ONE GROUP, N-30D, 1998-03-03

ONE GROUP
N-30D, 1998-03-03

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<PAGE> 1

Institutional Money
Market Funds
Semi-Annual Report
For the six months ended December 31, 1997

TREASURY ONLY MONEY MARKET FUND

GOVERNMENT MONEY MARKET FUND

[THE ONE GROUP FAMILY OF MUTUAL FUNDS LOGO]
<PAGE> 2
----------------------------------------------------------

IMPORTANT CUSTOMER INFORMATION. INVESTMENT PRODUCTS:

* are not deposits or obligations of, or guaranteed by,
BANC ONE CORPORATION or any of its affiliates,

* are not insured by the FDIC, and
----
* are subject to investment risks, including possible FDIC
loss of the principal amount invested. LOGO
----
-----------------------------------------------------------

<PAGE> 3

- --------------------------------------------------------------------------------
Table of Contents
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS DECEMBER 31, 1997

Report From Your Investment Advisor........................................ 2
Portfolio Performance Review............................................... 4
Schedules of Portfolio Investments.......................................... 6
Statements of Assets and Liabilities........................................ 8
Statements of Operations.................................................... 9
Statements of Changes in Net Assets........................................ 10
Notes to Financial Statements.............................................. 11
Financial Highlights....................................................... 14

<PAGE> 4

- --------------------------------------------------------------------------------
Report From Your Investment Advisor
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS DECEMBER 31, 1997

We are pleased to present this semiannual report for The One Group(R) Family of
Mutual Funds. On the following pages, you will find an overview of the financial
markets and your fund's performance for the period from July 1, 1997, through
December 31, 1997.

DEAR VALUED SHAREHOLDER:
Thank you for continuing to support The One Group Family of Mutual Funds during
an interesting, challenging and ultimately rewarding year for investors.

Despite strong volatility throughout 1997 and turmoil in Asia, the Dow Jones
Industrial Average was up 24.94% for 1997. Never before had the index returned
more than 20% for three consecutive years. The S&P 500 Index soared even higher,
closing the year up 33.36%.

At the same time, and largely the result of low inflation, a strong U.S. dollar
and the flight to quality spurred by the Asian crisis, U.S. bond yields ended
the year on an impressive note. The 30-year Treasury, for example, ended the
year yielding 5.92%, close to its 20-year low. (As bond yields fall, bond prices
go up.)

ONCE AGAIN, A PHILOSOPHY REINFORCED
While the calendar-year returns for both the stock and bond markets are
impressive, events in the final six months of 1997 may be the most memorable. On
August 6, the Dow closed at 8,259, a record high and its peak for the calendar
year. Shortly thereafter, though, volatility rocked the market, as the effects
of the Asian financial crisis worked their way west. These forces culminated on
Monday, October 27, when the Dow plummeted more than 554 points, its
largest-ever point decline.

This drop may be the defining moment for 1997's financial markets, and it
presented a significant challenge for investors. But, rather than panicking,
shareholders of The One Group demonstrated a clear understanding of market
dynamics and the importance of maintaining a long-term investment philosophy.

I am pleased to report that there were no significant redemptions of One Group
shares after "Black Monday." To us, this implies that our investors understand
the potential dangers of selling their investments based on short-term
volatility. In fact, The One Group experienced a record purchase day on Tuesday,
October 28, indicating that investors realize the benefits of staying focused on
the stock market's long-term potential.

TAX BILL CHANGES FACE OF INVESTING
The second half of 1997 may be remembered as much for the jubilance it brought
investors as for the turmoil. The Taxpayer Relief Act of 1997 became law,
ushering in lower capital gains taxes for investors and new investment
opportunities poised to change the face of investing for years to come.

The cut in the capital gains tax rate may make investing in stocks even more
attractive for many investors. As you are planning for your future financial
needs and taking into consideration your appropriate asset allocation, please do
not overlook the impact of the new tax treatment of capital gains.

And, while you're planning for your financial future, take note that the 1997
tax law makes investing in IRAs even more attractive, particularly with the
introduction of the Roth IRA, a new type of account that offers tax-exempt
distributions in retirement. In addition, the Traditional IRA has been enhanced
with many new features.

The One Group can help you incorporate any of these retirement accounts into
your investment plan. Speak to your investment representative or call
1-800-480-4111 for more information on IRAs.

SEEK ADVICE FOR A YEAR'S WORTH OF EVENTS
With 1997's record volatility and the new investment opportunities introduced by
the tax law, now may be an ideal time to meet with your investment professional
and make sure your investment plan remains on track to meet your financial
needs.

As you probably know, your asset allocation--or the way your investment dollars
are strategically distributed among stock, bond and cash investments according
to your goals, risk tolerance and investing time frame--may be the
single-greatest determinant of your long-term investment success. After a year
full of market ups and downs, your asset allocation probably shifted. For
example, stock market appreciation may have caused your allocation to equities
to swing higher than called for in your plan. Your investment professional can
help you evaluate your plan and, if necessary, get it back on track.

2
<PAGE> 5

- --------------------------------------------------------------------------------
Report From Your Investment Advisor, continued
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS DECEMBER 31, 1997

Furthermore, your investment representative can help you make the most of the
Taxpayer Relief Act of 1997. Many of the provisions take effect with the 1998
tax year, so make sure you start off the year with the strategy that's most
appropriate for you.

Thank you for investing with The One Group Family of Mutual Funds and for your
ongoing support of the firm's time-tested investment philosophies. We look
forward to helping you achieve your financial goals in 1998 and beyond.

Sincerely,

/s/ DAVID J. KUNDERT
- ---------------------
David J. Kundert
President and CEO,
Banc One Investment Advisors Corporation,
Investment Advisor to The One Group

[DAVID J. KUNDERT PHOTO]

For a prospectus with more complete information on The One Group Investor Funds,
including management fees and expenses, please contact The One Group at
1-800-480-4111. Please read the prospectus carefully before investing.
(2/98)

3
<PAGE> 6

- --------------------------------------------------------------------------------
Portfolio Performance Review
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS DECEMBER 31, 1997

ECONOMIC GROWTH REMAINS STRONG
Despite showing a slight slowdown from the first half of the year, U.S. economic
growth during the second half of 1997 remained robust at a growth rate of 3.7%.
For the entire 12-month period, the U.S. economy grew by a 3.8% growth rate.

Firm employment gains and strong consumer confidence fueled the growth rate. The
unemployment rate headed steadily downward, ending the year at 4.7%. The economy
witnessed an average of 301,500 new non-farm jobs being created per month, when
all that is needed to absorb the growth in the labor force and keep the
unemployment rate steady is 150,000.

LONG-TERM INTEREST RATES DECLINE
Slightly higher inflation in 1996 kept long-term interest rates relatively high
throughout much of 1997. With prices climbing 3.3% on a year-over-year basis in
1996, investors feared that inflation would keep that pace or even climb higher
in 1997.

But, as the year unfolded it became apparent that inflation was, indeed, under
control. For the final six months of the year the inflation rate was 2.0%, and
for the entire year prices were up only 1.7%, the best performance in 11 years.

Low prices helped pave the way for a significant decline in long-term interest
rates by the end of the year. Also significant was the impact of the Asian
financial crisis, which caused currency values to plunge and sent financial
markets into turmoil. As worldwide events unfolded during the second half of the
year, it became clear that the Asian economies would weaken. This caused
investors throughout the world to turn to the safety of U.S. Treasury
securities, which helped drive up prices.

As a result of these events, long-term interest rates showed a significant
decline during the second half of 1997--a decline that was much greater than the
economic fundamentals supported. At the end of the year, the yield on the
30-year U.S. Treasury bond was 5.92%, after starting the year at 6.64% and
climbing to a high of 7.17% in early April.

FED REMAINS IDLE
The Federal Reserve remained on the sidelines during the second half of the
year, after raising interest rates just once in all of 1997--a 0.25% increase of
the federal funds rate in March. This lack of monetary policy action kept
short-term interest rates relatively steady for the remainder of the year.

The impact of the Asian currency crisis and market meltdowns may have
contributed to the Fed's decision to keep rates unchanged in the second half of
1997. While strong economic growth certainly created a valid reason for another
rate hike, the Fed resisted the temptation, figuring that the Asian situation
would contribute to slower growth ahead.

LOOKING AHEAD
In terms of U.S. economic growth, the Asian crisis remains a factor that can't
be ignored. Thirty percent of U.S. exports go to Asia, and with many Asian
countries facing currency devaluations of 35% to 80%, consumers in that region
have significantly less purchasing power. Furthermore, there's the possibility
that this currency crisis could spread to Latin America, where another 20% of
U.S. exports are at risk if there are some currency devaluations.

The United States accounts for 28% of the non-Asian global economy, and,
therefore, should be heavily influenced by the change in trade flows from Asia.
Asian stock markets have dropped nearly 70% over the last several months, which
undoubtedly will be reflected in lower overall consumption, particularly for
foreign imports. And, as prices on goods produced in Asia continue to fall, U.S.
imports from that region should go up.

As a result, cheaper goods coming from Asia, and possibly Latin America, should
force domestic competitors to lower their prices (or face sharply lower sales
prospects). This could push the U.S. inflation rate to as low as 1.5% in 1998,
compared to 1.7% in 1997 and 3.3% in 1996. At the same time, fewer U.S. exports
and greater imports should cause economic growth to slow to a 2% year-over-year
average for 1998.

4
<PAGE> 7
- --------------------------------------------------------------------------------
Portfolio Performance Review, continued
- --------------------------------------------------------------------------------
THE ONE GROUP FAMILY OF MUTUAL FUNDS DECEMBER 31, 1997

Given all the instability overseas and the impending effects of a slowdown in
the U.S. economy, we believe that the Federal Reserve will lower interest rates
in 1998, probably sometime in the second half of the year. Long-term interest
rates should continue their downward trend, due to lower inflation and lower
economic growth. By the end of the year, we may see the yield on the 30-year
Treasury bond somewhere between 5.5% and 5.75%.

/s/ ANTHONY CHAN
- ------------------
Anthony Chan, Ph.D.
Managing Director and Chief Economist
Banc One Investment Advisors

5
<PAGE> 8

- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
Treasury Only Money Market Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in Thousands)
(Unaudited)

<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- --------- ----------------------------------- ----------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS (98.6%):
U.S. Treasury Bills (25.7%):
$125,412 1/22/98 (b)........................ $125,033
4,490 2/5/98............................. 4,467
2,489 2/12/98............................ 2,473
5,000 3/5/98............................. 4,953
52,500 3/26/98............................ 51,861
8,940 11/12/98........................... 8,528
--------
197,315
--------
</TABLE>

<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- --------- ----------------------------------- ----------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS, CONTINUED:
U.S. Treasury Notes (72.9%):
$100,000 7.88%, 1/15/98..................... $100,090
125,000 5.63%, 1/31/98..................... 124,993
189,177 7.25%, 2/17/98..................... 189,546
75,000 5.13%, 2/28/98..................... 74,950
1,065 7.88%, 4/15/98..................... 1,072
50,000 7.88%, 4/30/98 (b)................. 50,060
5,000 5.25%, 7/31/98..................... 4,990
15,000 6.13%, 8/31/98..................... 15,039
--------
560,740
--------
Total U.S. Treasury Obligations 758,055
--------
Total (Amortized Cost $758,055) (a) $758,055
========
</TABLE>

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

Percentages indicated are based on net assets of $768,616.

(a) Cost and value for federal income tax and financial reporting purposes are
the same.

(b) A portion of this security was loaned as of December 31, 1997.

See notes to financial statements.

6
<PAGE> 9

- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
Government Money Market Fund
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS DECEMBER 31, 1997
(Amounts in Thousands)
(Unaudited)

<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- --------- ----------------------------------- ----------
<S> <C> <C>
U.S. GOVERNMENT AGENCY SECURITIES (46.2%):
Federal Farm Credit Bank (4.9%):
$ 25,000 5.66%, 1/30/98..................... $ 24,888
25,000 5.45%, 3/3/98...................... 24,988
25,000 5.60%, 10/1/98..................... 24,960
----------
74,836
----------
Federal Home Loan Bank (10.9%):
9,750 5.99%, 2/9/98...................... 9,753
25,000 6.12%, 4/17/98..................... 24,999
45,000 5.90%, 6/19/98..................... 45,049
25,000 5.80%, 9/18/98..................... 25,013
7,550 5.69%, 10/2/98..................... 7,552
20,000 5.68%, 10/16/98.................... 19,989
10,000 5.90%, 10/23/98*................... 9,998
25,000 5.84%, 12/17/98.................... 24,987
----------
167,340
----------
Federal Home Loan Mortgage Corp. (3.7%):
25,000 5.73%, 2/20/98..................... 24,804
6,500 5.72%, 3/17/98..................... 6,501
25,000 5.95%, 6/19/98..................... 24,994
----------
56,299
----------
Federal National Mortgage Assoc. (19.6%):
22,000 5.48%, 1/2/98...................... 22,000
25,000 5.48%, 1/2/98...................... 25,000
45,000 5.55%, 1/28/98..................... 44,815
25,000 5.48%, 2/5/98...................... 24,869
25,000 6.02%, 4/15/98..................... 24,993
25,000 6.08%, 5/6/98...................... 25,031
48,420 5.89%, 5/21/98..................... 48,405
25,000 5.72%, 8/28/98..................... 25,016
20,000 5.71%, 9/9/98...................... 19,982
10,000 5.94%, 11/4/98*.................... 9,997
4,000 5.50%, 6/2/99*..................... 4,000
20,000 5.50%, 7/26/99*.................... 20,000
10,000 5.50%, 9/22/99*.................... 10,000
----------
304,108
----------
</TABLE>

<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT SECURITY DESCRIPTION COST
- --------- ----------------------------------- ----------
<S> <C> <C>
U.S. GOVERNMENT AGENCY SECURITIES, CONTINUED:
Student Loan Marketing Assoc. (7.1%):
$ 65,000 5.62%, 9/28/98*.................... $ 64,914
25,000 5.62%, 11/10/98*................... 24,999
10,000 5.64%, 1/13/99*.................... 10,000
10,000 5.65%, 8/2/99*..................... 9,998
----------
109,911
----------
Total U.S. Government Agency Securities 712,494
----------
U.S. TREASURY OBLIGATIONS (1.6%):
U.S. Treasury Notes (1.6%):
25,000 5.25%, 7/31/98..................... 24,949
----------
Total U.S. Treasury Obligations 24,949
----------
REPURCHASE AGREEMENTS (52.2%):
325,000 Barclays De Zoette Wedd Securities,
Inc., 6.67%, 1/2/98
(collateralized by $320,594
various U.S. Government Agency
Securities, 5.95% - 7.00%,
1/8/98 - 8/13/07, market value
$331,501)........................ 325,000
352,000 HSBC Securities, Inc., 6.60%,
1/2/98 (collateralized by
$355,405 various U.S. Government
Agency Securities, 0.00% - 9.65%,
2/2/98 - 11/2/18, market value
$359,041)........................ 352,000
77,000 Lehman Brothers Holdings, Inc.,
5.90%, 1/2/98 (collateralized by
$214,151 various U.S. Treasury
STRIPS, 11/15/04 - 2/15/26,
market value $78,541)............ 77,000
51,233 Prudential Securities, 6.80%,
1/2/98 (collateralized by $73,843
various U.S. Goverment
Securities, 0.00% - 9.25%,
2/4/00 - 10/1/27, market value
$52,532)......................... 51,233
----------
Total Repurchase Agreements 805,233
----------
Total (Amortized Cost $1,542,676) (a) $1,542,676
==========
</TABLE>

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

Percentages indicated are based on net assets of $1,542,248.

(a) Cost and value for federal income tax and financial reporting purposes are
the same.

* Securities having interest rates that reset weekly based on the U.S. Treasury
Bill auctions. The rate reflected on the Schedule of Portfolio Investments is
the rate in effect at December 31, 1997.

See notes to financial statements.

<PAGE> 10

- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1997
(Amounts in Thousands, except per share amounts)
(Unaudited)

<TABLE>
<CAPTION>
TREASURY ONLY GOVERNMENT
MONEY MARKET MONEY MARKET
FUND FUND
------------- -------------
<S> <C> <C>
ASSETS:
Investments, at amortized cost.............................. $758,055 $ 737,443
Repurchase agreements, at cost.............................. -- 805,233
-------- ----------
Total....................................................... 758,055 1,542,676
Cash........................................................ 1 --
Interest receivable......................................... 13,971 7,428
Deferred organization costs................................. 1 10
Prepaid expenses and other assets........................... -- 12
-------- ----------
TOTAL ASSETS................................................ 772,028 1,550,126
-------- ----------
LIABILITIES:
Dividends payable........................................... 3,315 7,697
Accrued expenses and other payables:
Investment advisory fees............................... 51 111
Administration fees.................................... 32 70
Other.................................................. 14 --
-------- ----------
TOTAL LIABILITIES........................................... 3,412 7,878
-------- ----------
NET ASSETS:
Capital..................................................... 768,705 1,542,372
Accumulated undistributed net realized gains (losses) from
investment transactions................................... (89) (124)
-------- ----------
NET ASSETS.................................................. $768,616 $1,542,248
======== ==========
Outstanding shares of beneficial interest................... 768,703 1,542,372
======== ==========
Net Asset Value:
Offering and redemption price per share................... $1.00 $1.00
======== =======
</TABLE>

See notes to financial statements.

8
<PAGE> 11

- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 1997
(Amounts in Thousands)
(Unaudited)

<TABLE>
<CAPTION>
TREASURY ONLY GOVERNMENT
MONEY MARKET MONEY MARKET
FUND FUND
------------- -------------
<S> <C> <C>
INVESTMENT INCOME:
Interest income............................................. $16,252 $39,842
Income from securities lending.............................. 85 3
------- -------
TOTAL INCOME................................................ 16,337 39,845
------- -------
EXPENSES:
Investment advisory fees.................................... 246 561
Administration fees......................................... 153 351
Custodian and accounting fees............................... 14 24
Legal and audit fees........................................ 2 --
Organization costs.......................................... 2 10
Trustees' fees and expenses................................. 4 4
Transfer agent fees......................................... 5 2
Registration and filing fees................................ 15 67
Printing costs.............................................. 1 1
Other....................................................... 18 3
------- -------
TOTAL EXPENSES.............................................. 460 1,023
------- -------
Net Investment Income....................................... 15,877 38,822
------- -------
REALIZED GAINS (LOSSES) FROM INVESTMENT TRANSACTIONS:
Net realized gains (losses) from investment transactions.... 3 61
------- -------
Net increase in net assets resulting from operations........ $15,880 $38,883
======= =======
</TABLE>

See notes to financial statements.

9
<PAGE> 12

- --------------------------------------------------------------------------------
The One Group Family of Mutual Funds
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
(Amounts in Thousands)
<TABLE>
<CAPTION>
TREASURY ONLY MONEY GOVERNMENT MONEY
MARKET FUND MARKET FUND
-------------------------- --------------------------
<S> <C> <C> <C> <C>
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30,
1997 1997 1997 1997
----------- ----------- ----------- -----------

<CAPTION>
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income...................... $ 15,877 $ 24,629 $ 38,822 $ 56,288
Net realized gains (losses) from investment
transactions............................. 3 (16) 61 (119)
----------- ----------- ----------- -----------
Change in net assets resulting from
operations.................................... 15,880 24,613 38,883 56,169
----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income................. (15,877) (24,629) (38,822) (56,288)
----------- ----------- ----------- -----------
Change in net assets from shareholder
distributions................................. (15,877) (24,629) (38,822) (56,288)
----------- ----------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued................ 1,093,772 1,603,666 2,956,522 4,075,935
Dividends reinvested....................... 1,501 3,409 7,351 11,375
Cost of shares redeemed.................... (807,520) (1,542,160) (2,505,124) (3,859,366)
----------- ----------- ----------- -----------
Change in net assets from share transactions.... 287,753 64,915 458,749 227,944
----------- ----------- ----------- -----------
Change in Net Assets............................ 287,756 64,899 458,810 227,825
NET ASSETS:
Beginning of period........................ 480,860 415,961 1,083,438 855,613
----------- ----------- ----------- -----------
End of period.............................. $ 768,616 $ 480,860 $ 1,542,248 $ 1,083,438
=========== =========== =========== ===========
SHARE TRANSACTIONS:
Issued..................................... 1,093,772 1,603,664 2,956,522 4,075,935
Reinvested................................. 1,501 3,409 7,351 11,375
Redeemed................................... (807,520) (1,542,160) (2,505,124) (3,859,366)
----------- ----------- ----------- -----------
Change in shares................................ 287,753 64,913 458,749 227,944
=========== =========== =========== ===========
</TABLE>

See notes to financial statements.

10
<PAGE> 13

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 accompanying financial
statements and financial highlights are those of the Treasury Only Money
Market Fund and the Government Money Market Fund (individually a "Fund",
collectively the "Funds") only. The Funds are diversified mutual funds and
are not offered in multiple classes.

The Funds' investment objectives are as follows:

<TABLE>
<CAPTION>
FUND OBJECTIVE
---- ---------
<S> <C>
Treasury Only Money Market Fund High current income with liquidity and stability of
principal with the added assurance of a fund that does
not purchase securities that are subject to repurchase
agreements.

Government Money Market Fund High current income with liquidity and stability of
principal.
</TABLE>

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 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

Securities are valued utilizing the amortized cost method permitted in
accordance with Rule 2a-7 under the 1940 Act. Under the amortized cost
method, discount or premium is amortized on a constant basis to the
maturity of the security. In addition, the Funds may not (a) purchase any
instrument with a remaining maturity greater than thirteen months unless
such instrument is subject to a demand feature, or (b) maintain a
dollar-weighted average maturity which exceeds 90 days.

REPURCHASE AGREEMENTS

The Government Money Market Fund may invest in repurchase agreements with
institutions that are deemed by Banc One Investment Advisors Corporation
(the "Advisor") to be of good standing and creditworthy under guidelines
established by the Board of Trustees. 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.

SECURITY TRANSACTIONS AND RELATED INCOME

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. Interest income, including any discount
or premium, is accrued as earned using the effective interest method.

11
<PAGE> 14

SECURITY TRANSACTIONS AND RELATED INCOME

Continued

12
<PAGE> 15

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
Advisor to be of good standing and creditworthy under guidelines
established by the Board of Trustees and when, in the judgment of the
Advisor, the consideration which can be earned currently from such
securities loans justifies the attendant risks. 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 December 31, 1997, the
following Fund had securities with the following amortized cost on loan
(amount in thousands):

<TABLE>
<CAPTION>
AMORTIZED COST
OF LOANED
SECURITIES
--------------
<S> <C>
Treasury Only Money Market Fund............................. $171,768
</TABLE>

The loaned securities were fully collateralized by cash and U.S.
Government securities as of December 31, 1997.

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.

DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS

Dividends from net investment income are declared daily and paid monthly.
Net investment income for this purpose consists of interest accrued and
discount earned (including both original issue discount and market
discount) less amortization of any market premium and accrued expenses.
Net realized capital gains, if any, are distributed at least annually.

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 expiring capital loss
carryforwards and deferrals of certain losses. Permanent book and tax
basis differences, if any, have been reclassified among the components of
net assets.

ORGANIZATION COSTS

Costs incurred by the Trust in connection with its organization,
including the fees and expenses of registering and qualifying its shares
for distribution have been deferred and are being amortized using the
straight-line method over a period of five years beginning with the
commencement of each Fund's operations. All such costs, which are
attributable to more than one fund of the Trust, have been allocated
among the respective funds pro-rata, based on the relative net assets of
each Fund. In the event that any of the initial shares are redeemed
during such period by any holder thereof, the related Fund will be
reimbursed by
Continued

12
<PAGE> 16

such holder for any unamortized organization costs in the proportion as
the number of initial shares being redeemed bears to the number of
initial shares outstanding at the time of redemption.

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 of net investment income and 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. The Trust is registered to offer forty
series and five classes of shares: Fiduciary, Class A, Class B, Class C and
Service Class. Currently, the Trust consists of thirty-three active Funds,
and not all Funds offer all classes of shares. As of December 31, 1997, there
were no shareholders 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.

4. INVESTMENT ADVISORY, ADMINISTRATIVE AND DISTRIBUTION AGREEMENTS:

The Trust and Advisor are parties to an investment advisory agreement under
which the Advisor is entitled to receive a fee, computed daily and paid
monthly, equal to 0.08% of the average daily net assets of each 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 0.05% of
each Fund's average daily net assets. The Advisor also serves as
Sub-Administrator to each fund of the Trust, pursuant to an agreement between
the Administrator and the Advisor. Pursuant to this agreement, the Advisor
performs many of the Administrator's duties, for which the Advisor receives a
fee paid by the Administrator.

The One Group Services Company (the "Distributor") and the Trust are parties
to a distribution agreement under which shares of the Funds are sold on a
continuous basis. No compensation is paid to the Distributor for distribution
services for 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.

13
<PAGE> 17

-----------------------------------------------------------------------------
The One Group Family of Mutual Funds

-----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
TREASURY ONLY MONEY MARKET FUND
--------------------------------------------------------------------
SIX MONTHS APRIL 16,
ENDED YEARS ENDED JUNE 30, 1993 TO
DECEMBER 31, ----------------------------------------- JUNE 30,
1997 1997 1996 1995 1994 1993(A)
------------ -------- -------- -------- -------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD........................ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- -------
Investment Activities:
Net investment income...................... 0.026 0.051 0.052 0.051 0.032 0.006
-------- -------- -------- -------- -------- -------
Distributions:
Net investment income...................... (0.026) (0.051) (0.052) (0.051) (0.032) (0.006)
-------- -------- -------- -------- -------- -------
NET ASSET VALUE,
END OF PERIOD.............................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ======== =======
Total Return................................. 2.64%(b) 5.24% 5.38% 5.22% 3.23% 2.96%(c)

RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).......... $768,616 $480,860 $415,961 $288,697 $217,725 $60,330
Ratio of expenses to average net assets.... 0.15%(c) 0.15% 0.17% 0.20% 0.15% 0.07%(c)
Ratio of net investment income to average
net assets............................... 5.18%(c) 5.12% 5.23% 5.14% 3.23% 2.95%(c)
Ratio of expenses to average net assets*... 0.15%(c) 0.15% 0.17% 0.21% 0.22% 0.33%(c)
Ratio of net investment income to average
net assets*.............................. 5.18%(c) 5.12% 5.23% 5.13% 3.16% 2.69%(c)
</TABLE>

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

* 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.

See notes to financial statements.

14
<PAGE> 18

<TABLE>
<CAPTION>
GOVERNMENT MONEY MARKET FUND
--------------------------------------------------------------------------
SIX MONTHS JUNE 14,
ENDED YEARS ENDED JUNE 30, 1993 TO
DECEMBER 31, ---------------------------------------------- JUNE 30,
1997 1997 1996 1995 1994 1993(a)
------------ ---------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD...................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- ---------- -------- -------- -------- --------
Investment Activities:
Net investment income.................... 0.028 0.053 0.055 0.053 0.033 0.001
---------- ---------- -------- -------- -------- --------
Distributions:
Net investment income.................... (0.028) (0.053) (0.055) (0.053) (0.033) (0.001)
---------- ---------- -------- -------- -------- --------
NET ASSET VALUE,
END OF PERIOD............................ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========== ========== ======== ======== ======== ========
Total Return............................... 2.82%(b) 5.43% 5.61% 5.41% 3.40% 3.28%(c)

RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)........ $1,542,248 $1,083,438 $855,613 $720,699 $692,253 $244,991
Ratio of expenses to average net
assets................................. 0.15%(c) 0.14% 0.18% 0.21% 0.11% 0.07%(c)
Ratio of net investment income to average
net assets............................. 5.53%(c) 5.31% 5.46% 5.28% 3.41% 3.13%(c)
Ratio of expenses to average net
assets*................................ 0.15%(c) 0.14% 0.18% 0.22% 0.20% 0.33%(c)
Ratio of net investment income to average
net assets*............................ 5.53%(c) 5.31% 5.46% 5.27% 3.32% 2.87%(c)
</TABLE>

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

See notes to financial statements.

<PAGE> 19

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<PAGE> 20
Important Customer Information.
Please Read:

Shares of The One Group:
* are not deposits or obligations
of, or guaranteed by, BANC ONE
CORPORATION or its affiliates
* are not insured or guaranteed by the
FDIC or by any other governmental
agency or government-sponsored
agency of the federal government
or any state
* are subject to investment risks,
including possible loss of the
principal amount invested.

Banc One Investment Advisors
Corporation, a registered investment
advisor and an indirect subsidiary of
BANC ONE CORPORATION, serves
as an investment advisor to The One
Group, for which it receives advisory
fees. The One Group is distributed by
The One Group Services Company,
3435 Stelzer Road, Columbus,
Ohio 43219, which is not affiliated
with BANC ONE CORPORATION and
is not a bank. Contact us at our web
site address: www.onegroup.com or
e-mail us at [email protected].

For more complete information on
any of The One Group Funds, including
management fees and expenses,
you may obtain a prospectus from
The One Group Services Company.
Read the prospectus carefully
before investing.

BANC ONE
INVESTMENT
ADVISORS
CORPORATION

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