 0 $ 76,459 $0 NA NA
Income Bond $ 763,202 $ 6,504 $ 67,577 $0 NA NA
Limited Volatility Bond $ 653,915 $ 2,136 $ 60,084 $0 NA NA
Intermediate Tax-Free Bond $ 305,651 $ 0 $ 31,017 $0 NA NA
Municipal Income $ 198,808 $ 79,249 $ 28,635 $0 NA NA
Ohio Municipal Bond $ 124,734 $ 32,085 $ 13,946 $0 NA NA
Government Bond $ 414,276 $ 14,952 $ 53,984 $0 NA NA
Ultra Short-Term Income $ 68,313 $ 72,059 $ 8,546 $0 NA NA
Intermediate Bond $ 208,925 $ 0 $ 26,063 $0 NA NA
Treasury Only Money Market $ 86,438 $ 0 $ 33,470 $0 NA NA
Government Money Market $ 273,911 $ 23,414 $ 88,367 $0 NA NA
Kentucky Municipal Bond $ 24,352*** $ 1,554*** $ 6,155*** $0*** $77,852**** $0****
Institutional Prime Money Market NA* NA* NA* NA* NA NA
Treasury Money Market NA* NA* NA* NA* NA NA
Tax-Exempt Money Market NA* NA* NA* NA* NA NA
Arizona Municipal Bond NA* NA* NA* NA* NA NA
Texas Tax-Free Bond NA* NA* NA* NA* NA NA
W. Virginia Municipal Bond NA* NA* NA* NA* NA NA
Louisiana Municipal Bond $ 297,746+ $ 99,248+ NA NA NA NA
Value Growth $ 295,695+ NA+ NA NA NA NA
Gulf South Growth $ 134,419+ NA+ NA NA NA NA
Income NA* NA* NA* NA* NA NA
Investor Growth NA* NA* NA* NA* NA NA
Investor Growth & Income NA* NA* NA* NA* NA NA
Investor Aggressive Growth NA* NA* NA* NA* NA NA
Investor Conservative Growth NA* NA* NA* NA* NA NA
Investor Balanced NA* NA* NA* NA* NA NA
Investor Fixed Income NA* NA* NA* NA* NA NA
</TABLE>
* As of June 30, 1995, the Fund had not commenced operations.
** These are fees paid by 440 to Banc One Advisors pursuant to the
Sub-Administration Agreement for the period from April 1, 1995 through
June 30, 1995.
*** These fees are paid from January 20, 1995 through June 30, 1995.
**** These fees are paid from February 1, 1994 through January 19, 1995.
+ These fees were paid for fiscal year ended November 30, 1995 to Goldman
Sachs Asset Management, the Funds' prior administrator.
69
<PAGE> 167
THE ONE GROUP(R) ADMINISTRATOR--NET
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30, 1994
-------------------------------
440 SEI WINSBURY FEDERATED
--- --- -------- ---------
FUND NET WAIVED NET WAIVED *NET WAIVED NET WAIVED
- ---- --- ------ --- ------ ---- ------ --- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury Securities Money $ 784,527 $145,627 $291,772 $120,358 NA NA NA NA
Market
Prime Money Market $1,198,953 $259,937 $586,109 $267,864 NA NA NA NA
Municipal Money Market $ 297,555 $ 62,779 $114,253 $ 61,144 NA NA NA NA
Ohio Municipal Money Market $ 41,436 $ 21,037 $ 6,987 $ 19,013 NA NA NA NA
Income Equity $ 218,261 $ 8,246 $115,876 $ 21,790 NA NA NA NA
Disciplined Value $ 389,399 $ 5,841 $157,726 $ 30,050 NA NA NA NA
Growth Opportunities $ 363,523 $ 8,369 $168,296 $ 30,159 NA NA NA NA
Equity Index $ 139,191 $ 13,656 $ 40,299 $ 36,379 NA NA NA NA
Large Company Value $ 150,681 $ 1,293 $ 79,477 $ 16,782 NA NA NA NA
Asset Allocation $ 35,653 $ 8,115 $ 9,104 $ 16,053 NA NA NA NA
International Equity Index $ 116,426 $ 476 $ 39,564 $ 0 NA NA NA NA
Large Company Growth $ 73,974 $ 901 NA NA $44,593 $0 NA NA
Income Bond $ 497,328 $ 65,405 $234,878 $143,075 NA NA NA NA
Limited Volatility Bond $ 403,410 $ 59,568 $199,661 $107,428 NA NA NA NA
Intermediate Tax-Free Bond $ 169,440 $ 19,827 $ 73,417 $ 55,558 NA NA NA NA
Municipal Income $ 129,864 $ 14,224 $ 39,346 $ 18,232 NA NA NA NA
Ohio Municipal Bond $ 97,895 $ 14,926 $ 43,502 $ 26,271 NA NA NA NA
Government Bond $ 168,602 $ 6,771 $ 59,555 $ 6,230 NA NA NA NA
Ultra Short-Term Income $ 195,828 $ 15,187 $115,709 $ 29,093 NA NA NA NA
Intermediate Bond $ 55,677 $ 19,323 NA NA $48,000 $0 NA NA
Treasury Only Money Market $ 33,500 $ 35,403 $ 0 $ 18,868 NA NA NA NA
Government Money Market $ 164,560 $ 92,943 $ 2,467 $ 78,512 NA NA NA NA
Institutional Prime Money Market NA* NA* NA* NA* NA NA NA NA
Treasury Money Market NA* NA* NA NA* NA NA NA NA
Tax-Exempt Money Market NA* NA* NA* NA* NA NA NA NA
Arizona Municipal Bond NA* NA* NA* NA* NA NA NA NA
Kentucky Municipal Bond NA* NA* NA* NA* NA NA $62,930** $0**
Texas Tax-Free Bond NA* NA* NA* NA* NA NA NA NA
W. Virginia Municipal Bond NA* NA* NA* NA* NA NA NA NA
Louisiana Municipal Bond $202,083+ $10,042+ NA NA NA NA NA NA
Value Growth $ 266,463+ NA+ NA NA NA NA NA NA
Gulf South Growth $ 120,693+ NA+ NA NA NA NA NA NA
Income NA* NA* NA* NA* NA NA NA NA
Investor Growth NA* NA* NA* NA* NA NA NA NA
Investor Growth & Income NA* NA* NA* NA* NA NA NA NA
Investor Aggressive Growth NA* NA* NA* NA* NA NA NA NA
Investor Conservative Growth NA* NA* NA* NA* NA NA NA NA
Investor Balanced NA* NA* NA* NA* NA NA NA NA
Investor Fixed Income NA* NA* NA* NA* NA NA NA NA
</TABLE>
70
<PAGE> 168
* As of June 30, 1994, the Fund had not commenced operations.
** For the fiscal year ended January 31, 1994.
+ These fees were paid for fiscal year ended November 30, 1994 to Goldman
Sachs Asset Management, the Funds' prior administrator.
Unless sooner terminated, the Administration Agreement between the Trust
and The One Group Services Company will continue in effect through November 30,
1996. The Administration Agreement thereafter shall be renewed automatically for
successive one year terms, unless written notice not to renew is given by the
non-renewing party to the other party at least sixty days prior to the
expiration of the then-current term. The Administration Agreement will be
reviewed and ratified at least annually by the Trust's Board of Trustees,
provided that the Administration Agreement is also reviewed and ratified by the
majority of the Trust's Trustees who are not parties to the Administration
Agreement or interested persons (as defined in the 1940 Act) of any party to the
Administration Agreement, by vote cast in person at a meeting called for the
purpose of reviewing and ratifying the Administration Agreement. The
Administration Agreement is terminable with respect to a particular Trust only
upon mutual agreement of the parties to the Administration Agreement and for
cause (as defined in the Administration Agreement) by the party alleging cause,
on not less than sixty days' notice by the Trust's Board of Trustees or by The
One Group Services Company.
The Administration Agreement provides that the Administrator shall not be
liable for any error of judgment or mistake of law or any loss suffered by the
Trust in connection with the matters to which the Administration Agreement
relates, except a loss resulting from willful misfeasance, bad faith, or
negligence in the performance of its duties, or from the reckless disregard by
it of its obligations and duties thereunder.
EXPENSES
If total expenses borne by any one of the Funds in any fiscal year exceed
expense limitations imposed by applicable State securities regulations, Banc One
Advisors and the Administrator will reimburse that Fund by the amount of such
excess in proportion to their respective fees. As of the date of this
Prospectus, under the most restrictive State expense limitation applicable to
the Trust, the annual expenses of the Trust may not exceed the total of two and
one-half percent (2.5%) of the first thirty million dollars ($30,000,000) of the
Trust's average net assets, plus two percent (2.0%) of the next seventy million
dollars ($70,000,000) of the Trust's average net assets, plus one and one-half
percent (1.5%) of the remaining amount of the Trust's average net assets. Any
expense reimbursements will be estimated daily and reconciled and paid on a
monthly basis. Fees charged to customers by certain entities in connection with
investments in a Fund on a customer's behalf are not included within Fund
expenses for purposes of any such expense limitation.
DISTRIBUTOR
The One Group Services Company serves as Distributor to each Fund of the
Trust pursuant to its Distribution Agreement with the Trust (the "Distribution
Agreement"). The Board of Trustees of the Trust approved The One Group Services
Company as the sole Distributor beginning November 1, 1995. Unless otherwise
terminated, the Distribution Agreement will continue in effect until November
30, 1996 and will continue from year to year if approved at least annually (i)
by the Trust's Board of Trustees or by the vote of a majority of the outstanding
Shares of the Funds (see "ADDITIONAL INFORMATION-- Miscellaneous," in this
Statement of Additional Information) that are parties to the Distribution
Agreement, and (ii) by the vote of a majority of the Trustees of the Trust who
are not parties to the Distribution Agreement or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval. The agreement may be terminated in the event of its assignment, as
defined in the 1940 Act. The One Group Services Company is a broker-dealer
registered
71
<PAGE> 169
with the Securities and Exchange Commission, and is a member of the National
Association of Securities Dealers, Inc.
DISTRIBUTION PLAN
The operation and fees with respect to Class A Shares, Class B Shares,
Class C Shares, and Service Class Shares of the Trust payable under the Trust's
Distribution and Shareholder Services Plans, to which Class A Shares, Class B
Shares, Class C Shares, and Service Class Shares of each Fund of the Trust are
subject, are described in each such Fund's Prospectuses and in the Multiple
Class Plan.
The Distribution and Shareholder Services Plan with respect to Class A
Shares (the "Distribution Plan") was initially approved on July 28, 1989 by the
Trust's Board of Trustees, including a majority of the Trustees who are not
interested persons of the Trust (as defined in the 1940 Act) and who have no
direct or indirect financial interest in the Distribution Plan (the "Independent
Trustees"). The Distribution Plan originally applied to the single class of
Shares of each Fund of the Trust that existed prior to the offering of the
Funds' Shares as five separate classes. An amendment to the Distribution Plan
was approved by the Independent Trustees on October 21, 1991, and became
effective on February 7, 1992. Such amendment limited fees under the
Distribution Plan only to the Class A Shares of each Fund. The Distribution Plan
was amended again on February 11, 1993 in order to make Retirement Class Shares
(now the Service Class Shares) subject to distribution fees. The Distribution
Plan was further amended on February 29, 1996, to eliminate certain "defensive"
provisions of the Distribution Plan. A Distribution and Shareholder Services
Plan (the "CDSC Plan") for Class B and Class C Shares was initially approved on
August 12, 1993 by the Independent Trustees. The CDSC Distribution Plan was
re-executed on December 13, 1995 and amended on February 20, 1997. Prior to
February 7, 1992, distribution fees were waived with respect to every Fund of
the Trust except the U.S. Treasury Securities Money Market Fund and the Prime
Money Market Fund.
During the fiscal year ending June 30, 1996, the distribution fees paid by
the Class A, Class B and Service Class Shares (formerly Retirement Class Shares)
of the Trust to 440 Financial Distributors, the previous Distributor to the
Trust and to Federated Administrative Services, the distributor to the
predecessor Fund of the Kentucky Municipal Bond Fund, the Trademark Kentucky
Municipal Bond Fund, were as follows:
72
<PAGE> 170
THE ONE GROUP DISTRIBUTION FEES PAID FOR THE FISCAL YEAR ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
SERVICE
FUND DISTRIBUTOR CLASS A CLASS B CLASS
- ---- ----------- ------- ------- -----
<S> <C> <C> <C> <C>
U.S. Treasury Securities Money Market 440 Finl: $ 95,887 NA 0
One Group Ser. $158,356 NA 0
Prime Money Market 440 Finl: $252,965 NA 0
One Group Ser. $436,739 NA 0
Municipal Money Market 440 Finl: $ 67,967 NA NA
One Group Ser. $ 92,604 NA 0
Ohio Municipal Money Market 440 Finl: $ 43,895 NA NA
One Group Ser. $ 70,604 NA 0
Income Equity 440 Finl: $ 17,079 $ 23,062 NA
One Group Ser. $ 45,011 $ 99,172
Disciplined Value 440 Finl: $ 15,357 $ 50,493 NA
One Group Ser. $ 27,687 $ 85,251
Growth Opportunities 440 Finl: $ 15,247 $ 15,986 NA
One Group Ser. $ 30,939 $ 49,433
Equity Index 440 Finl: $ 6,395 $ 14,481 NA
One Group Ser. $ 28,845 $114,425
Large Company Value 440 Finl: $ 4,772 $ 5,565 NA
One Group Ser. $ 12,163 $ 17,024
Asset Allocation 440 Finl: $ 6,741 $ 17,781 NA
One Group Ser. $ 19,297 $ 67,442
International Equity Index 440 Finl: $ 5,867 $ 15,916 NA
One Group Ser. $ 12,143 $ 28,121
Large Company Growth 440 Finl: $ 39,251 $ 55,576 NA
One Group Ser. $ 89,017 $214,351
Income Bond 440 Finl: $ 7,647 $ 9,108 NA
One Group Ser. $ 13,300 $ 23,100
Limited Volatility Bond 440 Finl: $ 13,223 $ 9,149 NA
One Group Ser. $ 24,663 $ 19,443
Intermediate Tax-Free Bond 440 Finl: $ 7,548 $ 5,052 NA
One Group Ser. $ 10,539 $ 9,597
Municipal Income 440 Finl: $ 15,155 $ 36,106 NA
One Group Ser. $ 30,695 $ 89,152
Ohio Municipal Bond 440 Finl: $ 13,084 $ 14,525 NA
One Group Ser. $ 20,939 $ 35,444
Government Bond 440 Finl: $ 9,612 $ 12,977 NA
One Group Ser. $ 35,311 $ 40,586
</TABLE>
73
<PAGE> 171
<TABLE>
<CAPTION>
SERVICE
FUND DISTRIBUTOR CLASS A CLASS B CLASS
- ---- ----------- ------- ------- -----
<S> <C> <C> <C> <C>
Ultra Short-Term Income 440 Finl: $ 2,308 $ 521
One Group Ser. $ 3,316 $ 3,369
Intermediate Bond 440 Finl: $ 6,802 $ 3,548 NA
One Group Ser. $ 17,159 $ 19,147
Treasury Only Money Market 440 Finl: $ 0 $ 0 NA
One Group Ser. $ 0 $ 0
Government Money Market 440 Finl: $ 0 $ 0 NA
One Group Ser. $ 0 $ 0
Kentucky Municipal Bond Federated:**** $ 0 $ 0
440 Finl:** $ 9,180 $ 642 NA
One Group Ser. $ 12,332 $ 4,154
Treasury Money Market 440 Finl: NA* NA* NA*
One Group Ser.
Tax-Exempt Money Market 440 Finl: NA* NA* NA*
One Group Ser.
Arizona Municipal Bond 440 Finl: NA* NA* NA*
One Group Ser.
Texas Tax-Free Bond 440 Finl: NA*** NA*** NA***
One Group Ser.
W. Virginia Municipal Bond 440 Finl: NA*** NA*** NA***
One Group Ser.
Louisiana Municipal Bond One Group Ser. 37,113++ $ 7,304++ NA++
Goldman 52,494++ 8,200++ NA++
Value Growth One Group Ser. 23,749++ $ 11,216++ NA++
Goldman 33,592++ 11,332++ NA++
Gulf South Growth One Group Ser. 12,222++ $ 6,378++ NA++
Goldman 17,228++ 6,444++ NA++
Income One Group Ser. NA*** NA*** NA***
Investor Growth One Group Ser. NA* NA* NA*
Investor Growth & Income One Group Ser. NA* NA* NA*
Investor Aggressive Growth One Group Ser. NA* NA* NA*
Investor Conservative Growth One Group Ser. NA* NA* NA*
Investor Balanced One Group Ser. NA* NA* NA*
Investor Fixed Income One Group Ser. NA* NA* NA*
</TABLE>
* These fees had not commenced operations as of June 30, 1996.
** These are fees paid from January 20, 1995 through June 30, 1995.
**** These are fees paid from February 1, 1994 through January 19, 1995.
++ These fees were paid from March 26, 1996 to June 30, 1996.
74
<PAGE> 172
In accordance with Rule 12b-1 under the 1940 Act, the Distribution Plan
and CDSC Plan may be terminated with respect to the Class A Shares, Class B
Shares, Class C Shares or Service Class Shares of any Fund by a vote of a
majority of the Independent Trustees, or by a vote of a majority of the
outstanding Class A Shares, Class B Shares, Class C Shares or Service Class
Shares, respectively, of that Fund. The Distribution Plan and CDSC Plan may be
amended by vote of the Trust's Board of Trustees, including a majority of the
Independent Trustees, cast in person at a meeting called for such purpose,
except that any change in the Distribution Plan or Class B Distribution Plan
that would materially increase the distribution fee with respect to the Class A
Shares, Class B Shares, Class C Shares or Service Class Shares of a Fund
requires the approval of that Fund's Class A, Class B, Class C or Service Class
Shareholders, respectively. The Trust's Board of Trustees will review on a
quarterly and annual basis written reports of the amounts received and expended
under the Distribution Plan (including amounts expended by the Distributor to
Participating Organizations pursuant to the Servicing Agreements entered into
under the Distribution Plan) indicating the purposes for which such expenditures
were made.
CUSTODIAN AND TRANSFER AGENT
Cash and securities owned by the Funds of the Trust are held by State
Street Bank and Trust Company ("State Street") as Custodian. State Street serves
the respective Funds as Custodian pursuant to a Custodian Agreement with the
Trust (the "Custodian Agreement"). Under the Custodian Agreement, State Street
(i) maintains a separate account or accounts in the name of each Fund; (ii)
makes receipts and disbursements of money on behalf of each Fund; (iii) collects
and receives all income and other payments and distributions on account of the
Funds' portfolio securities; (iv) responds to correspondence from security
brokers and others relating to its duties; and (v) makes periodic reports to the
Trust's Board of Trustees concerning the Trust's operations. State Street may,
at its own expense, open and maintain a sub-custody account or accounts on
behalf of the Trust, provided that State Street shall remain liable for the
performance of all of its duties under the Custodian Agreement.
Bank One Trust Company, N.A. serves as Sub-Custodian in connection
with the Trust's securities lending activities, pursuant to an agreement between
State Street and Bank One Trust Company. Bank One Trust Company receives a fee
paid by the Trust.
Rules adopted under the 1940 Act permit the Trust to maintain its
securities and cash in the custody of certain eligible banks and securities
depositories. The Trust intends to select foreign custodians or sub-custodians
to maintain foreign securities of the International Equity Index Fund pursuant
to such rules, following a consideration of a number of factors, including, but
not limited to, the reliability and financial stability of the institution; the
ability of the institution to perform custodial services for the Trust; the
reputation of the institution in its national market; the political and economic
stability of the country in which the institution is located; and the risks of
potential nationalization or expropriation of Trust assets. In addition, the
1940 Act requires that foreign bank sub-custodians, among other things have
Shareholder equity in excess of $200 million, have no lien on the Trust's assets
and maintain adequate and accessible records.
State Street Bank & Trust ("State Street") serves as Transfer Agent and
Dividend Disbursing Agent for each Fund pursuant to Transfer Agency Agreements
with the Trust (the "Transfer Agency Agreement"). Under the Transfer Agency
Agreements, State Street has agreed (i) to issue and redeem Shares of the Trust;
(ii) to address and mail all communications by the Trust to its Shareholders,
including reports to Shareholders, dividend and distribution notices, and proxy
material for its meetings of Shareholders; (iii) to respond to correspondence or
inquiries by Shareholders and others relating to its duties; (iv) to maintain
Shareholder accounts and certain sub-accounts; and (v) to make periodic reports
to the Trust's Board of Trustees concerning the Trust's operations.
75
<PAGE> 173
EXPERTS
The financial statements of the Trust for the fiscal year ended June 30,
1996 are incorporated by reference in this Statement of Additional Information,
have been audited by Coopers & Lybrand L.L.P., independent accountants, as set
forth in their reports appearing elsewhere herein, and are included in reliance
upon such reports and on the authority of such firm as experts in auditing and
accounting.
The financial statements for the predecessor funds of the Intermediate
Bond Fund and Large Company Growth Fund, Sun Eagle Intermediate Fixed Income
Fund and Sun Eagle Equity Growth Fund, respectively, for the fiscal year ended
June 30, 1993 and for the period from February 28, 1992 (commencement of
operations of each Fund) to June 30, 1992 are incorporated by reference in this
Statement of Additional Information, have been audited by KPMG Peat Marwick LLP,
independent accountants, and are included in reliance upon the authority of such
firm as experts in auditing and accounting.
The financial statements for the predecessor Fund of the Kentucky
Municipal Bond Fund, the Trademark Kentucky Municipal Bond Fund, for the period
from February 1, 1994 to January 19, 1995, and for the period from March 12,
1993 (commencement of operations) to January 31, 1994 are incorporated by
reference in this Statement of Additional Information, have been audited by KPMG
Peat Marwick LLP, independent accountants, and are included in reliance upon the
authority of such firm as experts in auditing and accounting.
The financial statements for the predecessor funds of the Louisiana
Municipal Bond Fund, the Value Growth Fund, and the Gulf South Growth Fund, the
Paragon Louisiana Tax-Free Fund, the Paragon Value Growth Fund and the Paragon
Gulf South Growth Fund, for the fiscal year ended November 30, 1995 are
incorporated by reference in this Statement of Additional Information, have been
audited by Price Waterhouse LLP, independent accountants, and are included in
reliance upon such reports and on the authority of such firm as experts in
auditing and accounting.
The law firm of Ropes & Gray, One Franklin Square, 1301 K Street, N.W.,
Suite 800 East, Washington, D.C. 20005 is counsel to the Trust. From time to
time, Ropes & Gray have rendered legal services to Bank One, Milwaukee and Bank
One, Wisconsin Trust Company, NA.
ADDITIONAL INFORMATION
DESCRIPTION OF SHARES
The Trust is a Massachusetts Business Trust. The Trust's Declaration of
Trust was filed with the Secretary of State of the Commonwealth of Massachusetts
on May 23, 1985 and authorizes the Board of Trustees to issue an unlimited
number of Shares, which are units of beneficial interest, without par value. The
Trust's Declaration of Trust authorizes the Board of Trustees to establish one
or more series of Shares of the Trust, and to classify or reclassify any series
into one or more classes by setting or changing in any one or more respects the
preferences, designations, conversion, or other rights, restrictions, or
limitations as to dividends, conditions of redemption, qualifications, or other
terms applicable to the Shares of such class, subject to those matters expressly
provided for in the Declaration of Trust, as amended, with respect to the Shares
of each series of the Trust. The Trust presently includes 40 series of Shares,
which represent interests in the Prime Money Market Fund, the U.S. Treasury
Securities Money Market Fund, the Municipal Money Market Fund, the Ohio
Municipal Money Market Fund, the Income Equity Fund, the Disciplined Value Fund,
the Growth Opportunities Fund, the Value Growth Fund, the Gulf South Growth
Fund, the Large Company Value Fund, the Large Company Growth Fund, the
International Equity Index Fund, the Equity Index Fund, the Asset Allocation
Fund, the Income Bond Fund, the Limited Volatility Bond Fund, the Intermediate
Bond Fund, the Government Bond Fund, the Ultra Short-Term Income Fund, the
Income Fund, the Investor Growth Fund, the Investor Growth & Income Fund, the
Investor Aggressive Growth Fund, the Investor Fixed Income Fund, the Investor
Conservative Growth Fund, the Investor Balanced Fund, the Municipal Income Fund,
the Intermediate Tax-Free Bond Fund, the Ohio Municipal Bond Fund, the Texas
76
<PAGE> 174
Tax-Free Bond Fund, the West Virginia Municipal Bond Fund, the Kentucky
Municipal Bond Fund, the Louisiana Municipal Bond Fund, the Arizona Municipal
Bond Fund, the Treasury Money Market Fund, the Treasury Only Money Market Fund,
the Government Money Market Fund, the Tax Exempt Money Market Fund, the
Institutional Prime Money Market Fund and the Treasury and Agency Fund. The
Funds of the Trust (other than the Institutional Money Market Funds, the U.S.
Treasury Securities Money Market Fund, the Prime Money Market Fund and the Funds
of Funds) offer Shares in three separate classes: Fiduciary Shares, Class A
Shares and Class B Shares. The U.S. Treasury Securities Money Market Fund and
the Prime Money Market Fund offer Fiduciary Shares, Class A Shares and Service
Class Shares. The Funds of Funds offer Fiduciary Class Shares, Class A Shares,
Class B Shares, and Class C Shares. See the relevant Prospectus for those Funds
for more details.
Shares have no subscription or preemptive rights and only such conversion
or exchange rights as the Board may grant in its discretion. When issued for
payment as described in the Prospectus and this Statement of Additional
Information, the Trust's Shares will be fully paid and non-assessable. In the
event of a liquidation or dissolution of the Trust, Shares of a Fund are
entitled to receive the assets available for distribution belonging to the Fund,
and a proportionate distribution, based upon the relative asset values of the
respective Funds, of any general assets not belonging to any particular Fund
which are available for distribution.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted to the holders of the outstanding voting securities of an investment
company such as the Trust shall not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding Shares of
each Fund affected by the matter. For purposes of determining whether the
approval of a majority of the outstanding Shares of a Fund will be required in
connection with a matter, a Fund will be deemed to be affected by a matter
unless it is clear that the interests of each Fund in the matter are identical,
or that the matter does not affect any interest of the Fund. Under Rule 18f-2,
the approval of an investment advisory agreement or any change in investment
policy would be effectively acted upon with respect to a Fund only if approved
by a majority of the outstanding Shares of such Fund. However, Rule 18f-2 also
provides that the ratification of independent public accountants, the approval
of principal underwriting contracts, and the election of Trustees may be
effectively acted upon by Shareholders of the Trust voting without regard to
series.
Class A Shares, Class B Shares, Class C Shares and Service Class Shares of
a Fund have exclusive voting rights with respect to matters pertaining to the
Fund's Distribution Plan.
SHAREHOLDER AND TRUSTEE LIABILITY
Under Massachusetts law, holders of units of beneficial interest in a
business trust may, under certain circumstances, be held personally liable as
partners for the obligations of the trust. However, the Trust's Declaration of
Trust provides that Shareholders shall not be subject to any personal liability
for the obligations of the Trust, and that every written agreement, obligation,
instrument, or undertaking made by the Trust shall contain a provision to the
effect that the Shareholders are not personally liable thereunder. The
Declaration of Trust provides for indemnification out of the trust property of
any Shareholder held personally liable solely by reason of his being or having
been a Shareholder. The Declaration of Trust also provides that the Trust shall,
upon request, assume the defense of any claim made against any Shareholder for
any act or obligation of the Trust, and shall satisfy any judgment thereon.
Thus, the risk of a Shareholder incurring financial loss on account of
Shareholder liability is limited to circumstances in which the Trust itself
would be unable to meet its obligations.
The Declaration of Trust states further that no Trustee, officer, or agent
of the Trust shall be personally liable in connection with the administration or
preservation of the assets of the trust or the conduct of the Trust's business;
nor shall any Trustee, officer, or agent be personally liable to any person for
any action or failure
77
<PAGE> 175
to act except for his own bad faith, willful misfeasance, gross negligence, or
reckless disregard of his duties. The Declaration of Trust also provides that
all persons having any claim against the Trustees or the Trust shall look solely
to the assets of the trust for payment.
CALCULATION OF PERFORMANCE DATA
Each Money Market Fund and the Treasury Only and Government Money Market
Funds' yield was computed with respect to each class of Shares by determining
the percentage net change, excluding capital changes, in the value of an
investment in one Share of the particular class of the Fund over the base
period, and multiplying the net change by 365/7 (or approximately 52 weeks). The
effective yield of each class of each Fund represents a compounding of the yield
by adding 1 to the number representing the percentage change in value of the
investment during the base period, raising that sum to a power equal to 365/7,
and subtracting 1 from the result. No performance data is available with respect
to the Tax Exempt Money Market, Treasury Money Market and Institutional Prime
Money Market Funds because those Funds had not commenced operations as of June
30, 1995.
The tax equivalent yields for the classes of the Municipal Money Market,
Ohio Municipal Money Market, and Tax Exempt Money Market Funds are computed by
dividing that portion of the Fund's yield (with respect to a particular class)
which is tax-exempt by 1 minus a stated income tax rate and adding the product
to that portion, if any, of the yield of the Fund (with respect to a particular
class) that is not tax-exempt. The tax equivalent yields for the classes of the
Municipal Money Market Fund contained in the preceding paragraph were computed
based on an assumed effective federal income tax rate of 39.6%. No such data was
provided for the Tax Exempt Money Market Fund because it had not commenced
operations as of June 30, 1996. The tax equivalent effective yield for the
classes of the Municipal Money Market Fund, Ohio Municipal Money Market Fund,
and Tax Exempt Money Market Funds are computed by dividing that portion of the
effective yield of the Fund (with respect to a particular class) which is
tax-exempt by 1 minus a stated income tax rate and adding the product to that
portion, if any, of the effective yield of the Fund (with respect to a
particular class) that is not tax-exempt.
Performance information showing a Fund's total return and/or 30-day yield
with respect to a particular class may be presented from time to time in
advertising and sales literature regarding the Equity Funds, the Bond Funds, the
Funds of Funds, and the Municipal Bond Funds. A 30-day yield is calculated by
dividing the net investment income per-share earned during the 30-day base
period by the maximum offering price per share on the last day of the period,
according to the following formula:
a-b
---
30-Day Yield = 2[( cd +1)6-1]
In the above formula, "a" represents dividends and interest earned by a
particular class during the 30-day base period; "b" represents expenses accrued
to a particular class for the 30-day base period (net of reimbursements); "c"
represents the average daily number of Shares of a particular class outstanding
during the 30-day base period that were entitled to receive dividends; and "d"
represents the maximum offering price per share of a particular class on the
last day of the 30-day base period.
From time to time the tax equivalent 30-day yield of a particular class of
a Municipal Bond Fund may be presented in advertising and sales literature. The
tax equivalent 30-day yield will be computed by dividing that portion of a
Fund's yield (respecting a particular class) which is tax-exempt by 1 minus a
stated income tax rate and adding the product to that portion, if any, of the
yield of the Fund (respecting a particular class) that is not tax-exempt. The
tax equivalent 30-day yields for a Municipal Bond Fund (respecting a particular
class) will, unless otherwise noted, be computed based on an assumed effective
federal income tax rate of 31%. No tax
78
<PAGE> 176
equivalent 30-day yield information is available for the West Virginia Municipal
Bond, Texas Tax-Free Bond and Arizona Municipal Bond Funds.
A Fund's respective cumulative total return and average annual total
return was determined by calculating the change in the value of a hypothetical
$1,000 investment in a particular class of the Fund for each of the periods
shown. Cumulative total return for a particular class of a Fund is computed by
determining the rate of return over the applicable period that would equate the
initial amount invested to the ending redeemable value of the investment. The
cumulative return is calculated as the total dollar increase or decrease in the
value of an account assuming reinvestment of all distributions divided by the
original initial investment. The average annual return for a particular class of
a Fund is computed by determining the average annual compounded rate of return
over the applicable period that would equate the initial amount invested to the
ending redeemable value of the investment. The ending redeemable value includes
dividends and capital gain distributions reinvested at net asset value. The
resulting percentages indicated the positive or negative investment results that
an investor would have experienced from changes in share price and reinvestment
of dividends and capital gains distributions.
Performance information showing a Fund's and/or particular Class's
distribution rate may be presented from time to time in advertising and sales
literature regarding the Bond Funds and Equity Funds. The distribution rate is
calculated as follows:
distribution yield = a/(b) x 365
-----------
c
In the formula, "a" represents dividends distributed by a particular class
during that period; "b" represents month end offer price or net asset value for
a particular class; "c" represents the number of days in the period being
calculated. "365" is the number of days in a year, used to annualize the
distribution yield.
Performance will fluctuate from time to time and is not necessarily
representative of future results. Accordingly, a Fund's performance may not
provide for comparison with bank deposits or other investments that pay a fixed
return for a stated period of time. Performance is a function of a Fund's
quality, composition, and maturity, as well as expenses allocated to the Fund.
Fees imposed upon customer accounts at a bank, with regard to Fiduciary Class
Shares and Service Class Shares, or a Participating Organization, with regard to
Class A and Class B Shares, will reduce a Fund's effective yield to customers.
Performance data for the Funds through June 30, 1996 (calculated as described
above) is as follows:
TAX-EQUIVALENT YIELD
<TABLE>
<CAPTION>
FIDUCIARY CLASS A
--------- -------
7 DAY 7 DAY
YIELD 28% TAX 39.6% TAX YIELD 28% TAX 39.6% TAX
----- ------- --------- ----- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Municipal Money 3.00% 4.17% 4.97% 2.75% 3.82% 4.55%
Market
Ohio Municipal
Money Market 3.00% 4.19% 5.00% 2.77% 3.85% 4.59%
</TABLE>
THE MONEY MARKET AND INSTITUTIONAL MONEY MARKET FUNDS may quote actual total
return performance in advertising and other types of literature compared to
indices or averages of alternative financial products available to prospective
investors. The performance comparisons may include the average return of various
bank instruments, some of which may carry certain return guarantees offered by
leading banks and thrifts, as monitored by the BANK RATE MONITOR, and those of
corporate and government security price indices of various durations prepared by
Shearson Lehman Brothers, Salomon Brothers, Inc. and the IBC/Donoghue
organization. These indices are not managed for any investment goals.
79
<PAGE> 177
The Money Market and Institutional Money Market Funds may also use
comparative performance information computed by and available from certain
industry and general market research and publications, such as Lipper Analytical
Services, Inc.
Statistical and performance information compiled and maintained by CDA
Technologies, Inc. and Interactive Data Corporation may also be used. CDA is a
performance evaluation service that maintains a statistical data base of
performance, as reported by a diverse universe of independently-managed mutual
funds. Interactive Data Corporation is a statistical access service that
maintains a data base of various industry indicators, such as historical and
current price/earning information and individual stock and fixed income price
and return information.
Current interest rate and yield information on government debt obligations
of various durations, as reported weekly by the Federal Reserve (Bulletin H.
15), may also be used. Also current rate information on municipal debt
obligations of various durations, as reported daily by the Bond Buyer, may also
be used. The BOND BUYER is published daily and is an industry-accepted source
for current municipal bond market information.
Comparative information on the Consumer Price Index may also be included.
This Index, as prepared by the U.S. Bureau of Labor Statistics, is the most
commonly used measure of inflation. It indicates the cost fluctuations of a
representative group of consumer goods. It does not represent a return on
investment.
THE EQUITY, BOND AND MUNICIPAL BOND FUNDS AND THE FUNDS OF FUNDS may quote
actual total return performance from time to time in advertising and other types
of literature compared to results reported by the Dow Jones Industrial Average.
The Dow Jones Industrial Average is an industry-accepted unmanaged index
of generally conservative securities used for measuring general market
performance. The performance reported will reflect the reinvestment of all
distributions on a quarterly basis and market price fluctuations. The index does
not take into account any brokerage commissions or other fees. Comparative
information on the Consumer Price Index may also be included.
The Equity Funds, the Bond Funds, the Municipal Bond Funds and the Funds
of Funds may also promote the yield and/or total return performance and use
comparative performance information computed by and available from certain
industry and general market research and publications, such as Lipper Analytical
Services, Inc.; they may also use indices such as the Standard & Poor's 400
Composite Stock Index, the Standard & Poor's 500 Composite Stock Index, the
Standard & Poor's 600 Composite Stock Index, the Russell 2000, or the Morgan
Stanley International European, Asian and Far East Gross Domestic Product Index
for performance comparison. Statistical and performance information compiled and
maintained by CDA Technologies, Inc. and Interactive Data Corporation may also
be used.
THE BOND FUNDS, THE FUNDS OF FUNDS AND THE ASSET ALLOCATION FUND may quote
actual yield and/or total return performance in advertising and other types of
literature compared to indices or averages of alternative financial products
available to prospective investors. The performance comparisons may include the
average return of various bank instruments, some of which may carry certain
return guarantees offered by leading banks and thrifts as monitored by BANK RATE
MONITOR, and those of corporate bond and government security price indices of
various durations. Comparative information on the Consumer Price Index may also
be included.
The Bond Funds, the Funds of Funds and the Asset Allocation Fund may also
use comparative performance information computed by and available from certain
industry and general market research and publications, as well as statistical
and performance information, compiled and maintained by CDA Technologies, Inc.
and Interactive Data Corporation.
80
<PAGE> 178
The Bond Funds, the Funds of Funds and the Asset Allocation Fund may also
use current interest rate and yield information on government debt obligations
of various durations, as reported weekly by the Federal Reserve (Bulletin H.
15). In addition, current rate information on municipal debt obligations of
various durations, as reported daily by the Bond Buyer, may also be used.
MISCELLANEOUS
The Trust is not required to hold a meeting of Shareholders for the
purpose of electing Trustees except that (i) the Trust is required to hold a
Shareholders' meeting for the election of Trustees at such time as less than a
majority of the Trustees holding office have been elected by Shareholders and
(ii) if, as a result of a vacancy on the Board of Trustees, less than two-thirds
of the Trustees holding office have been elected by the Shareholders, that
vacancy may only be filled by a vote of the Shareholders. In addition, Trustees
may be removed from office by a written consent signed by the holders of Shares
representing two-thirds of the outstanding Shares of the Trust at a meeting duly
called for the purpose, which meeting shall be held upon the written request of
the holders of Shares representing not less than 20% of the outstanding Shares
of the Trust. Except as set forth above, the Trustees may continue to hold
office and may appoint successor Trustees.
As used in the Trust's Prospectuses and in this Statement of Additional
Information, "assets belonging to a Fund" means the consideration received by
the Trust upon the issuance or sale of Shares in that 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 any general assets of the Trust not readily identified as
belonging to a particular Fund that are allocated to that Fund by the Trust's
Board of Trustees. The Board of Trustees may allocate such general assets in any
manner it deems fair and equitable. It is anticipated that the factor that will
be used by the Board of Trustees in making allocations of general assets to
particular Funds will be the relative net asset values of the respective Funds
at the time of allocation. Assets belonging to a particular Fund are charged
with the direct liabilities and expenses in respect of that Fund, and with a
share of the general liabilities and expenses of the Trust not readily
identified as belonging to a particular Fund that are allocated to that Fund in
proportion to the relative net asset values of the respective Funds at the time
of allocation. The timing of allocations of general assets and general
liabilities and expenses of the Trust to particular Funds will be determined by
the Board of Trustees of the Trust and will be in accordance with generally
accepted accounting principles. Determinations by the Board of Trustees of the
Trust as to the timing of the allocation of general liabilities and expenses and
as to the timing and allocable portion of any general assets with respect to a
particular Fund are conclusive. For information regarding the allocations of
Class Expenses to particular classes of a Fund, see the respective Prospectus of
the Fund under "MANAGEMENT-Expenses."
As used in the Trust's Prospectuses and in this Statement of Additional
Information, a "vote of a majority of the outstanding Shares" of the Trust, a
particular Fund, or a particular class of Shares of a Fund, means the
affirmative vote of the lesser of (a) more than 50% of the outstanding Shares of
the Trust, such Fund, or such class of Shares of such Fund, or (b) 67% or more
of the Shares of the Trust, such Fund, or such class of Shares of such Fund
present at a meeting at which the holders of more than 50% of the outstanding
Shares of the Trust, such Fund, or such class of Shares of such Fund are
represented in person or by proxy.
The Trust is registered with the Securities and Exchange Commission as a
management investment company. Such registration does not involve supervision by
the Commission of the management or policies of the Trust.
The Prospectus and this Statement of Additional Information omit certain
of the information contained in the Registration Statement filed with the
Securities and
81
<PAGE> 179
Exchange Commission. Copies of such information may be obtained from the
Commission upon payment of the prescribed fee.
The Prospectus and this Statement of Additional Information are not an
offering of the securities herein described in any State in which such offering
may not lawfully be made. No salesman, dealer, or other person is authorized to
give any information or make any representation other than those contained in
the Prospectus and Statement of Additional Information.
As of May 19, 1997, BANC ONE CORPORATION, 100 East Broad Street,
Columbus, Ohio 43271-0152 (an Ohio Corporation) through Bank Subsidiaries,
acting on behalf of their underlying accounts, held of record substantially all
of the Fiduciary Class Shares of the Trust, and possessed voting or investment
power as follows:
PERCENT OF
BENEFICIAL
FUND OWNERSHIP
Large Company Growth Fund 91.85%
Disciplined Value Fund 90.92%
Growth Opportunities Fund 85.90%
Income Bond Fund 91.00%
Intermediate Tax-Free Bond Fund 96.60%
Prime Money Market Fund 59.34%
U.S. Treasury Securities Money Market Fund 16.84%
Municipal Money Market Fund 80.97%
Income Equity Fund 93.17%
Equity Index Fund 83.51%
Large Company Value Fund 90.75%
Ohio Municipal Bond Fund 91.64%
Limited Volatility Bond Fund 90.87%
International Equity Index Fund 92.32%
Asset Allocation Fund 83.87%
Ohio Municipal Money Market Fund 72.62%
Municipal Income 96.10%
Kentucky Municipal Bond Fund 97.73%
Government Bond Fund 91.79%
Ultra Short-Term Income Fund 91.31%
Louisiana Municipal Bond Fund 95.81%
Value Growth Fund 90.71%
Gulf South Growth Fund 95.30%
Intermediate Bond Fund 93.17%
Arizona Municipal Bond Fund 91.96%
West Virginia Municipal Bond Fund 98.53%
Investor Growth Fund 85.01%
Investor Growth & Income Fund 90.25%
Investor Balanced Fund 95.44%
Investor Conservative Growth Fund 90.58%
Treasury Only Money Market Fund 24.59%
Government Money Market Fund 21.52%
Treasury & Agency Fund 99.72%
As a result, BANC ONE CORPORATION may be deemed to be a "controlling person" of
the Fiduciary Class Shares of each of the aforementioned Funds other than the
Treasury Only Money Market Fund and the Government Money Market Fund, under the
Investment Company Act of 1940.
In addition, as of May 19, 1997, the following persons were the beneficial
owners of more than 25% of the outstanding Shares of the following class of
Shares of the following Funds:
82
<PAGE> 180
<TABLE>
<CAPTION>
25% SHAREHOLDERS
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Dean Witter Reynolds Arizona Municipal Bond 45.54% Record
FBO Theodore Cesarano Fund
4617 E. Bernell Drive Class A
Phoenix, AZ 85028-5520
The One Group Services Company Arizona Municipal 100.00% Record
Fund Administration Bond Fund
3435 Stelzer Rd. Class B
Columbus, Ohio 43219-6004
Clark & Co. Arizona Municipal Bond 98.90% Record
Database 2-One Group/Cash Mgmt. Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Clark & Co. Asset Allocation Fund 53.47% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Asset Allocation Fund 33.28% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Strafe & Co. Disciplined Value 54.71% Record
Attn: Mutual Funds 0393 Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Clark & Co. Disciplined Value Fund 38.85% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Equity Index Fund 72.62% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Banc One Securities Savings Plan Equity Index Fund 31.06% Beneficial
235 West Schrock Road Fiduciary
Westerville, Ohio 43081-2874
</TABLE>
83
<PAGE> 181
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Strafe & Co. Government Bond Fund 67.29% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Clark & Co. Government Bond Fund 27.01% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Government 41.25% Record
Bank One Trust Co. Money Market Fund
Attn: Mutual Funds
100 E. Broad St.
Columbus, Ohio 43215-3607
Clark & Co. Government Money Market 26.57% Record
Database 2 - Attn: One Group/Cash Mgmt Fund
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co./Cash Div. Growth Opportunities Fund 51.94% Record
Bank One Trust Co. Fiduciary
Attn: Mutual Funds 0393
100 E. Board Street
Columbus, Ohio 43215-3607
Clark & Co. Growth Opportunities Fund 36.74% Record
Database 2 - Attn: One Group/Cash Mgmt. Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Gulf South Growth Fund 90.25% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Strafe & Co. Income Bond Fund 64.05% Record
Bank One Trust Co. Fiduciary
Attn: Mutual Funds
100 E. Board Street
Columbus, Ohio 43215-3607
</TABLE>
84
<PAGE> 182
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Clark & Co. Income Bond Fund 29.34% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Income Equity Fund 58.77% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Clark & Co. Income Equity Fund 36.04% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Clark & Co. Intermediate Bond Fund 49.88% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Intermediate Bond Fund 46.53% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, OH 43215-3607
Clark & Co. Intermediate Tax-Free 53.43% Record
Database 2-Attn: One Group/Cash Bond Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Strafe & Co. Intermediate Tax-Free 46.23% Record
Attn: Mutual Funds 0393 Bond Fund
100 E. Board Street Fiduciary
Columbus, Ohio 43215-3607
Strafe & Co. International Equity 58.86% Record
Attn: Mutual Funds 0393 Index Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Clark & Co. International Equity 35.81% Record
Database 2 - Attn: One Group/Cash Mgmt Index Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
</TABLE>
85
<PAGE> 183
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Strafe & Co. Investor Balanced Fund 65.30% Record
Bank One Trust Co. Fiduciary
Attn: Mutual Funds
100 E. Broad St.
Columbus, OH 43215-3607
Clark & Co. Investor Balanced Fund 32.86% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Rd.
Westerville, OH 43081-2874
Strafe & Co. Investor Conservative 75.87% Record
Bank One Trust Co. Growth Fund
Attn: Mutual Funds Fiduciary
100 E. Broad St.
Columbus, OH 43215-3607
Bank One TTEE Investor Growth Fund 31.46% Record
Morgantown Bank & Trust Class A
BISYS Qualified Plan Services
Springhouse Corporate Center
323 Norristown Road
Ambler, PA 19002-2756
Strafe & Co. Investor Growth Fund 59.32% Record
Bank One Trust Co. Fiduciary
Attn: Mutual Funds
100 E. Broad St.
Columbus, Ohio 43215-3607
Clark & Co. Investor Growth Fund 30.58% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Dean Witter Reynolds for Investor Growth & Income 28.85% Record
Robert E. Carlovsky IRA Fund
5 World Trade Center 6th Floor Class A
New York, NY 10048-0205
Strafe & Co. Investor Growth & Income 75.80% Record
Bank One Trust Co. Fund
Attn: Mutual funds Fiduciary
100 E. Broad St.
Columbus, Ohio 43215-3607
</TABLE>
86
<PAGE> 184
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Strafe & Co. Kentucky Municipal 99.73% Record
Attn: Mutual Funds 0393 Bond Fund
100 E. Broad Street Fiduciary
Westerville, Ohio 43215-3607
Strafe & Co. Large Company Growth Fund 59.62% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co. Large Company Growth Fund 34.40% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Large Company 66.52% Record
Attn: Mutual Funds 0393 Value Fund
100 E. Board Street Fiduciary
Columbus, Ohio 43215-3607
Clark & Co. Large Company 26.79% Record
Database 2 - Attn: One Group/Cash Mgmt Value Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Strafe & Co. Limited Volatility Bond 58.07% Record
Attn: Mutual Funds 0393 Fund
100 E. Board Street Fiduciary
Columbus, Ohio 43215-3607
Clark & Co. Limited Volatility Bond 36.54% Record
Database 2 - Attn: One Group/Cash Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Strafe & Co. Louisiana Municipal Bond 100.00% Record
Attn: Mutual Funds 0393 Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Clark & Co. Municipal Income Fund 50.03% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
</TABLE>
87
<PAGE> 185
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Strafe & Co. Municipal Income Fund 48.93% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Strafe & Co. (D) Municipal Money Market 58.49% Record
Bank One Ohio Trust Co., NA Fund
Department 0393 S.T.I.F Fiduciary
Columbus, Ohio 43271
Clark & Co. Municipal Money Market 38.37% Record
Database 2 - Attn: One Group/Cash Mgmt Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Strafe & Co. Ohio Municipal Bond 98.63% Record
Attn: Mutual Funds 0393 Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Strafe & Co. Ohio Municipal Money 92.87% Record
Bank One Trust Co. Market Fund
Attn: Mutual Funds Fiduciary
100 E. Broad St.
Columbus, Ohio
Strafe & Co. Prime Money Market Fund 51.69% Record
Bank One Ohio Trust Co., NA Fiduciary
Department 0393 S.T.I.F.
Columbus, Ohio 43271
Clark & Co. Prime Money Market Fund 40.37% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
State Street Bank & Trust Co. Treasury & Agency 31.39% Record
The One Group Family of Funds Fund
2 Heritage Drive, 8th Floor Class A
North Quincy, MA 02171-2119
Boston Financial Data Services Treasury & Agency Fund 31.39% Record
The One Group Family of Funds Class A
2 Heritage Drive, 8th Floor
North Quincy, MA 02171-2144
</TABLE>
88
<PAGE> 186
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Boston Financial Data Services Treasury & Agency 30.79% Record
The One Group Family of Funds Fund
2 Heritage Drive, 8th Floor Class A
North Quincy, MA 02171-2144
State Street Bank & Trust Co. Treasury & Agency 25.19% Record
The One Group Family of Funds Fund
2 Heritage Drive, 8th Floor Class B
North Quincy, MA 02171-2144
Boston Financial Data Services Treasury & Agency 25.19% Record
The One Group Family of Funds Fund
2 Heritage Drive, 8th Floor Class B
North Quincy, MA 02171-2144
Strafe & Co. Treasury & Agency 94.74% Record
Attn: Mutual Funds 0393 Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Strafe & Co. Treasury Only Money 58.05% Record
Bank One Trust Co. Market Fund
Attn: Mutual Funds
100 E. Broad St.
Columbus, Ohio 43215-3607
BISYS Fund Services, Inc. U.S. Treasury Securities 30.91% Record
FBO Bank One Corporate Sweep Money Market
Attn: Linda Zerbe Class A
First and Market Bldg., Ste. 300
Pittsburgh, PA 15222
State Street Bank & Trust Co. U.S. Treasury Securities 52.62% Record
Cust for the IRA of Money Market
Edward Hillman III Class B
121 S. Walnut St.
Troy, OH 45373-3530
Dean Witter for the Benefit of U.S. Treasury Securities 40.58% Record
Richard J. Park Jr. & Money Market
Christine L. Park JT TEN Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Strafe & Co. (N) U.S. Treasury Securities 56.03% Record
Bank One Ohio Trust Co., NA Money Market
Department 0393 S.T.I.F. Fiduciary
Columbus, Ohio 43271
</TABLE>
89
<PAGE> 187
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Dean Witter for the Benefit of Ultra Short-Term Income 27.77% Record
St. Joseph Hospital Fund
Attn: Rick West Class A
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Strafe & Co. Ultra Short-Term Income 58.74% Record
Attn: Mutual Funds 0393 Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Clark & Co. Ultra Short-Term Income 36.56% Record
Database 2 - Attn: One Group/Cash Mgmt Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Strafe & Co. Value Growth Fund 71.34% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Dean Witter for the Benefit of West Virginia Municipal 61.59% Record
Stephen A. Lewis Bond Fund
3720 Noves Ave. Class A
5 World Trade Center 6th Floor
New York, NY 10048-0205
Strafe & Co. West Virginia 99.12% Record
Attn: Mutual Funds 0393 Municipal Bond Fund
100 E. Broad Street Fiduciary
Columbus, OH 43215-3607
</TABLE>
As a result, the aforementioned persons may be deemed to be "controlling
persons' of the class of Shares of the Fund in which they own such Shares under
the Investment Company Act of 1940.
The table below indicates record and beneficial owners of over 5% of any class
of Shares of any Fund of the Trust.
<TABLE>
<CAPTION>
5% SHAREHOLDERS
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Dean Witter for the Benefit of Kentucky Municipal 11.21% Record
Roger J. Shott and Bond Fund
Diane J. Shott JT TEN Class A
P.O. Box 23403
Anchorage, KY 40223-0403
Yong K. Liu Kentucky Municipal 5.65% Record
Rui Bo Liu JT WROS Bond Fund
6304 Shadow Wood Drive Class A
Prospect, KY 40059-9626
Dean Witter for the Benefit of Kentucky Municipal 8.65% Record
Floyd Logan Bond Fund
201 Country Ln. Class B
Frankfort, KY 40601-3841
Strafe & Co. Kentucky Municipal 99.73% Record
Attn: Mutual Funds 0393 Bond Fund
100 E. Broad Street Fiduciary
Westerville, Ohio 43215-3607
Strafe & Co. Large Company Growth Fund 59.62% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co. Large Company Growth Fund 34.40% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Banc One Corporation Large Company Growth Fund 10.82% Beneficial
235 West Schrock Road Fiduciary
Westerville, Ohio 43081-2874
Banc One Securities Savings Plan Large Company Growth Fund 8.82% Beneficial
235 West Schrock Road Fiduciary
Westerville, Ohio 43081-2874
Strafe & Co. Disciplined Value 54.71% Record
Attn: Mutual Funds 0393 Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Clark & Co. Disciplined Value Fund 38.85% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
</TABLE>
90
<PAGE> 188
<TABLE>
<CAPTION>
5% SHAREHOLDERS
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Banc One Corporation Disciplined Value Fund 13.60% Beneficial
235 West Schrock Road Fiduciary
Westerville, Ohio 43081-2874
Strafe & Co. Gulf South Growth Fund 90.25% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Premier Bancorp Retirement Plan Gulf South Growth Fund 6.50% Beneficial
P.O. Box 91210 Fiduciary
Baton Rouge, LA 70821
Strafe & Co./Cash Div. Growth Opportunities Fund 51.94% Record
Bank One Trust Co. Fiduciary
Attn: Mutual Funds 0393
100 E. Board Street
Columbus, Ohio 43215-3607
Clark & Co. Growth Opportunities Fund 36.74% Record
Database 2 - Attn: One Group/Cash Mgmt. Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Banc One Corporation Growth Opportunities Fund 10.43% Beneficial
235 West Schrock Road Fiduciary
Westerville, Ohio 43081-2874
Strafe & Co. Value Growth Fund 71.34% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Clark & Co. Value Growth Fund 21.46% Record
Database 2-One Group/Cash Mgmt. Fiduciary
235 W. Schrock Road
Westerville, Ohio 43081-2874
Dean Witter for the Benefit of Income Bond Fund 8.98% Record
Alpert Corp. Money Purchase Plan Class A
Steven Kurtz TTEE
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of Income Bond Fund 6.75% Record
Signalsoft Corp. Class A
2045 Broadway
5 World Trade Center, 6th Floor
New York, NY 10048-0205
</TABLE>
91
<PAGE> 189
<TABLE>
<CAPTION>
5% SHAREHOLDERS
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Strafe & Co. Income Bond Fund 64.05% Record
Bank One Trust Co. Fiduciary
Attn: Mutual Funds
100 E. Board Street
Columbus, Ohio 43215-3607
Clark & Co. Income Bond Fund 29.34% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Banc One Securities Savings Plan Income Bond Fund 5.77% Beneficial
235 West Schrock Road Fiduciary
Westerville, Ohio 43081-2874
Strafe & Co. Louisiana Municipal Bond 100.00% Record
Attn: Mutual Funds 0393 Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Strafe & Co. International Equity 58.86% Record
Attn: Mutual Funds 0393 Index Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Clark & Co. International Equity 35.81% Record
Database 2 - Attn: One Group/Cash Mgmt Index Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Banc One Corporation International Equity 17.55% Beneficial
235 West Schrock Road Index Fund
Westerville, Ohio 43081-2874 Fiduciary
J. Noland Singletary Intermediate Tax-Free 13.19% Record
7350 Bocage Blvd. Bond Fund
Baton Rouge, LA 70809-1138 Class A
COHAMCO Intermediate Tax-Free 5.29% Record
Taylor Donald M. Trust Bond Fund
P.O. Box 476 Class A
Hamilton, Ohio 45012-0476
Dean Witter for the Benefit of Intermediate Tax-Free 6.28% Record
Katherine Poe Bond Fund
606 River Lane Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
</TABLE>
92
<PAGE> 190
<TABLE>
<CAPTION>
5% SHAREHOLDERS
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Dean Witter for the Benefit of Intermediate Tax-Free 5.45% Record
James Tolar Jr. Irrevocable Trust Bond Fund
Shirley A. Sochor TTEE Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of Intermediate Tax-Free 5.12% Record
Phyllis Robertson Young Bond Fund
P.O. Box 467 Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Clark & Co. Intermediate Tax-Free 53.43% Record
Database 2-Attn: One Group/Cash Bond Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Strafe & Co. Intermediate Tax-Free 46.23% Record
Attn: Mutual Funds 0393 Bond Fund
100 E. Board Street Fiduciary
Columbus, Ohio 43215-3607
Wallace & Co. Limited Volatility Bond 5.29% Record
P.O. Box 21119 Fund
Shreveport, LA 71152-0001 Class A
Strafe & Co. Limited Volatility Bond 58.07% Record
Attn: Mutual Funds 0393 Fund
100 E. Board Street Fiduciary
Columbus, Ohio 43215-3607
Clark & Co. Limited Volatility Bond 36.54% Record
Database 2 - Attn: One Group/Cash Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
James H. Nixon Jr. Prime Money Market Fund 15.31% Record
P.O. Box 17611 Class B
Dayton, OH 45417-0611
State Street Bank & Trust Co. Prime Money Market 7.88% Record
Cust for the IRA of Fund
Edward Hillman III Class B
121 S. Walnut St.
Troy, OH 45373-3530
</TABLE>
93
<PAGE> 191
<TABLE>
<CAPTION>
5% SHAREHOLDERS
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Dean Witter for the Benefit of Prime Money Market 7.50% Record
Ronald L. Bottoms Fund
4106 Garland Avenue Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
State Street Bank & Trust Co. Prime Money Market Fund 5.91% Record
Custodian for the Rollover IRA of Class B
Bobby H. Hicks
15207 N. 35th Drive
Phoenix, AZ 85023-4610
State Street Bank & Trust Co. Prime Money Market Fund 5.22% Record
Cust for the Rollover IRA of Class B
Kenneth S. Leighton
10423 W. Reade Avenue
Glendale, AZ 85307-4225
Strafe & Co. Prime Money Market Fund 51.69% Record
Bank One Ohio Trust Co., NA Fiduciary
Department 0393 S.T.I.F.
Columbus, Ohio 43271
Clark & Co. Prime Money Market Fund 40.37% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Bank One Trust Company NA Prime Money Market Fund 6.22% Record
Omnibus - Corporate Cash Sweep Acct. Fiduciary
Attn: Cash Management DB3
235 W Schrock Rd.
Westerville, Ohio 43081-2874
Dean Witter for the Benefit of Ohio Municipal Bond Fund 7.15% Record
James E. Sauls and Class A
Vivian R. Sauls JT TN
519 Chapel Rd.
Amelia, Ohio 45102-9738
Dean Witter for the Benefit of Ohio Municipal Bond 6.29% Record
Kerry K. Mott Fund
6361 Riverside Drive Class A
5 World Trade Center, 6th Floor
New York, NY 10048-0205
</TABLE>
94
<PAGE> 192
<TABLE>
<CAPTION>
5% SHAREHOLDERS
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Strafe & Co. Ohio Municipal Bond 98.63% Record
Attn: Mutual Funds 0393 Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
NES Group, Inc. Ohio Municipal Bond 7.54% Beneficial
Corp. Invest Account Fund
Strafe & Co. Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
BISYS Fund Services, Inc. U.S. Treasury Securities 30.91% Record
FBO Bank One Corporate Sweep Money Market
Attn: Linda Zerbe Class A
First and Market Bldg., Ste. 300
Pittsburgh, PA 15222
BISYS Fund Services Pittsburgh U.S. Treasury Securities 14.67% Record
FBO Bank One TX Sweep Customers Money Market
Attn: Linda Zerbe Class A
First and Market Bldg., Ste. 300
Pittsburgh, PA 15222
State Street Bank & Trust Co. U.S. Treasury Securities 52.62% Record
Cust for the IRA of Money Market
Edward Hillman III Class B
121 S. Walnut St.
Troy, OH 45373-3530
Dean Witter for the Benefit of U.S. Treasury Securities 40.58% Record
Richard J. Park Jr. & Money Market
Christine L. Park JT TEN Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
State Street Bank & Trust Co. U.S. Treasury Securities 6.54% Record
Cust for the Rollover IRA of Money Market Fund
Glenda B. Osborn Class B
25 Forest Drive
Jeffersonville, IN 47130-6864
Strafe & Co. (N) U.S. Treasury Securities 56.03% Record
Bank One Ohio Trust Co., NA Money Market
Department 0393 S.T.I.F. Fiduciary
Columbus, Ohio 43271
</TABLE>
95
<PAGE> 193
<TABLE>
<CAPTION>
5% SHAREHOLDERS
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Bank One Trust Company NA U.S. Treasury Securities 22.99% Record
Omnibus-Corporate Cash Sweep Acct. Money Market
Attn: Cash Management DB3 Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Clark & Co. U.S. Treasury Securities 20.58% Record
Database 2 - Attn: One Group/Cash Mgmt Money Market
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Bank One TTEE Large Company 6.30% Record
Harrison Holding Corp. 401k Value Fund
BISYS Qualified Plan Services Class A
Springhouse Corp. Center II-Invest A/C
323 Norristown Rd. Attn: S. Loch
Amber, PA 19002-2756
Strafe & Co. Large Company 66.52% Record
Attn: Mutual Funds 0393 Value Fund
100 E. Board Street Fiduciary
Columbus, Ohio 43215-3607
Clark & Co. Large Company 26.79% Record
Database 2 - Attn: One Group/Cash Mgmt Value Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Banc One Corporation Large Company 21.31% Beneficial
235 West Schrock Road Value Fund
Westerville, Ohio 43081-2874 Fiduciary
Kitty Hawk Group, Inc. Municipal Money Market 13.08% Record
Attn: Rick Wadsworth Fund
P.O. Box 612787 Class A
DFW Airport, TX 75261-2787
Strafe & Co. (D) Municipal Money Market 58.49% Record
Bank One Ohio Trust Co., NA Fund
Department 0393 S.T.I.F Fiduciary
Columbus, Ohio 43271
Clark & Co. Municipal Money Market 38.37% Record
Database 2 - Attn: One Group/Cash Mgmt Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
</TABLE>
96
<PAGE> 194
<TABLE>
<CAPTION>
5% SHAREHOLDERS
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Strafe & Co. Equity Index Fund 72.62% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Banc One Securities Savings Plan Equity Index Fund 31.06% Beneficial
235 West Schrock Road Fiduciary
Westerville, Ohio 43081-2874
Clark & Co. Equity Index Fund 14.47% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
NCR Benefit Acct - Trust #1 Equity Index Fund 5.97% Beneficial
Strafe & Co. Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Strafe & Co. Income Equity Fund 58.77% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Clark & Co. Income Equity Fund 36.04% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Government Bond Fund 67.29% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Clark & Co. Government Bond Fund 27.01% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Bank One TTEE Asset Allocation Fund
The Brown Publishing Co. Class A 6.64% Record
BISYS Qualified Plan Services
323 Norristown Road
Ambler, PA 19002-2576
</TABLE>
97
<PAGE> 195
<TABLE>
<CAPTION>
5% SHAREHOLDERS
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Clark & Co. Asset Allocation Fund 53.47% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Asset Allocation Fund 33.28% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Banc One Securities Corp. Intermediate Bond 11.28% Record
FBO The One Investment Solution Fund
733 Greencrest Drive Class A
Westerville, Ohio 43081-4903
Clark & Co. Intermediate Bond Fund 49.88% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Intermediate Bond Fund 46.53% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Broad Street
Columbus, OH 43215-3607
Dean Witter for the Benefit of Ultra Short-Term Income 27.77% Record
St. Joseph Hospital Fund
Attn: Rick West Class A
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of Ultra Short-Term Income 20.74% Record
Thermex Energy Corporation Fund
P.O. Box 701746 Class A
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of Ultra Short-Term Income 6.93% Record
Daniel M. Galbreath Revoc Trust Fund
Lizanne Galbreath Megrue TTEE Class A
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of Ultra Short-Term Income 11.08% Record
Jeanette P. Reilly Fund
3777 Bay Road North Drive Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
</TABLE>
98
<PAGE> 196
<TABLE>
<CAPTION>
5% SHAREHOLDERS
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Dean Witter Reynolds Cust for Ultra Short-Term 7.91% Record
Donald W. Journey Income Fund
IRA Rollover Dated 9/23/96 Class B
1967 Dry Run Rd.
West Portsmouth, OH 45663-9030
Strafe & Co. Ultra Short-Term Income 58.74% Record
Attn: Mutual Funds 0393 Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Clark & Co. Ultra Short-Term Income 36.56% Record
Database 2 - Attn: One Group/Cash Mgmt Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Dean Witter
FBO John M. Mills Ohio Municipal Money 9.62% Record
810 Pipestone Market Fund
Church Street Station Class A
P.O. Box 250
New York, NY 10277-0001
Mag-Nif Inc. Ohio Municipal Money 5.74% Record
P.O. Box 720 Market Fund
Mentor, OH 44061-0720 Class A
Strafe & Co. Ohio Municipal Money 92.87% Record
Bank One Trust Co. Market Fund
Attn: Mutual Funds Fiduciary
100 E. Broad St.
Columbus, Ohio
Henny Penny Corp. Money Market Account Ohio Municipal Money 10.89% Beneficial
Strafe & Co. Market Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Sandman & Co. Ohio Municipal Money 7.13% Record
State Street Bank & Trust Market Fund
P.O. Box 1713 Fiduciary
Boston, MA 02105-1713
Dean Witter for the Benefit of Municipal Income Fund 5.25% Record
Karl A. Fettig Class A
4455 Chippewa Dr.
5 World Trade Center, 6th Floor
New York, NY 10048-0205
</TABLE>
99
<PAGE> 197
<TABLE>
<CAPTION>
5% SHAREHOLDERS
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Clark & Co. Municipal Income Fund 50.03% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Strafe & Co. Municipal Income Fund 48.93% Record
Attn: Mutual Funds 0393 Fiduciary
100 E. Board Street
Columbus, Ohio 43215-3607
Strafe & Co. Treasury Only Money 58.05% Record
Bank One Trust Co. Market Fund
Attn: Mutual Funds
100 E. Broad St.
Columbus, Ohio 43215-3607
Clark & Co. Treasury Only Money 17.34% Record
Database 2 - Attn: One Group/Cash Mgmt Market Fund
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Bank One Texas NA Treasury Only Money 13.14% Record
1717 Main St. Market Fund
Dallas, TX 75201-4605
BISYS Fund Services, Inc. Treasury Only Money 8.85% Record
FBO Bank One Corporate Sweep Market Fund
Attn: Linda Zerbe
First and Market Bldg-Suite 300
Pittsburg, PA 15222
Strafe & Co. Government 41.25% Record
Bank One Trust Co. Money Market Fund
Attn: Mutual Funds
100 E. Broad St.
Columbus, Ohio 43215-3607
Clark & Co. Government Money Market 26.57% Record
Database 2 - Attn: One Group/Cash Mgmt Fund
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Bank One Texas NA Government Money Market 18.00% Record
1717 Main St. Fund
Dallas, TX 75201-4605
</TABLE>
100
<PAGE> 198
<TABLE>
<CAPTION>
5% SHAREHOLDERS
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Bank One Trust Company NA Government Money Market 12.67% Record
Corporate Cash Sweep Account Fund
Attn: Cash Management DB3
235 West Schrock Rd.
Westerville, Ohio 43081-2874
Police & Firefighters Disability Government Money Market 10.74% Beneficial
Strafe & Co. Fund
100 E. Broad Street
Columbus, Ohio 43215-3607
Boston Financial Data Services Treasury & Agency Fund 31.39% Record
The One Group Family of Funds Class A
2 Heritage Drive, 8th Floor
North Quincy, MA 02171-2144
State Street Bank & Trust Co. Treasury & Agency 31.39% Record
The One Group Family of Funds Fund
2 Heritage Drive, 8th Floor Class A
North Quincy, MA 02171-2119
Boston Financial Data Services Treasury & Agency 30.79% Record
The One Group Family of Funds Fund
2 Heritage Drive, 8th Floor Class A
North Quincy, MA 02171-2144
The One Group Services Company Treasury & Agency Fund 6.42% Record
Fund Administration Class A
3435 Stelzer Road
Columbus, Ohio 43219-6004
Boston Financial Data Services Treasury & Agency 25.19% Record
The One Group Family of Funds Fund
2 Heritage Drive, 8th Floor Class B
North Quincy, MA 02171-2144
State Street Bank & Trust Co. Treasury & Agency 25.19% Record
The One Group Family of Funds Fund
2 Heritage Drive, 8th Floor Class B
North Quincy, MA 02171-2144
Boston Financial Data Services Treasury & Agency 24.73% Record
The One Group Family of Funds Fund
2 Heritage Drive, 8th Floor Class B
North Quincy, MA 02171-2144
Rajesh Bansal Treasury & Agency 14.91% Record
15834 Knoll Lake Drive Fund
Houston, TX 77095-2640 Class B
</TABLE>
101
<PAGE> 199
<TABLE>
<CAPTION>
5% SHAREHOLDERS
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
The One Group Services Company Treasury & Agency 5.04% Record
Fund Administration Fund
3435 Stelzer Road Class B
Columbus, Ohio 43219-6004
Strafe & Co. Treasury & Agency 94.74% Record
Attn: Mutual Funds 0393 Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Clark & Co. Treasury & Agency Fund 5.13% Record
Database 2 - Attn: One Group/Cash Mgmt Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Dean Witter Reynolds Arizona Municipal Bond 45.54% Record
FBO Theodore Cesarano Fund
4617 E. Bernell Drive Class A
Phoenix, AZ 85028-5520
Dean Witter Reynolds Arizona Municipal Bond 17.28% Record
FBO F. Dazey Fund
P.O. Box 2443 Class A
5 World Trade Center
New York, NY 10048-0205
Dean Witter Reynolds Arizona Municipal Bond 12.00% Record
FBO Elizabeth Ryan Miller Fund
P.O. Box 2443 Class A
5 World Trade Center
New York, NY 10048-0205
Dean Witter Reynolds Arizona Municipal Bond 12.00% Record
FBO Sally Ryan Stults Fund
P.O. Box 2443 Class A
5 World Trade Center
New York, NY 10048-0205
Dean Witter Reynolds Arizona Municipal Bond 9.77% Record
FBO Viola M. Moberly Fund
P.O. Box 2443 Class A
5 World Trade Center
New York, NY 10048-0205
The One Group Services Company Arizona Municipal 100.00% Record
Fund Administration Bond Fund
3435 Stelzer Rd. Class B
Columbus, Ohio 43219-6004
</TABLE>
102
<PAGE> 200
<TABLE>
<CAPTION>
5% SHAREHOLDERS
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Clark & Co. Arizona Municipal Bond 98.90% Record
Database 2-One Group/Cash Mgmt. Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Dean Witter for the Benefit of West Virginia Municipal 61.59% Record
Stephen A. Lewis Bond Fund
3720 Noves Ave. Class A
5 World Trade Center 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of West Virginia 23.37% Record
C. Carl Tully Municipal Bond Fund
4530 Spring Hill Class A
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of West Virginia Municipal 15.04% Record
Ruth A. Harper Bond Fund
P.O. Box 196 Class A
5 World Trade Center 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of West Virginia Municipal 17.16% Record
Erma G. Shafer Bond Fund
142 Spencer Road Class B
5 World Trade Center 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of West Virginia Municipal 12.25% Record
Mary G. Coleman Bond Fund
3607 Virginia Avenue SE Class B
5 World Trade Center 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of West Virginia Municipal 12.25% Record
Helen H. Hall Bond Fund
59 Meade Street Class B
5 World Trade Center 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of West Virginia Municipal 8.75% Record
Ann S. Jackson Bond Fund
2317 Jefferson Avenue Class B
5 World Trade Center 6th Floor
New York, NY 10048-0205
</TABLE>
103
<PAGE> 201
<TABLE>
<CAPTION>
5% SHAREHOLDERS
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Dean Witter for the Benefit of West Virginia Municipal 6.94% Record
William R. Butler and Bond Fund
Prible D. Butler JT TEN Class B
5 World Trade Center 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of West Virginia Municipal 6.47% Record
James B. Johnson and Bond Fund
Eloise T. Johnson JT TEN Class B
5 World Trade Center 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of West Virginia Municipal 6.37% Record
Billie J. Zegger Bond Fund
P.O. Box 2 Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of West Virginia 5.25% Record
Hazel D. Cantees and Municipal Bond Fund
Joseph A. Cantees JT TEN Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of West Virginia Municipal 5.23% Record
William H. Hall and Bond Fund
Nita Hall JT TEN Class B
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Strafe & Co. West Virginia 99.12% Record
Attn: Mutual Funds 0393 Municipal Bond Fund
100 E. Broad Street Fiduciary
Columbus, OH 43215-3607
Bank One TTEE Investor Growth Fund 31.46% Record
Morgantown Bank & Trust Class A
BISYS Qualified Plan Services
Springhouse Corporate Center
323 Norristown Road
Ambler, PA 19002-2756
Strafe & Co. Investor Growth Fund 59.32% Record
Bank One Trust Co. Fiduciary
Attn: Mutual Funds
100 E. Broad St.
Columbus, Ohio 43215-3607
</TABLE>
104
<PAGE> 202
5% SHAREHOLDERS
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Clark & Co. Investor Growth Fund 30.58% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Rd.
Westerville, Ohio 43081-2874
Virginia R. Corrin Investor Growth Fund 23.90% Beneficial
Strafe & Co. Fiduciary
100 E. Broad Street
Columbus, Ohio 43215-3607
Banc One Securities Savings Plan Investor Growth Fund 7.21% Beneficial
235 West Schrock Road Fiduciary
Westerville, Ohio 43081-2874
Bank One TTEE Investor Growth Fund 5.57% Record
Therm-O-Disc Inc. 401K Fiduciary
BISYS Qualified Plan Services
Springhouse Corp. Ctr. II-Invest A/C
323 Norristown Rd. Attn: S. Loch
Ambler, PA 19002-2756
Dean Witter Reynolds for Investor Growth & Income 28.85% Record
Robert E. Carlovsky IRA Fund
5 World Trade Center 6th Floor Class A
New York, NY 10048-0205
State Street Bank & Trust Co. Investor Growth & Income 5.22% Record
Cust for the Rollover IRA of Fund
Gerald Frank Class A
9 Fir Ct.
Monticello, IL 61856-8266
Strafe & Co. Investor Growth & Income 75.80% Record
Bank One Trust Co. Fund
Attn: Mutual funds Fiduciary
100 E. Broad St.
Columbus, Ohio 43215-3607
Clark & Co. Investor Growth & 19.38% Record
Database 2-Attn: One Group/Cash Income Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Revco D.S., Inc. SERP - Trust B Investor Growth & Income 18.50% Beneficial
Strafe & Co. Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
</TABLE>
105
<PAGE> 203
5% SHAREHOLDERS
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Revco D.S., Inc. SERP-Trust A Investor Growth & Income 14.55% Beneficial
Strafe & Co. Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Dean Witter for the Benefit of Investor Balanced 22.83% Record
Sara Lee Youngs Fund
10832 Linwood Road Class A
5 World Trade Center 6th Floor
New York, NY 10048-0205
State Street Bank & Trust Co. Investor Balanced Fund 9.06% Record
Cust for the Rollover IRA of Class A
Pablo Villarreal
219 Alliance Ave
Rockford, IL 61103
Bank One TTEE Investor Balanced 6.71% Record
Morgantown Bank & Trust Fund
BISYS Qualified Plan Services Class A
Springhouse Corporate Center
323 Norristown Road
Ambler, PA 19002-2756
Dean Witter for the Benefit of Investor Balanced 6.64% Record
Neil A. Day IRA Fund
5 World Trade Center, 6th Floor Class A
New York, NY 10048-0205
State Street Bank & Trust Co. Investor Balanced 6.03% Record
Cust for the Rollover IRA of Fund
Delores J. Bartleson Class A
1600 N. Saba Street Unit 228
Chandler, AZ 85225-0911
Strafe & Co. Investor Balanced Fund 65.30% Record
Bank One Trust Co. Fiduciary
Attn: Mutual Funds
100 E. Broad St.
Columbus, OH 43215-3607
Clark & Co. Investor Balanced Fund 32.86% Record
Database 2-Attn: One Group/Cash Fiduciary
235 W. Schrock Rd.
Westerville, OH 43081-2874
</TABLE>
106
<PAGE> 204
5% SHAREHOLDERS
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Black Clawson Co. Investor Balanced Fund 17.85% Beneficial
Member Pension Plan Fiduciary
Strafe & Co.
100 E. Broad Street
Columbus, Ohio 43215-3607
Centennial Liquor Retirement Plan Investor Balanced 7.86% Beneficial
Strafe & Co. Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
North Texas Steel Co.. Investor Balanced Fund 5.50% Beneficial
Retirement Plan Fiduciary
Strafe & Co.
100 E. Broad Street
Columbus, Ohio 43215-3607
Dean Witter for the Benefit of Investor Conservative 8.92% Record
James W. Blair Growth Fund
95 Elizabeth Street Class A
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Bank One TTEE Investor Conservative 8.66% Record
Morgantown Bank & Trust Growth Fund
BISYS Qualified Plan Services Class A
Springhouse Corporate Center
323 Norristown Road
Ambler, PA 19002-2756
Dean Witter for the Benefit of Investor Conservative 8.10% Record
Duward M. Davis Growth Fund
213 Grace Avenue Class A
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of Investor Conservative 7.07% Record
Russell J. Birkos C/F Growth Fund
Elizabeth H. Birkos UTMA/OH Class A
5 World Trade Center, 6th Floor
New York, NY 10048-0205
Dean Witter for the Benefit of Investor Conservative 7.07% Record
Russell J. Birkos C/F Growth Fund
Taylor R. Birkos UTMA/OH Class A
5 World Trade Center, 6th Floor
New York, NY 10048-0205
</TABLE>
107
<PAGE> 205
5% SHAREHOLDERS
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Mabel Haven & Investor Conservative 6.95% Record
Martha Jane Hauser TEN COM Growth Fund
2416 Northside Drive Class A
Bossier City, LA 71111-3408
Dean Witter for the Benefit of Investor Conservative 6.67% Record
Twila M. Wichern & Growth Fund
Jack H. Wichern JT TEN Class A
5 World Trade Center, 6th Floor
New York, NY 10048-0205
State Street Bank & Trust Co. Investor Conservative 5.82% Record
Cust for the IRA of Growth Fund
Alice A. Shiba Class A
635 39th Avenue
Greeley, CO 80634-1512
State Street Bank & Trust Co. Investor Conservative 7.18% Record
Cust for the Rollover IRA of Growth Fund
Freddie C. Crawford Class B
1355 W. Cleveland Avenue
Hobart, IN 46342-4016
Dean Witter for the Benefit of Investor Conservative 5.73% Record
Elaine W. Sheridan Growth Fund
5 World Trade Center, 6th Floor Class B
New York, NY 10048-0205
Strafe & Co. Investor Conservative 75.87% Record
Bank One Trust Co. Growth Fund
Attn: Mutual Funds Fiduciary
100 E. Broad St.
Columbus, OH 43215-3607
Clark & Co. Investor Conservative 13.39% Record
Database 2-Attn: One Group/Cash Growth Fund
235 W. Schrock Rd. Fiduciary
Westerville, Ohio 43081-2874
Ermco, Inc. Pension Plan Investor Conservative 10.06% Beneficial
Strafe & Co. Growth Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Bank One TTEE Investor Conservative 9.16% Record
Therm-O-Disk Inc. 401K Growth Fund
BISYS Qualified Plan Services Fiduciary
Springhouse Corp. Ctr. II-Invest A/C
323 Norristown Rd., Attn: S. Loch
Ambler, PA 19002-2756
</TABLE>
108
<PAGE> 206
5% SHAREHOLDERS
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF TYPE OF
ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ------- ---------- --------- ---------
<S> <C> <C> <C>
Texas Contractors Supply 401(k) PSP Investor Conservative 8.63% Beneficial
Strafe & Co. Growth Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Young J. Lee, M.D., SERP Investor Conservative 5.98% Beneficial
Strafe & Co. Growth Fund
100 E. Board Street Fiduciary
Columbus, Ohio 43215-3607
Robert H. Meyn R/O IRA Investor Conservative 5.44% Beneficial
Strafe & Co. Growth Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
Ihsaa Pension Plan Investor Conservative 5.14% Beneficial
Strafe & Co. Growth Fund
100 E. Broad Street Fiduciary
Columbus, Ohio 43215-3607
</TABLE>
As a group, the Trustee and Officers of the Trust owned less than 1% of the
Shares of each class of the Trust.
109
<PAGE> 207
APPENDIX
--------
The nationally recognized statistical rating organizations (individually, an
"NRSRO") that may be utilized by the Advisers or the Sub-Advisers with regard to
portfolio investments for the Funds include Moody's Investors Service, Inc.
("Moody's"), Standard & Poor's Corporation ("S&P"), Duff & Phelps, Inc.
("Duff"), Fitch Investors Service, Inc. ("Fitch"), IBCA Limited and its
affiliate, IBCA Inc. (collectively, "IBCA"), and Thomson BankWatch, Inc.
("Thomson"). Set forth below is a description of the relevant ratings of each
such NRSRO. The NRSROs that may be utilized by the Advisers or the Sub-Advisers
and the description of each NRSRO's ratings is as of the date of this Statement
of Additional Information, and may subsequently change.
LONG-TERM DEBT RATINGS (may be assigned, for example, to corporate and municipal
bonds)
Description of the debt ratings by Moody's (Moody's applies numerical modifiers
(1, 2, and 3) in each rating category to indicate the security's ranking within
the category):
Aaa Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt edged." Interest payments
are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of
such issues.
Aa Bonds which are rated Aa are judged to be of high quality by
all standards. Together with the Aaa group they comprise what
are generally known as high grade bonds. They are rated lower
than the best bonds because margins 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 risk appear somewhat
larger than in Aaa securities.
A Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade
obligations. Factors giving security to principal and interest
are considered adequate, but elements may be present which
suggest a susceptibility to impairment some time in the
future.
Baa Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor
poorly secured. Interest payments and principal security
appear adequate for the present but certain protective
elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have
speculative characteristics as well.
110
<PAGE> 208
Ba Bonds rated Ba are more uncertain and have speculative
elements. The protection of interest and principal payments is
not well safeguarded during good and bad times.
B Bonds rated B lack the characteristics of a desirable
investment; i.e., potentially low assurance of timely interest
and principal payments or maintenance of other contract terms
over time.
Caa Bonds rated Caa have poor standing and may be in default.
These bonds carry an element of danger with respect to
principal and interest payments.
C Bonds rated Ca are speculative to a high degree and could be
in default or have other marked shortcomings. C is the lowest
rating. Bonds in this category have extremely poor prospects
of ever attaining investment standing.
Description of the debt ratings by S&P (S&P may apply a plus (+) or minus (-) to
a particular rating classification to show relative standing within that
classification):
AAA Debt rated AAA has the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely
strong.
AA Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the higher rated issues only
in small degree.
A Debt rated A 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.
BBB 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.
BB Bonds rated BB have less near-term vulnerability to default
than other speculative issues. However, they face major
ongoing uncertainties or exposure to adverse business,
financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal
payments. The BB rating category is also used for debt
subordinated to senior debt that is assigned an actual or
implied BBB rating.
B Bonds rated B have a greater vulnerability to default but
currently have the capacity to meet interest payments and
principal repayments. Adverse business, financial, or economic
conditions will likely impair capacity or
111
<PAGE> 209
willingness to pay interest and repay principal. The B rating
category is also used for debt subordinated to senior debt
that is assigned an actual or implied BB or BB- rating.
CCC Bonds rated CCC have currently identifiable vulnerability to
default, and are dependent upon favorable business, financial,
and economic conditions to meet timely payment of interest and
repayment of principal. In the event of adverse business,
financial, or economic conditions, they are not likely to have
the capacity to pay interest and repay principal. The CCC
rating category is also used for debt subordinated to senior
debt that is assigned an actual or implied B or B- rating.
CC The rating CC typically is applied to debt subordinated to
senior debt that is assigned an actual or implied CCC rating.
C The rating C typically is applied to debt subordinated to
senior debt that is assigned an actual or implied CCC rating.
The C ratings may be used to cover a situation where a
bankruptcy petition has been filed, but debt service payments
are continued.
CI The rating CI is reserved for income bonds on which no income
is being paid.
D Bonds rated D are in payment default. The D rating category is
used when interest payments or principal payments are not made
on the date due, even if the applicable grace period has not
expired, unless Standard & Poor believes that such payments
will be made during such grace period. The D rating also will
be used upon the filing of a bankruptcy petition if debt
service payments are jeopardized.
+/- Plus (+) or minus (-). Ratings from AA to CCC may be modified
by the addition of a plus or minus sign to show relative
standing within the major rating categories.
Description of the three highest long-term debt ratings by Duff:
AAA Highest credit quality. The risk factors are negligible being
only slightly more than for risk-free U.S. Treasury debt.
AA+ High credit quality. Protection factors are strong.
AA Risk is modest but may vary slightly from time to time because
of economic conditions.
112
<PAGE> 210
A+ Protection factors are average but adequate. However, risk
factors are more variable and greater in periods of economic
stress.
Description of the three highest long-term debt ratings by Fitch (plus or minus
signs are used with a rating symbol to indicate the relative position of the
credit within the rating category):
AAA Bonds considered to be investment grade and of the highest
credit quality. The obligor has an exceptionally strong
ability to pay interest and repay principal, which is unlikely
to be affected by reasonably foreseeable events.
AA Bonds considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and
repay principal is very strong, although not quite as strong
as bonds rated "AAA." Because bonds rated in the "AAA" and
"AA" categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these
issues is generally rated "[-]+."
A Bonds considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay
principal is considered to be strong, but may be more
vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
IBCA's description of its three highest long-term debt ratings:
AAA Obligations for which there is 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.
AA Obligations for which there is a very low expectation of
investment risk. 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.
A Obligations for which there is a low expectation of investment
risk. Capacity for timely repayment of principal and interest
is strong, although adverse changes in business, economic or
financial conditions may lead to increased investment risk.
SHORT-TERM DEBT RATINGS (may be assigned, for example, to commercial paper,
master demand notes, bank instruments, and letters of credit)
Moody's description of its three highest short-term debt ratings:
113
<PAGE> 211
Prime-1 Issuers rated Prime-1 (or supporting institutions) have
a superior capacity for repayment of senior short-term
promissory obligations. Prime-1 repayment capacity will
normally be evidenced by many of the following
characteristics:
-Leading market positions in well-established
industries.
-High rates of return on funds employed.
-Conservative capitalization structures with
moderate reliance on debt and ample asset
protection.
-Broad margins in earnings coverage of fixed
financial charges and high internal cash
generation.
-Well-established access to a range of
financial markets and assured sources of
alternate liquidity.
Prime-2 Issuers rated Prime-2 (or supporting institutions) have
a strong capacity for repayment of senior short-term
debt obligations. This will normally be evidenced by
many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while
sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate
liquidity is maintained.
Prime-3 Issuers rated Prime-3 (or supporting institutions) have
an acceptable ability for repayment of senior
short-term obligations. The effect of industry
characteristics and market compositions may be more
pronounced. Variability in earnings and profitability
may result in changes in the level of debt protection
measurements and may require relatively high financial
leverage. Adequate alternate liquidity is maintained.
S&P's description of its three highest short-term debt ratings:
A-1 This designation indicates that the degree of safety regarding
timely payment is strong. Those issues determined to have
extremely strong safety characteristics are denoted with a
plus sign (+).
A-2 Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as
high as for issues designated "A-1."
114
<PAGE> 212
A-3 Issues carrying this designation have adequate capacity for
timely payment. They are, however, more vulnerable to the
adverse effects of changes in circumstances than obligations
carrying the higher designations.
Duff's description of its three highest short-term debt ratings (Duff
incorporates gradations of "1+" (one plus) and "1-" (one minus) to assist
investors in recognizing quality differences within the highest rating
category):
Duff 1+ Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or access to
alternative sources of funds, is outstanding, and safety is
just below risk-free U.S. Treasury short-term obligations.
Duff 1 Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection
factors. Risk factors are minor.
Duff 1- High certainty of timely payment. Liquidity factors are
strong and supported by good fundamental protection factors.
Risk factors are very small.
Duff 2 Good certainty of timely payment. Liquidity factors and
company fundamentals are sound. Although ongoing funding needs
may enlarge total financing requirements, access to capital
markets is good. Risk factors are small.
Duff 3 Satisfactory liquidity and other protection factors qualify
issue as to investment grade. Risk factors are larger and
subject to more variation. Nevertheless, timely payment is
expected.
Fitch's description of its three highest short-term debt ratings:
F-1+ Exceptionally Strong Credit Quality. Issues assigned this
rating are regarded as having the strongest degree of
assurance for timely payment.
F-1 Very Strong Credit Quality. Issues assigned this rating
reflect an assurance of timely payment only slightly less in
degree than issues rated F-1+.
F-2 Good Credit Quality. Issues assigned this rating have a
satisfactory degree of assurance for timely payment, but the
margin of safety is not as great as for issues assigned F-1+
or F-1 ratings.
115
<PAGE> 213
F-3 Fair Credit Quality. Issues assigned this rating have
characteristics suggesting that the degree of assurance for
timely payment is adequate, however, near-term adverse changes
could cause these securities to be rated below investment
grade.
IBCA's description of its three highest short-term debt ratings:
A+ Obligations supported by the highest capacity for timely
repayment.
A1 Obligations supported by a very strong capacity for timely
repayment.
A2 Obligations supported by a strong capacity for timely
repayment, although such capacity may be susceptible to
adverse changes in business, economic or financial conditions.
Short-Term Loan/Municipal Note Ratings
- --------------------------------------
Moody's description of its two highest short-term loan/municipal note ratings:
MIG-1/VMIG-1 This designation denotes best quality. There is present
strong protection by established cash flows, superior
liquidity support or demonstrated broad-based access to
the market for refinancing.
MIG-2/VMIG-2 This designation denotes high quality. Margins of
protection are ample although not so large as in the
preceding group.
S&P's description of its two highest municipal note ratings:
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.
Short-Term Debt Ratings
Thomson BankWatch, Inc. ("TBW") ratings are based upon a qualitative and
quantitative analysis of all segments of the organization including, where
applicable, holding company and operating subsidiaries.
BankWatch(TM) Ratings do not constitute a recommendation to buy or sell
securities of any of these companies. Further, BankWatch does not suggest
specific investment criteria for individual clients.
116
<PAGE> 214
The TBW Short-Term Ratings apply to commercial paper, other senior short-term
obligations and deposit obligations of the entities to which the rating has been
assigned.
The TBW Short-Term Ratings apply only to unsecured instruments that have a
maturity of one year or less.
The TBW Short-Term Ratings specifically assess the likelihood of an untimely
payment of principal or interest.
TBW-1 The highest category; indicates a very high degree of
likelihood that principal and interest will be paid on a
timely basis.
TBW-2 The second highest category; while the degree of safety
regarding timely repayment of principal and interest is
strong, the relative degree of safety is not as high as
for issues rated "TBW-1."
TBW-3 The lowest investment grade category; indicates that while
more susceptible to adverse developments (both internal
and external) than obligations with higher ratings,
capacity to service principal and interest in a timely
fashion is considered adequate.
TBW-4 The lowest rating category; this rating is regarded as
non-investment grade and therefore speculative.
117
<PAGE> 215
DESCRIPTION OF BANK RATINGS
Moody's Bank Financial Strength Ratings represent Moody's opinion of a bank's
intrinsic safety and soundness. The definitions for Moody's Bank Financial
Strength Ratings are as follows:
"A" Banks rated A possess exceptional intrinsic financial strength.
Typically they will be major financial institutions with highly
valuable and defensible business franchises, strong financial
fundamentals, and a very attractive and stable operating
environment.
"B" Banks rated B possess strong intrinsic financial strength.
Typically, they will be important institutions with valuable
and defensible business franchises, good financial
fundamentals, and an attractive and stable operating
environment.
"C" Banks rated C possess good intrinsic financial strength.
Typically, they will be institutions with valuable and
defensible business franchises. These banks will demonstrate
either acceptable financial fundamentals within a stable
operating environment, or better than average financial
fundamentals within an unstable operating environment.
S&P's issue credit rating is a current opinion of the creditworthiness of an
obligor with respect to a specific financial obligation, a specific class of
financial obligations, or a specific financial program. S&P's ratings are as
follows:
"AAA" An obligation rated AAA has the highest rating assigned by S&P.
The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.
"AA" An obligation rated AA differs from the highest rated
obligations only in small degree. The obligor's capacity to
meet its financial commitments on the obligation is very
strong.
"A" An obligation rated A is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than obligations in higher rated categories.
However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
DESCRIPTION OF INSURANCE RATINGS
Moody's Insurance Financial Strength Ratings are Moody's opinions of the
ability of insurance companies to pay punctually senior policyholder claims and
obligations.
"Aaa" Insurance companies rated Aaa offer exceptional financial
security. While the financial strength of these companies is
likely to change, such changes as can be visualized are most
unlikely to impair their fundamentally strong position.
"Aa" Insurance companies rated Aa offer excellent financial
security. Together with the Aaa group, they constitute what
are generally known as high grade companies. They are rated
lower than Aaa companies because long-term risks appear
somewhat larger.
"A" Insurance companies rated A offer good financial security.
However, elements may be present which suggest a susceptibility
to impairment sometime in the future.
S&P's issue credit rating is a current opinion of the creditworthiness of an
obligor with respect to a specific financial obligation, a specific class of
financial obligations, or a specific financial program. S&P's ratings are as
follows:
118
<PAGE> 216
` "AAA" An obligation rated AAA has the highest rating assigned by S&P.
The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.
"AA" An obligation rated AA differs from the highest rated
obligations only in small degree. The obligor's capacity to
meet its financial commitments on the obligation is very
strong.
"A" An obligation rated A is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than obligations in higher rated categories.
However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
119
<PAGE> 217
DESCRIPTION OF PREFERRED STOCK RATINGS
The following descriptions of S&P's and Moody's preferred stock ratings have
been published by S&P and Moody's respectively.
Moody's Investor Services, Inc.
"aaa" An issue which is rated "aaa" is considered to be a top-quality preferred
stock. This rating indicates good asset protection and the least risk of
dividend impairment within the universe of preferred stocks.
"aa" An issue which is rated "aa" is considered a high-grade preferred stock.
This rating indicates that there is a reasonable assurance the earnings and
asset protection will remain relatively well maintained in the foreseeable
future.
"a" An issue which is rated "a" is considered to be an upper-medium grade
preferred stock. While risks are judged to be somewhat greater than in the
"aaa" and "aa" classification, earnings and asset protection are, nevertheless,
expected to be maintained at adequate levels.
"baa" An issue which is rated "baa" is considered to be a medium-grade
preferred stock, neither highly protected nor poorly secured. Earnings and
asset protection appear adequate at present but may be questionable over any
great length of time.
Standard & Poor's Rating Services
A S&P's preferred stock rating is an assessment of the capacity and willingness
of an issuer to pay preferred stock dividends and any applicable sinking fund
obligations. A preferred stock rating differs from a bond rating inasmuch as it
is assigned to an equity issue, which is intrinsically different from, and
subordinated to, a debt issue. Therefore, to reflect this difference, the
preferred stock rating symbol will normally not be higher than the debt rating
symbol assigned to, or that would be assigned to, the senior debt of the same
issuer.
AAA This is the highest rating that may be assigned by S&P to a preferred stock
issue and indicates an extremely strong capacity to pay the preferred stock
obligations.
AA A preferred stock issue rated "AA" also qualifies as a high-quality,
fixed-income security. The capacity to pay preferred stock obligations is very
strong, although not as overwhelming as for issues rated "AAA."
A An issue rated "A" is backed by a sound capacity to pay the preferred stock
obligations, although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions.
120
<PAGE> 218
BBB An issue rated "BBB" is regarded as backed by an adequate capacity to pay
the preferred stock obligations. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to make payments for a preferred
stock in this category than for issues in the "A" category.
121
<PAGE> 219
<TABLE>
<CAPTION>
THE ONE GROUP WEST VIRGINIA MUNICIPAL BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED) MARCH 31, 1997
<S> <C> <C> <C> <C>
SHARES OR
PRINCIPAL AMOUNT SECURITY DESCRIPTION COUPON RATE MATURITY DATE MARKET VALUE
- ------------------------ --------------------------------------------- -------------- ------------------ ----------------------
INVESTMENT COMPANIES (2.6%)
2,406 THE ONE GROUP MUNICIPAL MONEY MARKET FUND, CLASS A $ 2,406
---------
ALTERNATIVE MINIMUM TAX PAPER (2.2%)
WEST VIRGINIA (2.2%)
1,000 WEST VIRGINIA STATE, SERIES B 5.80% 11/01/2011 1,029
1,000 WEST VIRGINIA STATE, SERIES B 5.85% 11/01/2012 1,029
---------
2,058
---------
MUNICIPAL BONDS (95.0%)
HAWAII (0.5%)
400 HAWAII STATE SER BT 8.13% 02/01/2000 436
---------
OHIO (0.9%)
500 COLUMBUS OHIO 8.13% 05/01/2004 595
250 PUBLIC COMMUNITY FACILITIES, HIGHER EDUCATION CAP 5.38% 11/01/2000 256
----------
851
----------
PUERTO RICO (1.1%)
1,000 PUERTO RICO INDUSTRIAL TOURIST EDUCATIONAL 5.80% 07/01/2006 1,051
---------
RHODE ISLAND (0.2%)
200 STATE CONSTRUCTION CAPITAL DEVELOPMENT, SER B 6.00% 05/15/1998 204
---------
VIRGINIA (0.2%)
200 STATE PUBLIC SCHOOL AUTHORITY, SER A 6.30% 08/01/2001 213
---------
WEST VIRGINIA (92.1%)
515 BERKELEY COUNTY BUILDING COMMUNITY 5.25% 11/01/1997 519
200 BERKELEY COUNTY BUILDING COMMUNITY 5.40% 11/01/1998 203
1,000 BERKELEY COUNTY BUILDING COMMUNITY 6.50% 11/01/2009 1,044
500 BERKELEY COUNTY EDUCATION BOARD 5.00% 06/01/2008 491
1,000 BERKELEY COUNTY EDUCATION BOARD 5.50% 04/01/2001 1,027
800 BERKELEY COUNTY EDUCATION BOARD 5.55% 04/01/2002 824
900 BERKELEY COUNTY EDUCATION BOARD 5.60% 04/01/2003 930
1,525 BROOKE PLEASANTS TYLER WETZED COUNTIES 7.40% 08/15/2010 1,791
1,500 CABELL COUNTY EDUCATION BOARD 6.00% 05/01/2006 1,600
225 CABELL COUNTY EDUCATION BOARD 6.10% 05/01/1999 233
150 CABELL COUNTY EDUCATION BOARD 6.20% 05/01/2000 157
1,670 CABELL COUNTY EDUCATION BOARD 6.60% 05/01/2004 1,835
100 CHARLES TOWN RESIDENTIAL MORTGAGE 5.40% 09/01/2002 103
100 CHARLES TOWN RESIDENTIAL MORTGAGE 5.55% 03/01/2003 103
105 CHARLES TOWN RESIDENTIAL MORTGAGE 5.70% 09/01/2004 108
1,555 CHARLESTON BUILDING COMMUNITY 0.00% 12/01/2017 389
1,570 CHARLESTON BUILDING COMMUNITY 0.00% 12/01/2018 367
1,570 CHARLESTON BUILDING COMMUNITY 0.00% 12/01/2019 343
1,000 CHARLESTON BUILDING COMMUNITY 6.00% 12/01/2010 991
1,010 CHARLESTON PARKING REVENUE, SERIES B 6.75% 06/01/2008 1,112
500 CLARKSBURG WATER REVENUE 5.00% 09/01/1997 502
200 DELAWARE STATE 6.13% 04/01/1997 200
500 FLAGSTAFF ARIZONA, 8.50% 07/01/1997 506
2,000 HARRISON CO COMMUNITY SPLIT OBLIGATION, REF SER A 6.25% 05/15/2010 2,163
2,500 HARRISON COUNTY BOARD OF EDUCATION 6.40% 05/01/2007 2,749
200 HARRISON COUNTY EDUCATION BOARD 6.13% 05/01/1997 200
1,500 HARRISON COUNTY EDUCATION BOARD 6.30% 05/01/2005 1,628
95 HUNTINGTON RESIDENTIAL MORTGAGE REVENUE REFUNDING 6.30% 09/01/1998 98
735 JACKSON COUNTY RESIDENTIAL MORTGAGE REVENUE, 7.38% 06/01/2010 857
1,000 KANAWHA CNTY COMMUNITY BLDG REV, CHARLESTON HOSP 7.50% 11/01/2008 1,092
735 KANAWHA COUNTY BOARD OF EDUCATION 5.00% 06/01/2004 739
925 KANAWHA COUNTY BOARD OF EDUCATION 5.00% 06/01/2005 925
2,310 KANAWHA MERCER NICHOLAS CNTYS SINGLE FAM MTG REV 0.00% 02/01/2015 786
4,435 KANAWHA PUTNAM COUNTY, SINGLE FAMILY MORTGAGE 0.00% 12/01/2016 1,400
1,702 KEYSER HOUSING CORP MORTGAGE REVENUE 7.25% 04/01/2021 1,729
1,065 MARION COUNTY SINGLE FAMILY MORTGAGE REVENUE 7.38% 08/01/2011 1,256
265 MARION COUNTY SINGLE FAMILY MORTGAGE REVENUE, 7.05% 08/01/1998 275
150 MARSHALL COUNTY SPECIAL OBLIGATION 5.60% 05/15/1998 153
500 MARSHALL COUNTY SPECIAL OBLIGATION 6.50% 05/15/2010 550
100 MARSHALL COUNTY SPLIT OBLIGATION 5.40% 05/15/1997 100
1,000 MONONGALIA COUNTY BOARD OF EDUCATION 7.00% 04/01/2003 1,111
440 MONONGALIA COUNTY BOARD OF EDUCATION 7.00% 04/01/2004 494
300 MONONGALIA COUNTY BOARD OF EDUCATION 7.00% 04/01/2005 339
1,295 PARKERSBURG WATERWORKS AND SEWER SYSTEM REVENUE 5.50% 03/01/2010 1,301
</TABLE>
122
<PAGE> 220
<TABLE>
<CAPTION>
THE ONE GROUP WEST VIRGINIA MUNICIPAL BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED) MARCH 31, 1997
SHARES OR
PRINCIPAL AMOUNT SECURITY DESCRIPTION COUPON RATE MATURITY DATE MARKET VALUE
- ------------------------ ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1,335 PARKERSBURG WATERWORKS & SEWER SYSTEM REVENUE 5.50% 09/01/2010 1,341
1,250 PLEASANTS CITY POLLUTION WEST VIRGINIA, 6.15% 05/01/2015 1,290
2,610 PLEASANTS COUNTY POLLUTION CONTROL REVENUE 6.38% 11/01/2007 2,612
200 RALEIGH FAYETTE & NICHOLAS CNTYS SPL OBLIG REF 5.40% 08/01/1997 201
800 SCHOOL BUILDING AUTHORITY REV CAPITAL IMPROVEMENT 6.80% 07/01/2000 854
1,500 SCHOOL BUILDING AUTHORITY REVENUE 5.25% 07/01/1999 1,528
1,000 SCHOOL BUILDING AUTHORITY REVENUE 6.00% 07/01/1998 1,025
1,000 SCHOOL BUILDING AUTHORITY REVENUE 6.00% 07/01/2012 1,027
1,750 SCHOOL BUILDING AUTHORITY REVENUE 6.25% 07/01/2001 1,857
200 SCHOOL BUILDING AUTHORITY REVENUE 6.75% 07/01/2006 224
500 SCHOOL BUILDING AUTHORITY REVENUE 6.95% 07/01/2003 544
1,000 SCHOOL BUILDING AUTHORITY REVENUE CAPITAL IMPROV 6.90% 07/01/2002 1,083
500 STATE BUILDING COMMON LEASE REVENUE 6.70% 07/01/2002 539
1,000 STATE COLLEGE REVENUES 5.10% 04/01/1999 1,015
2,350 STATE HOSPITAL FINANCE AUTHORITY 5.10% 06/01/2006 2,337
625 STATE HOSPITAL FINANCE AUTHORITY 5.50% 01/01/2002 642
500 STATE HOSPITAL FINANCE AUTHORITY 5.70% 01/01/2004 520
500 STATE HOSPITAL FINANCE AUTHORITY 7.00% 08/01/2004 534
1,000 STATE HOSPITAL FINANCE AUTHORITY 7.00% 08/01/2009 1,068
2,500 STATE HOSPITAL FINANCE AUTHORITY REVENUE 5.13% 09/01/2006 2,491
140 STATE HOUSING DEVELOPMENT 5.50% 11/01/1998 143
190 STATE HOUSING DEVELOPMENT 6.30% 11/01/2003 200
150 STATE HOUSING DEVELOPMENT 6.60% 11/01/1997 152
450 STATE HOUSING DEVELOPMENT 7.00% 05/01/1999 465
500 STATE HOUSING DEVELOPMENT 7.38% 11/01/2005 517
1,000 STATE HOUSING DEVELOPMENT 7.40% 11/01/2011 1,035
1,000 STATE HOUSING DEVELOPMENT 7.40% 11/01/2013 1,035
500 STATE HOUSING DEVELOPMENT 7.40% 11/01/2013 515
865 STATE HOUSING DEVELOPMENT FUND REVENUE 6.13% 07/01/2013 866
200 STATE HOUSING DEVELOPMENT FUNDING 6.90% 07/01/1999 203
195 STATE HOUSING DEVELOPMENT FUNDING, SERIES A 6.40% 05/01/2004 205
205 STATE HOUSING DEVELOPMENT FUNDING, SERIES A 6.40% 11/01/2004 216
245 STATE HOUSING DEVELOPMENT FUNDING, SERIES A 6.75% 11/01/2010 255
315 STATE HOUSING DEVELOPMENT, SER A 6.75% 05/01/2011 328
320 STATE HOUSING DEVELOPMENT, SERIES A 6.75% 11/01/2011 333
100 STATE WATER DEVELOPMENT AUTHORITY REVENUE, SER A 7.30% 11/01/1999 106
100 STATE WATER DEVELOPMENT AUTHORTIY REVENUE, SER A 7.40% 11/01/2000 108
160 WATER DEVELOPMENT AUTHORITY, 7.10% 11/01/2004 176
1,000 WEIRTON MUNICIPAL HOSPITAL BUILDING COMMUNITY REV 5.10% 12/01/1998 1,016
1,000 WEST VIRGINIA SCHOOL BUILDING 5.50% 07/01/2011 998
1,085 WEST VIRGINIA ST 5.00% 02/01/1998 1,095
250 WEST VIRGINIA ST 5.20% 02/01/1999 254
300 WEST VIRGINIA ST 5.30% 02/01/2000 306
600 WEST VIRGINIA ST 5.40% 02/01/2001 615
2,500 WEST VIRGINIA ST 5.50% 02/01/2002 2,575
200 WEST VIRGINIA ST 5.70% 06/01/2001 200
1,200 WEST VIRGINIA ST 6.10% 06/01/2003 1,213
1,000 WEST VIRGINIA STATE BUILDING SERIES A 5.25% 07/01/2009 991
200 WEST VIRGINIA STATE HOSPITAL FINANCE AUTHORITY, 6.80% 08/01/1997 202
100 WEST VIRGINIA STATE HOSPITAL FINANCE AUTHORITY, 6.80% 08/01/1998 104
1,000 WEST VIRGINIA STATE HOUSING DEVELOPMENT, 5.80% 05/01/2017 988
1,500 WEST VIRGINIA STATE UNIVERSITY REVENUE 5.75% 04/01/2003 1,571
1,500 WEST VIRGINIA STATE UNIVERSITY REVENUE 5.75% 04/01/2004 1,574
1,000 WEST VIRGINIA STATE UNIVERSITY REVENUE 6.00% 04/01/2007 1,057
1,000 WEST VIRGINIA STATE UNIVERSITY REVENUE 6.00% 04/01/2012 1,034
130 WEST VIRGINIA STATE WATER DEVELOPMENT AUTHORITY 6.90% 11/01/2001 140
2,000 WEST VIRGINIA STATE WATER DEVELOPMENT AUTHORITY 7.00% 11/01/2011 2,187
250 WEST VIRGINIA ST. 5.25% 03/01/2001 250
195 WEST VIRGINIA UNIVERSITY REVENUES 5.20% 05/01/1999 195
225 WEST VIRGINIA UNIVERSITY REVS, SER A 5.60% 05/01/1999 231
750 WEST VIRGINIA UNIVERSITY REVS, STATE UNIVERSITY 5.60% 04/01/2011 756
1,000 WHEELING WATERWORKS & SEWER REVENUE REFUNDING 5.40% 06/01/2011 990
1,200 WHEELING WEST VIRGINIA WATERWORKS & SEWER 6.60% 06/01/2012 1,297
86,752
---------
TOTAL MUNICIPAL BONDS 89,507
----------
TOTAL (COST -- $90,625)(a) $ 93,971
==========
Percentages indicated are based on net assets of $94,189.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
</TABLE>
123
<PAGE> 221
<TABLE>
<CAPTION>
THE ONE GROUP WEST VIRGINIA MUNICIPAL BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED) MARCH 31, 1997
SHARES OR
PRINCIPAL AMOUNT SECURITY DESCRIPTION COUPON RATE MATURITY DATE MARKET VALUE
- ------------------------ ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Unrealized appreciation $ 3,392
Unrealized depreciation (46)
------------
Net unrealized appreciation $ 3,346
============
</TABLE>
124
<PAGE> 222
<TABLE>
<CAPTION>
THE ONE GROUP ARIZONA MUNICIPAL BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED) MARCH 31, 1997
SHARES OR
PRINCIPAL AMOUNT SECURITY DESCRIPTION COUPON RATE MATURITY DATE MARKET VALUE
- ------------------------------- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT COMPANIES (1.1%)
2,830 THE ONE GROUP MUNICIPAL MONEY MARKET FUND, CLASS A $ 2,830
-----------
MUNICIPAL BONDS (97.8%)
ARIZONA (97.8%)
500 APACHE CNTY ARIZONA PUBLIC FINANCE CORP CTFS PARTN 5.50% 05/01/2010 501
1,175 APACHE COUNTY ARIZONA PUBLIC FINANCE CORP PARTN 5.25% 05/01/2004 1,185
2,500 ARIZONA STATE CTFS PARTN 6.63% 09/01/2008 2,689
1,000 ARIZONA STATE MUNICIPAL FINANCING PROGRAM 7.00% 08/01/2004 1,039
1,000 ARIZONA STATE MUNICIPAL FINANCING PROGRAM 7.70% 08/01/2010 1,207
1,450 ARIZONA STATE POWER AUTHORITY POWER RESOURCE REV 4.80% 10/01/2001 1,458
2,035 ARIZONA STATE POWER AUTHORITY RESOURCE REVENUE 5.40% 10/01/2007 2,062
2,000 ARIZONA STATE TRANSPORTATION BOARD EXCISE TAX REV 7.60% 07/01/2005 2,126
5,000 ARIZONA STATE TRANSPORTATION BOARD HIGHWAY REV 5.25% 07/01/2007 5,041
1,000 ARIZONA STATE TRANSPORTATION BOARD HIGHWAY REV 6.50% 07/01/2008 1,091
2,000 ARIZONA STATE TRANSPORTATION BOARD HIGHWAY REV 7.00% 07/01/2006 2,162
1,000 ARIZONA STATE TRANSPORTATION BOARD REVENE, SER A 6.50% 07/01/2011 1,081
1,315 ARIZONA STATE UNIVERSITY REVENUES SYSTEM 7.00% 07/01/2006 1,449
1,000 ARIZONA STATE UNIVERSITY REVENUES SYSTEM, SER A 5.60% 07/01/2005 1,028
1,000 ARIZONA STATE UNIVERSITY REVENUES, 6.90% 07/01/2004 1,106
1,950 ARIZONA STATE UNIVERSITY REVENUES, SER A 5.85% 07/01/2008 2,007
1,820 ARIZONA STATE UNIVERSITY REVENUES, SER A 5.90% 07/01/2009 1,869
650 BULLHEAD COUNTY ARIZONA MUNICIPAL PROPERTY CORP 7.20% 07/01/2010 706
725 CASA GRANDE ARIZONA EXCISE TAX REVENUE 5.90% 04/01/2009 749
2,875 CENTRAL ARIZONA WATER CONSV DISTRICT 4.75% 11/01/2007 2,774
4,000 CENTRAL ARIZONA WATER CONSV DISTRICT 5.40% 11/01/2005 4,077
4,750 CENTRAL ARIZONA WATER CONSV DISTRICT 5.40% 11/01/2006 4,819
6,290 CENTRAL ARIZONA WATER CONSV DISTRICT 7.00% 11/01/2003 6,886
3,300 CENTRAL ARIZONA WATER CONSV DISTRICT 7.13% 11/01/2011 3,626
1,000 CENTRAL ARIZONA WATER CONSV DISTRICT 7.65% 11/01/2009 1,116
1,710 CENTRAL ARIZONA WATER CONSV DISTRICT CONTRA 5.20% 11/01/2003 1,733
4,175 CENTRAL ARIZONA WATER CONSV DISTRICT CONTRACT 6.50% 11/01/2011 4,514
750 CENTRAL ARIZONA WATER CONSV DISTRICT, 7.15% 11/01/1999 797
2,400 COCONINO COUNTY ARIZONA UNIVERSITY SCHOOL 5.50% 07/01/2008 2,435
905 COCONINO COUNTY ARIZONA UNIVERSITY SCHOOL 5.70% 07/01/2001 939
1,000 COCONINO & YAVAPAI COUNTIES ARIZONA 5.20% 07/01/2001 1,018
625 COCONINO & YAVAPAI COUNTIES ARIZONA 5.60% 07/01/2006 644
1,000 EAST VALLEY ARIZONA INSTITUTE OF TECHNOLOGY 6.00% 07/01/2004 1,039
2,500 EAST VALLEY ARIZONA INSTITUTE OF TECHNOLOGY 6.00% 07/01/2005 2,645
870 FLAGSTAFF 4.60% 07/01/2004 850
740 FLAGSTAFF ARIZONA STREET AND HIGHWAY USER REV 6.90% 07/01/2004 780
1,000 GILBERT ARIZONA IMPROVEMENT DISTRICT NO 011, 7.60% 01/01/2004 1,038
2,000 GLENDALE ARIZONA 5.05% 07/01/2002 2,026
1,000 GLENDALE ARIZONA MUNICIPAL PROPERTY CORP 7.00% 07/01/2009 1,056
1,000 GLENDALE ARIZONA MUNICIPAL PROPERTY CORP, 7.00% 07/01/2005 1,056
4,000 GLENDALE ARIZONA UNIVERSITY HIGH SCHOOL DISTRICT 5.30% 07/01/2007 4,025
2,900 GLENDALE ARIZONA UNIVERSITY HIGH SCHOOL DISTRICT 5.45% 07/01/2009 2,922
1,475 MARICOPA ARIZONA SCHOOL DISTRICT 4.90% 07/01/2006 1,456
2,400 MARICOPA ARIZONA SCHOOL DISTRICT 5.00% 07/01/2009 2,320
2,500 MARICOPA ARIZONA SCHOOL DISTRICT 5.00% 07/01/2010 2,389
1,000 MARICOPA ARIZONA SCHOOL DISTRICT 5.20% 07/01/2006 1,008
1,000 MARICOPA ARIZONA SCHOOL DISTRICT 5.25% 07/01/2008 1,003
1,015 MARICOPA ARIZONA SCHOOL DISTRICT 5.30% 07/01/2008 1,019
2,000 MARICOPA ARIZONA SCHOOL DISTRICT 5.50% 07/01/2009 2,024
750 MARICOPA ARIZONA SCHOOL DISTRICT 5.65% 07/01/2011 757
850 MARICOPA ARIZONA SCHOOL DISTRICT 5.75% 07/01/2005 885
900 MARICOPA ARIZONA SCHOOL DISTRICT 5.75% 07/01/2006 933
2,000 MARICOPA ARIZONA SCHOOL DISTRICT 5.80% 07/01/2015 2,017
2,000 MARICOPA ARIZONA SCHOOL DISTRICT 6.10% 07/01/2002 2,125
1,000 MARICOPA ARIZONA SCHOOL DISTRICT 6.30% 07/01/2004 1,083
2,500 MARICOPA ARIZONA SCHOOL DISTRICT 6.50% 07/01/2006 2,623
2,000 MARICOPA ARIZONA SCHOOL DISTRICT 6.50% 07/01/2008 2,134
1,440 MARICOPA ARIZONA SCHOOL DISTRICT 6.75% 07/01/1999 1,517
1,500 MARICOPA ARIZONA SCHOOL DISTRICT 6.75% 07/01/2009 1,627
2,000 MARICOPA ARIZONA SCHOOL DISTRICT 7.50% 07/01/2004 2,078
1,250 MARICOPA ARIZONA SCHOOL REFUNDING BONDS 5.25% 07/01/2003 1,276
1,000 MARICOPA CNTY SCH DIST NO 80 CHANDLER 5.10% 07/01/2008 987
1,000 MARICOPA COUNTY ARIZONA COMMUNITY 6.00% 07/01/2007 1,049
1,570 MARICOPA COUNTY ARIZONA COMMUNITY COLLEGE DISTRICT 5.10% 07/15/2005 1,578
500 MARICOPA COUNTY ARIZONA INDUSTRIAL DEVELOPMENT 6.20% 11/01/2011 508
2,000 MARICOPA COUNTY ARIZONA PHOENIX HIGH SCHOOL 5.25% 07/01/2004 2,038
1,200 MARICOPA COUNTY ARIZONA PHOENIX HIGH SCHOOL 5.60% 07/01/2013 1,197
1,000 MARICOPA COUNTY ARIZONA SCHOOL DISTRICT NO 001 5.50% 07/01/2010 1,002
1,000 MARICOPA COUNTY ARIZONA SERIES E 7.10% 07/01/2003 1,118
1,000 MARICOPA COUNTY ARIZONA UNIV SCHOOL DIST NO 097 5.90% 07/01/2003 1,055
1,000 MARICOPA COUNTY ARIZONA UNIVERSITY SCHOOL DISTRICT 5.80% 07/01/2008 1,043
3,100 MARICOPA COUNTY ARIZONA UNIVERSITY SCHOOL DISTRICT 5.80% 07/01/2009 3,243
500 MARICOPA COUNTY ARIZONA UNIVERSITY SCHOOL DISTRICT 6.20% 07/01/2004 527
1,000 MARICOPA COUNTY ARIZONA UNIVERSITY SCHOOL DISTRICT 6.35% 07/01/2010 1,095
</TABLE>
125
<PAGE> 223
<TABLE>
<CAPTION>
THE ONE GROUP ARIZONA MUNICIPAL BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED) MARCH 31, 1997
SHARES OR
PRINCIPAL AMOUNT SECURITY DESCRIPTION COUPON RATE MATURITY DATE MARKET VALUE
- ------------------------------- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2,000 MARICOPA COUNTY ARIZONA UNIVERSITY SCHOOL DISTRICT 6.90% 07/01/2001 2,156
2,780 MARICOPA COUNTY ARIZONA UNIVERSITY SCHOOL DISTRICT 7.90% 07/01/1999 2,986
2,250 MARICOPA COUNTY ARIZONA, SERIES - D 6.70% 07/01/2003 2,446
2,500 MARICOPA COUNTY SCHOOL DISTRICT, NO. 48 5.00% 07/01/2014 2,329
2,000 MARIOPA COUNTY ARIZONA SERIES E 6.20% 07/01/2006 2,114
1,000 MESA ARIZONA 5.70% 07/01/2003 1,043
1,625 MESA ARIZONA 6.00% 07/01/2002 1,715
2,000 MESA ARIZONA PROJECT OF 1987 5.70% 07/01/2008 2,056
2,040 MESA ARIZONA PROJECT OF 1987 9.00% 07/01/2001 2,369
2,000 MESA ARIZONA UTILITY SYSTEM REVENUE 5.38% 07/01/2012 1,965
725 MESA, ARIZONA 5.00% 07/01/2003 729
1,200 MOHAVE COUNTY ARIZONA 5.20% 07/01/2009 1,185
1,205 MOHAVWE COUNTY ELEMENTARY SCHOOL DISTRICT #16 5.25% 07/01/2009 1,192
2,750 NORTHERN ARIZONA UNIVERSITY REVENUES 6.40% 06/01/2007 2,919
1,215 NORTHERN ARIZONA UNIVERSITY REVENUES SERIES A 5.60% 06/01/2005 1,253
1,000 NORTHERN ARIZONA UNIVERSITY REVENUES, 7.50% 06/01/2003 1,065
2,000 NORTHERN ARIZONA UNIVERSITY REVENUES, 7.50% 06/01/2008 2,130
1,000 ORO VALLEY ARIZONA MUNICIPAL PPTY CORP REV 5.45% 07/01/2014 979
2,450 PHOENIX ARIZONA 6.38% 07/01/2013 2,615
3,000 PHOENIX ARIZONA 6.50% 07/01/2011 3,190
2,000 PHOENIX ARIZONA CIVIC IMPT CORP WATER SYSTEM REV 5.63% 07/01/2009 2,033
590 PHOENIX ARIZONA CIVIC IMPT CORP WATER SYSTEM REV 6.00% 07/01/2004 624
2,500 PHOENIX ARIZONA SERIES A 5.20% 07/01/2005 2,534
1,000 PHOENIX ARIZONA SERIES A 5.40% 07/01/2007 1,022
1,255 PHOENIX ARIZONA STREET & HIGHWAY USER REVENUE 5.80% 07/01/2005 1,310
1,320 PHOENIX ARIZONA STREET & HIGHWAY USER REVENUE 6.10% 07/01/2001 1,390
725 PHOENIX ARIZONA STREET & HIGHWAY USER REVENUE 6.25% 07/01/2006 772
2,000 PHOENIX ARIZONA STREET & HIGHWAY USER REVENUE 6.50% 07/01/2009 2,152
1,125 PHOENIZ ARIZONA SERIES A 5.10% 07/01/2004 1,138
725 PIMA COUNTY ARIZONA 5.60% 07/01/2007 743
555 PIMA COUNTY ARIZONA 6.20% 07/01/2008 583
1,000 PIMA COUNTY ARIZONA COLLEGE DISTRICT CTFS PARTNER 6.00% 07/01/2007 1,038
1,165 PIMA COUNTY ARIZONA INDL DEVELOPMENT AUTHORITY 6.40% 08/01/2011 1,202
315 PIMA COUNTY ARIZONA INDL DEVELOPMENT AUTHORITY 7.63% 02/01/2012 329
1,585 PIMA COUNTY ARIZONA SEWER REVENUE, SERIES A 4.90% 07/01/2008 1,527
1,000 PIMA COUNTY ARIZONA UNION SCHOOL DISTRICT 5.00% 07/01/2006 989
2,205 PIMA COUNTY ARIZONA UNION SCHOOL DISTRICT 5.00% 07/01/2007 2,178
500 PIMA COUNTY ARIZONA UNION SCHOOL DISTRICT 5.75% 07/01/2004 525
1,500 PIMA COUNTY ARIZONA UNIVERSITY SCHOOL DISTRICT 6.88% 07/01/2010 1,636
1,000 PIMA COUNTY ARIZONA UNIVERSITY SCHOOL DISTRICT 7.20% 07/01/2009 1,085
2,000 PIMA COUNTY UNION SCHOOL DISTRICT, SERIES - D 6.10% 07/01/2011 2,076
1,200 PINAL COUNTY ARIZONA SCHOOL DISTRICT 6.00% 07/01/2004 1,258
2,000 SALT RIVER PROJ ARIZ AGRIC 5.63% 01/01/2006 2,071
3,000 SALT RIVER PROJECT ARIZONA AGRICULTURE 6.00% 01/01/2013 3,079
2,200 SALT RIVER PROJECT ARIZONA AGRICULTURE, SER C 4.70% 01/01/2006 2,130
1,270 SALT RIVER PROJECT ARIZONA AGRICULTURE, SERIES A 5.40% 01/01/2004 1,303
1,000 SALT RIVER PROJECT ARIZONA AGRICULTURE, SERIES A 6.50% 01/01/2007 1,077
1,250 SALT RIVER PROJECT ARIZONA AGRICULTURE, SERIES A, 7.63% 01/01/2008 1,309
5,000 SALT RIVER PROJECT ARIZONA AGRICULTURE, SERIES B 5.05% 01/01/2006 4,977
3,250 SALT RIVER PROJECT ARIZONA AGRICULTURE, SERIES B 5.20% 01/01/2008 3,247
2,500 SALT RIVER PROJECT ARIZONA AGRICULTURE, SERIES B 5.38% 01/01/2009 2,500
850 SCOTTSDALE ARIZONA 5.00% 07/01/2009 828
1,700 SCOTTSDALE ARIZONA 5.25% 07/01/2006 1,724
500 SCOTTSDALE ARIZONA 5.50% 07/01/2009 510
750 SCOTTSDALE ARIZONA 6.00% 07/01/2009 792
2,200 SCOTTSDALE ARIZONA 6.90% 07/01/2006 2,388
1,100 SCOTTSDALE ARIZONA 6.90% 07/01/2007 1,194
2,085 SCOTTSDALE ARIZONA MUNICIPAL PROPERTY CORP 5.38% 07/01/2005 2,127
1,000 SCOTTSDALE ARIZONA MUNICIPAL PROPERTY CORP 6.38% 05/01/2005 1,059
1,900 SCOTTSDALE ARIZONA PROJECT OF 1989, SERIES E 5.50% 07/01/2014 1,882
1,065 SCOTTSDALE ARIZONA STREET & HIGHWAY USER REVENUE 5.50% 07/01/2007 1,090
1,615 SCOTTSDALE ARIZONA, SERIES A 4.80% 07/01/2008 1,556
1,635 TEMPE ARIZONA 5.00% 07/01/2010 1,562
1,000 TEMPE ARIZONA 5.10% 07/01/2005 1,005
580 TEMPE ARIZONA 6.00% 07/01/2006 607
2,235 TEMPE ARIZONA UNION HIGH SCHOOL DISTRICT 5.90% 07/01/2004 2,323
1,000 TUCSON ARIZONA STREET & HIGHWAY USER REVENUE 5.30% 07/01/2005 1,015
500 TUCSON ARIZONA STREET & HIGHWAY USER REVENUE 6.00% 07/01/2004 530
2,000 TUCSON ARIZONA WATER REVENUE 5.75% 07/01/2012 2,016
500 TUCSON ARIZONA WATER REVENUE 7.25% 07/01/2005 538
700 UNIVERSITY ARIZONA FNDTN CTFS PARTN, SERIES 8 4.90% 08/01/2009 668
1,000 UNIVERSITY ARIZONA UNIVERSITY REVENUES 6.25% 06/01/2011 1,055
2,215 UNIVERSITY ARIZONA UNIVERSITY REVENUES, 7.00% 06/01/2010 2,407
1,500 UNIVERSITY ARIZONA UNIVERSITY REVENUES, SERIES B 6.90% 06/01/2008 1,626
1,750 YUMA ARIZONA 6.13% 07/01/2012 1,819
1,000 YUMA ARIZONA MUN PPTY CORP REV, SERIES A 5.20% 07/01/2009 982
1,575 YUMA COUNTY ARIZONA UNION HIGH SCHOOL 5.00% 07/01/2006 1,563
253,224
--------
</TABLE>
126
<PAGE> 224
<TABLE>
<CAPTION>
THE ONE GROUP ARIZONA MUNICIPAL BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED) MARCH 31, 1997
SHARES OR
PRINCIPAL AMOUNT SECURITY DESCRIPTION COUPON RATE MATURITY DATE MARKET VALUE
- ------------------------------- --------------------------------------------------------------------------------------------------
<S> <C> <C>
TOTAL (COST -- $246,755)(a) $ 256,054
===========
Percentages indicated are based on net assets of $258,772.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation $ 9,938
Unrealized depreciation (639)
-----------
Net unrealized appreciation $ 9,299
===========
</TABLE>
127
<PAGE> 225
<TABLE>
<CAPTION>
THE ONE GROUP TREASURY & AGENCY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED) MARCH 31, 1997
PRINCIPAL
AMOUNT SECURITY DESCRIPTION COUPON RATE MATURITY DATE MARKET VALUE
- ------------------------------------------------------------------------------- ----------------------
<S> <C> <C> <C> <C>
U.S. TREASURY NOTES (55.8%)
14,000 U.S. TREASURY NOTES 5.88% 10/31/1998 $ 13,900
18,000 U.S. TREASURY NOTES 6.00% 05/31/1998 17,960
5,000 U.S. TREASURY NOTES 6.63% 06/30/2001 4,980
25,000 U.S. TREASURY NOTES 7.75% 11/30/1999 25,712
------------
62,552
------------
U.S. TREASURY BONDS (6.6%)
6,000 U.S. TREASURY BONDS 10.75% 08/15/2005 7,437
------------
U.S. GOVERNMENT AGENCIES (34.7%)
7,000 FEDERAL FARM CREDIT BUREAU 7.16% 05/15/2006 6,981
2,695 FEDERAL FARM CREDIT BUREAU 8.40% 09/05/2006 2,799
3,800 FEDERAL HOME LOAN BANK 5.70% 03/11/1999 3,741
2,000 FEDERAL HOME LOAN BANK 6.26% 11/26/2003 1,903
4,300 FEDERAL HOME LOAN BANK 7.74% 10/01/2003 4,268
6,000 STUDENT LOAN MARKETING ASSOC. 6.00% 03/05/2001 5,805
4,000 STUDENT LOAN MARKETING ASSOC. 6.29% 10/20/1999 3,960
10,000 TENNESSEE VALLEY AUTHORITY 6.13% 07/15/2003 9,513
------------
38,970
------------
TOTAL (COST -- $108,633) (a) $ 108,959
============
Percentages indicated are based on net assets of $112,228.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation $ 815
Unrealized depreciation (489)
-----------
Net unrealized appreciation $ 326
===========
</TABLE>
128
<PAGE> 226
<TABLE>
<CAPTION>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Statements of Assets and Liabilities March 31, 1997
(Unaudited)
(Amounts in Thousands, except per share amounts)
WEST VIRGINIA ARIZONA TREASURY &
MUNICIPAL MUNICIPAL AGENCY
BOND FUND (a) BOND FUND (a) FUND (a)
--------------- ------------- ----------
<S> <C> <C> <C>
ASSETS:
Investments, at value $ 93,971 $ 256,054 $ 108,959
--------- --------- ---------
Total (cost $90,625; $246,755; and $108,633, respectively) 93,971 256,054 108,959
Cash -- -- 1,500
Interest receivable 1,685 4,024 2,216
Receivable for capital shares issued 267 73 199
Prepaid expenses and other assets 1 4 25
--------- --------- ---------
Total Assets 95,924 260,155 112,899
--------- --------- ---------
LIABILITIES:
Cash overdrafts 267 73 --
Dividends payable 403 1,149 618
Payable to brokers for investments purchased 1,000 -- --
Accrued expenses and other payables:
Investment advisory fees 23 76 19
Administration fees 11 28 3
Other 31 57 31
--------- --------- ---------
Total Liabilities 1,735 1,383 671
--------- --------- ---------
NET ASSETS:
Capital 90,863 249,192 111,745
Accumulated undistributed net realized
gains (losses) from investment transactions (20) 281 157
Net unrealized appreciation (depreciation)
from investments 3,346 9,299 326
--------- --------- ---------
Net Assets $ 94,189 $ 258,772 $ 112,228
========= ========= =========
Net Assets
Fiduciary $ 93,342 $ 258,768 $ 112,228
Class A 791 4 -(c)
Class B 56 -(c) -(c)
--------- --------- ---------
Total $ 94,189 $ 258,772 $ 112,228
========= ========= =========
Outstanding units of beneficial interest (shares)
Fiduciary 9,389 26,130 11,366
Class A 79 --(c) --(c)
Class B 6 --(c) --(c)
--------- --------- ---------
Total $ 9,474 26,130 11,366
========= ========= =========
Net asset value
Fiduciary - offering and redemption
price per share $ 9.94 $ 9.90 $ 9.87
========= ========= =========
Class A - redemption price per share $ 10.03 $ 9.91 $ 9.86
========= ========= =========
Class A - maximum sales charge 4.50% 4.50% 3.00%
========= ========= =========
Class A maximum offering price (100%/(100% - maximum sales
charge) of net asset value adjusted to nearest cent) per share $ 10.50 $ 10.38 $ 10.16
========= ========= =========
Class B - offering price per share (b) $ 9.99 $ 9.91 $ 9.86
========= ========= =========
(a) The Fund commenced operations on January 20, 1997.
(b) Redemption price per Class B share varies based on length of time shares are held.
(c) Dollar and share amounts are less than 1,000.
</TABLE>
129
<PAGE> 227
<TABLE>
<CAPTION>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Statements of Operations January 20, 1997 to March 31, 1997 (a)
(Unaudited)
(Amounts in Thousands)
WEST VIRGINIA ARIZONA TREASURY &
MUNICIPAL MUNICIPAL AGENCY
BOND FUND BOND FUND FUND
------------- --------- ----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 997 $ 2,886 $ 1,503
Dividend income 12 14 --
Income from securities lending -- -- 1
------- ------- -------
Total Income 1,009 2,900 1,504
------- ------- -------
EXPENSES:
Investment advisory fees 81 228 87
Administration fees 29 83 35
Custodian and accounting fees 4 9 6
Legal and audit fees 2 4 2
Trustees' fees and expenses -- 1 1
Transfer agent fees 6 8 5
Registration and filing fees 13 36 30
Printing costs 2 7 3
Other 1 1 1
------- ------- -------
Total expenses before waivers 138 377 170
Less waivers (33) (77) (73)
------- ------- -------
Net Expenses 105 300 97
------- ------- -------
Net Investment Income 904 2,600 1,407
------- ------- -------
REALIZED/UNREALIZED GAINS (LOSSES)
FROM INVESTMENTS:
Net realized gains (losses) from
investment transactions (20) 281 157
Net change in unrealized appreciation (depreciation)
from investments (543) (2,798) (1,705)
------- ------- -------
Net realized/unrealized gains (losses)
from investments (563) (2,517) (1,548)
------- ------- -------
Change in net assets
resulting from operations $ 341 $ 83 $ (141)
======= ======= =======
(a) Period from commencement of operations.
</TABLE>
130
<PAGE> 228
<TABLE>
<CAPTION>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Statements of Changes in Net Assets March 31, 1997
(Amounts in Thousands)
WEST VIRGINIA MUNICIPAL ARIZONA MUNICIPAL TREASURY & AGENCY
BOND FUND BOND FUND FUND
----------- ---------- -------------
JANUARY 20, JANUARY 20, JANUARY 20,
1997 TO 1997 TO 1997 TO
MARCH 31, MARCH 31, MARCH 31,
1997(a) 1997(a) 1997(a)
----------- ----------- -------------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 904 $ 2,600 $ 1,407
Net realized gains (losses)
from investment transactions (20) 281 157
Net change in unrealized appreciation (depreciation)
from investments (543) (2,798) (1,705)
--------- --------- ---------
Change in net assets resulting from operations 341 83 (141)
--------- --------- ---------
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS:
From net investment income (903) (2,600) (1,407)
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income (1) -- (b) -- (b)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income -- (b) -- -- (b)
--------- --------- ---------
Change in net assets from shareholder distributions (904) (2,600) (1,407)
--------- --------- ---------
CAPITAL TRANSACTIONS:
Proceeds from shares issued 6,910 5,149 4,598
Proceeds issued in conversion 90,007 262,419 111,898
Cost of shares redeemed (2,165) (6,279) (2,720)
--------- --------- ---------
Change in net assets from share transactions 94,752 261,289 113,776
--------- --------- ---------
Change in net assets 94,189 258,772 112,228
NET ASSETS:
Beginning of period 0 0 0
--------- --------- ---------
End of period $ 94,189 $ 258,772 $ 112,228
========= ========= =========
SHARE TRANSACTIONS:
Issued 689 513 459
Issued in connection with acquisition 9,000 26,243 11,178
Reinvested -- -- --
Redeemed (215) (626) (271)
--------- --------- ---------
Change in shares 9,474 26,130 11,366
========= ========= =========
(a) Period from commencement of operations.
(b) Dollar amounts are less than $1,000.
</TABLE>
131
<PAGE> 229
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
Notes to Financial Statements March 31, 1997
(Unaudited)
1. ORGANIZATION:
The One Group (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end investment company
established as a Massachusetts business trust. The Trust is registered to
offer four classes of shares: Fiduciary, Class A, Class B and Service. The
Trust currently consists of thirty three active funds. The accompanying
financial statements and financial highlights are those of the Arizona
Municipal Bond Fund, the West Virginia Municipal Bond Fund, and the Treasury
& Agency Fund (individually a "Fund", collectively the "Funds") only. The
Funds are each offered in Fiduciary Class, Class A and Class B Shares. Class
A Shares are subject to initial sales charges, imposed at the time of
purchase, in accordance with the Funds' prospectuses. Certain redemptions of
Class B Shares are subject to contingent deferred sales charges in
accordance with the Funds' prospectuses. Each Fund is a diversified mutual
fund, except for the Arizona Municipal Bond Fund and the West Virginia
Municipal Bond Fund, which are non-diversified.
The Funds' investment objectives are as follows:
FUND OBJECTIVE
---- ---------
Arizona Municipal Bond Fund Current income exempt from Federal
income tax and Arizona personal
income tax, consistent with the
preservation of principal.
West Virginia Municipal Bond Fund Current income exempt from Federal
income tax and West Virginia
personal income tax, consistent
with the preservation of principal.
Treasury & Agency Fund A high level of current income by
investing in U.S. Treasury and
other U.S. Agency obligations with
a primary, but not exclusive, focus
on issues that produce income
exempt from state income taxes.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by
the Trust in the preparation of its financial statements. The policies are
in conformity with generally accepted
-continued-
132
<PAGE> 230
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- ------------------------------------------------------------------------------
Notes to Financial Statements March 31, 1997
(Unaudited)
accounting principles. The preparation of financial statements requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements
and the reported amounts of income and expenses for the period.
Actual results could differ from those estimates.
SECURITY VALUATION
Corporate debt securities and debt securities of U.S. issuers (other than
short-term investments maturing in 60 days or less), including municipal
securities, are valued on the basis of valuations provided by dealers or by
an independent pricing service approved by the Board of Trustees. Short-term
investments maturing in 60 days or less are valued at amortized cost, which
approximates market value. Futures contracts are valued at the settlement
price established each day by the board of trade or an exchange on which
they are traded. Options traded on an exchange are valued using the last
sale price or, in the absence of a sale, the last offering price. Options
traded over-the-counter are valued using dealer-supplied valuations.
Investments for which there are no such quotations or valuations are valued
at fair value as determined in good faith by the Adviser under the direction
of the Board of Trustees.
REPURCHASE AGREEMENTS
The Funds may invest in repurchase agreements with institutions that the
Fund's investment adviser has determined are creditworthy. Each repurchase
agreement is recorded at cost. The Fund requires that the securities
purchased in a repurchase agreement transaction be transferred to the
custodian in a manner sufficient to enable the Fund to obtain those
securities in the event of a counterparty default. The seller, under the
repurchase agreement, is required to maintain the value of the securities
held at not less than the repurchase price, including accrued interest.
Repurchase agreements are considered to be loans by a fund under the 1940
Act.
WRITTEN OPTIONS
The Funds (except the Treasury & Agency Fund) may write covered call or put
options for which premiums received are recorded as liabilities and are
subsequently adjusted to the current value of the options written. Premiums
received from writing options which expire are treated as realized gains.
Premiums received from writing options, which are either exercised or
closed, are offset against the proceeds received or amount paid on the
transaction to determine realized gains or losses.
FUTURES CONTRACTS
The Funds (except the Treasury & Agency Fund) may enter into futures
contracts for the delayed delivery of securities at a fixed price at some
future date or for the change in the value of a specified financial index
over a predetermined time period. Cash or securities are
-continued-
133
<PAGE> 231
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- -------------------------------------------------------------------------------
Notes to Financial Statements March 31, 1997
(Unaudited)
deposited with brokers in order to maintain a position. Subsequent payments
made or received by the fund based on the daily change in the market value
of the position are recorded as unrealized appreciation or depreciation
until the contract is closed out, at which time the appreciation or
depreciation is realized.
INDEXED SECURITIES
The Funds (except the Treasury & Agency Fund) may invest in indexed
securities whose value is linked either directly or inversely to changes in
foreign currencies, interest rates, commodities, indices or other reference
instruments. Indexed securities may be more volatile than the referenced
instrument itself, but any loss is limited to the amount of the original
investment.
MORTGAGE ROLLS
The Funds may enter into mortgage "dollar rolls" in which the Fund sells
mortgage-backed securities for delivery in the current month and
simultaneously contracts to repurchase substantially similar securities on a
specified future date. During the roll period, the Fund forgoes principal
and interest paid on the mortgage-backed securities. The Fund is compensated
by fee income or the difference between the current sales price and the
lower forward price for the future purchase.
SECURITIES LENDING
To generate additional income, the Funds may lend up to 33% of securities in
which they are invested pursuant to agreements requiring that the loan be
continuously secured by cash, U.S. Government or U.S. Government Agency
securities, shares of an investment trust or mutual fund, or any combination
of cash and such securities as collateral equal at all times to at least
100% of the market value plus accrued interest on the securities lent. The
Funds continue to earn interest on securities lent while simultaneously
seeking to earn interest on the investment of collateral. Collateral is
marked to market daily to provide a level of collateral at least equal to
the market value of securities lent. There may be risks of delay in recovery
of the securities or even loss of rights in the collateral should the
borrower of the securities fail financially. However, loans will be made
only to borrowers deemed by the Adviser to be of good standing and
creditworthy under guidelines established by the Board of Trustees and when,
in the judgement of the Adviser, the consideration which can be earned
currently from such securities loans justifies the attendant risk. Loans are
subject to termination by the Funds or the borrower at any time, and are,
therefore, not considered to be illiquid investments. As of March 31, 1997
the Treasury & Agency Fund had securities on loan totaling $11,257,738.
SECURITY TRANSACTIONS AND RELATED INCOME
-continued-
134
<PAGE> 232
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- ------------------------------------------------------------------------------
Notes to Financial Statements March 31, 1997
(Unaudited)
Security transactions are accounted for on a trade date basis. Net realized
gains or losses from sales of securities are determined on the specific
identification cost method. Interest income and expenses are recognized on
the accrual basis. Dividends are recorded on the ex-dividend date. Interest
income, including any discount or premium, is accrued as earned using the
effective interest method.
EXPENSES
Expenses directly attributable to a Fund are charged directly to that Fund,
while the expenses which are attributable to more than one fund of the Trust
are allocated among the respective Funds. Each class of shares bears its
pro-rata portion of expenses attributable to its series, except that each
class separately bears expenses related specifically to that class, such as
distribution fees.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared daily and paid monthly for
the Funds. Net realized capital gains, if any, are distributed at least
annually. Dividends are declared separately for each class. No class has
preferential dividend rights; differences in per share dividend rates are
generally due to differences in separate class expenses.
Distributions from net investment income and from net capital gains are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are primarily
due to differing treatments for mortgage-backed securities, expiring capital
loss carryforwards, and deferrals of certain losses. Permanent book and tax
basis differences have been reclassified among the components of net assets.
FEDERAL INCOME TAXES
The Trust treats each Fund as a separate entity for Federal income tax
purposes. Each Fund intends to continue to qualify as a regulated investment
company by complying with the provisions available to certain investment
companies as defined in applicable sections of the Internal Revenue Code,
and to make distributions from net investment income and from net realized
capital gains sufficient to relieve it from all, or substantially all,
Federal income taxes.
3. SHARES OF BENEFICIAL INTEREST:
The Trust has an unlimited number of shares of beneficial interest, with no
par value, which may, without shareholder approval, be divided into an
unlimited number of series of such shares and any series may be classified
or reclassified into one or more classes. Currently, shares of the Trust are
registered to be offered through forty series and four classes: Fiduciary,
-continued-
135
<PAGE> 233
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- ------------------------------------------------------------------------------
Notes to Financial Statements March 31, 1997
(Unaudited)
Class A, Class B and Service. As of March 31, 1997, no shareholders were in
the Service Class. Shareholders are entitled to one vote for each full share
held and will vote in the aggregate and not by class or series, except as
otherwise expressly required by law or when the Board of Trustees has
determined that the matter to be voted on affects only the interest of
shareholders of a particular class or series. The following is a summary of
transactions in Fund shares for the period ended March 31, 1997:
<TABLE>
<CAPTION>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Notes to Financial Statements, continued
(Amounts in Thousands)
WEST VIRGINIA ARIZONA TREASURY & AGENCY
MUNICIPAL BOND FUND MUNICIPAL BOND FUND BOND FUND
----------- ------------ -----------
JANUARY 20, JANUARY 20, JANUARY 20,
ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31,
1997 (a) 1997 (a) 1997 (a)
----------- ---------- ----------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C>
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES:
Proceeds from shares issued $ 6,057 $ 5,145 $ 4,598
Proceeds from shares issued in connection
with conversion 90,007 262,419 111,898
Cost of shares redeemed (2,165) (6,279) (2,720)
--------- --------- ---------
Change in net assets from
Fiduciary Share transactions $ 93,899 $ 261,285 $ 113,776
========= ========= =========
CLASS A SHARES:
Proceeds from shares issued $ 796 $ 4 -- (b)
--------- --------- ---------
Change in net assets from
Class A Share transactions $ 796 $ 4 $ 0
========= ========= =========
CLASS B SHARES:
Proceeds from shares issued $ 57 $ -- (b) $ -- (b)
--------- --------- ---------
Change in net assets from
Class B Share transactions $ 57 $ 0 $ 0
========= ========= =========
SHARE TRANSACTIONS:
FIDUCIARY SHARES:
Issued 604 513 459
Issued in connection with acquisition 9,000 26,243 11,178
Redeemed (215) (626) (271)
--------- --------- ---------
Change in Fiduciary Shares 9,389 26,130 11,366
========= ========= =========
CLASS A SHARES:
Issued 79 -- (b) -- (b)
--------- --------- ---------
Change in Class A Shares 79 0 0
========= ========= =========
CLASS B SHARES:
Issued 6 -- (b) -- (b)
--------- --------- ---------
Change in Class B Shares 6 0 0
========= ========= =========
(a) Period from commencement of operations.
(b) Dollar and share amounts are less than 1,000.
</TABLE>
4. INVESTMENT ADVISORY, ADMINISTRATIVE, AND DISTRIBUTION AGREEMENTS:
The Trust and Banc One Investment Advisors Corporation (the "Adviser") are
parties to an investment advisory agreement under which the Adviser is
entitled to receive an annual fee, computed daily and paid monthly, equal to
the following percentages of the Funds' average net assets: 0.45% of the
Arizona Municipal Bond Fund and the West Virginia Municipal Bond Fund; and
0.40% of the Treasury & Agency Fund.
The Trust and The One Group Services Company (the "Administrator"), a
wholly-owned subsidiary of The BISYS Group, Inc., are parties to an
administrative agreement under which the Administrator provides services for
a fee that is computed daily and paid monthly, at an annual rate of 0.20% on
the first $1.5 billion of Trust net assets (excluding the Investor Growth
Fund, the Investor Growth & Income Fund, the Investor Conservative Fund,
and the Investor Balanced Fund, the "Investor Funds" and the Treasury Only
Money Market Fund and the Government Money Market Fund, the "Institutional
Money Market Funds"); 0.18% on the next $0.5 billion of Trust net assets
(excluding the Investor Funds and the Institutional Money Market Funds); and
0.16% of Trust net assets (excluding the Investor Funds and the
Institutional Money Market Funds) over $2 billion. The Adviser also serves
as SubAdministrator to each fund of the Trust, pursuant to an agreement
between the Administrator and the Adviser. Pursuant to this agreement, the
Adviser performs many of the Administrator's duties, for which the Adviser
receives a fee paid by the Administrator.
The Trust and The One Group Services Company (the "Distributor") are parties
to a distribution agreement under which shares of the Funds are sold on a
continuous basis. Class A and Class B Shares are subject to distribution and
shareholder services plans (the "Plans") pursuant to Rule 12b-1 under the
1940 Act. As provided in the Plans, the Trust will pay the Distributor a fee
of 0.35% of the average daily net assets of Class A Shares of each of the
Funds and 1.00% of the average daily net assets of the Class B Shares of
each of the Funds. Currently, the Distributor has voluntarily agreed to
limit payments under the Plans to 0.25%
-continued-
136
<PAGE> 234
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- ------------------------------------------------------------------------------
Notes to Financial Statements March 31, 1997
(Unaudited)
and 0.90% of average daily net assets of the Class A Shares and Class B
Shares, respectively, of the Arizona Municipal Bond Fund and West Virginia
Municipal Bond Fund; and 0.25% and 0.75% of average daily net assets
respectively of the Treasury & Agency Fund. Up to 0.25% of the fees payable
under the Plans may be used as compensation for shareholder services by the
Distributor and/or financial institutions and intermediaries. Fees paid
under the Plans may be applied by the Distributor toward (i) compensation
for its services in connection with distribution assistance or provision of
shareholder services; or (ii) payments to financial institutions and
intermediaries such as banks (including affiliates of the Adviser), brokers,
dealers and other institutions, including the Distributor's affiliates and
subsidiaries as compensation for services or reimbursement of expenses
incurred in connection with distribution assistance or provision of
shareholder services. Fiduciary Class Shares of each Fund are offered
without distribution fees. For the period ended March 31, 1997, the
Distributor received $238 from commissions earned on sales of Class A Shares
and redemptions of Class B Shares, of which the Distributor reallowed $167
to affiliated broker/dealers of the Funds.
Certain officers of the Trust are affiliated with the Administrator. Such
officers receive no compensation from the Funds for serving in their
respective roles.
The Adviser, the Administrator and the Distributor voluntarily agreed to
waive a portion of their fees. For the period ended March 31, 1997, fees in
the following amounts were waived (amounts in thousands):
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Investment
Advisory Fees Administration 12 b-1 Fees
Waived Fees Waived Waived
------------- -------------- -----------
<S> <C> <C> <C>
West Virginia Municipal Bond Fund $29 $ 4 $-- (a)
Arizona Municipal Bond Fund 55 22 -- (a)
Treasury & Agency Bond Fund 43 30 --
(a) Dollar amount is less than 1,000.
</TABLE>
5. SECURITIES TRANSACTIONS:
The cost of security purchases and the proceeds from the sale of securities
(excluding short-term securities and purchased options) during the period
ended March 31, 1997 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
U.S. Government
Securities Other Securities
Purchases Sales Purchases Sales
--------- ----- --------- -----
<S> <C> <C> <C> <C>
West Virginia Municipal Bond Fund $ -- $ -- $3,903 $ 984
Arizona Municipal Bond Fund -- -- 3,065 6,752
Treasury & Agency Bond Fund 39,465 40,870 -- --
</TABLE>
6. FINANCIAL INSTRUMENTS:
Investing in financial instruments such as written options, futures,
structured notes and indexed securities involves risk in excess of the
amounts reflected in the Statement of Assets and Liabilities. The face or
contract amounts reflect the extent of the involvement the Funds have
-continued-
137
<PAGE> 235
THE ONE GROUP FAMILY OF MUTUAL FUNDS
- ------------------------------------------------------------------------------
Notes to Financial Statements March 31, 1997
(Unaudited)
in the particular class of instrument. Risks associated with these
instruments include an imperfect correlation between the movements in the
price of the instruments and the price of the underlying securities and
interest rates, an illiquid secondary market for the instruments or
inability of counter parties to perform under the terms of the contract. The
Funds enter into these contracts primarily as a means to hedge against
adverse fluctuation in securities.
7. CONCENTRATION OF CREDIT RISK:
The Arizona and West Virginia Municipal Bond Funds invest primarily in debt
obligations issued by their respective States and political subdivisions,
agencies and public authorities to obtain funds for various public purposes.
The Funds are more susceptible to economic and political factors adversely
affecting issuers of the state's specific municipal securities than are
municipal bond funds that are not concentrated in these issuers to the same
extent.
8. ACQUISITION OF BANK ONE COMMON TRUST FUNDS:
On January 20, 1997, the Funds separately issued shares to convert all of
the assets and liabilities of the West Virginia Municipal Common Trust, the
Arizona Municipal Common Trust and the Treasury & Agency Common Trust into
shares of the West Virginia Municipal Bond Fund, Arizona Municipal Bond
Fund, and Treasury & Agency Fund respectively. The conversion was structured
for tax purposes to qualify as a tax-free transaction under the Internal
Revenue Code. Therefore, the transaction was accounted for by a method
followed for tax purposes in a tax-free business combination. The following
is a summary of shares issued, net assets acquired, net asset value per
share and unrealized appreciation as of the date acquired:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
Net Asset Unrealized
Shares Net Assets Value Appreciation
------ ---------- --------- ------------
<S> <C> <C> <C> <C>
West Virginia Municipal Bond Fund 9,000 $ 90,007 $10.00 $ 3,889
Arizona Municipal Bond Fund 26,243 262,419 10.00 12,097
Treasury & Agency Bond Fund 11,178 111,898 10.00 2,031
</TABLE>
-continued-
138
<PAGE> 236
<TABLE>
<CAPTION>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Notes to Financial Statements, continued
(Amounts in Thousands)
WEST VIRGINIA ARIZONA TREASURY & AGENCY
MUNICIPAL BOND FUND MUNICIPAL BOND FUND FUND
----------- ------------ -----------
JANUARY 20, JANUARY 20, JANUARY 20,
ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31,
1997 (a) 1997 (a) 1997 (a)
----------- ---------- ----------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C>
CAPITAL TRANSACTIONS:
FIDUCIARY SHARES:
Proceeds from shares issued $ 6,057 $ 5,145 $ 4,598
Proceeds from shares issued in connection
with conversion 90,007 262,419 111,898
Cost of shares redeemed (2,165) (6,279) (2,720)
--------- --------- ---------
Change in net assets from
Fiduciary Share transactions $ 93,899 $ 261,285 $ 113,776
========= ========= =========
CLASS A SHARES:
Proceeds from shares issued $ 796 $ 4 -- (b)
--------- --------- ---------
Change in net assets from
Class A Share transactions $ 796 $ 4 $ 0
========= ========= =========
CLASS B SHARES:
Proceeds from shares issued $ 57 $ -- (b) $ -- (b)
--------- --------- ---------
Change in net assets from
Class B Share transactions $ 57 $ 0 $ 0
========= ========= =========
SHARE TRANSACTIONS:
FIDUCIARY SHARES:
Issued 604 513 11,636
Redeemed (215) (626) (271)
--------- --------- ---------
Change in Fiduciary Shares 389 (113) 11,365
========= ========= =========
CLASS A SHARES:
Issued 79 -- (b) -- (b)
--------- --------- ---------
Change in Class A Shares 79 0 0
========= ========= =========
CLASS B SHARES:
Issued 6 -- (b) -- (b)
--------- --------- ---------
Change in Class B Shares 6 0 0
========= ========= =========
(a) Period from commencement of operations.
(b) Dollar and share amounts are less than 1,000.
</TABLE>
139
<PAGE> 237
<TABLE>
<CAPTION>
Table 2
- ------------------------------------------------------------------------------
Investment
Advisory Fees Administration 12 b-1 Fees
Waived Fees Waived Waived
------------- -------------- -----------
<S> <C> <C> <C>
West Virginia Municipal Bond Fund $29 $ 4 $-- (a)
Arizona Municipal Bond Fund 55 22 -- (a)
Treasury & Agency Fund 43 30 --
(a) Dollar amount is less than 1,000.
</TABLE>
140
<PAGE> 238
<TABLE>
<CAPTION>
Table 3
- -------------------------------------------------------------------------------
U.S. Government
Securities Other Securities
Purchases Sales Purchases Sales
--------- ----- --------- -----
<S> <C> <C> <C> <C>
West Virginia Municipal Bond Fund $ -- $ -- $3,903 $ 984
Arizona Municipal Bond Fund -- -- 3,065 6,752
Treasury & Agency Fund 39,465 40,870 -- --
</TABLE>
141
<PAGE> 239
<TABLE>
<CAPTION>
Table 5
- -----------------------------------------------------------------------------
Net Asset Unrealized
Shares Net Assets Value Appreciation
------ ---------- --------- ------------
<S> <C> <C> <C> <C>
West Virginia Municipal Bond Fund 9,000 $ 90,008 $10.00 $ 3,889
Arizona Municipal Bond Fund 26,244 262,419 10.00 12,097
Treasury & Agency Fund 11,178 111,898 10.00 2,031
</TABLE>
142
<PAGE> 240
<TABLE>
<CAPTION>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Financial Highlights
WEST VIRGINIA MUNICIPAL BOND FUND
---------------
FIDUCIARY
---------------
JANUARY 20,
1997 TO
MARCH 31,
1997 (a)
---------------
(Unaudited)
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.00
----------
Investment Activities
Net investment income 0.10
Net realized and unrealized gains (losses)
from investments (0.06)
----------
Total from Investment Activities 0.04
----------
Distributions
Net investment income (0.10)
----------
Total Distributions (0.10)
----------
NET ASSET VALUE,
END OF PERIOD $ 9.94
===========
Total Return 0.35% (b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 93,342
Ratio of expenses to
average net assets 0.59% (c)
Ratio of net investment income
to average net assets 5.08% (c)
Ratio of expenses to
average net assets * 0.77% (c)
Ratio of net investment income
to average net assets * 4.90% (c)
Portfolio Turnover (d) 1.09%
<FN>
- ------------------------
* During the period certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been
as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
143
<PAGE> 241
<TABLE>
<CAPTION>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Financial Highlights
WEST VIRGINIA MUNICIPAL BOND FUND
---------------
CLASS A
---------------
JANUARY 20,
1997 TO
MARCH 31,
1997 (a)
---------------
(Unaudited)
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.00
-------
Investment Activities
Net investment income 0.03
Net realized and unrealized gains (losses)
from investments 0.03
-------
Total from Investment Activities 0.06
-------
Distributions
Net investment income (0.03)
-------
Total Distributions (0.03)
-------
NET ASSET VALUE,
END OF PERIOD $ 10.03
=======
Total Return (Excludes Sales Charge) 0.65% (b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 791
Ratio of expenses to
average net assets 0.84% (c)
Ratio of net investment income
to average net assets 4.83% (c)
Ratio of expenses to
average net assets * 1.12% (c)
Ratio of net investment income
to average net assets * 4.55% (c)
Portfolio Turnover (d) 1.09%
<FN>
------------
* During the period certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been
as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
144
<PAGE> 242
<TABLE>
<CAPTION>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Financial Highlights
WEST VIRGINIA MUNICIPAL BOND FUND
---------------
CLASS B
---------------
JANUARY 20,
1997 TO
MARCH 31,
1997 (a)
---------------
(Unaudited)
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $10.00
------
Investment Activities
Net investment income 0.04
Net realized and unrealized gains (losses)
from investments (0.01)
------
Total from Investment Activities 0.03
------
Distributions
Net investment income (0.04)
------
Total Distributions (0.04)
------
NET ASSET VALUE,
END OF PERIOD $ 9.99
======
Total Return (Excludes Redemption Charge) 0.27% (b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 56
Ratio of expenses to
average net assets 1.49% (c)
Ratio of net investment income
to average net assets 4.18% (c)
Ratio of expenses to
average net assets * 1.77% (c)
Ratio of net investment income
to average net assets * 3.90% (c)
Portfolio Turnover (d) 1.09%
<FN>
- -----------------
* During the period certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been
as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
145
<PAGE> 243
<TABLE>
<CAPTION>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Financial Highlights
ARIZONA MUNICIPAL BOND FUND
---------------
FIDUCIARY
---------------
JANUARY 20,
1997 TO
MARCH 31,
1997 (a)
---------------
(Unaudited)
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.00
--------------
Investment Activities
Net investment income 0.10
Net realized and unrealized gains (losses)
from investments (0.10)
--------------
Total from Investment Activities 0.00
--------------
Distributions
Net investment income (0.10)
--------------
Total Distributions (0.10)
--------------
NET ASSET VALUE,
END OF PERIOD $ 9.90
==============
Total Return -0.02%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 258,768
Ratio of expenses to
average net assets 0.59%(c)
Ratio of net investment income
to average net assets 5.13%(c)
Ratio of expenses to
average net assets * 0.74%(c)
Ratio of net investment income
to average net assets * 4.98%(c)
Portfolio Turnover (d) 1.18%
<FN>
------------
* During the period certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been
as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
146
<PAGE> 244
<TABLE>
<CAPTION>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Financial Highlights
ARIZONA MUNICIPAL BOND FUND
---------------
CLASS A
---------------
JANUARY 20,
1997 TO
MARCH 31,
1997 (a)
---------------
(Unaudited)
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $10.00
------
Investment Activities
Net investment income 0.03
Net realized and unrealized gains (losses)
from investments (0.09)
------
Total from Investment Activities (0.06)
------
Distributions
Net investment income (0.03)
------
Total Distributions (0.03)
------
NET ASSET VALUE,
END OF PERIOD $ 9.91
======
Total Return (Excludes Sales Charge) -0.62%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 4
Ratio of expenses to
average net assets 0.84%(c)
Ratio of net investment income
to average net assets 4.88%(c)
Ratio of expenses to
average net assets * 1.09%(c)
Ratio of net investment income
to average net assets * 4.63%(c)
Portfolio Turnover (d) 1.18%
<FN>
- ------------
* During the period certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been
as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
147
<PAGE> 245
<TABLE>
<CAPTION>
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Financial Highlights
ARIZONA MUNICIPAL BOND FUND
---------------
CLASS B
---------------
JANUARY 20,
1997 TO
MARCH 31,
1997 (a)
---------------
(Unaudited)
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $10.00
---------
Investment Activities
Net realized and unrealized gains (losses)
from investments (0.09)
---------
Total from Investment Activities (0.09)
---------
NET ASSET VALUE,
END OF PERIOD $ 9.91
=========
Total Return (Excludes Redemption Charge) -0.90%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ -- (c)
Ratio of expenses to
average net assets 1.49%(d)
Ratio of net investment income
to average net assets 4.23%(d)
Ratio of expenses to
average net assets * 1.74%(d)
Ratio of net investment income
to average net assets * 3.98%(d)
Portfolio Turnover (e) 1.18%
<FN>
- ---------
* During the period certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been
as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Amount is less than 1,000.
(d) Annualized
(e) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
148
<PAGE> 246
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Financial Highlights
<TABLE>
<CAPTION>
TREASURY & AGENCY FUND
---------
FIDUCIARY
---------
JANUARY 20,
1997 TO
MARCH 31,
1997 (a)
---------
(Unaudited)
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.00
-------------
Investment Activities
Net investment income 0.12
Net realized and unrealized gains (losses)
from investments (0.13)
-------------
Total from Investment Activities (0.01)
Distributions -------------
Net investment income (0.12)
-------------
Total Distributions (0.12)
-------------
NET ASSET VALUE,
END OF PERIOD $ 9.87
=============
Total Return -0.06%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ 112,228
Ratio of expenses to
average net assets 0.45%(c)
Ratio of net investment income
to average net assets 6.48%(c)
Ratio of expenses to
average net assets * 0.79%(c)
Ratio of net investment income
to average net assets * 6.14%(c)
Portfolio Turnover (d) 35.57%
- ------------
<FN>
* During the period certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been
as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
149
<PAGE> 247
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Financial Highlights
<TABLE>
<CAPTION>
TREASURY & AGENCY FUND
-------------
CLASS A
-------------
JANUARY 20,
1997 TO
MARCH 31,
1997 (a)
-------------
(Unaudited)
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.00
---------
Investment Activities
Net investment income 0.13
Net realized and unrealized gains (losses)
from investments (0.14)
---------
Total from Investment Activities (0.01)
---------
Distributions
Net investment income (0.13)
---------
Total Distributions (0.13)
---------
NET ASSET VALUE,
END OF PERIOD $ 9.86
=========
Total Return (Excludes Sales Charge) -0.11%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ -- (c)
Ratio of expenses to
average net assets 0.70%(d)
Ratio of net investment income
to average net assets 6.23%(d)
Ratio of expenses to
average net assets * 1.14%(d)
Ratio of net investment income
to average net assets * 5.79%(d)
Portfolio Turnover (e) 35.57%
<FN>
- ------------
* During the period certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been
as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Amount is less than 1,000.
(d) Annualized.
(e) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
150
<PAGE> 248
THE ONE GROUP FAMILY OF MUTUAL FUNDS
Financial Highlights
<TABLE>
<CAPTION>
TREASURY & AGENCY FUND
---------
CLASS B
---------
JANUARY 20,
1997 TO
MARCH 31,
1997 (a)
---------
(Unaudited)
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.00
--------
Investment Activities
Net investment income 0.12
Net realized and unrealized gains (losses)
from investments (0.14)
--------
Total from Investment Activities (0.02)
--------
Distributions
Net investment income (0.12)
--------
Total Distributions (0.12)
--------
NET ASSET VALUE,
END OF PERIOD $ 9.86
========
Total Return (Excludes Redemption Charge) -0.17%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) $ -(c)
Ratio of expenses to
average net assets 1.20%(d)
Ratio of net investment income
to average net assets 5.73%(d)
Ratio of expenses to
average net assets * 1.79%(d)
Ratio of net investment income
to average net assets * 5.14%(d)
Portfolio Turnover (e) 35.57%
<FN>
- ------------
* During the period certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been
as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Amount is less than 1,000.
(d) Annualized.
(e) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares issued.
</TABLE>
151
<PAGE> 249
Registration Statement
of
The One Group(R)
on
Form N-lA
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Included in Part A:
-- Financial Highlights
Included in Part B:
-- The One Group West Virginia Municipal Bond Fund
Schedule of Portfolio Investments as of March 31,
1997 (unaudited).
-- The One Group Arizona Municipal Bond Fund Schedule
of Portfolio Investments as of March 31, 1997
(unaudited).
-- The One Group Treasury & Agency Bond Fund Schedule
of Investments as of March 31, 1997 (unaudited).
-- The One Group West Virginia Municipal Bond Fund
Statement of Assets and Liabilities as of March 31,
1997 (unaudited).
-- The One Group Arizona Municipal Bond Fund Statement
of Assets and Liabilities as of March 31, 1997
(unaudited).
-- The One Group Treasury & Agency Bond Fund Statement
of Assets and Liabilities as of March 31, 1997
(unaudited).
-- The One Group West Virginia Municipal Bond Fund
Statement of Operations as of March 31, 1997
(unaudited).
-- The One Group Arizona Municipal Bond Fund Statement
of Operations as of March 31, 1997 (unaudited).
-- The One Group Treasury & Agency Bond Fund Statement
of Operations as of March 31, 1997 (unaudited).
-- The One Group West Virginia Municipal Bond Fund
Statement of Changes in Net Assets as of March 31,
1997 (unaudited).
-- The One Group Arizona Municipal Bond Fund Statement
of Changes in Net Assets as of March 31, 1997
(unaudited).
-- The One Group Treasury & Agency Bond Fund Statement
of Changes in Net Assets as of March 31, 1997
(unaudited).
-- The One Group West Virginia Municipal Bond Fund
Financial Highlights as of March 31, 1997
(unaudited).
-- The One Group Arizona Municipal Bond Fund Financial
Highlights as of March 31, 1997 (unaudited).
-- The One Group Treasury & Agency Bond Fund Financial
Highlights as of March 31, 1997 (unaudited).
-- The One Group West Virginia Municipal Bond Fund Notes
to Financial Statements as of March 31, 1997
(unaudited).
-- The One Group Arizona Municipal Bond Fund Notes to
Financial Statements as of March 31, 1997
(unaudited).
-- The One Group Treasury & Agency Bond Fund Notes to
Financial Statements as of March 31, 1997
(unaudited).
The following financial statements are incorporated by
reference into the Statement of Additional Information from
Post-Effective Amendment No. 41 (filed April 18, 1997) to
Registrant's Registration Statement on Form N-1A.
-- The One Group Funds Portfolio of Investments as of
June 30, 1996 (audited).
-- The One Group Funds Statement of Assets and
Liabilities as of June 30, 1996 (audited).
-- The One Group Funds Statements of Operations for
Fiscal Year Ended June 30, 1996 (audited).
-- The One Group Funds Statements of Changes in Net
Assets for Fiscal Year Ended June 30, 1996 (audited).
-- The One Group Funds Financial Highlights as of June
30, 1996 (audited).
-- The One Group Funds Notes to Financial Statements as
of June 30, 1996 (audited).
-- Reports dated August 19 and 27, 1996 of Coopers &
Lybrand L.L.P., independent accountants on The One
Group Funds financial statements.
-- The One Group Funds Portfolio of Investments as of
December 31, 1996 (unaudited).
-- The One Group Funds Statement of Assets and
Liabilities as of December 31, 1996 (unaudited).
-- The One Group Funds Statements of Operations for the
Period Ended December 31, 1996 (unaudited).
<PAGE> 250
-- The One Group Funds Statements of Changes in Net
Assets for the Period Ended December 31, 1996
(unaudited).
-- The One Group Funds Financial Highlights as of
December 31, 1996 (unaudited).
-- The One Group Funds Notes to Financial Statements as
of December 31, 1996 (unaudited).
All required financial statements are contained in
Part B hereof. All other financial statements and
schedules are inapplicable.
(b) Exhibits:
(1) Amended and Restated Declaration of Trust is
incorporated by reference to Exhibit (1) to
Post-Effective Amendment No. 39 (filed August 16,
1996) to Registrant's Registration Statement on Form
N-1A.
(2) Code of Regulations as amended and restated July 26,
1990 is incorporated by reference to Exhibit (2) to
Post-Effective Amendment No. 39 (filed August 16,
1996) to Registrant's Registration Statement on Form
N-1A.
(3) None.
(4) None.
(5)(a) Investment Advisory Agreement dated January 11, 1993
between Registrant and Banc One Investment Advisors
Corporation is incorporated by reference to Exhibit
5(a) to Post-Effective Amendment No. 27 (filed March
l7, l993) to Registrant's Registration Statement on
Form N-1A.
(5)(b) Revised Schedule A to the Investment Advisory
Agreement between Registrant and Banc One Investment
Advisors Corporation is incorporated by reference to
Exhibit (5)(b) to Post-Effective Amendment No. 40
(filed August 29, 1996) to the Registrant's
Registration Statement on Form N-1A..
(5)(c) Sub-Investment Advisory Agreement dated October
1,1996 between Banc One Investment Advisors
Corporation and Independence International
Associates, Inc. is filed herewith
(6)(a) Distribution Agreement dated November 1, 1995 between
the Registrant and The One Group Services Company is
incorporated by reference to Exhibit (6)(a) to
Post-Effective Amendment No. 36 (filed November 24,
1995) to Registrant's Registration Statement on Form
N-1A.
(6)(b) Revised Schedules A-D to the Distribution Agreement
between the Registrant and The One Group Services
Company are incorporated by reference to Exhibit
(6)(b) to Post-Effective Amendment No. 40 (filed
August 29, 1996) to the Registrant's Registration
Statement on Form N-1A.
<PAGE> 251
(6)(c) Re-executed Distribution Agreement dated December 13, 1995
between Registrant and The One Group Services Company is
incorporated by reference to Exhibit (7)(c) to Registrant's
Registration Statement on Form N-14 (filed January 19, 1996).
(6)(d) Schedule E to the Distribution Agreement between Registrant
and The One Group Services Company is filed herewith.
(6)(e) Amendment to Distribution Agreement between the Registrant and
The One Group Services Company is filed herewith.
(6)(f) Dealer's Agreement for The One Group(R) Funds dated November
11, 1995 between The One Group Services Company and Banc One
Securities Corporation is incorporated by reference to Exhibit
(7)(d) to Registrant's Registration Statement on Form N-14
(filed January 19, 1996).
(7) None.
(8)(a) Custodian Contract between Registrant and State Street Bank
and Trust Company is incorporated by reference to Exhibit (8)
to Post-Effective Amendment No. 12 (filed September 9, 1988)
to Registrant's Registration Statement on Form N-1A.
(8)(b) Sub-Custodian Agreement between State Street Bank and Trust
Company and Bank One Trust Company, NA is incorporated by
reference to Exhibit (8)(b) to Post-Effective Amendment No. 37
(filed June 13, 1996) to the Registrant's Registration
Statement on Form N-1A.
(9)(a) Management and Administration Agreement dated December 1, 1995
between the Registrant and The One Group Services Company is
incorporated by reference to Exhibit (13)(a) to Registrant's
Registration Statement on Form N-14 (filed January 19, 1996).
(9)(b) Revised Schedule A to the Management and Administration
Agreement between the Registrant and The One Group Services
Company is incorporated by reference to Exhibit (9)(b) to
Post-Effective Amendment No. 40 (filed August 29, 1996) to the
Registrant's Registration Statement on Form N-1A.
(9)(c) Transfer Agency and Service Agreement between the Registrant
and State Street Bank and Trust Company is incorporated by
reference to Exhibit (9)(b) to Post-Effective Amendment No. 12
(filed September 9, 1988) to Registrant's Registration
Statement on Form N-1A.
(9)(d) Fund Accounting Agreement dated December 1, 1995 between the
Registrant and The One Group Services Company is incorporated
by reference to Exhibit (13)(c) to Registrant's Registration
Statement on Form N-14 (filed January 19, 1996).
(9)(e) Revised Schedule A to the Fund Accounting Agreement between
the Registrant and The One Group Services Company is
incorporated by reference to Exhibit (9)(e) to Post-Effective
Amendment No. 40 (filed August 29, 1996) to the Registrant's
Registration Statement on Form N-1A.
(9)(f) Sub-Administration Agreement dated December 1, 1995 between
The One Group Services Company and Banc One Investment
Advisors Corporation is
<PAGE> 252
incorporated by reference to Exhibit (13)(d) to the
Registrant's Registration Statement on Form N-14 (filed
January 19, 1996).
(9)(g) Revised Schedule A to the Sub-Administration Agreement between
The One Group Services Company and Banc One Investment
Advisors is incorporated by reference to Exhibit (9)(g) to
Post-Effective Amendment No. 40 (filed August 29, 1996) to the
Registrant's Registration Statement on Form N-1A.
(9)(h) Agency Services and Delegation Agreement dated January 1, 1996
between the Registrant and BISYS Qualified Plan Services is
incorporated by reference to Exhibit (9)(g) to Post-Effective
Amendment No. 37 (filed June 13, 1996) to the Registrant's
Registration Statement on Form N-1A.
(9)(i) Shareholder Servicing Agreement is incorporated by reference
to Exhibit 9(h) to Post-Effective Amendment No. 37 (filed June
13, 1996) to the Registrant's Registration Statement on Form
N-1A.
(10) Opinion and consent of counsel is filed herewith.
(11)(a) Consent of Coopers & Lybrand L.L.P. is filed herewith.
(11)(b) Consent of KPMG Peat Marwick LLP is filed herewith.
(11)(c) Consent of Price Waterhouse, LLP is filed herewith.
(11)(d) Consent of Ropes & Gray is filed herewith.
(12) None.
(13) Purchase Agreement dated July 18, 1985, between Registrant and
Physicians Insurance Company of Ohio is incorporated by
reference to Exhibit (13) of the Registrant's Pre-Effective
Amendment No. 2 (filed July 18, 1985) to Registrant's
Registration Statement on Form N-1A.
(14) None.
(15)(a) Re-Executed Distribution and Shareholder Services Plan - Class
A and Service Class shares dated November 1, 1995, as amended
February 29, 1996, between the Registrant and The One Group
Services Company is incorporated by reference to Exhibit
(15)(a) to Post-Effective Amendment No. 37 (filed June 13,
1996) to the Registrant's Registration Statement on Form N-1A.
(15)(b) Revised Schedule A to the Re-Executed Distribution and
Shareholder Services Plan Class A and Service Class shares
between the Registrant and The One Group Services Company is
incorporated by reference to Exhibit (15)(b) to Post-Effective
Amendment No. 40 (filed August 29, 1996) to the Registrant's
Registration Statement on Form N-1A.
<PAGE> 253
(15)(c) Distribution and Shareholder Services Plan - Class B and Class
C Shares dated January 1, 1994, as amended February 20, 1997,
between the Registrant and The One Group Services Company is
incorporated by reference to Exhibit 15(c) to Post-Effective
Amendment No. 41 (filed April 18, 1997) to the Registrant's
Registration Statement on Form N-1A.
(16) Schedules for computation of performance quotations for the
Funds provided in the Registration Statement in response to
Item 22 of Form N-1A are incorporated herein by reference to
Exhibit 16 to Post-Effective Amendment No. 31 (filed April 29,
1994) to the Registrant's Registration Statement on Form N-1A.
(17) Financial data schedules for:
<TABLE>
<S> <C> <C> <C>
17.1 Prime Money Market Fiduciary 06/30/96
17.2 Prime Money Market Class A 06/30/96
17.3 U.S. Treasury Securities
Money Market Fiduciary 06/30/96
17.4 U.S. Treasury Securities
Money Market Class A 06/30/96
17.5 Municipal Money Market Fiduciary 06/30/96
17.6 Municipal Money Market Class A 06/30/96
17.7 Income Equity Fund Fiduciary 06/30/96
17.8 Income Equity Fund Class A 06/30/96
17.9 Income Equity Fund Class B 06/30/96
17.10 Income Bond Fiduciary 06/30/96
17.11 Income Bond Class A 06/30/96
17.12 Income Bond Class B 06/30/96
17.13 Intermediate Tax-Free Bond Fiduciary 06/30/96
17.14 Intermediate Tax-Free Bond Class A 06/30/96
17.15 Intermediate Tax-Free Bond Class B 06/30/96
17.16 Disciplined Value Fund Fiduciary 06/30/96
17.17 Disciplined Value Fund Class A 06/30/96
17.18 Disciplined Value Fund Class B 06/30/96
17.19 Growth Opportunities Fund Fiduciary 06/30/96
17.20 Growth Opportunities Fund Class A 06/30/96
17.21 Growth Opportunities Fund Class B 06/30/96
17.22 Limited Volatility Bond Fiduciary 06/30/96
17.23 Limited Volatility Bond Class A 06/30/96
17.24 Limited Volatility Bond Class B 06/30/96
17.25 Equity Index Fund Fiduciary 06/30/96
17.26 Equity Index Fund Class A 06/30/96
17.27 Equity Index Fund Class B 06/30/96
17.28 Large Company Value Fund Fiduciary 06/30/96
17.29 Large Company Value Fund Class A 06/30/96
17.30 Large Company Value Fund Class B 06/30/96
17.31 Ohio Municipal Bond Fiduciary 06/30/96
17.32 Ohio Municipal Bond Class A 06/30/96
17.33 Ohio Municipal Bond Class B 06/30/96
17.34 International Equity
Index Fund Fiduciary 06/30/96
17.35 International Equity
Index Fund Class A 06/30/96
17.36 International Equity
Index Fund Class B 06/30/96
17.37 Treasury Only Money
Market Fund -- 06/30/96
17.38 Government Money
Market Fund -- 06/30/96
17.39 Asset Allocation Fund Fiduciary 06/30/96
17.40 Asset Allocation Fund Class A 06/30/96
17.41 Asset Allocation Fund Class B 06/30/96
17.42 Government Bond Fiduciary 06/30/96
17.43 Government Bond Class A 06/30/96
17.44 Government Bond Class B 06/30/96
17.45 Government ARM Fiduciary 06/30/96
17.46 Government ARM Class A 06/30/96
17.47 Government ARM Class B 06/30/96
17.48 Municipal Income Fund Fiduciary 06/30/96
17.49 Municipal Income Fund Class A 06/30/96
17.50 Municipal Income Fund Class B 06/30/96
17.51 Ohio Municipal Money Market Fiduciary 06/30/96
17.52 Ohio Municipal Money Market Class A 06/30/96
17.53 Intermediate Bond Fiduciary 06/30/96
17.54 Intermediate Bond Class A 06/30/96
17.55 Intermediate Bond Class B 06/30/96
17.56 Large Company Growth Fund Fiduciary 06/30/96
17.57 Large Company Growth Fund Class A 06/30/96
17.58 Large Company Growth Fund Class B 06/30/96
17.59 Kentucky Municipal Bond Fiduciary 06/30/96
17.60 Kentucky Municipal Bond Class A 06/30/96
17.61 Kentucky Municipal Bond Class B 06/30/96
17.62 Louisiana Municipal Bond Fiduciary 06/30/96
17.63 Louisiana Municipal Bond Class A 06/30/96
17.64 Louisiana Municipal Bond Class B 06/30/96
17.65 Gulf South Growth Fiduciary 06/30/96
17.66 Gulf South Growth Class A 06/30/96
17.67 Gulf South Growth Class B 06/30/96
17.68 Value Growth Fiduciary 06/30/96
17.69 Value Growth Class A 06/30/96
17.70 Value Growth Class B 06/30/96
17.71 Prime Money Market Fiduciary 12/31/96
17.72 Prime Money Market Class A 12/31/96
17.73 Prime Money Market Class B 12/31/96
17.74 U.S. Treasury Securities
Money Market Fiduciary 12/31/96
17.75 U.S. Treasury Securities
Money Market Class A 12/31/96
17.76 U.S. Treasury Securities
Money Market Class B 12/31/96
17.77 Municipal Money Market Fiduciary 12/31/96
17.78 Municipal Money Market Class A 12/31/96
17.79 Income Equity Fund Fiduciary 12/31/96
17.80 Income Equity Fund Class A 12/31/96
17.81 Income Equity Fund Class B 12/31/96
17.82 Income Bond Fiduciary 12/31/96
17.83 Income Bond Class A 12/31/96
17.84 Income Bond Class B 12/31/96
17.85 Intermediate Tax-Free Bond Fiduciary 12/31/96
17.86 Intermediate Tax-Free Bond Class A 12/31/96
17.87 Intermediate Tax-Free Bond Class B 12/31/96
17.88 Disciplined Value Fund Fiduciary 12/31/96
17.89 Disciplined Value Fund Class A 12/31/96
17.90 Disciplined Value Fund Class B 12/31/96
17.91 Growth Opportunities Fund Fiduciary 12/31/96
17.92 Growth Opportunities Fund Class A 12/31/96
17.93 Growth Opportunities Fund Class B 12/31/96
17.94 Limited Volatility Bond Fiduciary 12/31/96
17.95 Limited Volatility Bond Class A 12/31/96
17.96 Limited Volatility Bond Class B 12/31/96
17.97 Equity Index Fund Fiduciary 12/31/96
17.98 Equity Index Fund Class A 12/31/96
17.99 Equity Index Fund Class B 12/31/96
17.100 Large Company Value Fund Fiduciary 12/31/96
17.101 Large Company Value Fund Class A 12/31/96
17.102 Large Company Value Fund Class B 12/31/96
17.103 Ohio Municipal Bond Fiduciary 12/31/96
17.104 Ohio Municipal Bond Class A 12/31/96
17.105 Ohio Municipal Bond Class B 12/31/96
17.106 International Equity
Index Fund Fiduciary 12/31/96
</TABLE>
<PAGE> 254
<TABLE>
<CAPTION>
<S> <C> <C> <C>
17.107 International Equity
Index Fund Class A 12/31/96
17.108 International Equity
Index Fund Class B 12/31/96
17.109 Treasury Only Money
Market Fund -- 12/31/96
17.110 Government Money
Market Fund -- 12/31/96
17.111 Asset Allocation Fund Fiduciary 12/31/96
17.112 Asset Allocation Fund Class A 12/31/96
17.113 Asset Allocation Fund Class B 12/31/96
17.114 Government Bond Fiduciary 12/31/96
17.115 Government Bond Class A 12/31/96
17.116 Government Bond Class B 12/31/96
17.117 Ultra Short-Term Income Fiduciary 12/31/96
17.118 Ultra Short-Term Income Class A 12/31/96
17.119 Ultra Short-Term Income Class B 12/31/96
17.120 Municipal Income Fund Fiduciary 12/31/96
17.121 Municipal Income Fund Class A 12/31/96
17.122 Municipal Income Fund Class B 12/31/96
17.123 Ohio Municipal
Money Market Fiduciary 12/31/96
17.124 Ohio Municipal
Money Market Class A 12/31/96
17.125 Intermediate Bond Fiduciary 12/31/96
17.126 Intermediate Bond Class A 12/31/96
17.127 Intermediate Bond Class B 12/31/96
17.128 Large Company Growth
Fund Fiduciary 12/31/96
17.129 Large Company Growth
Fund Class A 12/31/96
17.130 Large Company Growth
Fund Class B 12/31/96
17.131 Kentucky Municipal Bond Fiduciary 12/31/96
17.132 Kentucky Municipal Bond Class A 12/31/96
17.133 Kentucky Municipal Bond Class B 12/31/96
17.134 Louisiana Municipal Bond Fiduciary 12/31/96
17.135 Louisiana Municipal Bond Class A 12/31/96
17.136 Louisiana Municipal Bond Class B 12/31/96
17.137 Gulf South Growth Fiduciary 12/31/96
17.138 Gulf South Growth Class A 12/31/96
17.139 Gulf South Growth Class B 12/31/96
17.140 Value Growth Fiduciary 12/31/96
17.141 Value Growth Class A 12/31/96
17.142 Value Growth Class B 12/31/96
17.143 Investor Growth Fiduciary 12/31/96
17.144 Investor Growth Class A 12/31/96
17.145 Investor Growth Class B 12/31/96
17.146 Investor Growth & Income Fiduciary 12/31/96
17.147 Investor Growth & Income Class A 12/31/96
17.148 Investor Growth & Income Class B 12/31/96
17.149 Investor Conservative Growth Fiduciary 12/31/96
17.150 Investor Conservative Growth Class A 12/31/96
17.151 Investor Conservative Growth Class B 12/31/96
17.152 Investor Balanced Fiduciary 12/31/96
17.153 Investor Balanced Class A 12/31/96
17.154 Investor Balanced Class B 12/31/96
17.155 West Virginia Municipal Bond Fund Fiduciary 03/31/97
17.156 West Virginia Municipal Bond Fund Class A 03/31/97
17.157 West Virginia Municipal Bond Fund Class B 03/31/97
17.158 Arizona Municipal Bond Fund Fiduciary 03/31/97
17.159 Arizona Municipal Bond Fund Class A 03/31/97
17.160 Arizona Municipal Bond Fund Class B 03/31/97
17.161 Treasury & Agency Fund Fiduciary 03/31/97
17.162 Treasury & Agency Fund Class A 03/31/97
17.163 Treasury & Agency Fund Class B 03/31/97
</TABLE>
(18)(a) Multiple Class Plan for The One Group(R)adopted by the Board
of Trustees on May 22, 1995 as amended February 20, 1997 is
incorporated by reference to Exhibit (18)(a) to
Post-Effective No. 41 (filed April 18, 1997) to the
Registrant's Registration Statement on Form N-1A.
<PAGE> 255
Item 25. Persons Controlled by or under Common Control with Registrant
As of the effective date of this Registration Statement there
are no persons controlled or under common control with the
Registrant.
Item 26. Number of Holders of Securities
As of May 19, 1997 the number of record holders of each
series of Fiduciary Class shares of the Registrant were as
follows:
<TABLE>
<CAPTION>
Number of Record
Title of Series Holders
- --------------- ----------------
<S> <C>
Prime Money Market Fund 427
U.S. Treasury Securities 75
Money Market Fund
Municipal Money Market Fund 27
Income Equity Fund 206
Income Bond Fund 152
Growth Opportunities Fund 234
Disciplined Value Fund 144
Limited Volatility Bond Fund 138
International Equity Index Fund 103
Intermediate Tax-Free Bond Fund 24
Equity Index Fund 152
Large Company Value Fund 87
Ohio Municipal Bond Fund 21
Ohio Municipal 7
Money Market Fund
Kentucky Municipal Bond Fund 8
Texas Tax-Free Bond Fund 0
West Virginia Municipal Bond Fund 7
Asset Allocation Fund 68
</TABLE>
<PAGE> 256
<TABLE>
<CAPTION>
<S> <C>
Ultra Short-Term Income Fund 40
Government Bond Fund 112
Municipal Income Fund 34
Intermediate Bond Fund 80
Arizona Municipal Bond Fund 5
Large Company Growth Fund 202
Louisiana Municipal Bond Fund 7
Value Growth Fund 35
Gulf South Growth Fund 31
Income Fund 0
Investor Conservative Growth Fund 12
Investor Growth Fund 14
Investor Balanced Fund 12
Investor Fixed Income Fund 0
Investor Aggressive Growth Fund 0
Investor Growth & Income Fund 10
Treasury & Agency Fund 8
</TABLE>
As of May 19, 1997 the number of record holders of each series of Class A
Shares of the Registrant were as follows:
<TABLE>
<CAPTION>
Number of Record
Title of Series Holders
- --------------- ----------------
<S> <C>
Prime Money Market Fund 19,386
U.S. Treasury Securities 69,235
Money Market Fund
Municipal Money Market Fund 1,265
Income Equity Fund 6,334
Income Bond Fund 687
</TABLE>
<PAGE> 257
<TABLE>
<S> <C>
Growth Opportunities Fund 5,911
Disciplined Value Fund 3,232
Limited Volatility Bond Fund 1,188
International Equity Index Fund 1,741
Intermediate Tax-Free Bond Fund 146
Equity Index Fund 9,835
Large Company Value Fund 981
Ohio Municipal Bond Fund 403
Ohio Municipal 931
Money Market Fund
Kentucky Municipal Bond Fund 222
Texas Tax-Free Bond Fund 0
West Virginia Municipal Bond Fund 8
Asset Allocation Fund 2,716
Ultra Short-Term Income Fund 138
Government Bond Fund 2,048
Municipal Income Fund 711
Intermediate Bond Fund 1,009
Arizona Municipal Bond Fund 15
Large Company Growth Fund 12,936
Louisiana Municipal Bond Fund 1,273
Value Growth Fund 4,280
Gulf South Growth Fund 2,579
Income Fund 0
Investor Conservative Growth Fund 46
Investor Growth Fund 284
</TABLE>
<PAGE> 258
<TABLE>
<S> <C>
Investor Balanced Fund 78
Investor Fixed Income Fund 0
Investor Aggressive Growth Fund 0
Investor Growth & Income Fund 149
Treasury & Agency Fund 4
</TABLE>
As of May 19, 1997 the number of record holders of each series of Service Class
Shares of the Registrant were as follows:
<TABLE>
<CAPTION>
Number of Record
Title of Series Holders
- --------------- ----------------
<S> <C>
Prime Money Market Fund 0
U.S. Treasury Securities 0
Money Market Fund
</TABLE>
As of May 19, 1997 the number of record holders of each series of Class B
Shares (CDSC) of the Registrant were as follows:
<TABLE>
<CAPTION>
Number of Record
Title of Series Holders
- --------------- ----------------
<S> <C>
Prime Money Market Fund 53
U.S. Treasury Securities Money 10
Market Fund
Income Equity Fund 7,709
Income Bond Fund 894
Growth Opportunities Fund 7,656
Disciplined Value Fund 3,076
Limited Volatility Bond Fund 515
International Equity Index Fund 2,371
Intermediate Tax-Free Bond Fund 95
Equity Index Fund 19,092
</TABLE>
<PAGE> 259
<TABLE>
<S> <C>
Large Company Value Fund 1,538
Ohio Municipal Bond Fund 478
Kentucky Municipal Bond Fund 90
Texas Tax-Free Bond Fund 0
West Virginia Municipal Bond Fund 26
Asset Allocation Fund 4,313
Ultra Short-Term Income Fund 242
Government Bond Fund 1,044
Municipal Income Bond Fund 1,064
Intermediate Bond Fund 935
Arizona Municipal Bond Fund 3
Large Company Growth Fund 16,233
Louisiana Municipal Bond Fund 178
Value Growth Fund 1,587
Gulf South Growth Fund 931
Income Fund 0
Investor Conservative Growth Fund 90
Investor Growth Fund 530
Investor Balanced Fund 225
Investor Fixed Income Fund 0
Investor Aggressive Growth Fund 0
Investor Growth & Income Fund 353
Treasury & Agency Fund 6
</TABLE>
<PAGE> 260
As of May 19, 1997 the number of record holders of each of the Institutional
Money Market Funds of the Registrant were as follows:
<TABLE>
<CAPTION>
Number of Record
Title of Series Holders
- --------------- ----------------
<S> <C>
Treasury Only Money Market Fund 12
Government Money Market Fund 11
Institutional Prime Money Market Fund 1
Treasury Money Market 0
Tax-Exempt Money Market 0
</TABLE>
As of May 19, 1997 the number of record holders of each series of Class C
Shares of the Registrant were as follows:
<TABLE>
<CAPTION>
Number of Record
Title of Series Holders
- --------------- ----------------
<S> <C>
Investor Conservative Growth Fund 0
Investor Growth Fund 0
Investor Balanced Fund 0
Investor Fixed Income Fund 0
Investor Aggressive Growth Fund 0
Investor Growth & Income Fund 0
</TABLE>
<PAGE> 261
Item 27. Indemnification
Article IX, Section 9.2 of the Registrant's
Declaration of Trust, incorporated as Exhibit (1)
hereto, provides for the indemnification of
Registrant's trustees and officers. Indemnification
of the Group's principal underwriter, custodians,
investment advisers, administrator, and transfer
agents is provided for in the Group's respective
Agreements with those service providers as filed or
incorporated by reference as Exhibits hereto. As of
the effective date of this Registration Statement,
the Group has obtained from a major insurance carrier
a trustees and officers' liability policy covering
certain types of errors and omissions. In no event
will Registrant indemnify any of its trustees,
officers, employees, or agents against any liability
to which such person would otherwise be subject by
reason of his willful misfeasance, bad faith, or
gross negligence in the performance of his duties, or
by reason of his reckless disregard of the duties
involved in the conduct of his office or under his
agreement with Registrant. Registrant will comply
with Rule 484 under the Securities Act of 1933 and
Release 11330 under the Investment Company Act of
1940 in connection with any indemnification.
Insofar as indemnification for liability arising
under the Securities Act of 1933 may be permitted to
trustees, officers, and controlling persons of
Registrant pursuant to the foregoing provisions, or
otherwise, Registrant has been advised that in the
opinion of the Securities and Exchange Commission
such indemnification is against public policy as
expressed in the Act and is, therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other than
the payment by Registrant of expenses incurred or
paid by a trustee, officer or controlling person of
Registrant in the successful defense of any action,
suit or proceeding) is asserted by such trustee,
officer, or controlling person in connection with the
securities being registered, Registrant will, unless
in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court
of appropriate jurisdiction the question of whether
such indemnification by it is against public policy
as expressed in the Act and will be governed by the
final adjudication of such issue.
Item 28. Business and Other Connections of Investment Advisers
Banc One Investment Advisors Corporation ("Banc One
Advisors") performs investment advisory services for
all of the Funds of the Group. Boston International
Advisors, Inc. performs investment sub-advisory
services for the International Equity Index Fund.
Banc One Advisors is an indirect wholly-owned
subsidiary of BANC ONE CORPORATION, a bank holding
company incorporated in the state of Ohio. BANC ONE
CORPORATION now operates affiliate banking
organizations in Arizona, Colorado, Illinois,
Indiana, Kentucky, Louisiana, Ohio, Oklahoma, Texas,
Utah, West Virginia and Wisconsin. In addition, BANC
ONE CORPORATION has several affiliates that engage in
data processing, venture capital, investment and
merchant banking, and other diversified services
including trust management, investment management,
brokerage, equipment leasing, mortgage banking,
consumer finance, and insurance.
<PAGE> 262
To the knowledge of Registrant, none of the directors
or officers of Banc One Advisors or Boston
International Advisors, Inc., except as set forth or
incorporated herein, is or has been, at any time
during the past two calendar years, engaged in any
other business, profession, vocation or employment of
a substantial nature. Set forth below are the names
and principal businesses of the directors of Banc One
Advisors and Boston International Advisors, Inc. who
are engaged in any other business, profession,
vocation or employment of a substantial nature.
<PAGE> 263
Banc One Advisors
<TABLE>
<CAPTION>
Position(s)
Held with Banc Principal
Name and Address One Advisors Occupation
- ---------------- -------------- ----------
<S> <C> <C>
Michael J. McMennamin Director Executive Vice President and Chief
Financial Officer BANC ONE
CORPORATION
Frederick L. Cullen Director Chairman and Chief Executive Officer, Bank
One, Columbus, NA and President and
Chief Operating Officer, Banc One Ohio
Corporation
David R. Meuse Director Chairman and Chief Executive Officer, Banc
One Capital Holdings Corporation
Garrett Jamison Director Senior Managing Director, Banc One
Investment Management and Trust Group
Geoff Von Kuhn Director Senior Managing Director, Banc One
Investment Management and Trust Group
Michael V. Wible Secretary Senior Attorney, BANC ONE CORPORATION
David J. Kundert Chairman and Chief Chairman and Chief Executive Officer, Banc
Executive Officer One Investment Management and Trust
Group
</TABLE>
The principal business address of the principal executive officer and directors
of Banc One Advisors is 1111 Polaris Parkway, P.O. Box 710211, Columbus, Ohio
43271-0211.
Independence International Associates, Inc.
Independence International Advisors, Inc. ("IIA") is the Sub-Investment
Advisor to the International Equity Index Fund. IIA, a corporation organized
under the laws of Massachusetts, provides investment advice to institutional and
investment company clients. Information regarding the firm's ownership and other
business connections of the officers and directors is listed on the Form ADV
filed by IIA with the SEC pursuant to the Investment Advisers Act of 1940 (SEC
File No. 801-28785), the text of which is hereby incorporated by reference.
Item 29. Principal Underwriters
(a) The One Group Services Company acts as administrator and
distributor for each of the Fund's Portfolios.
(b) The directors and officers of The One Group Services Company
are set forth below. The business address of each director or
officer is 3435 Stelzer Road, Columbus, Ohio 43219.
<PAGE> 264
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address with The One Group with Registrant
- ------------------ Services Company ---------------
---------------------
<S> <C> <C>
Lynn J. Mangum Chairman and Chief None
Executive Officer
Robert J. McMullen Executive Vice President None
and Director
Dennis Sheehan Senior Vice President None
Kevin J. Dell Vice President/Secretary/ None
General Counsel
Michael D. Burns Vice President/Compliance Officer None
Annamaria Porcaro Assistant Secretary None
Robert Tuch Assistant Secretary None
Stephen G. Mintos Executive Vice President/ None
Chief Operating Officer
George Martinez Senior Vice President Secretary
Dale Smith Vice President/ None
Chief Financial Officer
John Gilliam Vice President None
Mark Dillon President President
Mark J. Ryberczyk Senior Vice President None
Mark S. Redman Vice President Vice President and
Treasurer
</TABLE>
(c) Not applicable.
Item 30. Location of Accounts and Records
(1) Banc One Investment Advisors Corporation, 1111
Polaris Parkway, P.O. Box 710211, Columbus, Ohio
43271-0211 (records relating to its functions as
Investment Adviser and Sub-Administrator).
(2) Independence International Advisors, Inc., 75 State
Street, Boston, MA 02109 (records relating to its
functions as Sub-Investment Adviser to the
International Equity Index Fund).
(3) The One Group Services Company, 3435 Stelzer Road,
Columbus, OH 43219 (records relating to its functions
as Distributor for all funds).
<PAGE> 265
(4) The One Group Services Company, 3435 Stelzer Road,
Columbus, OH 43219 (records relating to its functions
as Administrator for all funds).
(5) State Street Bank and Trust Company, 470 Atlantic
Avenue, Fifth Floor, Boston, MA 02205-9087 (records
relating to its functions as custodian and transfer
agent to all funds).
(6) Ropes & Gray, One Franklin Square, 1301 K Street,
N.W., Suite 800 East, Washington, D.C. 20005
(Declaration of Trust, Code of Regulations, and
Minute Books).
Item 31. Management Services
N/A.
Item 32. Undertakings
The Registrant undertakes to call a meeting of
Shareholders, at the request of at least 10% of the
Registrant's outstanding shares, for the purpose of voting
upon the question of removal of a trustee or trustees and
to assist in communications with other shareholders as
required by Section 16(c) of the Investment Company Act of
1940.
The Registrant undertakes to furnish to each person to
whom a prospectus for a particular fund is delivered a
copy of the Registrant's latest annual report to
shareholders relating to that fund upon request and
without charge.
<PAGE> 266
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certified that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the 1933 Act and has duly caused this Amendment to the Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Washington, D.C. on the 18th day of June, 1997.
The One Group(R)
(Registrant)
By: /s/ Mark Dillon
-----------------------------
*Mark Dillon
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature Title Date
- --------- ----- ----
/s/ Mark Dillon President June 18, 1997
- -----------------------------
* Mark Dillon
/s/ Peter C. Marshall Trustee June 18, 1997
- -----------------------------
*Peter C. Marshall
/s/ Charles I. Post Trustee June 18, 1997
- -----------------------------
*Charles I. Post
/s/ John S. Randall Trustee June 18, 1997
- -----------------------------
*John S. Randall
/s/ Frederick W. Ruebeck Trustee June 18, 1997
- -----------------------------
*Frederick W. Ruebeck
*By: /s/ Alan G. Priest
-----------------------------
Alan G. Priest
Attorney-in-Fact
<PAGE> 267
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
(6)(d) Schedule E to the Distribution Agreement between Registrant
and The One Group Services Company.
(6)(e) Amendment to Distribution Agreement between the Registrant and
The One Group Services Company.
(10) Opinion and Consent of Counsel.
(11)(a) Consent of Coopers & Lybrand, L.L.P.
(11)(b) Consent of KPMG Peat Marwick, LLP.
(11)(c) Consent of Price Waterhouse, LLP.
(11)(d) Consent of Ropes & Gray.
(17) Financial data schedules for:
<TABLE>
<S> <C> <C> <C>
27.1 Prime Money Market Fiduciary 06/30/96
27.2 Prime Money Market Class A 06/30/96
27.3 U.S. Treasury Securities
Money Market Fiduciary 06/30/96
27.4 U.S. Treasury Securities
Money Market Class A 06/30/96
27.5 Municipal Money Market Fiduciary 06/30/96
27.6 Municipal Money Market Class A 06/30/96
27.7 Income Equity Fund Fiduciary 06/30/96
27.8 Income Equity Fund Class A 06/30/96
27.9 Income Equity Fund Class B 06/30/96
27.10 Income Bond Fiduciary 06/30/96
27.11 Income Bond Class A 06/30/96
27.12 Income Bond Class B 06/30/96
27.13 Intermediate Tax-Free Bond Fiduciary 06/30/96
27.14 Intermediate Tax-Free Bond Class A 06/30/96
27.15 Intermediate Tax-Free Bond Class B 06/30/96
27.16 Disciplined Value Fund Fiduciary 06/30/96
27.17 Disciplined Value Fund Class A 06/30/96
27.18 Disciplined Value Fund Class B 06/30/96
27.19 Growth Opportunities Fund Fiduciary 06/30/96
27.20 Growth Opportunities Fund Class A 06/30/96
27.21 Growth Opportunities Fund Class B 06/30/96
27.22 Limited Volatility Bond Fiduciary 06/30/96
27.23 Limited Volatility Bond Class A 06/30/96
27.24 Limited Volatility Bond Class B 06/30/96
27.25 Equity Index Fund Fiduciary 06/30/96
27.26 Equity Index Fund Class A 06/30/96
27.27 Equity Index Fund Class B 06/30/96
27.28 Large Company Value Fund Fiduciary 06/30/96
27.29 Large Company Value Fund Class A 06/30/96
27.30 Large Company Value Fund Class B 06/30/96
27.31 Ohio Municipal Bond Fiduciary 06/30/96
27.32 Ohio Municipal Bond Class A 06/30/96
27.33 Ohio Municipal Bond Class B 06/30/96
27.34 International Equity
Index Fund Fiduciary 06/30/96
27.35 International Equity
Index Fund Class A 06/30/96
27.36 International Equity
Index Fund Class B 06/30/96
27.37 Treasury Only Money
Market Fund -- 06/30/96
27.38 Government Money
Market Fund -- 06/30/96
27.39 Asset Allocation Fund Fiduciary 06/30/96
27.40 Asset Allocation Fund Class A 06/30/96
27.41 Asset Allocation Fund Class B 06/30/96
27.42 Government Bond Fiduciary 06/30/96
27.43 Government Bond Class A 06/30/96
27.44 Government Bond Class B 06/30/96
27.45 Government ARM Fiduciary 06/30/96
27.46 Government ARM Class A 06/30/96
27.47 Government ARM Class B 06/30/96
27.48 Municipal Income Fund Fiduciary 06/30/96
27.49 Municipal Income Fund Class A 06/30/96
27.50 Municipal Income Fund Class B 06/30/96
27.51 Ohio Municipal Money Market Fiduciary 06/30/96
27.52 Ohio Municipal Money Market Class A 06/30/96
27.53 Intermediate Bond Fiduciary 06/30/96
27.54 Intermediate Bond Class A 06/30/96
27.55 Intermediate Bond Class B 06/30/96
27.56 Large Company Growth Fund Fiduciary 06/30/96
27.57 Large Company Growth Fund Class A 06/30/96
27.58 Large Company Growth Fund Class B 06/30/96
27.59 Kentucky Municipal Bond Fiduciary 06/30/96
27.60 Kentucky Municipal Bond Class A 06/30/96
27.61 Kentucky Municipal Bond Class B 06/30/96
27.62 Louisiana Municipal Bond Fiduciary 06/30/96
27.63 Louisiana Municipal Bond Class A 06/30/96
27.64 Louisiana Municipal Bond Class B 06/30/96
27.65 Gulf South Growth Fiduciary 06/30/96
27.66 Gulf South Growth Class A 06/30/96
27.67 Gulf South Growth Class B 06/30/96
27.68 Value Growth Fiduciary 06/30/96
27.69 Value Growth Class A 06/30/96
27.70 Value Growth Class B 06/30/96
27.71 Prime Money Market Fiduciary 12/31/96
27.72 Prime Money Market Class A 12/31/96
27.73 Prime Money Market Class B 12/31/96
27.74 U.S. Treasury Securities
Money Market Fiduciary 12/31/96
27.75 U.S. Treasury Securities
Money Market Class A 12/31/96
27.76 U.S. Treasury Securities
Money Market Class B 12/31/96
27.77 Municipal Money Market Fiduciary 12/31/96
27.78 Municipal Money Market Class A 12/31/96
27.79 Income Equity Fund Fiduciary 12/31/96
27.80 Income Equity Fund Class A 12/31/96
27.81 Income Equity Fund Class B 12/31/96
27.82 Income Bond Fiduciary 12/31/96
27.83 Income Bond Class A 12/31/96
27.84 Income Bond Class B 12/31/96
27.85 Intermediate Tax-Free Bond Fiduciary 12/31/96
27.86 Intermediate Tax-Free Bond Class A 12/31/96
27.87 Intermediate Tax-Free Bond Class B 12/31/96
27.88 Disciplined Value Fund Fiduciary 12/31/96
27.89 Disciplined Value Fund Class A 12/31/96
27.90 Disciplined Value Fund Class B 12/31/96
27.91 Growth Opportunities Fund Fiduciary 12/31/96
27.92 Growth Opportunities Fund Class A 12/31/96
27.93 Growth Opportunities Fund Class B 12/31/96
27.94 Limited Volatility Bond Fiduciary 12/31/96
27.95 Limited Volatility Bond Class A 12/31/96
27.96 Limited Volatility Bond Class B 12/31/96
27.97 Equity Index Fund Fiduciary 12/31/96
27.98 Equity Index Fund Class A 12/31/96
27.99 Equity Index Fund Class B 12/31/96
27.100 Large Company Value Fund Fiduciary 12/31/96
27.101 Large Company Value Fund Class A 12/31/96
27.102 Large Company Value Fund Class B 12/31/96
27.103 Ohio Municipal Bond Fiduciary 12/31/96
27.104 Ohio Municipal Bond Class A 12/31/96
27.105 Ohio Municipal Bond Class B 12/31/96
27.106 International Equity
Index Fund Fiduciary 12/31/96
</TABLE>
<PAGE> 268
<TABLE>
<S> <C> <C> <C>
27.107 International Equity
Index Fund Class A 12/31/96
27.108 International Equity
Index Fund Class B 12/31/96
27.109 Treasury Only Money
Market Fund -- 12/31/96
27.110 Government Money
Market Fund -- 12/31/96
27.111 Asset Allocation Fund Fiduciary 12/31/96
27.112 Asset Allocation Fund Class A 12/31/96
27.113 Asset Allocation Fund Class B 12/31/96
27.114 Government Bond Fiduciary 12/31/96
27.115 Government Bond Class A 12/31/96
27.116 Government Bond Class B 12/31/96
27.117 Ultra Short-Term Income Fiduciary 12/31/96
27.118 Ultra Short-Term Income Class A 12/31/96
27.119 Ultra Short-Term Income Class B 12/31/96
27.120 Municipal Income Fund Fiduciary 12/31/96
27.121 Municipal Income Fund Class A 12/31/96
27.122 Municipal Income Fund Class B 12/31/96
27.123 Ohio Municipal
Money Market Fiduciary 12/31/96
27.124 Ohio Municipal
Money Market Class A 12/31/96
27.125 Intermediate Bond Fiduciary 12/31/96
27.126 Intermediate Bond Class A 12/31/96
27.127 Intermediate Bond Class B 12/31/96
27.128 Large Company Growth
Fund Fiduciary 12/31/96
27.129 Large Company Growth
Fund Class A 12/31/96
27.130 Large Company Growth
Fund Class B 12/31/96
27.131 Kentucky Municipal Bond Fiduciary 12/31/96
27.132 Kentucky Municipal Bond Class A 12/31/96
27.133 Kentucky Municipal Bond Class B 12/31/96
27.134 Louisiana Municipal Bond Fiduciary 12/31/96
27.135 Louisiana Municipal Bond Class A 12/31/96
27.136 Louisiana Municipal Bond Class B 12/31/96
27.137 Gulf South Growth Fiduciary 12/31/96
27.138 Gulf South Growth Class A 12/31/96
27.139 Gulf South Growth Class B 12/31/96
27.140 Value Growth Fiduciary 12/31/96
27.141 Value Growth Class A 12/31/96
27.142 Value Growth Class B 12/31/96
27.143 Investor Growth Fiduciary 12/31/96
27.144 Investor Growth Class A 12/31/96
27.145 Investor Growth Class B 12/31/96
27.146 Investor Growth & Income Fiduciary 12/31/96
27.147 Investor Growth & Income Class A 12/31/96
27.148 Investor Growth & Income Class B 12/31/96
27.149 Investor Conservative Growth Fiduciary 12/31/96
27.150 Investor Conservative Growth Class A 12/31/96
27.151 Investor Conservative Growth Class B 12/31/96
27.152 Investor Balanced Fiduciary 12/31/96
27.153 Investor Balanced Class A 12/31/96
27.154 Investor Balanced Class B 12/31/96
27.155 West Virginia Municipal Bond Fund Fiduciary 03/31/97
27.156 West Virginia Municipal Bond Fund Class A 03/31/97
27.157 West Virginia Municipal Bond Fund Class B 03/31/97
27.158 Arizona Municipal Bond Fund Fiduciary 03/31/97
27.159 Arizona Municipal Bond Fund Class A 03/31/97
27.160 Arizona Municipal Bond Fund Class B 03/31/97
27.161 Treasury & Agency Fund Fiduciary 03/31/97
27.162 Treasury & Agency Fund Class A 03/31/97
27.163 Treasury & Agency Fund Class B 03/31/97
</TABLE>
<PAGE> 1
EXHIBIT 6(D)
SCHEDULE E
TO THE DISTRIBUTION AGREEMENT
BETWEEN
THE ONE GROUP(R)
AND
THE ONE GROUP SERVICES COMPANY
<PAGE> 2
SCHEDULE E
TO THE DISTRIBUTION AGREEMENT
BETWEEN
THE ONE GROUP(R)
AND
THE ONE GROUP SERVICES COMPANY
CDSC CLASSES
------------
NAME OF THE FUND
- ----------------
EQUITY FUNDS
- ------------
Investor Aggressive Growth Fund -- Class C Shares
Investor Growth Fund -- Class C Shares
Investor Growth & Income Fund -- Class C Shares
Investor Balanced Fund -- Class C Shares
Investor Conservative Growth Fund -- Class C Shares
FIXED INCOME FUNDS
- ------------------
Investor Fixed Income Fund -- Class C Shares
THE ONE GROUP(R) THE ONE GROUP SERVICES COMPANY
By: By:
------------------------- -------------------------------
Date: Date:
----------------------- -----------------------------
E-1
<PAGE> 1
EXHIBIT 6(E)
AMENDMENT TO DISTRIBUTION AGREEMENT
<PAGE> 2
AMENDMENT TO DISTRIBUTION AGREEMENT
This Amendment to the Distribution Agreement, dated November 1, 1995,
as re-executed December 13, 1995 (the "Distribution Agreement") is hereby made
this __ day of May, 1997 by and between The One Group(R) (the "Trust") and The
One Group Servicing Company ("Distributor"):
WHEREAS, certain of the Funds offer Class C shares that are subject to
a Contingent Deferred Sales Charge; and
WHEREAS, the Trust and the Distributor desire to amend the Agreement to
add a new Schedule E which identifies the Funds that offer the Class C shares.
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree to amend the Distribution Agreement as
follows:
1. AMENDMENT TO SECTION 5. The first paragraph of Section 5.1 of the
Distribution Agreement is hereby deleted in its entirety and the following is
substituted in its place:
"5.1 The Trust may offer Shares subject to a contingent deferred sales
charge (a "CDSC"). The Distributor may pay brokers, dealers and other
financial institutions and intermediaries commissions with regard to
the sale of CDSC Shares. Under this Agreement, the following provisions
shall apply with respect to Shares of a Class featuring a CDSC (a "CDSC
Class") as described in the prospectus(es) of the Funds and identified
on Schedules D and E hereto."
2. ADDITION OF SCHEDULE E. Schedule E hereto is hereby made a part of
the Distribution Agreement in order to identify the Funds that offer Class C
Shares.
3. DEFINITION OF TERMS. All terms not otherwise defined in this
Amendment to the Distribution Agreement shall have the meaning ascribed to them
in the Distribution Agreement.
IN WITNESS WHEREOF, the parties have caused this instrument to be
executed by their officers designated below as of the day and year first written
above.
THE ONE GROUP THE ONE GROUP SERVICES COMPANY
By: By:
----------------------- ----------------------------
Title: Title:
-------------------- -------------------------
Date: Date:
--------------------- --------------------------
<PAGE> 1
Exhibit (10)
Opinion and Consent of Counsel
<PAGE> 2
ROPES & GRAY
ONE FRANKLIN SQUARE
1301 K STREET, N.W.
SUITE 800 EAST
WASHINGTON, DC 20005-3333
(202) 626-3900
FAX: (202) 626-3961
WRITER'S DIRECT DIAL NUMBER: (202) 626-3923
[Letterhead]
June 18, 1997
The One Group
1111 Polaris Parkway
P.O. Box 710211
Columbus, Ohio 43271-0211
Ladies and Gentlemen:
You have registered under the Securities Act of 1933, as amended (the "1933
Act") an indefinite number of shares of beneficial interest ("Shares") of The
One Group ("Trust"), as permitted by Rule 24f-2 under the Investment Company Act
of 1940, as amended (the "1940 Act"). You propose to file a post-effective
amendment on Form N-1A (the "Post-Effective Amendment") to your Registration
Statement as required by Section 10(a)(3) in order to register under the 1933
Act Shares of each Fund of the Trust (the "Series").
We have examined your Agreement and Declaration of Trust on file in the
office of the Secretary of The Commonwealth of Massachusetts and the Clerk of
the City of Boston. We have also examined a copy of your Bylaws and such other
documents, receipts and records as we have deemed necessary for the purposes of
this opinion.
Based upon the foregoing, we are of the opinion that the issue and sale of
the authorized but unissued Shares of the Series have been duly authorized under
Massachusetts law. Upon the original issue and sale of your authorized but
unissued Shares and upon receipt of the authorized consideration thereof in an
amount not less than the net asset value of the Shares established and in force
at the time of their sale, the Shares issued will be validly issued, fully paid
and non-assessable.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Agreement and Declaration of
<PAGE> 3
ROPES & GRAY
The One Group
June 18, 1997
Page 2
Trust provides for indemnification out of the property of a particular series
of Shares for all loss and expenses of any shareholder of that series held
personally liable solely by reason of his being or having been a shareholder.
Thus, the risk of shareholder liability is limited to circumstances in which
that series of Shares itself would be unable to meet its obligations.
We understand that this opinion is to be used in connection with the filing
of the Post-Effective Amendment. We consent to the filing of this opinion with
and as part of your Post-Effective Amendment.
Sincerely,
/s/ ROPES & GRAY
-------------------
Ropes & Gray
<PAGE> 1
Exhibit (11)(a)
Consent of Coopers & Lybrand LLP
<PAGE> 2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this Post-Effective Amendment No. 42 to the
Registration Statement on Form N-1A (File No. 2-95973) of The One Group, of
our reports dated August 19, 1996 on our audits of the financial statements
and financial highlights of the U.S. Treasury Securities Money Market Fund,
the Prime Money Market Fund, the Municipal Money Market Fund, the Ohio
Municipal Money Market Fund, the Government ARM Fund, the Limited Volatility
Bond Fund, The Intermediate Bond Fund, the Government Bond Fund, the Income Bond
Fund, the Intermediate Tax-Free Bond Fund, the Municipal Income Fund, the
Kentucky Municipal Bond Fund, the Ohio Municipal Bond Fund, the Louisiana
Municipal Bond Fund, the Treasury Only Money Market Fund and the Government
Money Market Fund and our report dated August 27, 1996 on our audits of the
financial statements and financial highlights of the Asset Allocation Fund, the
Income Equity Fund, the Equity Index Fund, the Value Growth Fund, the Large
Company Value Fund, the Disciplined Value Fund, the Large Company Growth Fund,
the Growth Opportunities Fund, the Gulf South Growth Fund and the International
Equity Index Fund, constituting The One Group whose reports are included in the
Annual Reports to Shareholders for the year ended June 30, 1996 which are
included in the Registration Statement. We also consent to the reference to our
Firm under the caption "Financial Highlights", "Counsel and Independent
Accountants" and "Independent Accountants" in the Prospectus and "Experts" in
the Statement of Additional Information relating to The One Group in this
Post-Effective Amendment No. 42 to the Registration Statement on Form N-1A.
Coopers & Lybrand L.L.P.
Columbus, Ohio
June 16, 1997
<PAGE> 1
Exhibit (11)(b)
Consent of KPMG Peat Marwick LLP
<PAGE> 2
AUDITORS' CONSENT
The Board of Trustees of
The One Group
We consent to the reference to our firm under the heading "Experts" in the
Statement of Additional Information, which is included in the Form N-1A filed
by The One Group.
KPMG PEAT MARWICK LLP
Columbus, Ohio
June 17, 1997
<PAGE> 1
Exhibit (11)(c)
Consent of Price Waterhouse, LLP
<PAGE> 2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the reference to us under the heading "Experts" in the
Statement of Additional Information constituting part of this Post-Effective
Amendment No. 42 to the registration statement on Form N-1A of The One Group.
PRICE WATERHOUSE, LLP
New York, NY
June 17, 1997
<PAGE> 1
Exhibit (11)(d)
Consent of Ropes & Gray
<PAGE> 2
CONSENT OF COUNSEL
We hereby consent to the use of our name and the references to our firm
under the caption "Legal Counsel" included in or made a part of Post-Effective
Amendment No. 42 to the Registration Statement of The One Group (Nos. 2-95973
and 811-4236) on Form N-1A under the Securities Act of 1933, as amended.
/s/ ROPES & GRAY
-------------------------
ROPES & GRAY
Washington, D.C.
June 18, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 011
<NAME> THE ONE GROUP PRIME MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 2505293
<INVESTMENTS-AT-VALUE> 2505293
<RECEIVABLES> 8699
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2513992
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12056
<TOTAL-LIABILITIES> 12056
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2501956
<SHARES-COMMON-STOCK> 2186583<F1>
<SHARES-COMMON-PRIOR> 1965444<F1>
<ACCUMULATED-NII-CURRENT> 7
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 27
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2501936
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 142118
<OTHER-INCOME> 6
<EXPENSES-NET> 11711
<NET-INVESTMENT-INCOME> 130413
<REALIZED-GAINS-CURRENT> 9
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 130422
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 116410<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 4119886<F1>
<NUMBER-OF-SHARES-REDEEMED> 3900430<F1>
<SHARES-REINVESTED> 1683<F1>
<NET-CHANGE-IN-ASSETS> 334552
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 20
<OVERDIST-NET-GAINS-PRIOR> 36
<GROSS-ADVISORY-FEES> 8602
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 14650
<AVERAGE-NET-ASSETS> 2180912<F1>
<PER-SHARE-NAV-BEGIN> 1.000<F1>
<PER-SHARE-NII> .054<F1>
<PER-SHARE-GAIN-APPREC> .000<F1>
<PER-SHARE-DIVIDEND> .054<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 1.000<F1>
<EXPENSE-RATIO> .440<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 012
<NAME> THE ONE GROUP PRIME MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 2505293
<INVESTMENTS-AT-VALUE> 2505293
<RECEIVABLES> 8699
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2513992
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12056
<TOTAL-LIABILITIES> 12056
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2501956
<SHARES-COMMON-STOCK> 315373<F1>
<SHARES-COMMON-PRIOR> 201996<F1>
<ACCUMULATED-NII-CURRENT> 7
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 27
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2501936
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 142118
<OTHER-INCOME> 6
<EXPENSES-NET> 11711
<NET-INVESTMENT-INCOME> 130413
<REALIZED-GAINS-CURRENT> 9
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 130422
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 13976<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 1262765<F1>
<NUMBER-OF-SHARES-REDEEMED> 1161804<F1>
<SHARES-REINVESTED> 12416<F1>
<NET-CHANGE-IN-ASSETS> 334552
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 20
<OVERDIST-NET-GAINS-PRIOR> 36
<GROSS-ADVISORY-FEES> 8602
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 14650
<AVERAGE-NET-ASSETS> 275794<F1>
<PER-SHARE-NAV-BEGIN> 1.000<F1>
<PER-SHARE-NII> .051<F1>
<PER-SHARE-GAIN-APPREC> .000<F1>
<PER-SHARE-DIVIDEND> .051<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 1.000<F1>
<EXPENSE-RATIO> .690<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 021
<NAME> THE ONE GROUP U.S. TREASURY SECURITIES MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 1957978
<INVESTMENTS-AT-VALUE> 1957978
<RECEIVABLES> 6365
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1964344
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8890
<TOTAL-LIABILITIES> 8890
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1955445
<SHARES-COMMON-STOCK> 1844578<F1>
<SHARES-COMMON-PRIOR> 1178070<F1>
<ACCUMULATED-NII-CURRENT> 43
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 34
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1955454
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 87131
<OTHER-INCOME> 88
<EXPENSES-NET> 6861
<NET-INVESTMENT-INCOME> 80358
<REALIZED-GAINS-CURRENT> (9)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 80349
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 75330<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 3907668<F1>
<NUMBER-OF-SHARES-REDEEMED> 3241505<F1>
<SHARES-REINVESTED> 345<F1>
<NET-CHANGE-IN-ASSETS> 678640
<ACCUMULATED-NII-PRIOR> 27
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 25
<GROSS-ADVISORY-FEES> 5456
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9126
<AVERAGE-NET-ASSETS> 1456507<F1>
<PER-SHARE-NAV-BEGIN> 1.000<F1>
<PER-SHARE-NII> .052<F1>
<PER-SHARE-GAIN-APPREC> .000<F1>
<PER-SHARE-DIVIDEND> .052<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 1.000<F1>
<EXPENSE-RATIO> .420<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 022
<NAME> THE ONE GROUP U.S. TREASURY SECURITIES MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 1957978
<INVESTMENTS-AT-VALUE> 1957978
<RECEIVABLES> 6365
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1964344
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8890
<TOTAL-LIABILITIES> 8890
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1955445
<SHARES-COMMON-STOCK> 110864<F1>
<SHARES-COMMON-PRIOR> 98723<F1>
<ACCUMULATED-NII-CURRENT> 43
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 34
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1955454
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 87131
<OTHER-INCOME> 88
<EXPENSES-NET> 6861
<NET-INVESTMENT-INCOME> 80358
<REALIZED-GAINS-CURRENT> (9)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 80349
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5012<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 449868<F1>
<NUMBER-OF-SHARES-REDEEMED> 442190<F1>
<SHARES-REINVESTED> 4447<F1>
<NET-CHANGE-IN-ASSETS> 678640
<ACCUMULATED-NII-PRIOR> 27
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 25
<GROSS-ADVISORY-FEES> 5456
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9126
<AVERAGE-NET-ASSETS> 101654<F1>
<PER-SHARE-NAV-BEGIN> 1.000<F1>
<PER-SHARE-NII> .050<F1>
<PER-SHARE-GAIN-APPREC> .000<F1>
<PER-SHARE-DIVIDEND> .000<F1>
<PER-SHARE-DISTRIBUTIONS> .050<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 1.000<F1>
<EXPENSE-RATIO> .670<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 031
<NAME> THE ONE GROUP MUNICIPAL MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 532345
<INVESTMENTS-AT-VALUE> 532345
<RECEIVABLES> 18571
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 550916
<PAYABLE-FOR-SECURITIES> 38703
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 1686
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 510658
<SHARES-COMMON-STOCK> 459924<F1>
<SHARES-COMMON-PRIOR> 437856<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 127
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 4
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 510527
<DIVIDEND-INCOME> 332
<INTEREST-INCOME> 21285
<OTHER-INCOME> 0
<EXPENSES-NET> 2583
<NET-INVESTMENT-INCOME> 19034
<REALIZED-GAINS-CURRENT> (4)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 19030
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 17075<F1>
<DISTRIBUTIONS-OF-GAINS> 4<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 1109221<F1>
<NUMBER-OF-SHARES-REDEEMED> 1087267<F1>
<SHARES-REINVESTED> 114<F1>
<NET-CHANGE-IN-ASSETS> 16266
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4
<OVERDISTRIB-NII-PRIOR> 139
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2042
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3718
<AVERAGE-NET-ASSETS> 518909<F1>
<PER-SHARE-NAV-BEGIN> 1.000<F1>
<PER-SHARE-NII> .033<F1>
<PER-SHARE-GAIN-APPREC> .000<F1>
<PER-SHARE-DIVIDEND> .033<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 1.000<F1>
<EXPENSE-RATIO> .410<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 032
<NAME> THE ONE GROUP MUNICIPAL MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 532345
<INVESTMENTS-AT-VALUE> 532345
<RECEIVABLES> 18571
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 550916
<PAYABLE-FOR-SECURITIES> 38703
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 1686
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 510658
<SHARES-COMMON-STOCK> 50734<F1>
<SHARES-COMMON-PRIOR> 56540<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 127
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 4
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 510527
<DIVIDEND-INCOME> 332
<INTEREST-INCOME> 21285
<OTHER-INCOME> 0
<EXPENSES-NET> 2583
<NET-INVESTMENT-INCOME> 19034
<REALIZED-GAINS-CURRENT> (4)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 19030
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 19047<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 299953<F1>
<NUMBER-OF-SHARES-REDEEMED> 307534<F1>
<SHARES-REINVESTED> 1775<F1>
<NET-CHANGE-IN-ASSETS> 16266
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4
<OVERDISTRIB-NII-PRIOR> 139
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2042
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3718
<AVERAGE-NET-ASSETS> 64201<F1>
<PER-SHARE-NAV-BEGIN> 1.000<F1>
<PER-SHARE-NII> .030<F1>
<PER-SHARE-GAIN-APPREC> .000<F1>
<PER-SHARE-DIVIDEND> .030<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 1.000<F1>
<EXPENSE-RATIO> .660<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 041
<NAME> INCOME EQUITY FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 278208
<INVESTMENTS-AT-VALUE> 394818
<RECEIVABLES> 1710
<ASSETS-OTHER> 15
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 396543
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 1263
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 272217
<SHARES-COMMON-STOCK> 18230<F2>
<SHARES-COMMON-PRIOR> 11297<F2>
<ACCUMULATED-NII-CURRENT> 13
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6440
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 116610
<NET-ASSETS> 395280
<DIVIDEND-INCOME> 7617
<INTEREST-INCOME> 1061
<OTHER-INCOME> 18
<EXPENSES-NET> 2667
<NET-INVESTMENT-INCOME> 6029
<REALIZED-GAINS-CURRENT> 8723
<APPREC-INCREASE-CURRENT> 35127
<NET-CHANGE-FROM-OPS> 49879
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5346<F2>
<DISTRIBUTIONS-OF-GAINS> 7457<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 404468<F2>
<NUMBER-OF-SHARES-REDEEMED> 239261<F2>
<SHARES-REINVESTED> 6734<F2>
<NET-CHANGE-IN-ASSETS> 207100
<ACCUMULATED-NII-PRIOR> 41
<ACCUMULATED-GAINS-PRIOR> 6380
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1880
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2803
<AVERAGE-NET-ASSETS> 216886<F2>
<PER-SHARE-NAV-BEGIN> 15.13<F2>
<PER-SHARE-NII> .40<F2>
<PER-SHARE-GAIN-APPREC> 3.22<F2>
<PER-SHARE-DIVIDEND> .40<F2>
<PER-SHARE-DISTRIBUTIONS> .70<F2>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.65<F2>
<EXPENSE-RATIO> .98<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Fiduciary Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 042
<NAME> INCOME EQUITY FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 278208
<INVESTMENTS-AT-VALUE> 394818
<RECEIVABLES> 1710
<ASSETS-OTHER> 15
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 396543
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 1263
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 272217
<SHARES-COMMON-STOCK> 2510<F2>
<SHARES-COMMON-PRIOR> 913<F2>
<ACCUMULATED-NII-CURRENT> 13
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6440
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 116610
<NET-ASSETS> 395280
<DIVIDEND-INCOME> 7617
<INTEREST-INCOME> 1061
<OTHER-INCOME> 18
<EXPENSES-NET> 2667
<NET-INVESTMENT-INCOME> 6029
<REALIZED-GAINS-CURRENT> 8723
<APPREC-INCREASE-CURRENT> 35127
<NET-CHANGE-FROM-OPS> 49879
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 530<F2>
<DISTRIBUTIONS-OF-GAINS> 850<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 9884<F2>
<NUMBER-OF-SHARES-REDEEMED> 3267<F2>
<SHARES-REINVESTED> 316<F2>
<NET-CHANGE-IN-ASSETS> 207100
<ACCUMULATED-NII-PRIOR> 41
<ACCUMULATED-GAINS-PRIOR> 6380
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1880
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2803
<AVERAGE-NET-ASSETS> 24834<F2>
<PER-SHARE-NAV-BEGIN> 15.11<F2>
<PER-SHARE-NII> .38<F2>
<PER-SHARE-GAIN-APPREC> 3.20<F2>
<PER-SHARE-DIVIDEND> .35<F2>
<PER-SHARE-DISTRIBUTIONS> .70<F2>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.64<F2>
<EXPENSE-RATIO> 1.23<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 043
<NAME> INCOME EQUITY FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 278208
<INVESTMENTS-AT-VALUE> 394818
<RECEIVABLES> 1710
<ASSETS-OTHER> 15
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 396543
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 1263
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 272217
<SHARES-COMMON-STOCK> 1650<F2>
<SHARES-COMMON-PRIOR> 229<F2>
<ACCUMULATED-NII-CURRENT> 13
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6440
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 116610
<NET-ASSETS> 395280
<DIVIDEND-INCOME> 7617
<INTEREST-INCOME> 1061
<OTHER-INCOME> 18
<EXPENSES-NET> 2667
<NET-INVESTMENT-INCOME> 6029
<REALIZED-GAINS-CURRENT> 8723
<APPREC-INCREASE-CURRENT> 35127
<NET-CHANGE-FROM-OPS> 49879
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 181<F2>
<DISTRIBUTIONS-OF-GAINS> 356<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 1447<F2>
<NUMBER-OF-SHARES-REDEEMED> 52<F2>
<SHARES-REINVESTED> 26<F2>
<NET-CHANGE-IN-ASSETS> 207100
<ACCUMULATED-NII-PRIOR> 41
<ACCUMULATED-GAINS-PRIOR> 6380
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1880
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2803
<AVERAGE-NET-ASSETS> 12222<F2>
<PER-SHARE-NAV-BEGIN> 15.14<F2>
<PER-SHARE-NII> .24<F2>
<PER-SHARE-GAIN-APPREC> 3.23<F2>
<PER-SHARE-DIVIDEND> .23<F2>
<PER-SHARE-DISTRIBUTIONS> .70<F2>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.68<F2>
<EXPENSE-RATIO> 1.98<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Class B Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 051
<NAME> THE ONE GROUP INCOME BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 523732
<INVESTMENTS-AT-VALUE> 537716
<RECEIVABLES> 8578
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 546294
<PAYABLE-FOR-SECURITIES> 5974
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3844
<TOTAL-LIABILITIES> 9818
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 577283
<SHARES-COMMON-STOCK> 55786<F1>
<SHARES-COMMON-PRIOR> 51527<F1>
<ACCUMULATED-NII-CURRENT> 396
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 54533
<ACCUM-APPREC-OR-DEPREC> 13330
<NET-ASSETS> 536476
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 37285
<OTHER-INCOME> 91
<EXPENSES-NET> 3047
<NET-INVESTMENT-INCOME> 34329
<REALIZED-GAINS-CURRENT> (1361)
<APPREC-INCREASE-CURRENT> (11155)
<NET-CHANGE-FROM-OPS> 21813
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 33573<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 16245<F1>
<NUMBER-OF-SHARES-REDEEMED> 11460<F1>
<SHARES-REINVESTED> 1318<F1>
<NET-CHANGE-IN-ASSETS> 53669
<ACCUMULATED-NII-PRIOR> 357
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 53042
<GROSS-ADVISORY-FEES> 3053
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4195
<AVERAGE-NET-ASSETS> 496756<F1>
<PER-SHARE-NAV-BEGIN> 9.540<F1>
<PER-SHARE-NII> .650<F1>
<PER-SHARE-GAIN-APPREC> (.210)<F1>
<PER-SHARE-DIVIDEND> .000<F1>
<PER-SHARE-DISTRIBUTIONS> .650<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.330<F1>
<EXPENSE-RATIO> .590<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 052
<NAME> THE ONE GROUP INCOME BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 523732
<INVESTMENTS-AT-VALUE> 537716
<RECEIVABLES> 8578
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 546294
<PAYABLE-FOR-SECURITIES> 5974
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3844
<TOTAL-LIABILITIES> 9818
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 577283
<SHARES-COMMON-STOCK> 1087<F1>
<SHARES-COMMON-PRIOR> 895<F1>
<ACCUMULATED-NII-CURRENT> 396
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 54533
<ACCUM-APPREC-OR-DEPREC> 13330
<NET-ASSETS> 536476
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 37285
<OTHER-INCOME> 91
<EXPENSES-NET> 3047
<NET-INVESTMENT-INCOME> 34329
<REALIZED-GAINS-CURRENT> (1361)
<APPREC-INCREASE-CURRENT> (11155)
<NET-CHANGE-FROM-OPS> 21813
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 545<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 680<F1>
<NUMBER-OF-SHARES-REDEEMED> 347<F1>
<SHARES-REINVESTED> 41<F1>
<NET-CHANGE-IN-ASSETS> 53669
<ACCUMULATED-NII-PRIOR> 357
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 53042
<GROSS-ADVISORY-FEES> 3053
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4195
<AVERAGE-NET-ASSETS> 8376<F1>
<PER-SHARE-NAV-BEGIN> 9.540<F1>
<PER-SHARE-NII> .630<F1>
<PER-SHARE-GAIN-APPREC> (.230)<F1>
<PER-SHARE-DIVIDEND> .000<F1>
<PER-SHARE-DISTRIBUTIONS> .620<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.320<F1>
<EXPENSE-RATIO> .840<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 053
<NAME> THE ONE GROUP INCOME BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 523732
<INVESTMENTS-AT-VALUE> 537716
<RECEIVABLES> 8578
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 546294
<PAYABLE-FOR-SECURITIES> 5974
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3844
<TOTAL-LIABILITIES> 9818
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 577283
<SHARES-COMMON-STOCK> 650<F1>
<SHARES-COMMON-PRIOR> 326<F1>
<ACCUMULATED-NII-CURRENT> 396
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 54533
<ACCUM-APPREC-OR-DEPREC> 13330
<NET-ASSETS> 536476
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 37285
<OTHER-INCOME> 91
<EXPENSES-NET> 3047
<NET-INVESTMENT-INCOME> 34329
<REALIZED-GAINS-CURRENT> (1361)
<APPREC-INCREASE-CURRENT> (11155)
<NET-CHANGE-FROM-OPS> 21813
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 211<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 130<F1>
<NUMBER-OF-SHARES-REDEEMED> 17<F1>
<SHARES-REINVESTED> 5<F1>
<NET-CHANGE-IN-ASSETS> 53669
<ACCUMULATED-NII-PRIOR> 357
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 53042
<GROSS-ADVISORY-FEES> 3053
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4195
<AVERAGE-NET-ASSETS> 3579<F1>
<PER-SHARE-NAV-BEGIN> 9.620<F1>
<PER-SHARE-NII> .560<F1>
<PER-SHARE-GAIN-APPREC> (.210)<F1>
<PER-SHARE-DIVIDEND> .000<F1>
<PER-SHARE-DISTRIBUTIONS> .570<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.400<F1>
<EXPENSE-RATIO> 1.490<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 061
<NAME> THE ONE GROUP INTERMEDIATE TAX-FREE BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 227749
<INVESTMENTS-AT-VALUE> 230575
<RECEIVABLES> 4296
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 234871
<PAYABLE-FOR-SECURITIES> 6333
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2276
<TOTAL-LIABILITIES> 8609
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 222793
<SHARES-COMMON-STOCK> 20353<F1>
<SHARES-COMMON-PRIOR> 20121<F1>
<ACCUMULATED-NII-CURRENT> 233
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 410
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2826
<NET-ASSETS> 226262
<DIVIDEND-INCOME> 105
<INTEREST-INCOME> 12507
<OTHER-INCOME> 0
<EXPENSES-NET> 1300
<NET-INVESTMENT-INCOME> 11312
<REALIZED-GAINS-CURRENT> 1432
<APPREC-INCREASE-CURRENT> (248)
<NET-CHANGE-FROM-OPS> 12496
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 10698<F1>
<DISTRIBUTIONS-OF-GAINS> 468<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 6859<F1>
<NUMBER-OF-SHARES-REDEEMED> 6488<F1>
<SHARES-REINVESTED> 121<F1>
<NET-CHANGE-IN-ASSETS> 8303
<ACCUMULATED-NII-PRIOR> 11
<ACCUMULATED-GAINS-PRIOR> 563
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1400
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2079
<AVERAGE-NET-ASSETS> 224266<F1>
<PER-SHARE-NAV-BEGIN> 10.640<F1>
<PER-SHARE-NII> .520<F1>
<PER-SHARE-GAIN-APPREC> .040<F1>
<PER-SHARE-DIVIDEND> .510<F1>
<PER-SHARE-DISTRIBUTIONS> .020<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 10.670<F1>
<EXPENSE-RATIO> .540<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 062
<NAME> THE ONE GROUP INTERMEDIATE TAX-FREE BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 227749
<INVESTMENTS-AT-VALUE> 230575
<RECEIVABLES> 4296
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 234871
<PAYABLE-FOR-SECURITIES> 6333
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2276
<TOTAL-LIABILITIES> 8609
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 222793
<SHARES-COMMON-STOCK> 621<F1>
<SHARES-COMMON-PRIOR> 1735<F1>
<ACCUMULATED-NII-CURRENT> 233
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 410
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2826
<NET-ASSETS> 226262
<DIVIDEND-INCOME> 105
<INTEREST-INCOME> 12507
<OTHER-INCOME> 0
<EXPENSES-NET> 1300
<NET-INVESTMENT-INCOME> 11312
<REALIZED-GAINS-CURRENT> 1432
<APPREC-INCREASE-CURRENT> (248)
<NET-CHANGE-FROM-OPS> 12496
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 328<F1>
<DISTRIBUTIONS-OF-GAINS> 17<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 387<F1>
<NUMBER-OF-SHARES-REDEEMED> 316<F1>
<SHARES-REINVESTED> 22<F1>
<NET-CHANGE-IN-ASSETS> 8303
<ACCUMULATED-NII-PRIOR> 11
<ACCUMULATED-GAINS-PRIOR> 563
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1400
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2079
<AVERAGE-NET-ASSETS> 7230<F1>
<PER-SHARE-NAV-BEGIN> 10.630<F1>
<PER-SHARE-NII> .500<F1>
<PER-SHARE-GAIN-APPREC> .050<F1>
<PER-SHARE-DIVIDEND> .490<F1>
<PER-SHARE-DISTRIBUTIONS> .020<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 10.670<F1>
<EXPENSE-RATIO> .790<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 063
<NAME> THE ONE GROUP INTERMEDIATE TAX-FREE BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 227749
<INVESTMENTS-AT-VALUE> 230575
<RECEIVABLES> 4296
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 234871
<PAYABLE-FOR-SECURITIES> 6333
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2276
<TOTAL-LIABILITIES> 8609
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 222793
<SHARES-COMMON-STOCK> 228<F1>
<SHARES-COMMON-PRIOR> 124<F1>
<ACCUMULATED-NII-CURRENT> 233
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 410
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2826
<NET-ASSETS> 226262
<DIVIDEND-INCOME> 105
<INTEREST-INCOME> 12507
<OTHER-INCOME> 0
<EXPENSES-NET> 1300
<NET-INVESTMENT-INCOME> 11312
<REALIZED-GAINS-CURRENT> 1432
<APPREC-INCREASE-CURRENT> (248)
<NET-CHANGE-FROM-OPS> 12496
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 64<F1>
<DISTRIBUTIONS-OF-GAINS> 3<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 138<F1>
<NUMBER-OF-SHARES-REDEEMED> 20<F1>
<SHARES-REINVESTED> 5<F1>
<NET-CHANGE-IN-ASSETS> 8303
<ACCUMULATED-NII-PRIOR> 11
<ACCUMULATED-GAINS-PRIOR> 563
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1400
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2079
<AVERAGE-NET-ASSETS> 1637<F1>
<PER-SHARE-NAV-BEGIN> 10.650<F1>
<PER-SHARE-NII> .430<F1>
<PER-SHARE-GAIN-APPREC> .040<F1>
<PER-SHARE-DIVIDEND> .420<F1>
<PER-SHARE-DISTRIBUTIONS> .020<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 10.680<F1>
<EXPENSE-RATIO> 1.440<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 071
<NAME> DISCIPLINE VALUE FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 506190
<INVESTMENTS-AT-VALUE> 560181
<RECEIVABLES> 907
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 561088
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1471
<TOTAL-LIABILITIES> 1471
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 464636
<SHARES-COMMON-STOCK> 35564<F2>
<SHARES-COMMON-PRIOR> 33982<F2>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 45
<ACCUMULATED-NET-GAINS> 41035
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 53991
<NET-ASSETS> 559617
<DIVIDEND-INCOME> 15128
<INTEREST-INCOME> 1236
<OTHER-INCOME> 0
<EXPENSES-NET> 5523
<NET-INVESTMENT-INCOME> 10841
<REALIZED-GAINS-CURRENT> 60286
<APPREC-INCREASE-CURRENT> 25630
<NET-CHANGE-FROM-OPS> 96757
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 10493<F2>
<DISTRIBUTIONS-OF-GAINS> 27544<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 9341<F2>
<NUMBER-OF-SHARES-REDEEMED> 9186<F2>
<SHARES-REINVESTED> 1427<F2>
<NET-CHANGE-IN-ASSETS> 86305
<ACCUMULATED-NII-PRIOR> 43
<ACCUMULATED-GAINS-PRIOR> 9921
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3995
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5601
<AVERAGE-NET-ASSETS> 508906<F2>
<PER-SHARE-NAV-BEGIN> 13.20<F2>
<PER-SHARE-NII> .29<F2>
<PER-SHARE-GAIN-APPREC> 2.27<F2>
<PER-SHARE-DIVIDEND> .29<F2>
<PER-SHARE-DISTRIBUTIONS> .78<F2>
<RETURNS-OF-CAPITAL> 0<F2>
<PER-SHARE-NAV-END> 14.69<F2>
<EXPENSE-RATIO> .99<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Fiduciary Share Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 072
<NAME> DISCIPLINE VALUE FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 506190
<INVESTMENTS-AT-VALUE> 560181
<RECEIVABLES> 907
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 561088
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1471
<TOTAL-LIABILITIES> 1471
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 464636
<SHARES-COMMON-STOCK> 1416<F2>
<SHARES-COMMON-PRIOR> 1026<F2>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 45
<ACCUMULATED-NET-GAINS> 41035
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 53991
<NET-ASSETS> 559617
<DIVIDEND-INCOME> 15128
<INTEREST-INCOME> 1236
<OTHER-INCOME> 0
<EXPENSES-NET> 5523
<NET-INVESTMENT-INCOME> 10841
<REALIZED-GAINS-CURRENT> 60286
<APPREC-INCREASE-CURRENT> 25630
<NET-CHANGE-FROM-OPS> 96757
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 304<F2>
<DISTRIBUTIONS-OF-GAINS> 920<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 760<F2>
<NUMBER-OF-SHARES-REDEEMED> 456<F2>
<SHARES-REINVESTED> 86<F2>
<NET-CHANGE-IN-ASSETS> 86305
<ACCUMULATED-NII-PRIOR> 43
<ACCUMULATED-GAINS-PRIOR> 9921
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3995
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5601
<AVERAGE-NET-ASSETS> 17212<F2>
<PER-SHARE-NAV-BEGIN> 13.22<F2>
<PER-SHARE-NII> .25<F2>
<PER-SHARE-GAIN-APPREC> 2.28<F2>
<PER-SHARE-DIVIDEND> .25<F2>
<PER-SHARE-DISTRIBUTIONS> .78<F2>
<RETURNS-OF-CAPITAL> 0<F2>
<PER-SHARE-NAV-END> 14.72<F2>
<EXPENSE-RATIO> 1.24<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 073
<NAME> DISCIPLINE VALUE FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 506190
<INVESTMENTS-AT-VALUE> 560181
<RECEIVABLES> 907
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 561088
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1471
<TOTAL-LIABILITIES> 1471
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 464636
<SHARES-COMMON-STOCK> 1110<F2>
<SHARES-COMMON-PRIOR> 851<F2>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 45
<ACCUMULATED-NET-GAINS> 41035
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 53991
<NET-ASSETS> 559617
<DIVIDEND-INCOME> 15128
<INTEREST-INCOME> 1236
<OTHER-INCOME> 0
<EXPENSES-NET> 5523
<NET-INVESTMENT-INCOME> 10841
<REALIZED-GAINS-CURRENT> 60286
<APPREC-INCREASE-CURRENT> 25630
<NET-CHANGE-FROM-OPS> 96757
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 132<F2>
<DISTRIBUTIONS-OF-GAINS> 708<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 298<F2>
<NUMBER-OF-SHARES-REDEEMED> 99<F2>
<SHARES-REINVESTED> 60<F2>
<NET-CHANGE-IN-ASSETS> 86305
<ACCUMULATED-NII-PRIOR> 43
<ACCUMULATED-GAINS-PRIOR> 9921
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3995
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5601
<AVERAGE-NET-ASSETS> 13569<F2>
<PER-SHARE-NAV-BEGIN> 13.19<F2>
<PER-SHARE-NII> .15<F2>
<PER-SHARE-GAIN-APPREC> 2.27<F2>
<PER-SHARE-DIVIDEND> .14<F2>
<PER-SHARE-DISTRIBUTIONS> .78<F2>
<RETURNS-OF-CAPITAL> 0<F2>
<PER-SHARE-NAV-END> 14.69<F2>
<EXPENSE-RATIO> 1.99<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Class B Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 081
<NAME> GROWTH OPPORTUNITIES FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 592135
<INVESTMENTS-AT-VALUE> 600299
<RECEIVABLES> 8074
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 604202
<TOTAL-ASSETS> 612276
<PAYABLE-FOR-SECURITIES> 34062
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4727
<TOTAL-LIABILITIES> 38789
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 28310<F2>
<SHARES-COMMON-PRIOR> 22469<F2>
<ACCUMULATED-NII-CURRENT> 07
<OVERDISTRIBUTION-NII> 47
<ACCUMULATED-NET-GAINS> 80677
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 8164
<NET-ASSETS> 573487
<DIVIDEND-INCOME> 8638
<INTEREST-INCOME> 2051
<OTHER-INCOME> 177
<EXPENSES-NET> 5063
<NET-INVESTMENT-INCOME> 5803
<REALIZED-GAINS-CURRENT> 150392
<APPREC-INCREASE-CURRENT> 49094
<NET-CHANGE-FROM-OPS> 107101
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5572<F2>
<DISTRIBUTIONS-OF-GAINS> 78544<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 8947<F2>
<NUMBER-OF-SHARES-REDEEMED> 5714<F2>
<SHARES-REINVESTED> 2608<F2>
<NET-CHANGE-IN-ASSETS> 126929
<ACCUMULATED-NII-PRIOR> 357764
<ACCUMULATED-GAINS-PRIOR> 12472
<OVERDISTRIB-NII-PRIOR> 11
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3743
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5135
<AVERAGE-NET-ASSETS> 480493<F2>
<PER-SHARE-NAV-BEGIN> 18.40<F2>
<PER-SHARE-NII> .20<F2>
<PER-SHARE-GAIN-APPREC> 3.83<F2>
<PER-SHARE-DIVIDEND> .20<F2>
<PER-SHARE-DISTRIBUTIONS> 3.42<F2>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.81<F2>
<EXPENSE-RATIO> 1.00<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Fiduciary Share Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 082
<NAME> GROWTH OPPORTUNITIES FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 592135
<INVESTMENTS-AT-VALUE> 600299
<RECEIVABLES> 8074
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 604202
<TOTAL-ASSETS> 612276
<PAYABLE-FOR-SECURITIES> 34062
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4727
<TOTAL-LIABILITIES> 38789
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1495<F2>
<SHARES-COMMON-PRIOR> 609<F2>
<ACCUMULATED-NII-CURRENT> 07
<OVERDISTRIBUTION-NII> 47
<ACCUMULATED-NET-GAINS> 80677
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 8164
<NET-ASSETS> 573487
<DIVIDEND-INCOME> 8638
<INTEREST-INCOME> 2051
<OTHER-INCOME> 177
<EXPENSES-NET> 5063
<NET-INVESTMENT-INCOME> 5803
<REALIZED-GAINS-CURRENT> 150392
<APPREC-INCREASE-CURRENT> 49094
<NET-CHANGE-FROM-OPS> 107101
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 216<F2>
<DISTRIBUTIONS-OF-GAINS> 2747<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 108378<F2>
<NUMBER-OF-SHARES-REDEEMED> 95119<F2>
<SHARES-REINVESTED> 2718<F2>
<NET-CHANGE-IN-ASSETS> 126929
<ACCUMULATED-NII-PRIOR> 357764
<ACCUMULATED-GAINS-PRIOR> 12472
<OVERDISTRIB-NII-PRIOR> 11
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3743
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5135
<AVERAGE-NET-ASSETS> 18468<F2>
<PER-SHARE-NAV-BEGIN> 18.36<F2>
<PER-SHARE-NII> .17<F2>
<PER-SHARE-GAIN-APPREC> 3.80<F2>
<PER-SHARE-DIVIDEND> .15<F2>
<PER-SHARE-DISTRIBUTIONS> 3.42<F2>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.76<F2>
<EXPENSE-RATIO> 1.25<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 083
<NAME> GROWTH OPPORTUNITIES FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 592135
<INVESTMENTS-AT-VALUE> 600299
<RECEIVABLES> 8074
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 604202
<TOTAL-ASSETS> 612276
<PAYABLE-FOR-SECURITIES> 34062
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4727
<TOTAL-LIABILITIES> 38789
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 700<F2>
<SHARES-COMMON-PRIOR> 154<F2>
<ACCUMULATED-NII-CURRENT> 07
<OVERDISTRIBUTION-NII> 47
<ACCUMULATED-NET-GAINS> 80677
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 8164
<NET-ASSETS> 573487
<DIVIDEND-INCOME> 8638
<INTEREST-INCOME> 2051
<OTHER-INCOME> 177
<EXPENSES-NET> 5063
<NET-INVESTMENT-INCOME> 5803
<REALIZED-GAINS-CURRENT> 150392
<APPREC-INCREASE-CURRENT> 49094
<NET-CHANGE-FROM-OPS> 107101
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 51<F2>
<DISTRIBUTIONS-OF-GAINS> 896<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 522<F2>
<NUMBER-OF-SHARES-REDEEMED> 30<F2>
<SHARES-REINVESTED> 55<F2>
<NET-CHANGE-IN-ASSETS> 126929
<ACCUMULATED-NII-PRIOR> 357764
<ACCUMULATED-GAINS-PRIOR> 12472
<OVERDISTRIB-NII-PRIOR> 11
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3743
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5135
<AVERAGE-NET-ASSETS> 6541<F2>
<PER-SHARE-NAV-BEGIN> 18.14<F2>
<PER-SHARE-NII> .09<F2>
<PER-SHARE-GAIN-APPREC> 3.69<F2>
<PER-SHARE-DIVIDEND> .07<F2>
<PER-SHARE-DISTRIBUTIONS> 3.42<F2>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.43<F2>
<EXPENSE-RATIO> 2.00<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Class B Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 101
<NAME> THE ONE GROUP LIMITED VOLATILITY BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 631998
<INVESTMENTS-AT-VALUE> 630943
<RECEIVABLES> 8783
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 639726
<PAYABLE-FOR-SECURITIES> 4978
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3566
<TOTAL-LIABILITIES> 8544
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 639183
<SHARES-COMMON-STOCK> 58043<F1>
<SHARES-COMMON-PRIOR> 1249<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 121
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 6825
<ACCUM-APPREC-OR-DEPREC> (1055)
<NET-ASSETS> 631182
<DIVIDEND-INCOME> 62
<INTEREST-INCOME> 30286
<OTHER-INCOME> 120
<EXPENSES-NET> 2450
<NET-INVESTMENT-INCOME> 28018
<REALIZED-GAINS-CURRENT> 1885
<APPREC-INCREASE-CURRENT> (6631)
<NET-CHANGE-FROM-OPS> 23272
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 26964<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 30536<F1>
<NUMBER-OF-SHARES-REDEEMED> 12260<F1>
<SHARES-REINVESTED> 768<F1>
<NET-CHANGE-IN-ASSETS> 205014
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 122
<OVERDIST-NET-GAINS-PRIOR> 7201
<GROSS-ADVISORY-FEES> 2781
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3920
<AVERAGE-NET-ASSETS> 444845<F1>
<PER-SHARE-NAV-BEGIN> 10.530<F1>
<PER-SHARE-NII> .640<F1>
<PER-SHARE-GAIN-APPREC> (.110)<F1>
<PER-SHARE-DIVIDEND> .640<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 10.420<F1>
<EXPENSE-RATIO> .510<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 102
<NAME> THE ONE GROUP LIMITED VOLATILITY BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 631998
<INVESTMENTS-AT-VALUE> 630943
<RECEIVABLES> 8783
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 639726
<PAYABLE-FOR-SECURITIES> 4978
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3566
<TOTAL-LIABILITIES> 8544
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 639183
<SHARES-COMMON-STOCK> 2050<F1>
<SHARES-COMMON-PRIOR> 1249<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 121
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 6825
<ACCUM-APPREC-OR-DEPREC> (1055)
<NET-ASSETS> 631182
<DIVIDEND-INCOME> 62
<INTEREST-INCOME> 30286
<OTHER-INCOME> 120
<EXPENSES-NET> 2450
<NET-INVESTMENT-INCOME> 28018
<REALIZED-GAINS-CURRENT> 1885
<APPREC-INCREASE-CURRENT> (6631)
<NET-CHANGE-FROM-OPS> 23272
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 878<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 12072<F1>
<NUMBER-OF-SHARES-REDEEMED> 11265<F1>
<SHARES-REINVESTED> 54<F1>
<NET-CHANGE-IN-ASSETS> 205014
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 122
<OVERDIST-NET-GAINS-PRIOR> 7201
<GROSS-ADVISORY-FEES> 2781
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3920
<AVERAGE-NET-ASSETS> 15150<F1>
<PER-SHARE-NAV-BEGIN> 10.520<F1>
<PER-SHARE-NII> .630<F1>
<PER-SHARE-GAIN-APPREC> (.130)<F1>
<PER-SHARE-DIVIDEND> .610<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 10.410<F1>
<EXPENSE-RATIO> .760<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 103
<NAME> THE ONE GROUP LIMITED VOLATILITY BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 631998
<INVESTMENTS-AT-VALUE> 630943
<RECEIVABLES> 8783
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 639726
<PAYABLE-FOR-SECURITIES> 4978
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3566
<TOTAL-LIABILITIES> 8544
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 639183
<SHARES-COMMON-STOCK> 469<F1>
<SHARES-COMMON-PRIOR> 279<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 121
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 6825
<ACCUM-APPREC-OR-DEPREC> (1055)
<NET-ASSETS> 631182
<DIVIDEND-INCOME> 62
<INTEREST-INCOME> 30286
<OTHER-INCOME> 120
<EXPENSES-NET> 2450
<NET-INVESTMENT-INCOME> 28018
<REALIZED-GAINS-CURRENT> 1885
<APPREC-INCREASE-CURRENT> (6631)
<NET-CHANGE-FROM-OPS> 23272
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 175<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 251<F1>
<NUMBER-OF-SHARES-REDEEMED> 68<F1>
<SHARES-REINVESTED> 12<F1>
<NET-CHANGE-IN-ASSETS> 205014
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 122
<OVERDIST-NET-GAINS-PRIOR> 7201
<GROSS-ADVISORY-FEES> 2781
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3920
<AVERAGE-NET-ASSETS> 4588<F1>
<PER-SHARE-NAV-BEGIN> 10.600<F1>
<PER-SHARE-NII> .550<F1>
<PER-SHARE-GAIN-APPREC> (.100)<F1>
<PER-SHARE-DIVIDEND> .560<F1>
<PER-SHARE-DISTRIBUTIONS> 0<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 10.490<F1>
<EXPENSE-RATIO> 1.260<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 111
<NAME> EQUITY INDEX FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 305312
<INVESTMENTS-AT-VALUE> 391424
<RECEIVABLES> 1249
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 392673
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 891
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 303532
<SHARES-COMMON-STOCK> 19269<F2>
<SHARES-COMMON-PRIOR> 16747<F2>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 405
<ACCUMULATED-NET-GAINS> 2450
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 86205
<NET-ASSETS> 391782
<DIVIDEND-INCOME> 6339
<INTEREST-INCOME> 888
<OTHER-INCOME> 28
<EXPENSES-NET> 1056
<NET-INVESTMENT-INCOME> 6199
<REALIZED-GAINS-CURRENT> 10186
<APPREC-INCREASE-CURRENT> 47556
<NET-CHANGE-FROM-OPS> 63941
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5943<F2>
<DISTRIBUTIONS-OF-GAINS> 8186<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 7069<F2>
<NUMBER-OF-SHARES-REDEEMED> 5207<F2>
<SHARES-REINVESTED> 660<F2>
<NET-CHANGE-IN-ASSETS> 152476
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 1065
<OVERDISTRIB-NII-PRIOR> 232
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 876
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1924
<AVERAGE-NET-ASSETS> 265033<F2>
<PER-SHARE-NAV-BEGIN> 14.03<F2>
<PER-SHARE-NII> .33<F2>
<PER-SHARE-GAIN-APPREC> 3.16<F2>
<PER-SHARE-DIVIDEND> .34<F2>
<PER-SHARE-DISTRIBUTIONS> .52<F2>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.66<F2>
<EXPENSE-RATIO> .30<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Fiduciary Share Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 112
<NAME> EQUITY INDEX FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 305312
<INVESTMENTS-AT-VALUE> 391424
<RECEIVABLES> 1249
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 392673
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 891
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 303532
<SHARES-COMMON-STOCK> 1931<F2>
<SHARES-COMMON-PRIOR> 214<F2>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 405
<ACCUMULATED-NET-GAINS> 2450
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 86205
<NET-ASSETS> 391782
<DIVIDEND-INCOME> 6339
<INTEREST-INCOME> 888
<OTHER-INCOME> 28
<EXPENSES-NET> 1056
<NET-INVESTMENT-INCOME> 6199
<REALIZED-GAINS-CURRENT> 10186
<APPREC-INCREASE-CURRENT> 47556
<NET-CHANGE-FROM-OPS> 63941
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5943<F2>
<DISTRIBUTIONS-OF-GAINS> 8186<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 7069<F2>
<NUMBER-OF-SHARES-REDEEMED> 5207<F2>
<SHARES-REINVESTED> 660<F2>
<NET-CHANGE-IN-ASSETS> 152476
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 1065
<OVERDISTRIB-NII-PRIOR> 232
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 876
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1924
<AVERAGE-NET-ASSETS> 14094<F2>
<PER-SHARE-NAV-BEGIN> 14.02<F2>
<PER-SHARE-NII> .27<F2>
<PER-SHARE-GAIN-APPREC> 3.18<F2>
<PER-SHARE-DIVIDEND> .28<F2>
<PER-SHARE-DISTRIBUTIONS> .52<F2>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.67<F2>
<EXPENSE-RATIO> .55<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 113
<NAME> EQUITY INDEX FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 305312
<INVESTMENTS-AT-VALUE> 391424
<RECEIVABLES> 1249
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 392673
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 891
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 303532
<SHARES-COMMON-STOCK> 2310<F2>
<SHARES-COMMON-PRIOR> 100<F2>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 405
<ACCUMULATED-NET-GAINS> 2450
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 86205
<NET-ASSETS> 391782
<DIVIDEND-INCOME> 6339
<INTEREST-INCOME> 888
<OTHER-INCOME> 28
<EXPENSES-NET> 1056
<NET-INVESTMENT-INCOME> 6199
<REALIZED-GAINS-CURRENT> 10186
<APPREC-INCREASE-CURRENT> 47556
<NET-CHANGE-FROM-OPS> 63941
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 153<F2>
<DISTRIBUTIONS-OF-GAINS> 256<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 2232<F2>
<NUMBER-OF-SHARES-REDEEMED> 47<F2>
<SHARES-REINVESTED> 25<F2>
<NET-CHANGE-IN-ASSETS> 152476
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 1065
<OVERDISTRIB-NII-PRIOR> 232
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 876
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1924
<AVERAGE-NET-ASSETS> 12890<F2>
<PER-SHARE-NAV-BEGIN> 14.05<F2>
<PER-SHARE-NII> .16<F2>
<PER-SHARE-GAIN-APPREC> 3.16<F2>
<PER-SHARE-DIVIDEND> .17<F2>
<PER-SHARE-DISTRIBUTIONS> .52<F2>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.68<F2>
<EXPENSE-RATIO> 1.30<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Class B Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 121
<NAME> LARGE COMPANY VALUE FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 604175
<INVESTMENTS-AT-VALUE> 599949
<RECEIVABLES> 5449
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 605398
<PAYABLE-FOR-SECURITIES> 4613
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2743
<TOTAL-LIABILITIES> 7356
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 555124
<SHARES-COMMON-STOCK> 45543<F2>
<SHARES-COMMON-PRIOR> 0<F2>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 114
<ACCUMULATED-NET-GAINS> 47238
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (4206)
<NET-ASSETS> 598042
<DIVIDEND-INCOME> 13341
<INTEREST-INCOME> 3900
<OTHER-INCOME> 58
<EXPENSES-NET> 4986
<NET-INVESTMENT-INCOME> 12313
<REALIZED-GAINS-CURRENT> 66494
<APPREC-INCREASE-CURRENT> (17058)
<NET-CHANGE-FROM-OPS> 61749
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 12259<F2>
<DISTRIBUTIONS-OF-GAINS> 46275<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 17295<F2>
<NUMBER-OF-SHARES-REDEEMED> 9049<F2>
<SHARES-REINVESTED> 594<F2>
<NET-CHANGE-IN-ASSETS> 226099
<ACCUMULATED-NII-PRIOR> 7
<ACCUMULATED-GAINS-PRIOR> 12852
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3764
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5026
<AVERAGE-NET-ASSETS> 499344<F2>
<PER-SHARE-NAV-BEGIN> 12.87<F2>
<PER-SHARE-NII> .31<F2>
<PER-SHARE-GAIN-APPREC> 1.20<F2>
<PER-SHARE-DIVIDEND> .31<F2>
<PER-SHARE-DISTRIBUTIONS> 1.24<F2>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.83<F2>
<EXPENSE-RATIO> .97<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Fiduciary Share Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 122
<NAME> LARGE COMPANY VALUE FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 604175
<INVESTMENTS-AT-VALUE> 599949
<RECEIVABLES> 5449
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 605398
<PAYABLE-FOR-SECURITIES> 4613
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2743
<TOTAL-LIABILITIES> 7356
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 555124
<SHARES-COMMON-STOCK> 729<F2>
<SHARES-COMMON-PRIOR> 270<F2>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 114
<ACCUMULATED-NET-GAINS> 47238
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (4206)
<NET-ASSETS> 598042
<DIVIDEND-INCOME> 13341
<INTEREST-INCOME> 3900
<OTHER-INCOME> 58
<EXPENSES-NET> 4986
<NET-INVESTMENT-INCOME> 12313
<REALIZED-GAINS-CURRENT> 66494
<APPREC-INCREASE-CURRENT> (17058)
<NET-CHANGE-FROM-OPS> 61749
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 143<F2>
<DISTRIBUTIONS-OF-GAINS> 631<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 815<F2>
<NUMBER-OF-SHARES-REDEEMED> 417<F2>
<SHARES-REINVESTED> 61<F2>
<NET-CHANGE-IN-ASSETS> 226099
<ACCUMULATED-NII-PRIOR> 7
<ACCUMULATED-GAINS-PRIOR> 12852
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3764
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5026
<AVERAGE-NET-ASSETS> 6772<F2>
<PER-SHARE-NAV-BEGIN> 12.89<F2>
<PER-SHARE-NII> .27<F2>
<PER-SHARE-GAIN-APPREC> 1.22<F2>
<PER-SHARE-DIVIDEND> .27<F2>
<PER-SHARE-DISTRIBUTIONS> 1.24<F2>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.87<F2>
<EXPENSE-RATIO> 1.22<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 123
<NAME> LARGE COMPANY VALUE FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 604175
<INVESTMENTS-AT-VALUE> 599949
<RECEIVABLES> 5449
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 605398
<PAYABLE-FOR-SECURITIES> 4613
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2743
<TOTAL-LIABILITIES> 7356
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 555124
<SHARES-COMMON-STOCK> 318<F2>
<SHARES-COMMON-PRIOR> 66<F2>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 114
<ACCUMULATED-NET-GAINS> 47238
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (4206)
<NET-ASSETS> 598042
<DIVIDEND-INCOME> 13341
<INTEREST-INCOME> 3900
<OTHER-INCOME> 58
<EXPENSES-NET> 4986
<NET-INVESTMENT-INCOME> 12313
<REALIZED-GAINS-CURRENT> 66494
<APPREC-INCREASE-CURRENT> (17058)
<NET-CHANGE-FROM-OPS> 61749
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 32<F2>
<DISTRIBUTIONS-OF-GAINS> 183<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 262<F2>
<NUMBER-OF-SHARES-REDEEMED> 26<F2>
<SHARES-REINVESTED> 16<F2>
<NET-CHANGE-IN-ASSETS> 226099
<ACCUMULATED-NII-PRIOR> 7
<ACCUMULATED-GAINS-PRIOR> 12852
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3764
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5026
<AVERAGE-NET-ASSETS> 2258<F2>
<PER-SHARE-NAV-BEGIN> 12.96<F2>
<PER-SHARE-NII> .18<F2>
<PER-SHARE-GAIN-APPREC> 1.26<F2>
<PER-SHARE-DIVIDEND> .18<F2>
<PER-SHARE-DISTRIBUTIONS> 1.24<F2>
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.98<F2>
<EXPENSE-RATIO> 1.97<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Class B Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 131
<NAME> THE ONE GROUP OHIO MUNICIPAL BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 100675
<INVESTMENTS-AT-VALUE> 104955
<RECEIVABLES> 1774
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 106729
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 757
<TOTAL-LIABILITIES> 757
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 105650
<SHARES-COMMON-STOCK> 7540<F1>
<SHARES-COMMON-PRIOR> 7153<F1>
<ACCUMULATED-NII-CURRENT> 8
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 3966
<ACCUM-APPREC-OR-DEPREC> 4280
<NET-ASSETS> 105972
<DIVIDEND-INCOME> 85
<INTEREST-INCOME> 5574
<OTHER-INCOME> 0
<EXPENSES-NET> 649
<NET-INVESTMENT-INCOME> 5010
<REALIZED-GAINS-CURRENT> (253)
<APPREC-INCREASE-CURRENT> 483
<NET-CHANGE-FROM-OPS> 5240
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4102<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 1528<F1>
<NUMBER-OF-SHARES-REDEEMED> 1523<F1>
<SHARES-REINVESTED> 23<F1>
<NET-CHANGE-IN-ASSETS> 10764
<ACCUMULATED-NII-PRIOR> 8
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 3774
<GROSS-ADVISORY-FEES> 586
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1044
<AVERAGE-NET-ASSETS> 79305<F1>
<PER-SHARE-NAV-BEGIN> 10.650<F1>
<PER-SHARE-NII> .560<F1>
<PER-SHARE-GAIN-APPREC> .040<F1>
<PER-SHARE-DIVIDEND> .560<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 10.690<F1>
<EXPENSE-RATIO> .570<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 132
<NAME> THE ONE GROUP OHIO MUNICIPAL BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 100675
<INVESTMENTS-AT-VALUE> 104955
<RECEIVABLES> 1774
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 106729
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 757
<TOTAL-LIABILITIES> 757
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 105650
<SHARES-COMMON-STOCK> 1540<F1>
<SHARES-COMMON-PRIOR> 1219<F1>
<ACCUMULATED-NII-CURRENT> 8
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 3966
<ACCUM-APPREC-OR-DEPREC> 4280
<NET-ASSETS> 105972
<DIVIDEND-INCOME> 85
<INTEREST-INCOME> 5574
<OTHER-INCOME> 0
<EXPENSES-NET> 649
<NET-INVESTMENT-INCOME> 5010
<REALIZED-GAINS-CURRENT> (253)
<APPREC-INCREASE-CURRENT> 483
<NET-CHANGE-FROM-OPS> 5240
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 670<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 539<F1>
<NUMBER-OF-SHARES-REDEEMED> 167<F1>
<SHARES-REINVESTED> 44<F1>
<NET-CHANGE-IN-ASSETS> 10764
<ACCUMULATED-NII-PRIOR> 8
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 3774
<GROSS-ADVISORY-FEES> 586
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1044
<AVERAGE-NET-ASSETS> 13604<F1>
<PER-SHARE-NAV-BEGIN> 10.680<F1>
<PER-SHARE-NII> .550<F1>
<PER-SHARE-GAIN-APPREC> .030<F1>
<PER-SHARE-DIVIDEND> .540<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 10.720<F1>
<EXPENSE-RATIO> .820<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 133
<NAME> THE ONE GROUP OHIO MUNICIPAL BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 100675
<INVESTMENTS-AT-VALUE> 104955
<RECEIVABLES> 1774
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 106729
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 757
<TOTAL-LIABILITIES> 757
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 105650
<SHARES-COMMON-STOCK> 820<F1>
<SHARES-COMMON-PRIOR> 463<F1>
<ACCUMULATED-NII-CURRENT> 8
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 3966
<ACCUM-APPREC-OR-DEPREC> 4280
<NET-ASSETS> 105972
<DIVIDEND-INCOME> 85
<INTEREST-INCOME> 5574
<OTHER-INCOME> 0
<EXPENSES-NET> 649
<NET-INVESTMENT-INCOME> 5010
<REALIZED-GAINS-CURRENT> (253)
<APPREC-INCREASE-CURRENT> 483
<NET-CHANGE-FROM-OPS> 5240
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 238<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 561<F1>
<NUMBER-OF-SHARES-REDEEMED> 54<F1>
<SHARES-REINVESTED> 15<F1>
<NET-CHANGE-IN-ASSETS> 10764
<ACCUMULATED-NII-PRIOR> 8
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 3774
<GROSS-ADVISORY-FEES> 586
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1044
<AVERAGE-NET-ASSETS> 5551<F1>
<PER-SHARE-NAV-BEGIN> 10.750<F1>
<PER-SHARE-NII> .480<F1>
<PER-SHARE-GAIN-APPREC> .030<F1>
<PER-SHARE-DIVIDEND> .470<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 10.790<F1>
<EXPENSE-RATIO> 1.470<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 141
<NAME> THE ONE GROUP INTERNATIONAL EQUITY INDEX FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 323827
<INVESTMENTS-AT-VALUE> 363102
<RECEIVABLES> 8149
<ASSETS-OTHER> 1819
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 373070
<PAYABLE-FOR-SECURITIES> 7608
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1027
<TOTAL-LIABILITIES> 8635
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 321819
<SHARES-COMMON-STOCK> 22921<F1>
<SHARES-COMMON-PRIOR> 15680<F1>
<ACCUMULATED-NII-CURRENT> 1395
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1893
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 39328
<NET-ASSETS> 364435
<DIVIDEND-INCOME> 6421
<INTEREST-INCOME> 248
<OTHER-INCOME> (877)
<EXPENSES-NET> 2852
<NET-INVESTMENT-INCOME> 2940
<REALIZED-GAINS-CURRENT> 1467
<APPREC-INCREASE-CURRENT> 26748
<NET-CHANGE-FROM-OPS> 31155
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3254<F1>
<DISTRIBUTIONS-OF-GAINS> 2147<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 10623<F1>
<NUMBER-OF-SHARES-REDEEMED> 3542<F1>
<SHARES-REINVESTED> 160<F1>
<NET-CHANGE-IN-ASSETS> 137421
<ACCUMULATED-NII-PRIOR> 2643
<ACCUMULATED-GAINS-PRIOR> 2003
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1584
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2951
<AVERAGE-NET-ASSETS> 276248<F1>
<PER-SHARE-NAV-BEGIN> 13.930<F1>
<PER-SHARE-NII> .110<F1>
<PER-SHARE-GAIN-APPREC> 1.430<F1>
<PER-SHARE-DIVIDEND> .000<F1>
<PER-SHARE-DISTRIBUTIONS> .300<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 15.170<F1>
<EXPENSE-RATIO> .970<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 142
<NAME> THE ONE GROUP INTERNATIONAL EQUITY INDEX FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 323827
<INVESTMENTS-AT-VALUE> 363102
<RECEIVABLES> 8149
<ASSETS-OTHER> 1819
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 373070
<PAYABLE-FOR-SECURITIES> 7608
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1027
<TOTAL-LIABILITIES> 8635
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 321819
<SHARES-COMMON-STOCK> 712<F1>
<SHARES-COMMON-PRIOR> 361<F1>
<ACCUMULATED-NII-CURRENT> 1395
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1893
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 39328
<NET-ASSETS> 364435
<DIVIDEND-INCOME> 6421
<INTEREST-INCOME> 248
<OTHER-INCOME> (877)
<EXPENSES-NET> 2852
<NET-INVESTMENT-INCOME> 2940
<REALIZED-GAINS-CURRENT> 1467
<APPREC-INCREASE-CURRENT> 26748
<NET-CHANGE-FROM-OPS> 31155
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 83<F1>
<DISTRIBUTIONS-OF-GAINS> 55<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 484<F1>
<NUMBER-OF-SHARES-REDEEMED> 143<F1>
<SHARES-REINVESTED> 10<F1>
<NET-CHANGE-IN-ASSETS> 137421
<ACCUMULATED-NII-PRIOR> 2643
<ACCUMULATED-GAINS-PRIOR> 2003
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1584
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2951
<AVERAGE-NET-ASSETS> 7201<F1>
<PER-SHARE-NAV-BEGIN> 13.920<F1>
<PER-SHARE-NII> .140<F1>
<PER-SHARE-GAIN-APPREC> 1.400<F1>
<PER-SHARE-DIVIDEND> .000<F1>
<PER-SHARE-DISTRIBUTIONS> .300<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 15.160<F1>
<EXPENSE-RATIO> 1.220<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 143
<NAME> THE ONE GROUP INTERNATIONAL EQUITY INDEX FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 323827
<INVESTMENTS-AT-VALUE> 363102
<RECEIVABLES> 8149
<ASSETS-OTHER> 1819
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 373070
<PAYABLE-FOR-SECURITIES> 7608
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1027
<TOTAL-LIABILITIES> 8635
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 321819
<SHARES-COMMON-STOCK> 396<F1>
<SHARES-COMMON-PRIOR> 269<F1>
<ACCUMULATED-NII-CURRENT> 1395
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1893
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 39328
<NET-ASSETS> 364435
<DIVIDEND-INCOME> 6421
<INTEREST-INCOME> 248
<OTHER-INCOME> (877)
<EXPENSES-NET> 2852
<NET-INVESTMENT-INCOME> 2940
<REALIZED-GAINS-CURRENT> 1467
<APPREC-INCREASE-CURRENT> 26748
<NET-CHANGE-FROM-OPS> 31155
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 50<F1>
<DISTRIBUTIONS-OF-GAINS> 33<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 179<F1>
<NUMBER-OF-SHARES-REDEEMED> 57<F1>
<SHARES-REINVESTED> 5<F1>
<NET-CHANGE-IN-ASSETS> 137421
<ACCUMULATED-NII-PRIOR> 2643
<ACCUMULATED-GAINS-PRIOR> 2003
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1584
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2951
<AVERAGE-NET-ASSETS> 4402<F1>
<PER-SHARE-NAV-BEGIN> 13.730<F1>
<PER-SHARE-NII> .030<F1>
<PER-SHARE-GAIN-APPREC> 1.320<F1>
<PER-SHARE-DIVIDEND> .000<F1>
<PER-SHARE-DISTRIBUTIONS> .290<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 14.790<F1>
<EXPENSE-RATIO> 1.970<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 150
<NAME> THE ONE GROUP TREASURY ONLY MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 414057
<INVESTMENTS-AT-VALUE> 414057
<RECEIVABLES> 3688
<ASSETS-OTHER> 8
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 417753
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1792
<TOTAL-LIABILITIES> 1792
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 416037
<SHARES-COMMON-STOCK> 416037
<SHARES-COMMON-PRIOR> 288676
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 76
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 415961
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 19404
<OTHER-INCOME> 0
<EXPENSES-NET> 607
<NET-INVESTMENT-INCOME> 18797
<REALIZED-GAINS-CURRENT> (76)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 18721
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 18797
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 21
<NUMBER-OF-SHARES-SOLD> 1135597
<NUMBER-OF-SHARES-REDEEMED> 1010723
<SHARES-REINVESTED> 2487
<NET-CHANGE-IN-ASSETS> 127264
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 21
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 288
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 607
<AVERAGE-NET-ASSETS> 359528
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .052
<PER-SHARE-GAIN-APPREC> .000
<PER-SHARE-DIVIDEND> .052
<PER-SHARE-DISTRIBUTIONS> .000
<RETURNS-OF-CAPITAL> .000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> .170
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 160
<NAME> THE ONE GROUP GOVERNMENT MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 607004
<INVESTMENTS-AT-VALUE> 607004
<RECEIVABLES> 4330
<ASSETS-OTHER> 43
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 859794
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4181
<TOTAL-LIABILITIES> 4181
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 855679
<SHARES-COMMON-STOCK> 855679
<SHARES-COMMON-PRIOR> 720773
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 66
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 855613
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 43537
<OTHER-INCOME> 0
<EXPENSES-NET> 1402
<NET-INVESTMENT-INCOME> 42135
<REALIZED-GAINS-CURRENT> 8
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 42143
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 42135
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2638822
<NUMBER-OF-SHARES-REDEEMED> 2514579
<SHARES-REINVESTED> 10663
<NET-CHANGE-IN-ASSETS> 134914
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 74
<GROSS-ADVISORY-FEES> 618
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1407
<AVERAGE-NET-ASSETS> 771576
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .055
<PER-SHARE-GAIN-APPREC> .000
<PER-SHARE-DIVIDEND> .055
<PER-SHARE-DISTRIBUTIONS> .000
<RETURNS-OF-CAPITAL> .000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> .180
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 171
<NAME> ASSET ALLOCATION FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 83029
<INVESTMENTS-AT-VALUE> 87354
<RECEIVABLES> 780
<ASSETS-OTHER> 36
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 88170
<PAYABLE-FOR-SECURITIES> 1022
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 401
<TOTAL-LIABILITIES> 1423
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 79288
<SHARES-COMMON-STOCK> 4299<F2>
<SHARES-COMMON-PRIOR> 3509<F2>
<ACCUMULATED-NII-CURRENT> 19
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3058
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4382
<NET-ASSETS> 86747
<DIVIDEND-INCOME> 587
<INTEREST-INCOME> 2166
<OTHER-INCOME> 16
<EXPENSES-NET> 679
<NET-INVESTMENT-INCOME> 2090
<REALIZED-GAINS-CURRENT> 4144
<APPREC-INCREASE-CURRENT> 1631
<NET-CHANGE-FROM-OPS> 7865
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1520<F2>
<DISTRIBUTIONS-OF-GAINS> 640<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 20364<F2>
<NUMBER-OF-SHARES-REDEEMED> 13065<F2>
<SHARES-REINVESTED> 1810<F2>
<NET-CHANGE-IN-ASSETS> 41325
<ACCUMULATED-NII-PRIOR> 8
<ACCUMULATED-GAINS-PRIOR> (204)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 398
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 841
<AVERAGE-NET-ASSETS> 42300<F2>
<PER-SHARE-NAV-BEGIN> 10.73<F2>
<PER-SHARE-NII> .41<F2>
<PER-SHARE-GAIN-APPREC> 1.16<F2>
<PER-SHARE-DIVIDEND> .41<F2>
<PER-SHARE-DISTRIBUTIONS> .18<F2>
<RETURNS-OF-CAPITAL> 0<F2>
<PER-SHARE-NAV-END> 11.71<F2>
<EXPENSE-RATIO> .94<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Fiduciary Share Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 172
<NAME> ASSET ALLOCATION FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 83029
<INVESTMENTS-AT-VALUE> 87354
<RECEIVABLES> 780
<ASSETS-OTHER> 36
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 88170
<PAYABLE-FOR-SECURITIES> 1022
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 401
<TOTAL-LIABILITIES> 1423
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 79288
<SHARES-COMMON-STOCK> 1523<F2>
<SHARES-COMMON-PRIOR> 442<F2>
<ACCUMULATED-NII-CURRENT> 19
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3058
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4382
<NET-ASSETS> 86747
<DIVIDEND-INCOME> 587
<INTEREST-INCOME> 2166
<OTHER-INCOME> 16
<EXPENSES-NET> 679
<NET-INVESTMENT-INCOME> 2090
<REALIZED-GAINS-CURRENT> 4144
<APPREC-INCREASE-CURRENT> 1631
<NET-CHANGE-FROM-OPS> 7865
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 343<F2>
<DISTRIBUTIONS-OF-GAINS> 143<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 1241<F2>
<NUMBER-OF-SHARES-REDEEMED> 198<F2>
<SHARES-REINVESTED> 38<F2>
<NET-CHANGE-IN-ASSETS> 41325
<ACCUMULATED-NII-PRIOR> 8
<ACCUMULATED-GAINS-PRIOR> (204)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 398
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 841
<AVERAGE-NET-ASSETS> 10413<F2>
<PER-SHARE-NAV-BEGIN> 10.74<F2>
<PER-SHARE-NII> .37<F2>
<PER-SHARE-GAIN-APPREC> 1.16<F2>
<PER-SHARE-DIVIDEND> .37<F2>
<PER-SHARE-DISTRIBUTIONS> .18<F2>
<RETURNS-OF-CAPITAL> 0<F2>
<PER-SHARE-NAV-END> 11.72<F2>
<EXPENSE-RATIO> 1.19<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 173
<NAME> ASSET ALLOCATION FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 83029
<INVESTMENTS-AT-VALUE> 87354
<RECEIVABLES> 780
<ASSETS-OTHER> 36
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 88170
<PAYABLE-FOR-SECURITIES> 1022
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 401
<TOTAL-LIABILITIES> 1423
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 79288
<SHARES-COMMON-STOCK> 1580<F2>
<SHARES-COMMON-PRIOR> 281<F2>
<ACCUMULATED-NII-CURRENT> 19
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3058
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4382
<NET-ASSETS> 86747
<DIVIDEND-INCOME> 587
<INTEREST-INCOME> 2166
<OTHER-INCOME> 16
<EXPENSES-NET> 679
<NET-INVESTMENT-INCOME> 2090
<REALIZED-GAINS-CURRENT> 4144
<APPREC-INCREASE-CURRENT> 1631
<NET-CHANGE-FROM-OPS> 7865
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 216<F2>
<DISTRIBUTIONS-OF-GAINS> 99<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 1349<F2>
<NUMBER-OF-SHARES-REDEEMED> 74<F2>
<SHARES-REINVESTED> 24<F2>
<NET-CHANGE-IN-ASSETS> 41325
<ACCUMULATED-NII-PRIOR> 8
<ACCUMULATED-GAINS-PRIOR> (204)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 398
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 841
<AVERAGE-NET-ASSETS> 8521<F2>
<PER-SHARE-NAV-BEGIN> 10.76<F2>
<PER-SHARE-NII> .28<F2>
<PER-SHARE-GAIN-APPREC> 1.18<F2>
<PER-SHARE-DIVIDEND> .28<F2>
<PER-SHARE-DISTRIBUTIONS> .18<F2>
<RETURNS-OF-CAPITAL> 0<F2>
<PER-SHARE-NAV-END> 11.76<F2>
<EXPENSE-RATIO> 1.94<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Class B Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 181
<NAME> THE ONE GROUP GOVERNMENT BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 733350
<INVESTMENTS-AT-VALUE> 729159
<RECEIVABLES> 7830
<ASSETS-OTHER> 5
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 736994
<PAYABLE-FOR-SECURITIES> 5289
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4797
<TOTAL-LIABILITIES> 10086
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 752154
<SHARES-COMMON-STOCK> 70842<F1>
<SHARES-COMMON-PRIOR> 41050<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 325
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 20043
<ACCUM-APPREC-OR-DEPREC> (4878)
<NET-ASSETS> 726908
<DIVIDEND-INCOME> 25
<INTEREST-INCOME> 34941
<OTHER-INCOME> 178
<EXPENSES-NET> 3521
<NET-INVESTMENT-INCOME> 31623
<REALIZED-GAINS-CURRENT> 2769
<APPREC-INCREASE-CURRENT> (2769)
<NET-CHANGE-FROM-OPS> (15409)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 30195<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 44220<F1>
<NUMBER-OF-SHARES-REDEEMED> 12833<F1>
<SHARES-REINVESTED> 735<F1>
<NET-CHANGE-IN-ASSETS> 336439
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 301
<OVERDIST-NET-GAINS-PRIOR> 12952
<GROSS-ADVISORY-FEES> 2253
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3634
<AVERAGE-NET-ASSETS> 476509<F1>
<PER-SHARE-NAV-BEGIN> 9.810<F1>
<PER-SHARE-NII> .620<F1>
<PER-SHARE-GAIN-APPREC> (.250)<F1>
<PER-SHARE-DIVIDEND> .000<F1>
<PER-SHARE-DISTRIBUTIONS> .620<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.560<F1>
<EXPENSE-RATIO> .680<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 182
<NAME> THE ONE GROUP GOVERNMENT BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 733350
<INVESTMENTS-AT-VALUE> 729159
<RECEIVABLES> 7830
<ASSETS-OTHER> 5
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 736994
<PAYABLE-FOR-SECURITIES> 5289
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4797
<TOTAL-LIABILITIES> 10086
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 752154
<SHARES-COMMON-STOCK> 4056<F1>
<SHARES-COMMON-PRIOR> 1116<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 325
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 20043
<ACCUM-APPREC-OR-DEPREC> (4878)
<NET-ASSETS> 726908
<DIVIDEND-INCOME> 25
<INTEREST-INCOME> 34941
<OTHER-INCOME> 178
<EXPENSES-NET> 3521
<NET-INVESTMENT-INCOME> 31623
<REALIZED-GAINS-CURRENT> 2769
<APPREC-INCREASE-CURRENT> (2769)
<NET-CHANGE-FROM-OPS> (15409)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1103<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 31613<F1>
<NUMBER-OF-SHARES-REDEEMED> 28451<F1>
<SHARES-REINVESTED> 66<F1>
<NET-CHANGE-IN-ASSETS> 336439
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 301
<OVERDIST-NET-GAINS-PRIOR> 12952
<GROSS-ADVISORY-FEES> 2253
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3634
<AVERAGE-NET-ASSETS> 17971<F1>
<PER-SHARE-NAV-BEGIN> 9.810<F1>
<PER-SHARE-NII> .600<F1>
<PER-SHARE-GAIN-APPREC> (.250)<F1>
<PER-SHARE-DIVIDEND> .000<F1>
<PER-SHARE-DISTRIBUTIONS> .600<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.560<F1>
<EXPENSE-RATIO> .930<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 183
<NAME> THE ONE GROUP GOVERNMENT BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 733350
<INVESTMENTS-AT-VALUE> 729159
<RECEIVABLES> 7830
<ASSETS-OTHER> 5
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 736994
<PAYABLE-FOR-SECURITIES> 5289
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4797
<TOTAL-LIABILITIES> 10086
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 752154
<SHARES-COMMON-STOCK> 1128<F1>
<SHARES-COMMON-PRIOR> 500<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 325
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 20043
<ACCUM-APPREC-OR-DEPREC> (4878)
<NET-ASSETS> 726908
<DIVIDEND-INCOME> 25
<INTEREST-INCOME> 34941
<OTHER-INCOME> 178
<EXPENSES-NET> 3521
<NET-INVESTMENT-INCOME> 31623
<REALIZED-GAINS-CURRENT> 2769
<APPREC-INCREASE-CURRENT> (2769)
<NET-CHANGE-FROM-OPS> (15409)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 324<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 951<F1>
<NUMBER-OF-SHARES-REDEEMED> 99<F1>
<SHARES-REINVESTED> 20<F1>
<NET-CHANGE-IN-ASSETS> 336439
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 301
<OVERDIST-NET-GAINS-PRIOR> 12952
<GROSS-ADVISORY-FEES> 2253
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3634
<AVERAGE-NET-ASSETS> 5951<F1>
<PER-SHARE-NAV-BEGIN> 9.810<F1>
<PER-SHARE-NII> .540<F1>
<PER-SHARE-GAIN-APPREC> (.250)<F1>
<PER-SHARE-DIVIDEND> .000<F1>
<PER-SHARE-DISTRIBUTIONS> .540<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.560<F1>
<EXPENSE-RATIO> 1.580<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 191
<NAME> THE ONE GROUP GOVERNMENT ARM FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 66003
<INVESTMENTS-AT-VALUE> 65541
<RECEIVABLES> 786
<ASSETS-OTHER> 8
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 66335
<PAYABLE-FOR-SECURITIES> 3484
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 462
<TOTAL-LIABILITIES> 3946
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 66978
<SHARES-COMMON-STOCK> 5853<F1>
<SHARES-COMMON-PRIOR> 4109<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 313
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 3772
<ACCUM-APPREC-OR-DEPREC> (504)
<NET-ASSETS> 62389
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3423
<OTHER-INCOME> 0
<EXPENSES-NET> 243
<NET-INVESTMENT-INCOME> 3180
<REALIZED-GAINS-CURRENT> (594)
<APPREC-INCREASE-CURRENT> 150
<NET-CHANGE-FROM-OPS> 2736
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2924<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 26<F1>
<NUMBER-OF-SHARES-SOLD> 3560<F1>
<NUMBER-OF-SHARES-REDEEMED> 2989<F1>
<SHARES-REINVESTED> 94<F1>
<NET-CHANGE-IN-ASSETS> 6548
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 207
<OVERDIST-NET-GAINS-PRIOR> 3579
<GROSS-ADVISORY-FEES> 283
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 559
<AVERAGE-NET-ASSETS> 48746<F1>
<PER-SHARE-NAV-BEGIN> 9.840<F1>
<PER-SHARE-NII> .620<F1>
<PER-SHARE-GAIN-APPREC> (.070)<F1>
<PER-SHARE-DIVIDEND> .600<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.790<F1>
<EXPENSE-RATIO> .450<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 192
<NAME> THE ONE GROUP GOVERNMENT ARM FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 66003
<INVESTMENTS-AT-VALUE> 65541
<RECEIVABLES> 786
<ASSETS-OTHER> 8
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 66335
<PAYABLE-FOR-SECURITIES> 3484
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 462
<TOTAL-LIABILITIES> 3946
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 66978
<SHARES-COMMON-STOCK> 406<F1>
<SHARES-COMMON-PRIOR> 148<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 313
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 3772
<ACCUM-APPREC-OR-DEPREC> (504)
<NET-ASSETS> 62389
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3423
<OTHER-INCOME> 0
<EXPENSES-NET> 243
<NET-INVESTMENT-INCOME> 3180
<REALIZED-GAINS-CURRENT> (594)
<APPREC-INCREASE-CURRENT> 150
<NET-CHANGE-FROM-OPS> 2736
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 129<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 269<F1>
<NUMBER-OF-SHARES-REDEEMED> 344<F1>
<SHARES-REINVESTED> 10<F1>
<NET-CHANGE-IN-ASSETS> 6548
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 207
<OVERDIST-NET-GAINS-PRIOR> 3579
<GROSS-ADVISORY-FEES> 283
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 559
<AVERAGE-NET-ASSETS> 2248<F1>
<PER-SHARE-NAV-BEGIN> 9.830<F1>
<PER-SHARE-NII> .580<F1>
<PER-SHARE-GAIN-APPREC> (.060)<F1>
<PER-SHARE-DIVIDEND> .570<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.780<F1>
<EXPENSE-RATIO> .700<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 193
<NAME> THE ONE GROUP GOVERNMENT ARM FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 66003
<INVESTMENTS-AT-VALUE> 65541
<RECEIVABLES> 786
<ASSETS-OTHER> 8
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 66335
<PAYABLE-FOR-SECURITIES> 3484
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 462
<TOTAL-LIABILITIES> 3946
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 66978
<SHARES-COMMON-STOCK> 117<F1>
<SHARES-COMMON-PRIOR> 18<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 313
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 3772
<ACCUM-APPREC-OR-DEPREC> (504)
<NET-ASSETS> 62389
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3423
<OTHER-INCOME> 0
<EXPENSES-NET> 243
<NET-INVESTMENT-INCOME> 3180
<REALIZED-GAINS-CURRENT> (594)
<APPREC-INCREASE-CURRENT> 150
<NET-CHANGE-FROM-OPS> 2736
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 24<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 105<F1>
<NUMBER-OF-SHARES-REDEEMED> 5<F1>
<SHARES-REINVESTED> 1<F1>
<NET-CHANGE-IN-ASSETS> 6548
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 207
<OVERDIST-NET-GAINS-PRIOR> 3579
<GROSS-ADVISORY-FEES> 283
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 559
<AVERAGE-NET-ASSETS> 444<F1>
<PER-SHARE-NAV-BEGIN> 9.840<F1>
<PER-SHARE-NII> .520<F1>
<PER-SHARE-GAIN-APPREC> (.070)<F1>
<PER-SHARE-DIVIDEND> .530<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.760<F1>
<EXPENSE-RATIO> 1.200<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 201
<NAME> THE ONE GROUP MUNICIPAL INCOME FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 291275
<INVESTMENTS-AT-VALUE> 291562
<RECEIVABLES> 7254
<ASSETS-OTHER> 6
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 298822
<PAYABLE-FOR-SECURITIES> 5985
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2731
<TOTAL-LIABILITIES> 8716
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 297878
<SHARES-COMMON-STOCK> 24956<F1>
<SHARES-COMMON-PRIOR> 21360<F1>
<ACCUMULATED-NII-CURRENT> 20
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 8079
<ACCUM-APPREC-OR-DEPREC> 287
<NET-ASSETS> 290106
<DIVIDEND-INCOME> 82
<INTEREST-INCOME> 15260
<OTHER-INCOME> 0
<EXPENSES-NET> 1561
<NET-INVESTMENT-INCOME> 13781
<REALIZED-GAINS-CURRENT> (2505)
<APPREC-INCREASE-CURRENT> 1176
<NET-CHANGE-FROM-OPS> 12452
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 12119<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 10330<F1>
<NUMBER-OF-SHARES-REDEEMED> 4649<F1>
<SHARES-REINVESTED> 86<F1>
<NET-CHANGE-IN-ASSETS> 84402
<ACCUMULATED-NII-PRIOR> 19
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 6399
<GROSS-ADVISORY-FEES> 1103
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2068
<AVERAGE-NET-ASSETS> 212502<F1>
<PER-SHARE-NAV-BEGIN> 9.690<F1>
<PER-SHARE-NII> .560<F1>
<PER-SHARE-GAIN-APPREC> (.030)<F1>
<PER-SHARE-DIVIDEND> .560<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.660<F1>
<EXPENSE-RATIO> .560<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 202
<NAME> THE ONE GROUP MUNICIPAL INCOME FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 291275
<INVESTMENTS-AT-VALUE> 291562
<RECEIVABLES> 7254
<ASSETS-OTHER> 6
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 298822
<PAYABLE-FOR-SECURITIES> 5985
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2731
<TOTAL-LIABILITIES> 8716
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 297878
<SHARES-COMMON-STOCK> 2662<F1>
<SHARES-COMMON-PRIOR> 1735<F1>
<ACCUMULATED-NII-CURRENT> 20
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 8079
<ACCUM-APPREC-OR-DEPREC> 287
<NET-ASSETS> 290106
<DIVIDEND-INCOME> 82
<INTEREST-INCOME> 15260
<OTHER-INCOME> 0
<EXPENSES-NET> 1561
<NET-INVESTMENT-INCOME> 13781
<REALIZED-GAINS-CURRENT> (2505)
<APPREC-INCREASE-CURRENT> 1176
<NET-CHANGE-FROM-OPS> 12452
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 996<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 1933<F1>
<NUMBER-OF-SHARES-REDEEMED> 522<F1>
<SHARES-REINVESTED> 72<F1>
<NET-CHANGE-IN-ASSETS> 84402
<ACCUMULATED-NII-PRIOR> 19
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 6399
<GROSS-ADVISORY-FEES> 1103
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2068
<AVERAGE-NET-ASSETS> 18334<F1>
<PER-SHARE-NAV-BEGIN> 9.720<F1>
<PER-SHARE-NII> .550<F1>
<PER-SHARE-GAIN-APPREC> (.040)<F1>
<PER-SHARE-DIVIDEND> .540<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.690<F1>
<EXPENSE-RATIO> .810<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 203
<NAME> THE ONE GROUP MUNICIPAL INCOME FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 291275
<INVESTMENTS-AT-VALUE> 291562
<RECEIVABLES> 7254
<ASSETS-OTHER> 6
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 298822
<PAYABLE-FOR-SECURITIES> 5985
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2731
<TOTAL-LIABILITIES> 8716
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 297878
<SHARES-COMMON-STOCK> 2403<F1>
<SHARES-COMMON-PRIOR> 1232<F1>
<ACCUMULATED-NII-CURRENT> 20
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 8079
<ACCUM-APPREC-OR-DEPREC> 287
<NET-ASSETS> 290106
<DIVIDEND-INCOME> 82
<INTEREST-INCOME> 15260
<OTHER-INCOME> 0
<EXPENSES-NET> 1561
<NET-INVESTMENT-INCOME> 13781
<REALIZED-GAINS-CURRENT> (2505)
<APPREC-INCREASE-CURRENT> 1176
<NET-CHANGE-FROM-OPS> 12452
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 666<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 1612<F1>
<NUMBER-OF-SHARES-REDEEMED> 108<F1>
<SHARES-REINVESTED> 40<F1>
<NET-CHANGE-IN-ASSETS> 84402
<ACCUMULATED-NII-PRIOR> 19
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 6399
<GROSS-ADVISORY-FEES> 1103
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2068
<AVERAGE-NET-ASSETS> 13913<F1>
<PER-SHARE-NAV-BEGIN> 9.690<F1>
<PER-SHARE-NII> .470<F1>
<PER-SHARE-GAIN-APPREC> (.030)<F1>
<PER-SHARE-DIVIDEND> .470<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.660<F1>
<EXPENSE-RATIO> 1.460<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 211
<NAME> THE ONE GROUP OHIO MUNICIPAL MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 96754
<INVESTMENTS-AT-VALUE> 96754
<RECEIVABLES> 626
<ASSETS-OTHER> 2
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 97382
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 335
<TOTAL-LIABILITIES> 335
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 97098
<SHARES-COMMON-STOCK> 55946<F1>
<SHARES-COMMON-PRIOR> 51806<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 51
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 97047
<DIVIDEND-INCOME> 43
<INTEREST-INCOME> 3394
<OTHER-INCOME> 0
<EXPENSES-NET> 496
<NET-INVESTMENT-INCOME> 2941
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 2941
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1610<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 165403<F1>
<NUMBER-OF-SHARES-REDEEMED> 161325<F1>
<SHARES-REINVESTED> 62<F1>
<NET-CHANGE-IN-ASSETS> 9451
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 10
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 286
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 823
<AVERAGE-NET-ASSETS> 49562<F1>
<PER-SHARE-NAV-BEGIN> 1.000<F1>
<PER-SHARE-NII> .033<F1>
<PER-SHARE-GAIN-APPREC> .000<F1>
<PER-SHARE-DIVIDEND> .033<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 1.000<F1>
<EXPENSE-RATIO> .410<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 212
<NAME> THE ONE GROUP OHIO MUNICIPAL MONEY MARKET FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 96754
<INVESTMENTS-AT-VALUE> 96754
<RECEIVABLES> 626
<ASSETS-OTHER> 2
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 97382
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 335
<TOTAL-LIABILITIES> 335
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 97098
<SHARES-COMMON-STOCK> 41152<F1>
<SHARES-COMMON-PRIOR> 35800<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 51
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 97047
<DIVIDEND-INCOME> 43
<INTEREST-INCOME> 3394
<OTHER-INCOME> 0
<EXPENSES-NET> 496
<NET-INVESTMENT-INCOME> 2941
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 2941
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1372<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 172412<F1>
<NUMBER-OF-SHARES-REDEEMED> 168335<F1>
<SHARES-REINVESTED> 1275<F1>
<NET-CHANGE-IN-ASSETS> 9451
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 10
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 286
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 823
<AVERAGE-NET-ASSETS> 45783<F1>
<PER-SHARE-NAV-BEGIN> 1.000<F1>
<PER-SHARE-NII> .030<F1>
<PER-SHARE-GAIN-APPREC> .000<F1>
<PER-SHARE-DIVIDEND> .030<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 1.000<F1>
<EXPENSE-RATIO> .660<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 221
<NAME> THE ONE GROUP INTERMEDIATE BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 248425
<INVESTMENTS-AT-VALUE> 245651
<RECEIVABLES> 19022
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 254895
<PAYABLE-FOR-SECURITIES> 1991
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2309
<TOTAL-LIABILITIES> 4300
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 257643
<SHARES-COMMON-STOCK> 23457<F1>
<SHARES-COMMON-PRIOR> 21562<F1>
<ACCUMULATED-NII-CURRENT> 94
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 4368
<ACCUM-APPREC-OR-DEPREC> (2774)
<NET-ASSETS> 250595
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 16008
<OTHER-INCOME> 91
<EXPENSES-NET> 1282
<NET-INVESTMENT-INCOME> 14817
<REALIZED-GAINS-CURRENT> 1421
<APPREC-INCREASE-CURRENT> (5722)
<NET-CHANGE-FROM-OPS> 10516
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 14065<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 10266<F1>
<NUMBER-OF-SHARES-REDEEMED> 6200<F1>
<SHARES-REINVESTED> 296<F1>
<NET-CHANGE-IN-ASSETS> 54172
<ACCUMULATED-NII-PRIOR> 119
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 4475
<GROSS-ADVISORY-FEES> 1359
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2042
<AVERAGE-NET-ASSETS> 214376<F1>
<PER-SHARE-NAV-BEGIN> 10.010<F1>
<PER-SHARE-NII> .660<F1>
<PER-SHARE-GAIN-APPREC> (.170)<F1>
<PER-SHARE-DIVIDEND> .000<F1>
<PER-SHARE-DISTRIBUTIONS> .660<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.840<F1>
<EXPENSE-RATIO> .540<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 222
<NAME> THE ONE GROUP INTERMEDIATE BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 248425
<INVESTMENTS-AT-VALUE> 245651
<RECEIVABLES> 19022
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 254895
<PAYABLE-FOR-SECURITIES> 1991
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2309
<TOTAL-LIABILITIES> 4300
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 257643
<SHARES-COMMON-STOCK> 1389<F1>
<SHARES-COMMON-PRIOR> 955<F1>
<ACCUMULATED-NII-CURRENT> 94
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 4368
<ACCUM-APPREC-OR-DEPREC> (2774)
<NET-ASSETS> 250595
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 16008
<OTHER-INCOME> 91
<EXPENSES-NET> 1282
<NET-INVESTMENT-INCOME> 14817
<REALIZED-GAINS-CURRENT> 1421
<APPREC-INCREASE-CURRENT> (5722)
<NET-CHANGE-FROM-OPS> 10516
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 607<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 1231<F1>
<NUMBER-OF-SHARES-REDEEMED> 373<F1>
<SHARES-REINVESTED> 39<F1>
<NET-CHANGE-IN-ASSETS> 54172
<ACCUMULATED-NII-PRIOR> 119
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 4475
<GROSS-ADVISORY-FEES> 1359
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2042
<AVERAGE-NET-ASSETS> 9582<F1>
<PER-SHARE-NAV-BEGIN> 10.040<F1>
<PER-SHARE-NII> .640<F1>
<PER-SHARE-GAIN-APPREC> (.170)<F1>
<PER-SHARE-DIVIDEND> .000<F1>
<PER-SHARE-DISTRIBUTIONS> .640<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.870<F1>
<EXPENSE-RATIO> .790<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 223
<NAME> THE ONE GROUP INTERMEDIATE BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 248425
<INVESTMENTS-AT-VALUE> 245651
<RECEIVABLES> 19022
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 254895
<PAYABLE-FOR-SECURITIES> 1991
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2309
<TOTAL-LIABILITIES> 4300
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 257643
<SHARES-COMMON-STOCK> 618<F1>
<SHARES-COMMON-PRIOR> 200<F1>
<ACCUMULATED-NII-CURRENT> 94
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 4368
<ACCUM-APPREC-OR-DEPREC> (2774)
<NET-ASSETS> 250595
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 16008
<OTHER-INCOME> 91
<EXPENSES-NET> 1282
<NET-INVESTMENT-INCOME> 14817
<REALIZED-GAINS-CURRENT> 1421
<APPREC-INCREASE-CURRENT> (5722)
<NET-CHANGE-FROM-OPS> 10516
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 144<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 617<F1>
<NUMBER-OF-SHARES-REDEEMED> 34<F1>
<SHARES-REINVESTED> 8<F1>
<NET-CHANGE-IN-ASSETS> 54172
<ACCUMULATED-NII-PRIOR> 119
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 4475
<GROSS-ADVISORY-FEES> 1359
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2042
<AVERAGE-NET-ASSETS> 2522<F1>
<PER-SHARE-NAV-BEGIN> 10.010<F1>
<PER-SHARE-NII> .580<F1>
<PER-SHARE-GAIN-APPREC> (.180)<F1>
<PER-SHARE-DIVIDEND> .000<F1>
<PER-SHARE-DISTRIBUTIONS> .580<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.830<F1>
<EXPENSE-RATIO> 1.440<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 231
<NAME> THE ONE GROUP LARGE COMPANY GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 717380
<INVESTMENTS-AT-VALUE> 876968
<RECEIVABLES> 2540
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 879509
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2148
<TOTAL-LIABILITIES> 2148
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 693730
<SHARES-COMMON-STOCK> 48320<F1>
<SHARES-COMMON-PRIOR> 39480<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 45
<ACCUMULATED-NET-GAINS> 41035
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 53991
<NET-ASSETS> 559617
<DIVIDEND-INCOME> 14838
<INTEREST-INCOME> 1068
<OTHER-INCOME> 74
<EXPENSES-NET> 7514
<NET-INVESTMENT-INCOME> 8466
<REALIZED-GAINS-CURRENT> 29317
<APPREC-INCREASE-CURRENT> 85542
<NET-CHANGE-FROM-OPS> 123325
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 7991<F1>
<DISTRIBUTIONS-OF-GAINS> 7625<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 17295<F1>
<NUMBER-OF-SHARES-REDEEMED> 9049<F1>
<SHARES-REINVESTED> 594<F1>
<NET-CHANGE-IN-ASSETS> 311420
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 3247
<OVERDISTRIB-NII-PRIOR> 10
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5481
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7810
<AVERAGE-NET-ASSETS> 662145<F1>
<PER-SHARE-NAV-BEGIN> 13.470<F1>
<PER-SHARE-NII> .180<F1>
<PER-SHARE-GAIN-APPREC> 2.140<F1>
<PER-SHARE-DIVIDEND> .000<F1>
<PER-SHARE-DISTRIBUTIONS> .350<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 15.440<F1>
<EXPENSE-RATIO> .960<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 232
<NAME> THE ONE GROUP LARGE COMPANY GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 717380
<INVESTMENTS-AT-VALUE> 876968
<RECEIVABLES> 2540
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 879509
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2148
<TOTAL-LIABILITIES> 2148
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 693730
<SHARES-COMMON-STOCK> 4745<F1>
<SHARES-COMMON-PRIOR> 1983<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 45
<ACCUMULATED-NET-GAINS> 41035
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 53991
<NET-ASSETS> 559617
<DIVIDEND-INCOME> 14838
<INTEREST-INCOME> 1068
<OTHER-INCOME> 74
<EXPENSES-NET> 7514
<NET-INVESTMENT-INCOME> 8466
<REALIZED-GAINS-CURRENT> 29317
<APPREC-INCREASE-CURRENT> 85542
<NET-CHANGE-FROM-OPS> 123325
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 482<F1>
<DISTRIBUTIONS-OF-GAINS> 558<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 3373<F1>
<NUMBER-OF-SHARES-REDEEMED> 674<F1>
<SHARES-REINVESTED> 63<F1>
<NET-CHANGE-IN-ASSETS> 311420
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 3247
<OVERDISTRIB-NII-PRIOR> 10
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5481
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7810
<AVERAGE-NET-ASSETS> 51294<F1>
<PER-SHARE-NAV-BEGIN> 13.830<F1>
<PER-SHARE-NII> .140<F1>
<PER-SHARE-GAIN-APPREC> 2.170<F1>
<PER-SHARE-DIVIDEND> .000<F1>
<PER-SHARE-DISTRIBUTIONS> .310<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 15.830<F1>
<EXPENSE-RATIO> 1.210<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 233
<NAME> THE ONE GROUP LARGE COMPANY GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 717380
<INVESTMENTS-AT-VALUE> 876968
<RECEIVABLES> 2540
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 879509
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2148
<TOTAL-LIABILITIES> 2148
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 693730
<SHARES-COMMON-STOCK> 3600<F1>
<SHARES-COMMON-PRIOR> 507<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 45
<ACCUMULATED-NET-GAINS> 41035
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 53991
<NET-ASSETS> 559617
<DIVIDEND-INCOME> 14838
<INTEREST-INCOME> 1068
<OTHER-INCOME> 74
<EXPENSES-NET> 7514
<NET-INVESTMENT-INCOME> 8466
<REALIZED-GAINS-CURRENT> 29317
<APPREC-INCREASE-CURRENT> 85542
<NET-CHANGE-FROM-OPS> 123325
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 68<F1>
<DISTRIBUTIONS-OF-GAINS> 253<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 3229<F1>
<NUMBER-OF-SHARES-REDEEMED> 163<F1>
<SHARES-REINVESTED> 27<F1>
<NET-CHANGE-IN-ASSETS> 311420
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 3247
<OVERDISTRIB-NII-PRIOR> 10
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5481
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7810
<AVERAGE-NET-ASSETS> 27569<F1>
<PER-SHARE-NAV-BEGIN> 13.630<F1>
<PER-SHARE-NII> .050<F1>
<PER-SHARE-GAIN-APPREC> 2.170<F1>
<PER-SHARE-DIVIDEND> .000<F1>
<PER-SHARE-DISTRIBUTIONS> .220<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 15.630<F1>
<EXPENSE-RATIO> 1.960<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B Class
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 241
<NAME> THE ONE GROUP KENTUCKY MUNICIPAL BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 39153
<INVESTMENTS-AT-VALUE> 39523
<RECEIVABLES> 684
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 40207
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 272
<TOTAL-LIABILITIES> 272
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 41380
<SHARES-COMMON-STOCK> 3018<F1>
<SHARES-COMMON-PRIOR> 3203<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 1815
<ACCUM-APPREC-OR-DEPREC> 370
<NET-ASSETS> 39935
<DIVIDEND-INCOME> 17
<INTEREST-INCOME> 2128
<OTHER-INCOME> 0
<EXPENSES-NET> 300
<NET-INVESTMENT-INCOME> 1845
<REALIZED-GAINS-CURRENT> (36)
<APPREC-INCREASE-CURRENT> 571
<NET-CHANGE-FROM-OPS> 2380
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1450<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 593<F1>
<NUMBER-OF-SHARES-REDEEMED> 856<F1>
<SHARES-REINVESTED> 4<F1>
<NET-CHANGE-IN-ASSETS> (1482)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 1856
<GROSS-ADVISORY-FEES> 241
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 445
<AVERAGE-NET-ASSETS> 31498<F1>
<PER-SHARE-NAV-BEGIN> 9.920<F1>
<PER-SHARE-NII> .500<F1>
<PER-SHARE-GAIN-APPREC> .120<F1>
<PER-SHARE-DIVIDEND> .500<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 10.040<F1>
<EXPENSE-RATIO> .680<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 242
<NAME> THE ONE GROUP KENTUCKY MUNICIPAL BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 39153
<INVESTMENTS-AT-VALUE> 39523
<RECEIVABLES> 684
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 40207
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 272
<TOTAL-LIABILITIES> 272
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 41380
<SHARES-COMMON-STOCK> 814<F1>
<SHARES-COMMON-PRIOR> 842<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 1815
<ACCUM-APPREC-OR-DEPREC> 370
<NET-ASSETS> 39935
<DIVIDEND-INCOME> 17
<INTEREST-INCOME> 2128
<OTHER-INCOME> 0
<EXPENSES-NET> 300
<NET-INVESTMENT-INCOME> 1845
<REALIZED-GAINS-CURRENT> (36)
<APPREC-INCREASE-CURRENT> 571
<NET-CHANGE-FROM-OPS> 2380
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 374<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 48<F1>
<NUMBER-OF-SHARES-REDEEMED> 140<F1>
<SHARES-REINVESTED> 18<F1>
<NET-CHANGE-IN-ASSETS> (1482)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 1856
<GROSS-ADVISORY-FEES> 241
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 445
<AVERAGE-NET-ASSETS> 8601<F1>
<PER-SHARE-NAV-BEGIN> 9.930<F1>
<PER-SHARE-NII> .440<F1>
<PER-SHARE-GAIN-APPREC> .120<F1>
<PER-SHARE-DIVIDEND> .440<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 10.050<F1>
<EXPENSE-RATIO> .930<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 243
<NAME> THE ONE GROUP KENTUCKY MUNICIPAL BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 39153
<INVESTMENTS-AT-VALUE> 39523
<RECEIVABLES> 684
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 40207
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 272
<TOTAL-LIABILITIES> 272
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 41380
<SHARES-COMMON-STOCK> 146<F1>
<SHARES-COMMON-PRIOR> 24<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 1815
<ACCUM-APPREC-OR-DEPREC> 370
<NET-ASSETS> 39935
<DIVIDEND-INCOME> 17
<INTEREST-INCOME> 2128
<OTHER-INCOME> 0
<EXPENSES-NET> 300
<NET-INVESTMENT-INCOME> 1845
<REALIZED-GAINS-CURRENT> (36)
<APPREC-INCREASE-CURRENT> 571
<NET-CHANGE-FROM-OPS> 2380
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 21<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 138<F1>
<NUMBER-OF-SHARES-REDEEMED> 1<F1>
<SHARES-REINVESTED> 1<F1>
<NET-CHANGE-IN-ASSETS> (1482)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 1856
<GROSS-ADVISORY-FEES> 241
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 445
<AVERAGE-NET-ASSETS> 532<F1>
<PER-SHARE-NAV-BEGIN> 9.870<F1>
<PER-SHARE-NII> .380<F1>
<PER-SHARE-GAIN-APPREC> .130<F1>
<PER-SHARE-DIVIDEND> .390<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.990<F1>
<EXPENSE-RATIO> 1.580<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 251
<NAME> THE ONE GROUP LOUISIANA MUNICIPAL BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 7-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> DEC-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 189709
<INVESTMENTS-AT-VALUE> 192835
<RECEIVABLES> 3261
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 196096
<PAYABLE-FOR-SECURITIES> 2395
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 958
<TOTAL-LIABILITIES> 3353
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 190213
<SHARES-COMMON-STOCK> 13706<F1>
<SHARES-COMMON-PRIOR> 0<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 596
<ACCUM-APPREC-OR-DEPREC> 3126
<NET-ASSETS> 192743
<DIVIDEND-INCOME> 40
<INTEREST-INCOME> 6372
<OTHER-INCOME> 0
<EXPENSES-NET> 834
<NET-INVESTMENT-INCOME> 5578
<REALIZED-GAINS-CURRENT> (146)
<APPREC-INCREASE-CURRENT> (3198)
<NET-CHANGE-FROM-OPS> 2234
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1732<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 13956<F1>
<NUMBER-OF-SHARES-REDEEMED> 250<F1>
<SHARES-REINVESTED> 0<F1>
<NET-CHANGE-IN-ASSETS> (15491)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 450
<GROSS-ADVISORY-FEES> 641
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1052
<AVERAGE-NET-ASSETS> 136910<F1>
<PER-SHARE-NAV-BEGIN> 10.000<F1>
<PER-SHARE-NII> .130<F1>
<PER-SHARE-GAIN-APPREC> (.070)<F1>
<PER-SHARE-DIVIDEND> .130<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.930<F1>
<EXPENSE-RATIO> .710<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Fiduciary Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 252
<NAME> THE ONE GROUP LOUISIANA MUNICIPAL BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 7-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> DEC-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 189709
<INVESTMENTS-AT-VALUE> 192835
<RECEIVABLES> 3261
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 196096
<PAYABLE-FOR-SECURITIES> 2395
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 958
<TOTAL-LIABILITIES> 3353
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 190213
<SHARES-COMMON-STOCK> 5388<F1>
<SHARES-COMMON-PRIOR> 19149<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 596
<ACCUM-APPREC-OR-DEPREC> 3126
<NET-ASSETS> 192743
<DIVIDEND-INCOME> 40
<INTEREST-INCOME> 6372
<OTHER-INCOME> 0
<EXPENSES-NET> 834
<NET-INVESTMENT-INCOME> 5578
<REALIZED-GAINS-CURRENT> (146)
<APPREC-INCREASE-CURRENT> (3198)
<NET-CHANGE-FROM-OPS> 2234
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3782<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 1784<F1>
<NUMBER-OF-SHARES-REDEEMED> 15630<F1>
<SHARES-REINVESTED> 85<F1>
<NET-CHANGE-IN-ASSETS> (15491)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 450
<GROSS-ADVISORY-FEES> 641
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1052
<AVERAGE-NET-ASSETS> 56014<F1>
<PER-SHARE-NAV-BEGIN> 10.090<F1>
<PER-SHARE-NII> .240<F1>
<PER-SHARE-GAIN-APPREC> (.160)<F1>
<PER-SHARE-DIVIDEND> .240<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.930<F1>
<EXPENSE-RATIO> .690<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class A Shares
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 253
<NAME> THE ONE GROUP LOUISIANA MUNICIPAL BOND FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 7-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> DEC-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 189709
<INVESTMENTS-AT-VALUE> 192835
<RECEIVABLES> 3261
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 196096
<PAYABLE-FOR-SECURITIES> 2395
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 958
<TOTAL-LIABILITIES> 3353
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 190213
<SHARES-COMMON-STOCK> 325<F1>
<SHARES-COMMON-PRIOR> 196<F1>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 596
<ACCUM-APPREC-OR-DEPREC> 3126
<NET-ASSETS> 192743
<DIVIDEND-INCOME> 40
<INTEREST-INCOME> 6372
<OTHER-INCOME> 0
<EXPENSES-NET> 834
<NET-INVESTMENT-INCOME> 5578
<REALIZED-GAINS-CURRENT> (146)
<APPREC-INCREASE-CURRENT> (3198)
<NET-CHANGE-FROM-OPS> 2234
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 64<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 155<F1>
<NUMBER-OF-SHARES-REDEEMED> 27<F1>
<SHARES-REINVESTED> 4<F1>
<NET-CHANGE-IN-ASSETS> (15491)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 450
<GROSS-ADVISORY-FEES> 641
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1052
<AVERAGE-NET-ASSETS> 3062<F1>
<PER-SHARE-NAV-BEGIN> 10.090<F1>
<PER-SHARE-NII> .210<F1>
<PER-SHARE-GAIN-APPREC> (.160)<F1>
<PER-SHARE-DIVIDEND> .210<F1>
<PER-SHARE-DISTRIBUTIONS> .000<F1>
<RETURNS-OF-CAPITAL> .000<F1>
<PER-SHARE-NAV-END> 9.930<F1>
<EXPENSE-RATIO> 1.500<F1>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F1>Class B Shares
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 261
<NAME> GULF SOUTH GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 7 MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> DEC-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 81892
<INVESTMENTS-AT-VALUE> 104032
<RECEIVABLES> 130
<ASSETS-OTHER> 198
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 104360
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 88
<TOTAL-LIABILITIES> 88
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 77424
<SHARES-COMMON-STOCK> 7757<F2>
<SHARES-COMMON-PRIOR> 0<F2>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4708
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 22140
<NET-ASSETS> 104272
<DIVIDEND-INCOME> 237
<INTEREST-INCOME> 191
<OTHER-INCOME> 21
<EXPENSES-NET> 611
<NET-INVESTMENT-INCOME> (162)
<REALIZED-GAINS-CURRENT> 20607
<APPREC-INCREASE-CURRENT> (8026)
<NET-CHANGE-FROM-OPS> 12419
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F2>
<DISTRIBUTIONS-OF-GAINS> 237<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 8116<F2>
<NUMBER-OF-SHARES-REDEEMED> 360<F2>
<SHARES-REINVESTED> 1<F2>
<NET-CHANGE-IN-ASSETS> 6991
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 414
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 644
<AVERAGE-NET-ASSETS> 88184<F2>
<PER-SHARE-NAV-BEGIN> 10.00<F2>
<PER-SHARE-NII> .78<F2>
<PER-SHARE-GAIN-APPREC> 0<F2>
<PER-SHARE-DIVIDEND> 0.03<F2>
<PER-SHARE-DISTRIBUTIONS> 0<F2>
<RETURNS-OF-CAPITAL> 0<F2>
<PER-SHARE-NAV-END> 10.75<F2>
<EXPENSE-RATIO> .96<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Fiduciary Share Class
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 262
<NAME> GULF SOUTH GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 7 MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> DEC-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 81892
<INVESTMENTS-AT-VALUE> 104032
<RECEIVABLES> 130
<ASSETS-OTHER> 198
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 104360
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 88
<TOTAL-LIABILITIES> 88
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 77424
<SHARES-COMMON-STOCK> 1710<F2>
<SHARES-COMMON-PRIOR> 5286<F2>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4708
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 22140
<NET-ASSETS> 104272
<DIVIDEND-INCOME> 237
<INTEREST-INCOME> 191
<OTHER-INCOME> 21
<EXPENSES-NET> 611
<NET-INVESTMENT-INCOME> (162)
<REALIZED-GAINS-CURRENT> 20607
<APPREC-INCREASE-CURRENT> (8026)
<NET-CHANGE-FROM-OPS> 12419
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F2>
<DISTRIBUTIONS-OF-GAINS> 17443<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 4064<F2>
<NUMBER-OF-SHARES-REDEEMED> 8516<F2>
<SHARES-REINVESTED> 876<F2>
<NET-CHANGE-IN-ASSETS> 6991
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 414
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 644
<AVERAGE-NET-ASSETS> 59886<F2>
<PER-SHARE-NAV-BEGIN> 11.50<F2>
<PER-SHARE-NII> (.07)<F2>
<PER-SHARE-GAIN-APPREC> 1.40<F2>
<PER-SHARE-DIVIDEND> 0<F2>
<PER-SHARE-DISTRIBUTIONS> 2.10<F2>
<RETURNS-OF-CAPITAL> 0<F2>
<PER-SHARE-NAV-END> 10.73<F2>
<EXPENSE-RATIO> 1.05<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Class A Shares
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 263
<NAME> GULF SOUTH GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 7 MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> DEC-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 81892
<INVESTMENTS-AT-VALUE> 104032
<RECEIVABLES> 130
<ASSETS-OTHER> 198
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 104360
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 88
<TOTAL-LIABILITIES> 88
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 77424
<SHARES-COMMON-STOCK> 237<F2>
<SHARES-COMMON-PRIOR> 101<F2>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4708
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 22140
<NET-ASSETS> 104272
<DIVIDEND-INCOME> 237
<INTEREST-INCOME> 191
<OTHER-INCOME> 21
<EXPENSES-NET> 611
<NET-INVESTMENT-INCOME> (162)
<REALIZED-GAINS-CURRENT> 20607
<APPREC-INCREASE-CURRENT> (8026)
<NET-CHANGE-FROM-OPS> 12419
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0<F2>
<DISTRIBUTIONS-OF-GAINS> 393<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 123<F2>
<NUMBER-OF-SHARES-REDEEMED> 12<F2>
<SHARES-REINVESTED> 25<F2>
<NET-CHANGE-IN-ASSETS> 6991
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 414
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 644
<AVERAGE-NET-ASSETS> 2167<F2>
<PER-SHARE-NAV-BEGIN> 11.56<F2>
<PER-SHARE-NII> (.06)<F2>
<PER-SHARE-GAIN-APPREC> 1.35<F2>
<PER-SHARE-DIVIDEND> 0<F2>
<PER-SHARE-DISTRIBUTIONS> 2.13<F2>
<RETURNS-OF-CAPITAL> 0<F2>
<PER-SHARE-NAV-END> 10.72<F2>
<EXPENSE-RATIO> 1.87<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Class B Shares
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 271
<NAME> VALUE GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 7-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> DEC-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 206479
<INVESTMENTS-AT-VALUE> 231863
<RECEIVABLES> 821
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 232684
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 815
<TOTAL-LIABILITIES> 815
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 174138
<SHARES-COMMON-STOCK> 18398<F2>
<SHARES-COMMON-PRIOR> 0<F2>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 12
<ACCUMULATED-NET-GAINS> 32307
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 25436
<NET-ASSETS> 231869
<DIVIDEND-INCOME> 2167
<INTEREST-INCOME> 379
<OTHER-INCOME> 78
<EXPENSES-NET> 1299
<NET-INVESTMENT-INCOME> 1254
<REALIZED-GAINS-CURRENT> 50010
<APPREC-INCREASE-CURRENT> (28550)
<NET-CHANGE-FROM-OPS> 22714
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 574<F2>
<DISTRIBUTIONS-OF-GAINS> 0<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 18953<F2>
<NUMBER-OF-SHARES-REDEEMED> 556<F2>
<SHARES-REINVESTED> 1<F2>
<NET-CHANGE-IN-ASSETS> 47291
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 17560
<OVERDISTRIB-NII-PRIOR> 2382
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 965
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1413
<AVERAGE-NET-ASSETS> 0<F2>
<PER-SHARE-NAV-BEGIN> 10.00<F2>
<PER-SHARE-NII> .03<F2>
<PER-SHARE-GAIN-APPREC> .39<F2>
<PER-SHARE-DIVIDEND> .03<F2>
<PER-SHARE-DISTRIBUTIONS> 0<F2>
<RETURNS-OF-CAPITAL> 0<F2>
<PER-SHARE-NAV-END> 10.39<F2>
<EXPENSE-RATIO> .95<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Fiduciary Share Class
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 272
<NAME> VALUE GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 7-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> DEC-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 206479
<INVESTMENTS-AT-VALUE> 231863
<RECEIVABLES> 821
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 232684
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 815
<TOTAL-LIABILITIES> 815
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 174138
<SHARES-COMMON-STOCK> 3462<F2>
<SHARES-COMMON-PRIOR> 12814<F2>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 12
<ACCUMULATED-NET-GAINS> 32307
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 25436
<NET-ASSETS> 231869
<DIVIDEND-INCOME> 2167
<INTEREST-INCOME> 379
<OTHER-INCOME> 78
<EXPENSES-NET> 1299
<NET-INVESTMENT-INCOME> 1254
<REALIZED-GAINS-CURRENT> 50010
<APPREC-INCREASE-CURRENT> (28550)
<NET-CHANGE-FROM-OPS> 22714
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 685<F2>
<DISTRIBUTIONS-OF-GAINS> 34705<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 8698<F2>
<NUMBER-OF-SHARES-REDEEMED> 19795<F2>
<SHARES-REINVESTED> 1745<F2>
<NET-CHANGE-IN-ASSETS> 47291
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 17560
<OVERDISTRIB-NII-PRIOR> 2382
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 965
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1413
<AVERAGE-NET-ASSETS> 136400<F2>
<PER-SHARE-NAV-BEGIN> 11.15<F2>
<PER-SHARE-NII> .94<F2>
<PER-SHARE-GAIN-APPREC> .08<F2>
<PER-SHARE-DIVIDEND> .95<F2>
<PER-SHARE-DISTRIBUTIONS> .83<F2>
<RETURNS-OF-CAPITAL> 0<F2>
<PER-SHARE-NAV-END> 10.39<F2>
<EXPENSE-RATIO> .97<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Class A Shares
</FN>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000763852
<NAME> THE ONE GROUP FAMILY OF MUTUAL FUNDS
<SERIES>
<NUMBER> 273
<NAME> VALUE GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 7-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> DEC-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 206479
<INVESTMENTS-AT-VALUE> 231863
<RECEIVABLES> 821
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 232684
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 815
<TOTAL-LIABILITIES> 815
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 174138
<SHARES-COMMON-STOCK> 450<F2>
<SHARES-COMMON-PRIOR> 172<F2>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 12
<ACCUMULATED-NET-GAINS> 32307
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 25436
<NET-ASSETS> 231869
<DIVIDEND-INCOME> 2167
<INTEREST-INCOME> 379
<OTHER-INCOME> 78
<EXPENSES-NET> 1299
<NET-INVESTMENT-INCOME> 1254
<REALIZED-GAINS-CURRENT> 50010
<APPREC-INCREASE-CURRENT> <28550>
<NET-CHANGE-FROM-OPS> 22714
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5<F2>
<DISTRIBUTIONS-OF-GAINS> 557<F2>
<DISTRIBUTIONS-OTHER> 0<F2>
<NUMBER-OF-SHARES-SOLD> 258<F2>
<NUMBER-OF-SHARES-REDEEMED> 16<F2>
<SHARES-REINVESTED> 36<F2>
<NET-CHANGE-IN-ASSETS> 47291
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 17560
<OVERDISTRIB-NII-PRIOR> 2382
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 965
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1413
<AVERAGE-NET-ASSETS> 3776<F2>
<PER-SHARE-NAV-BEGIN> 11.16<F2>
<PER-SHARE-NII> .91<F2>
<PER-SHARE-GAIN-APPREC> .07<F2>
<PER-SHARE-DIVIDEND> .92<F2>
<PER-SHARE-DISTRIBUTIONS> .83<F2>
<RETURNS-OF-CAPITAL> 0<F2>
<PER-SHARE-NAV-END> 10.39<F2>
<EXPENSE-RATIO> 1.86<F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<FN>
<F2>Class B Shares
</FN>
</TABLE>
