<PAGE> 1
One Group(R) mutual funds
INSTITUTIONAL PRIME MONEY MARKET FUND
-------------------------------------
PROSPECTUS
March 18, 1999
This prospectus describes one money market mutual fund. The Fund
is offered only to certain institutional and accredited investors. The
information in this prospectus is important. Please read it carefully
before you invest, and save it for future reference.
Please remember that shares of the Fund: - Are not deposits or obligations
of, or guaranteed by BANK ONE CORPORATION or its affiliates; - Are not insured
or guaranteed by the Federal Deposit Insurance Corporation or by any federal or
state governmental agency; - Involve investment risk, including the possible
loss of the principal amount invested.
There is no assurance that the Fund will meet its investment objective or
be able to maintain a net asset value of $1.00 per share on a continuous basis.
These securities have not been approved or disapproved by the
Securities and Exchange Commission or any state securities commission
nor has the Securities and Exchange Commission or any state securities
commission passed upon the accuracy or adequacy of this prospectus.
Any representation to the contrary is a criminal offense.
*
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
A BRIEF PREVIEW OF THE FUND................................. 1
ABOUT THE FUND.............................................. 2
MORE ABOUT THE FUND......................................... 4
HOW TO DO BUSINESS WITH ONE GROUP MUTUAL FUNDS.............. 6
Purchasing Fund Shares.................................... 6
Exchanging Fund Shares.................................... 8
Redeeming Fund Shares..................................... 8
SHAREHOLDER INFORMATION..................................... 11
Voting Rights............................................. 11
Dividend Policies......................................... 11
Tax Treatment of the Fund................................. 11
Tax Treatment of Shareholders............................. 11
Shareholder Inquiries..................................... 12
ORGANIZATION AND MANAGEMENT OF THE FUND..................... 12
The Fund.................................................. 12
The Board of Trustees..................................... 12
The Advisor............................................... 12
The Distributor........................................... 12
The Administrator and Sub-Administrator................... 12
The Transfer Agent, Custodian and the Sub-Custodian....... 13
Year 2000................................................. 13
DETAILS ABOUT THE FUND'S INVESTMENT PRACTICES AND
POLICIES.................................................. 14
Investment Practices...................................... 14
Investment Risks.......................................... 16
Investment Policies....................................... 17
APPENDIX: DESCRIPTION OF RATINGS............................ 18
</TABLE>
<PAGE> 3
A BRIEF PREVIEW OF THE FUND
WHAT ARE THE GOALS OF ONE GROUP INSTITUTIONAL PRIME MONEY MARKET FUND?
The Fund seeks high current income consistent with the preservation of
capital and maintenance of liquidity. The Fund will use its best efforts to
maintain a constant net asset value of $1.00 per share, although there is no
guarantee that the Fund will be able to do so. Please read about the Fund before
investing.
WHAT IS THE FUND'S INVESTMENT STRATEGY?
The Fund will invest only in U.S. dollar-denominated securities, will
maintain an average maturity on a dollar-weighted basis of 90 days or less, and
will acquire only "eligible securities" that present minimal credit risks and
have a maturity of 397 days or less. The Fund intends to comply with Rule 2a-7
under the Investment Company Act of 1940. At least 25% of the Fund's total
assets will be invested in securities issued by companies in the financial
services sector, including asset-backed commercial paper programs.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
The Fund invests in securities that are backed by "credit enhancements"
such as letters of credit. The value of investments in the Fund could decrease
if the credit quality of the credit enhancement provider declines. The Fund
invests in mortgage-related securities which have significantly greater price
and yield volatility than traditional fixed income securities. In addition, the
Fund invests in U.S. dollar denominated foreign securities which may expose the
Fund to risks that are different from investments in U.S. Securities. An
investment in the Fund is not a deposit of BANK ONE CORPORATION or its
affiliates and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency. For more information about risks,
please read "More About the Fund" and "Investment Risks."
WHO CAN BUY SHARES?
The Fund currently offers shares only to institutional and other accredited
investors. For more details, please see the section of this prospectus entitled
"Purchasing Fund Shares."
HOW DO I PURCHASE AND REDEEM SHARES?
You may buy and redeem shares of the Fund on any day that the Fund is open
for business. Purchase and redemption procedures are explained in greater detail
in "How To Do Business With One Group Mutual Funds." For additional information,
call The One Group Services Company at 1-800-480-4111 or visit One Group Mutual
Funds' web site at www.OneGroup.com.
HOW ARE DIVIDENDS PAID?
Generally, dividends are declared on each business day and are distributed
periodically. Any capital gains are distributed at least annually. Distributions
are paid in additional shares of the same class unless you elect to take the
payment in cash. For a more detailed discussion of dividends, see "Dividend
Policies."
WHO MANAGES THE FUND?
Banc One Investment Advisors Corporation ("Banc One Investment Advisors"),
an indirect subsidiary of BANK ONE CORPORATION, serves as the advisor of the
Fund. Banc One Investment Advisors is paid a fee for its services. A more
detailed discussion regarding Banc One Investment Advisors, its services and
compensation can be found in the Prospectus under the headings "The Advisor" and
"Expense Summary."
1
<PAGE> 4
ONE GROUP(R)
INSTITUTIONAL PRIME MONEY MARKET FUND
INVESTMENT OBJECTIVE
The Fund is a diversified money market fund that seeks current income with
liquidity and stability of principal.
PORTFOLIO SECURITIES
The Fund invests exclusively in high quality money market instruments.
These instruments include U.S. Treasury obligations, obligations issued or
guaranteed by U.S. agencies or instrumentalities, mortgage-backed securities,
commercial paper, bank obligations and deposit notes. The Fund also may invest
in commercial paper issued by foreign issuers. The Fund will invest at least 25%
of its total assets in securities issued by companies in the financial services
industry, although the Fund may invest less than 25% of its total assets in that
industry if warranted due to adverse economic conditions, and if consistent with
the best interests of shareholders. The financial services industry includes,
but is not limited to, banks, broker-dealers, finance companies and other
issuers of asset-backed securities. Securities issued by these companies include
bankers acceptance, certificates of deposit, and asset-backed securities,
including commercial paper. Asset-backed securities will constitute a large
percentage of the Fund's investments. The Fund may invest up to 10% of its net
assets in illiquid investments such as certain restricted securities and private
placements. The Fund may also engage in securities lending. For a list of all of
the securities in which the Fund may invest, please read "Investment Practices."
RISK CONSIDERATIONS
The Fund invests in securities that are backed by "credit enhancements"
such as letters of credit. The value of your investment in the Fund could
decrease if the value of the securities in the portfolio decreases in response
to declining credit quality of a credit enhancement provider. The Fund also
invests in U.S. dollar denominated foreign investments which involve risks that
are different from investments in U.S. companies. In addition, the Fund invests
in mortgage-related securities which have significantly greater price and yield
volatility than traditional fixed-income securities. Before you invest, please
read "More About the Fund" and "Investment Risks."
SHAREHOLDER EXPENSES
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES (1)
------------------------------------
<S> <C>
Maximum Sales Charge Imposed on Purchases (as a percentage
of offering price) none
Maximum Contingent Deferred Sales Charge (as a percentage of
original purchase price or redemption proceeds, as
applicable) none
Redemption Fees none
Exchange Fees none
ANNUAL OPERATING EXPENSE (as a percentage of average daily
net assets)
Investment Advisory Fees(2) .08%
Other Expenses(3) .10%
Total Fund Operating Expenses (after fee waiver)(4) .18%
</TABLE>
- ---------------
(1) If you buy or sell shares through a Shareholder Servicing Agent, you may be
charged separate transaction fees by the Shareholder Servicing Agent.
(2) Without the fee waiver, Investment Advisory Fees would be .10%.
(3) Other Expenses are based on estimated amounts for the current fiscal year.
(4) Total Operating Expenses have been revised to reflect fee waivers. Without
the voluntary reduction of Investment Advisory Fees, Total Fund Operating
Expenses would be .20%.
2
<PAGE> 5
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the
Fund, assuming: (1) payment 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
- ------ -------
<S> <C>
$2 $6
</TABLE>
These examples are designed to assist you in understanding the various
costs and expenses that may be directly or indirectly paid by investors in the
Fund. THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
3
<PAGE> 6
ONE GROUP(R)
INSTITUTIONAL PRIME MONEY MARKET FUND
Financial Highlights
This section normally would include Financial Highlights for the Fund.
Because the Fund had not begun operations as of June 30, 1998, there are no
Financial Highlights for the Fund.
MORE ABOUT THE FUND
PORTFOLIO QUALITY
Securities will be purchased by the Fund only if Banc One Investment
Advisors determines that they present minimal credit risk under guidelines
adopted by the Board of Trustees. In addition, unless a more specific rating is
specified, all investments of the Fund must be rated in one of the three highest
rating categories described in "Description of Ratings" in the Appendix. If an
investment is unrated, Banc One Investment Advisors must determine that it is of
comparable quality to a rated security. Banc One Investment Advisors will look
at a security's rating at the time of investment. For more information about
ratings, please see "Description of Ratings" in the Appendix.
ILLIQUID INVESTMENTS
The Fund may invest up to 10% of its net assets in illiquid investments. A
security is illiquid if it cannot be sold at approximately the value assessed by
the Fund within seven (7) days. Banc One Investment Advisors will follow
guidelines adopted by the Board of Trustees of One Group Mutual Funds in
determining whether an investment is illiquid.
SPECIAL RISK CONSIDERATIONS
NET ASSET VALUE: There is no assurance that the Fund will meet its
investment objectives or be able to maintain a net asset value of $1.00 per
share on a continuous basis.
FIXED INCOME SECURITIES: The value of fixed income securities (for example,
bonds) will increase or decrease based on changes in interest rates. If rates
increase, the value of a Fund's investments generally declines. On the other
hand, if rates fall, the value of the investments generally increases. The value
of your investment in a Fund will increase or decrease as the value of the
Fund's investments increase and decrease. While securities with longer duration
and maturities tend to produce higher yields, they are also subject to greater
fluctuations in value when interest rates change. Usually changes in the value
of fixed income securities will not affect cash income generated, but may affect
the value of your investment. Fixed income securities also are subject to the
risk that the issuer of the security will be unable to meet its repayment
obligation.
DERIVATIVES: The Fund may invest in securities that are considered to be
derivatives. "Derivatives" are securities that derive their value from the
performance of underlying assets or securities. These securities may be more
volatile than other securities. These include mortgage-backed securities,
including collateralized mortgage obligations and Real Estate Mortgage
Investment Conduits (CMOs and REMICs) and asset-backed securities. Derivatives
may be riskier than traditional investments. Derivatives present, to varying
degrees, market, credit, leverage, liquidity, and management risks. The Fund's
use of derivatives may cause the Fund to recognize higher amounts of short-term
capital gains (generally taxed at ordinary income tax rates) than it would if
the Fund did not use such instruments. For a more detailed discussion of these
risks, please read "Investment Risks."
CONCENTRATION: The Fund will invest a significant portion of its assets in
the securities of companies in the financial services industry. Because of the
Fund's greater exposure to that industry, economic, political and regulatory
developments affecting the financial services industry will have a
disproportionate effect on the Fund.
4
<PAGE> 7
PREPAYMENT RISK: As part of its investment strategy, the Fund invests in
asset-backed securities. The issuers of these securities may be able to repay
principal early, especially when interest rates fall. Changes in prepayment
rates can make the price and yield of asset-backed securities volatile. When
obligations are prepaid, the Fund may have to reinvest in securities with lower
yields. The Fund may fail to recover premiums paid for the securities, resulting
in an unexpected capital loss.
5
<PAGE> 8
HOW TO DO BUSINESS WITH ONE GROUP MUTUAL FUNDS
PURCHASING FUND SHARES
WHERE CAN I BUY SHARES?
You may purchase Fund shares from the following sources:
- The One Group Services Company, and
- Shareholder Servicing Agents. These include investment advisors, brokers,
financial planners, banks, insurance companies, retirement or 401(k) plan
sponsors, or other intermediaries. Shares purchased this way will be held
for you by the Shareholder Servicing Agent.
WHO MAY PURCHASE FUND SHARES?
Fund shares may be purchased by:
- Commercial and retail institutional investors, including affiliates of
BANK ONE CORPORATION, that have opened accounts with the Fund's transfer
agent, State Street Bank and Trust Company, either directly or through a
Shareholder Servicing Agent.
- Individuals with a net worth, or joint net worth with their spouse, at
the time of purchase in excess of $1 million.
- Individuals with annual income, or joint annual income with their spouse,
at the time of purchase in excess of $200,000.
- If you have questions about eligibility, please call The One Group
Services Company at 1-800-480-4111.
WHEN CAN I BUY SHARES?
- Purchases may be made on any business day. This includes any day that the
Fund is open for business, other than weekends, days on which the New
York Stock Exchange ("NYSE") is closed, and the following holidays: New
Years Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day,
Thanksgiving, and Christmas.
- Purchase requests will be effective on the day received by The One Group
Services Company and you will be eligible to receive dividends declared
the same day, if (i) such purchase orders are received by The One Group
Services Company before 4:00 p.m., Eastern Time ("ET"), and (ii) the
Fund's custodian, State Street Bank and Trust Company, receives "federal
funds" before 4:00 p.m., ET on such day. If State Street Bank and Trust
Company does not receive federal funds by the cut-off time, the purchase
order will not be effective until the next Business Day on which federal
funds are timely received by State Street Bank and Trust Company.
- On occasion, the NYSE will close before 4:00 p.m. ET. When that happens,
purchase requests received after the NYSE closes will be effective the
following business day.
- If your shares are held by a Shareholder Servicing Agent, it is the
responsibility of the Shareholder Servicing Agent to send your purchase
or redemption order to the Fund. Your Shareholder Servicing Agent may
have an earlier cut-off time for purchase and redemption requests.
- The One Group Services Company can reject a purchase order if it does not
think that it is in the best interests of the Fund and/or its
shareholders to accept the order.
- Shares are electronically recorded. Therefore, certificates will not be
issued.
6
<PAGE> 9
HOW MUCH DO SHARES COST?
- Shares are sold at net asset value ("NAV").
- NAV per share is calculated by dividing the total market value of the
Fund's investment and other assets (minus expenses) by the number of
outstanding shares. The Fund uses its best efforts to maintain its NAV at
$1.00, although there is no guarantee that it will be able to do so.
- NAV is calculated each business day as of 4:00 p.m., ET. On occasion, the
NYSE will close before 4:00 p.m. ET. When that happens, NAV will be
calculated as of the time the NYSE closes.
HOW DO I OPEN AN ACCOUNT?
1. Read the prospectus carefully.
2. Decide how much you want to invest.
- The minimum initial investment is $1,000,000.
- Subsequent investments must be at least $5,000.
- The One Group Services Company may waive these minimums.
3. Complete the Account Application Form. Be sure to sign up for all of the
Account privileges that you plan to take advantage of. Doing so now
means that you will not have to complete additional paperwork later.
4. Send the completed application and a personal check (unless you choose
to pay by wire or bank transfer) payable to "One Group" to:
State Street Bank and Trust Company
c/o One Group
P.O. Box 8528
Boston, MA 02266-8528
5. All checks should be in U.S. dollars. Third party checks will not be
accepted. Redemptions from the Fund will not be permitted for ten (10)
calendar days if purchases are made by check.
6. If you purchase shares through a Shareholder Servicing Agent, you may be
required to complete additional forms or follow additional procedures.
You should contact your Shareholder Servicing Agent regarding purchases,
exchanges and redemptions.
7. If you have any questions, contact your Shareholder Servicing Agent or
call The One Group Services Company at 1-800-480-4111.
CAN I PURCHASE SHARES OVER THE TELEPHONE?
Yes. Simply select this option on your Account Application Form and then:
- Contact your Shareholder Servicing Agent or The One Group Services
Company at 1-800-480-4111 to relay your purchase instructions.
- Authorize a bank transfer or initiate a wire transfer payable to "One
Group" to State Street Bank and Trust Company at the following wire
address:
State Street Bank & Trust Company
Attn: Custody & Shareholder Services
ABA 011 000 028
DDA 99034167
FBO One Group Fund (ex: One Group Institutional Prime Money Market Fund)
Your Account Number (ex: 123456789)
Your Account Registration (ex: ABC Corporation)
7
<PAGE> 10
- One Group uses reasonable procedures to confirm that instructions given
by telephone are genuine. These procedures include recording telephone
instructions and asking for personal identification. If these procedures
are followed, One Group will not be responsible for any loss, liability,
cost or expense of acting upon unauthorized or fraudulent instructions;
you bear the risk of loss.
- You may revoke your right to make purchases over the telephone or by
sending a letter to:
State Street Bank and Trust Company
c/o One Group
P.O. Box 8528
Boston, MA 02266-8528
EXCHANGING FUND SHARES
WHAT ARE MY EXCHANGE PRIVILEGES?
- You may exchange your shares for shares of any other One Group
Institutional Money Market Fund.
- One Group may change the terms and conditions of your exchange privileges
upon 60 days written notice.
- One Group does not charge a fee for this privilege.
WHEN ARE EXCHANGES PROCESSED?
Exchanges are processed the same business day they are received, provided:
- State Street Bank and Trust Company receives the request by 2:00 p.m.,
ET.
- You have provided One Group with all of the information necessary to
process the exchange.
- You have received a current prospectus of the Fund or Funds in which you
wish to invest.
- You have contacted your Shareholder Servicing Agent, if necessary.
ARE EXCHANGES TAXABLE?
Generally:
- An exchange between Funds is considered a sale and may result in a
capital gain or loss for Federal income tax purposes.
- You should talk to your tax advisor before making an exchange.
ARE THERE LIMITS ON EXCHANGES?
Yes. The exchange privilege is not intended as a way for you to speculate
on short-term movements in the market. Therefore:
- To prevent disruptions in the management of the Funds, One Group limits
excessive exchange activity.
- Exchange activity is excessive if it EXCEEDS TWO SUBSTANTIVE EXCHANGE
REDEMPTIONS (WITHIN 30 DAYS OF EACH OTHER) WITHIN A TWELVE MONTH PERIOD.
- In addition, One Group reserves the right to reject any exchange request
(even those that are not excessive) if the Fund reasonably believes that
the exchange will result in excessive transaction cost or otherwise
adversely affect other shareholders.
REDEEMING FUND SHARES
WHEN CAN I REDEEM SHARES?
- Redemption requests received by The One Group Services Company before
4:00 p.m., ET (or when the NYSE closes), will be effective that day.
8
<PAGE> 11
HOW DO I REDEEM SHARES?
- Unless you have selected the telephone option on your Account Application
Form, you must send a written redemption request to your Shareholder
Servicing Agent, if applicable, or to State Street Bank and Trust Company
at the following address:
State Street Bank and Trust Company
c/o One Group
P.O. Box 8528
Boston, MA 02266-8528
- You may request redemption forms by calling The One Group Services
Company at 1-800-480-4111.
- State Street Bank and Trust Company may require that the signature on
your redemption request be guaranteed by a commercial bank, a member of a
domestic stock exchange, or a member of the Securities Transfer
Association Medallion Program or the Stock Exchange Medallion Program,
unless:
1. the redemption is for $50,000 worth of shares or less;
2. the redemption is payable to the shareholder of record;
3. the redemption check is mailed to the shareholder at the record
address; or
4. the redemption is payable by wire or bank transfer (ACH) to a
pre-existing bank account.
- On the Account Application Form you may elect to have the redemption
proceeds mailed or wired to:
1. a designated commercial bank; or
2. State Street Bank and Trust Company or your Shareholder Servicing
Agent.
- Your redemption proceeds will ordinarily be paid within seven days after
receipt of the redemption request. If you have wire instructions on file,
the Funds will attempt to honor requests for same day payment if the
request is received before 4:00 p.m., ET. If redemption requests are
received after 4:00 p.m., ET, the Funds will attempt to wire payment the
next business day.
- The Funds also will attempt to honor requests for payments in two
business days, if the redemption request is received after the time
listed above.
WHAT WILL MY SHARES BE WORTH?
- The NAV of shares of the Fund is expected to remain constant at $1.00 per
share, although there is no assurance that this will always be the case.
- You will receive the NAV calculated after your redemption request is
received. Please read "How Much Do Shares Cost?"
CAN I REDEEM BY TELEPHONE?
Yes, if you selected this option on your Account Application Form.
- Call your Shareholder Servicing Agent or The One Group Services Company
at 1-800-480-4111 to relay your redemption request.
- Your redemption proceeds will be mailed or wired to the commercial bank
account you designated on your Account Application Form.
- One Group uses reasonable procedures to confirm that instructions given
by telephone are genuine. These procedures include recording telephone
instructions and asking for personal identification. If these procedures
are followed, One Group will not be responsible for any loss, liability,
cost or expense of acting upon unauthorized or fraudulent instructions;
you bear the risk of loss.
9
<PAGE> 12
ADDITIONAL INFORMATION REGARDING REDEMPTIONS
- All redemptions will be for cash. The redemption price of shares is
expected to remain constant at $1.00 per share, although there is no
assurance that this will always be the case.
- If you redeem shares for which you paid by check, and One Group has not
yet received payment on the check, One Group will delay forwarding your
redemption proceeds for 10 or more days until payment has been collected
from your bank.
- One Group may suspend your ability to redeem when:
1. Trading on the NYSE is restricted.
2. The NYSE is closed (other than weekend and holiday closings).
3. The SEC has permitted a suspension.
4. An emergency exists.
The Statement of Additional Information offers more details about
this process.
- You generally will recognize a gain or loss on a redemption for Federal
income tax purposes. You should talk to your tax advisor before making a
redemption.
10
<PAGE> 13
SHAREHOLDER INFORMATION
VOTING RIGHTS
The Fund does not hold annual shareholder meetings, but may hold special
meetings. The special meetings are held, for example, to elect or remove
Trustees, change the Fund's fundamental investment objective, or approve an
investment advisory contract.
As a Fund shareholder, you have one vote for each share that you own. The
Fund, and each class of shares within the Fund, vote separately on matters
relating solely to the Fund or class, or which affect the Fund or class
differently. However, all shareholders will have equal voting rights on matters
that affect all shareholders equally.
DIVIDEND POLICIES
DIVIDENDS
The Fund generally declares dividends on each business day. Dividends are
distributed on the first business day of each month. Capital gains, if any, for
the Fund are distributed at least annually.
DIVIDEND REINVESTMENT
You automatically will receive all income dividends and capital gain
distributions in additional shares of the same Fund, unless you have elected to
take such payment in cash. The price of the shares is the NAV determined
immediately following the dividend record date. Reinvested dividends and
distributions receive the same tax treatment as dividends and distributions paid
in cash.
If you want to change the way in which you receive dividends and
distributions, you must write to State Street Bank & Trust Company at P.O. Box
8528, Boston, MA 02266-8528, at least 15 days prior to the distribution. The
change is effective upon receipt by State Street.
TAX TREATMENT OF THE FUND
TAX STATUS OF THE FUND
The Fund intends to qualify as a "regulated investment company" for Federal
income tax purposes. If the Fund qualifies, it will pay no federal income tax on
the earnings it distributes to shareholders.
TAX TREATMENT OF SHAREHOLDERS
TAXATION OF SHAREHOLDER TRANSACTIONS
A sale, exchange, or redemption of Fund shares may produce either a taxable
gain or a loss. You are responsible for any tax liabilities generated by your
transactions.
TAXATION OF DISTRIBUTIONS
The Fund will distribute substantially all of its net investment income
(including, for this purpose, net short-term capital gains over net long-term
capital losses) and, if any, net capital gains (i.e., the excess, if any, of net
long-term capital gains over net short-term capital losses) to investors on at
least an annual basis. Dividends you receive from the Fund, whether reinvested
or received in cash, will be taxable to you. Dividends from the Fund's net
investment income will be taxable as ordinary income and dividends from the
Fund's long-term capital gains will be taxable to you as such, regardless of how
long you have held the shares.
Dividends paid in January, but declared in October, November or December of
the previous year, will be considered to have been paid the previous year.
11
<PAGE> 14
TAX INFORMATION
The Form 1099 that is mailed to eligible taxpayers in January details your
dividends and their federal tax category. Even though the Fund provides you with
this information, you are responsible for verifying your tax liability with your
tax professional. For additional tax information see the Statement of Additional
Information. Please note that this tax discussion is general in nature; no
attempt has been made to present a complete explanation of the Federal, state,
local or foreign tax treatment of the Fund or its shareholders.
SHAREHOLDER INQUIRIES
If you have any questions or need additional information, please write The
One Group Services Company at 3435 Stelzer Road, Columbus, OH 43219 or call
1-800-480-4111.
REPORTING
In March and September you will receive a financial report from One Group. In
addition, One Group will periodically send you proxy statements and other
reports.
ORGANIZATION AND MANAGEMENT OF THE FUND
THE FUND
The Fund is a series of One Group Mutual Funds, an open-end management
investment company. One Group currently consists of 49 separate Funds. The other
48 Funds are described in separate prospectuses. The Fund described in this
prospectus is diversified. Each Fund is supervised by the Board of Trustees.
THE BOARD OF TRUSTEES
The Trustees oversee the management and administration of the Fund. The
Trustees are responsible for making major decisions about the Fund's investment
objectives and policies, but delegate the day-to-day administration of the Fund
to the officers of One Group.
THE ADVISOR
Banc One Investment Advisors makes the day-to-day investment decisions for
the Fund and continuously reviews, supervises and administers the Fund's
investment program. Banc One Investment Advisors has served as investment
advisor to One Group since 1993. Prior to that time, One Group was advised by
affiliates of Banc One Investment Advisors. In addition to One Group, Banc One
Investment Advisors serves as investment advisor to other mutual funds and
individual, corporate, charitable and retirement accounts. As of June 30, 1998,
Banc One Investment Advisors, an indirect, wholly-owned subsidiary of BANK ONE
CORPORATION, managed over $59 billion in assets.
THE DISTRIBUTOR
The One Group Services Company, 3435 Stelzer Road, Columbus, Ohio 43219, a
wholly-owned subsidiary of The BISYS Group, Inc., markets the Fund and
distributes shares through selling brokers, financial institutions, investment
advisors, and other financial representatives.
THE ADMINISTRATOR AND SUB-ADMINISTRATOR
The One Group Services Company also serves as the Fund's administrator. The
One Group Services Company is responsible for responding to shareholder
inquiries and requests for information, as well as providing regulatory
compliance and reporting. For these services, The One Group Services Company
receives an annual fee of .05% of the Fund's average daily assets. The fee is
calculated daily and paid monthly. Banc One
12
<PAGE> 15
Investment Advisors, the Sub-Administrator, provides office space, equipment,
and facilities, as well as legal and regulatory support.
THE TRANSFER AGENT, CUSTODIAN AND THE SUB-CUSTODIAN
State Street Bank and Trust Company, P.O. Box 8528, Boston, MA 02266-8528
or your Shareholder Servicing Agent, if appropriate, handles shareholder
recordkeeping and statements, distributes dividends, and processes buy and sell
requests. As the Fund's custodian, State Street holds the Fund's assets, settles
all portfolio trades and assists in calculating the Fund's net asset values.
Bank One Trust Company, N.A. serves as sub-custodian in connection with the
Fund's securities lending activities under an agreement with State Street Bank
and Trust Company. Bank One Trust Company, N.A. is paid a fee for this service.
YEAR 2000
Preparing for the Year 2000 is a high priority for One Group. Both The One
Group Services Company and Banc One Investment Advisors have formed dedicated
teams to help them successfully achieve Year 2000 compliance. In addition, these
teams are responsible for assessing the readiness of all other service providers
to One Group. Year 2000 remediation efforts are directed toward both information
technology and non-information technology systems. Non-information technology
systems include elevators, photocopy machines, and facsimile machines, and
should have no significant impact on the delivery of services to One Group.
Banc One Investment Advisors has identified 49 information technology
systems and interfaces that provide service and support to One Group. Each
system is assigned a priority rating: high, medium or low. Systems rated "high"
are those which are essential to the operation of One Group. Each system rated
"high" is scheduled to be Year 2000 compliant by December 31, 1998. All systems
will be tested for compliance throughout 1999.
Many, if not all, of the systems are owned or operated by third party
servicers (for example, One Group's Custodian). Consequently, remediation
efforts must be made by those servicers. Banc One Investment Advisors and The
One Group Services Company have, and will continue to, monitor the remediation
progress of the service providers. This process involves documentation, on-site
visits, and review of remediation plans and test results. Both Banc One
Investment Advisors and The One Group Services Company have budgeted in excess
of $700,000 in fiscal year 1998 and over $1 million in fiscal year 1999 toward
the remediation effort for all systems and interfaces. Neither One Group nor its
shareholders will bear any of the direct remediation expenses.
Neither The One Group Services Company nor Banc One Investment Advisors
currently anticipates that the move to Year 2000 will have a material impact on
their ability to continue to provide the Funds with service at current levels.
Likewise, One Group currently anticipates that the move to Year 2000 will not
have a material impact on its operations.
13
<PAGE> 16
DETAILS ABOUT THE FUND'S
INVESTMENT PRACTICES AND POLICIES
INVESTMENT PRACTICES
The Fund invests in a variety of securities and employs a number of
investment techniques. Each security and technique involves certain risks. What
follows is a list of the securities and techniques utilized by the Fund, as well
as the risks inherent in their use. Fixed income securities are primarily
influenced by market, credit and prepayment risks, although certain securities
may be subject to additional risks. For a more complete discussion, see the
Statement of Additional Information. Following the table is a more complete
discussion of risk.
<TABLE>
<CAPTION>
INSTRUMENT RISK TYPE
---------- ---------
<S> <C>
U.S. TREASURY OBLIGATIONS: Bills, notes, bonds, STRIPS, and Market
CUBES.
TREASURY RECEIPTS: TRS, TIGRs, and CATS. Market
U.S. GOVERNMENT AGENCY SECURITIES: Securities issued by Market
agencies and instrumentalities of the U.S. Government. These Credit
include Ginnie Mae, Fannie Mae, and Freddie Mac.
CERTIFICATES OF DEPOSIT: Negotiable instruments with a Market
stated maturity. Credit
Liquidity
TIME DEPOSITS: Non-negotiable receipts issued by a bank in Liquidity
exchange for the deposit of funds. Credit
Market
REPURCHASE AGREEMENTS: The purchase of a security and the Credit
simultaneous commitment to return the security to the seller Market
at an agreed upon price on an agreed upon date. This is Liquidity
treated as a loan.
REVERSE REPURCHASE AGREEMENT: The sale of a security and the Market
simultaneous commitment to buy the security back at an Leverage
agreed upon price on an agreed upon date. This is treated as
a borrowing by a Fund.
SECURITIES LENDING: The lending of up to 33 1/3% of the Credit
Fund's total assets. In return the Fund will receive cash, Market
other securities and/or letters of credit as collateral. Leverage
WHEN-ISSUED SECURITIES AND FORWARD COMMITMENTS: Purchase or Market
contract to purchase securities at a fixed price for Leverage
delivery at a future date. Liquidity
INVESTMENT COMPANY SECURITIES: Shares of other money market Market
mutual funds, including money market funds of One Group and
shares of other investment companies for which Banc One
Investment Advisors serves as investment advisor or
administrator. Banc One Investment Advisors will waive
certain fees when investing in funds for which it serves as
investment advisor.
EXTENDABLE COMMERCIAL NOTES: Notes which normally mature Credit
within a short period of time (e.g., one month) but which Market
may be extended by the issuer for a maximum of thirteen Liquidity
months. In the extended period, the rate payable on the
notes will change.
</TABLE>
14
<PAGE> 17
<TABLE>
<CAPTION>
INSTRUMENT RISK TYPE
---------- ---------
<S> <C>
BANKERS' ACCEPTANCES: Bills of exchange or time drafts drawn Credit
on and accepted by a commercial bank. Maturities are Liquidity
generally six months or less. Market
COMMERCIAL PAPER: Secured and unsecured short-term Credit
promissory notes issued by corporations and other entities. Liquidity
Maturities generally vary from a few days to nine months. Market
FOREIGN SECURITIES: Commercial paper of foreign issuers and Market
obligations of foreign banks, overseas branches of U.S. Political
banks and supranational entities. Liquidity
Foreign
Investment
RESTRICTED SECURITIES: Securities not registered under the Liquidity
Securities Act of 1933, such as privately placed commercial Market
paper and Rule 144A securities.
VARIABLE AND FLOATING RATE NOTES: Obligations with interest Market
rates which are reset daily, weekly, quarterly or some other Credit
period and which may be payable to the Fund on demand. Liquidity
MORTGAGE-BACKED SECURITIES: Debt obligations secured by real Pre-payment
estate loans and pools of loans. These include Market
collateralized mortgage obligations ("CMOs") and Real Estate Credit
Mortgage Investment Conduits ("REMICs"). Regulatory
DEMAND FEATURES: Securities that are subject to puts and Market
standby commitments to purchase the securities at a fixed Liquidity
price (usually with accrued interest) within a fixed period Management
of time following demand by a Fund.
MUNICIPAL SECURITIES: Securities issued by a state or Market
political subdivision to obtain funds for various public Credit
purposes. Municipal securities include private activity Political
bonds and industrial development bonds, as well as General Tax
Obligation Notes, Tax Anticipation Notes, Bond Anticipation
Notes, Revenue Anticipation Notes, Project Notes, other
short-term municipal obligations, municipal leases, and
obligations of municipal housing authorities and single
family revenue bonds.
SHORT-TERM FUNDING AGREEMENTS: Agreements issued by banks Market
and highly rated insurance companies such as Guaranteed Credit
Investment Contracts ("GICs") and Bank Investment Contracts Liquidity
("BICs").
PARTICIPATION INTERESTS: Interests in municipal securities, Credit
including municipal leases, from financial institutions such Tax
as commercial and investment banks, savings and loan Market
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 Fund to treat the income from the
investment as exempt from Federal Income Tax.
</TABLE>
15
<PAGE> 18
<TABLE>
<CAPTION>
INSTRUMENT RISK TYPE
---------- ---------
<S> <C>
ASSET-BACKED SECURITIES: Securities secured by company Pre-payment
receivables, home equity loans, truck and auto loans, Market
leases, credit card receivables and other securities backed Credit
by other types of receivables or other assets. Regulatory
</TABLE>
INVESTMENT RISKS
Below is a more complete discussion of the types of risks inherent in the
securities and investment techniques listed above. Because of these risks, the
value of the securities held by the Fund may fluctuate, as will the value of
your investment in the Fund. Certain investments are more susceptible to these
risks than others.
- CREDIT RISK. The risk that the issuer of a security, or the counterparty
to a contract, will default or otherwise become unable to honor a
financial obligation. Credit risk is generally higher for non-investment
grade securities. The price of a security can be adversely affected prior
to actual default as its credit status deteriorates and the probability
of default rises.
- LEVERAGE RISK. The risk associated with securities or practices (such as
borrowing) that multiply small index or market movements into large
changes in value. Leverage is often associated with investments in
derivatives, but also may be embedded directly in the characteristics of
other securities.
- LIQUIDITY RISK. The risk that certain securities may be difficult or
impossible to sell at the time and the price that normally prevails in
the market. The seller may have to lower the price, sell other securities
instead or forego an investment opportunity, any of which could have a
negative effect on fund management or performance. This includes the risk
of missing out on an investment opportunity because the assets necessary
to take advantage of it are tied up in less advantageous investments.
- MANAGEMENT RISK. The risk that a strategy used by a fund's management may
fail to produce the intended result. This includes the risk that changes
in the value of a hedging instrument will not match those of the asset
being hedged. Incomplete matching can result in unanticipated risks.
- MARKET RISK. The risk that the market value of a security may move up and
down, sometimes rapidly and unpredictably. These fluctuations may cause a
security to be worth less than the price originally paid for it, or less
than it was worth at an earlier time. Market risk may affect a single
issuer, industry, sector of the economy or the market as a whole. There
also is the risk that the current interest rate may not accurately
reflect existing market rates. For fixed income securities, market risk
is largely, but not exclusively, influenced by changes in interest rates.
A rise in interest rates typically causes a fall in values, while a fall
in rates typically causes a rise in values. Finally, key information
about a security or market may be inaccurate or unavailable.
- POLITICAL RISK. The risk of losses attributable to unfavorable
governmental or political actions, seizure of foreign deposits, changes
in tax or trade statutes, and governmental collapse and war.
- FOREIGN INVESTMENT RISK. Risks associated with higher transaction costs,
delayed settlements, currency controls, and adverse economic
developments. This also includes the risk that fluctuations in the
exchange rates between the U.S. dollar and foreign currencies may
negatively affect an investment. Adverse changes in exchange rates may
erode or reverse any gains produced by foreign currency denominated
investments and may widen any losses. Exchange rate volatility also may
affect the ability of an issuer to repay U.S. dollar denominated debt,
thereby increasing credit risk.
- PRE-PAYMENT RISK. The risk that the principal repayment of a security
will occur at an unexpected time, especially that the repayment of a
mortgage or asset-backed security occurs either significantly sooner or
later than expected. Changes in pre-payment rates can result in greater
price and yield volatility. Pre-payments generally accelerate when
interest rates decline. When mortgage and other obligations are pre-
paid, a Fund may have to reinvest in securities with a lower yield.
Further, with early repayment, a Fund may fail to recoup any premium
paid, resulting in an unexpected capital loss.
16
<PAGE> 19
- TAX RISK. The risk that the issuer of the securities will fail to comply
with certain requirements of the Internal Revenue Code, which would cause
adverse tax consequences.
- REGULATORY RISK. The risk associated with Federal and state laws which
may restrict the remedies that a mortgage lender has when a borrower
defaults on mortgage loans. These laws include restrictions on
foreclosures, redemption rights after foreclosure, Federal and state
bankruptcy and debtor relief laws, restrictions on "due on sale" clauses,
and state usury laws.
INVESTMENT POLICIES
The Fund's investment objective and the investment policies summarized
below are fundamental. This means that they cannot be changed without the
consent of a majority of the outstanding shares of the Fund. In addition to the
fundamental policies mentioned earlier, the following fundamental policies apply
to the Fund as specified. The full text of the fundamental policies can be found
in the Statement of Additional Information.
THE FUND:
1. Will use its best efforts to maintain a constant net asset value of
$1.00 per share, although there is no guarantee that the Fund will be
able to do so.
2. Will not 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.
3. Will not concentrate its investments in the securities of one or more
issuers conducting their principal business in a particular industry or
group of industries (except that the Fund may concentrate its
investments in securities issued by companies in the financial services
industry.) This does not include obligations issued or guaranteed by the
U.S. government or its agencies and instrumentalities, domestic bank
certificates of deposit or banker's acceptances, and repurchase
agreements involving such securities, municipal securities or
governmental guarantees of municipal securities. In addition, private
activity bonds backed only by the revenues and assets of a
non-governmental user will not be deemed to be municipal securities.
4. Will not purchase an issuer's securities if as a result more than 5% of
its total assets would be invested in the securities of that issuer or
the Fund would own more than 10% of the outstanding voting securities of
that issuer. This does not include securities issued or guaranteed by
the United States, its agencies or instrumentalities, and repurchase
agreements involving these securities. This restriction applies with
respect to 75% of the Fund's total assets. The Fund may invest the
remaining 25% of its total assets without restriction.
Additional investment policies can be found in the Statement of Additional
Information.
17
<PAGE> 20
APPENDIX
DESCRIPTION OF RATINGS
The following is a summary of published ratings by major credit rating
agencies. Credit ratings evaluate only the safety of principal and interest
payments, not the market value risk of lower quality securities. Credit rating
agencies may fail to change credit ratings to reflect subsequent events on a
timely basis. Although Banc One Investment Advisors considers security ratings
when making investment decisions, it also performs its own investment analysis
and does not rely solely on the ratings assigned by credit agencies.
Unrated securities will be treated as non-investment grade securities
unless Banc One Investment Advisors determines that such securities are the
equivalent of investment grade securities. Securities that have received
different ratings from more than one agency are considered investment grade if
at least one agency has rated the security investment grade.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
DUFF & PHELPS CREDIT RATING CO. ("DUFF")
D-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 obligations.
D-1 Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection factors.
Risk factors are minor.
D-1- High certainty of timely payment. Liquidity factors are strong and
supported by good fundamental protection factors. Risk factors are
very small.
STANDARD & POOR'S CORPORATION ("S&P")
A-1 Highest category of commercial paper. Capacity to meet financial
commitment is strong. Obligations designated with a plus sign (+)
indicate that capacity to meet financial commitment is extremely
strong.
A-2 Issues somewhat more susceptible to adverse effects of changes in
circumstances and economic conditions than obligations in higher
rating categories. However, the capacity to meet financial
commitments is satisfactory.
FITCH IBCA, INC. ("FITCH")
F-1 Highest capacity for timely repayment. Those issues rated F-1+
possess a particularly strong credit feature.
F-2 Satisfactory capacity for timely repayment although such capacity
may be susceptible to adverse changes in business, economic or
financial conditions.
18
<PAGE> 21
MOODY'S INVESTORS SERVICE ("MOODY'S")
PRIME-1 Superior ability for repayment.
PRIME-2 Strong ability for repayment.
DESCRIPTION OF BANK RATINGS
MOODY'S
These ratings represent Moody's opinion of a bank's intrinsic safety and
soundness.
A These banks 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 These banks 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 These banks 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&P's credit rating is a current opinion of an obligor's overall financial
capacity (its creditworthiness) to pay its financial obligation.
AAA The highest rating assigned by S&P. The obligor's capacity to
meet its financial commitment on the obligation is extremely
strong.
AA The obligor's capacity to meet its financial commitments on the
obligation is very strong.
A The obligation 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
These ratings represent Moody's opinions of the ability of insurance
companies to pay punctually senior policyholder claims and obligations.
AAA Insurance companies rated in this category 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 These insurance companies 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 in this category offer good financial
security. However, elements may be present which suggest a
susceptibility to impairment sometime in the future.
S&P
S&P's 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.
19
<PAGE> 22
AAA This is the highest rating assigned by S&P. The obligor's capacity
to meet its financial commitment on the obligation is extremely
strong.
AA 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 CORPORATE/MUNICIPAL BOND RATINGS
S&P
Investment Grade
AAA The highest rating. The rating indicates an extremely strong
capacity to meet its financial commitment.
AA Differs from AAA issues only in a small degree. The obligor's
capacity to meet its financial commitment is very strong.
A These bonds are somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than debt in
higher rated categories. However, capacity to meet its financial
commitment on the obligations is still strong.
BBB Exhibits adequate protection parameters. However, adverse economic
conditions or changing circumstances are more likely to lead to a
weakened capacity to meet its financial commitment on the
obligations.
Speculative Grade
BB Less vulnerable to non-payment than other speculative issues.
However, these bonds face major ongoing uncertainties or exposure
to adverse business, financial or economic conditions which could
lead to inadequate capacity to meet financial commitment on the
obligation.
B More vulnerable to non-payment than obligations rated BB, but
currently has the capacity to meet its financial commitment on the
obligation. Adverse business, financial or economic conditions
will likely impair capacity or willingness to meet its financial
commitment on the obligation.
CCC Currently vulnerable to non-payment, and is dependent upon
favorable business, financial, and economic conditions to meet its
financial commitment on the obligation. In the event of adverse
business, financial, or economic conditions, they are not likely
to have the capacity to meet its financial commitment on the
obligation.
CC Currently highly vulnerable to non-payment.
C This rating may be used to cover a situation where a bankruptcy
petition has been filed, or similar action has been taken, but
payments on this obligation are being continued.
D Bonds in payment default.
Ratings from AA to CCC may be modified by a plus (+) or minus (-) to show
relative standing within the major rating categories.
MOODY'S
Investment Grade
AAA 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 an exceptionally stable, margin and
principal is secure.
20
<PAGE> 23
Aa High quality by all standards. Margins of protection may not be as
large as in Aaa securities or fluctuation of protective elements
may be greater, or there may be other elements present that make
the long-term risks appear somewhat larger than in Aaa securities.
A These bonds 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.
Baa These bonds are considered 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.
Non-Investment Grade
Ba These bonds have speculative elements; their future cannot be
considered as well assured. The protection of interest and
principal payments may be very moderate and thereby not well
safeguarded during good and bad times over the future.
B These bonds 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 any long
period of time may be small).
Caa Bonds in this category have poor standing and may be in default.
These bonds carry an element of danger with respect to principal
and interest payments.
Ca Speculative to a high degree and could be in default or have other
marked shortcomings. C is the lowest rating.
DESCRIPTION OF MUNICIPAL NOTE RATINGS
MOODY'S
MIG1 &
VMIG1 Short-term municipal securities rated MIG1 or VMIG1 are of the
best quality. They have strong protection from established cash
flows, superior liquidity support or demonstrated broad-based
access to the market for refinancing.
MIG2 &
VMIG2 These Short-term municipal securities are of high quality. Margins
of protection are ample although not so large as in the preceding
group.
MIG3 &
VMIG3 Favorable quality. All security elements are accounted for, but
the undeniable strength of the preceding grades is lacking.
Liquidity and cash flow protection may be narrow and marketing
access for refinancing is likely to be less well established.
S&P
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.
SP-1 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.
21
<PAGE> 24
SHORT-TERM DEBT RATINGS
Thompson Bank Watch, Inc. ("TBW") assigns ratings to specific debt
instruments with original maturities of one year or less. The TBW Short-Term
ratings specifically assess the likelihood of an untimely payment of principal
and interest.
TBW-1 Very high degree of likelihood that principal and interest will be
paid on a timely basis.
TBW-2 While degree of safety regarding timely repayment of principal and
interest is strong, the relative degree is not as high as for issues
rated TBW-1.
TBW-3 Lowest investment grade category. While more susceptible to adverse
developments than obligations with higher ratings, capacity to
service principal and interest in a timely fashion is considered
adequate.
TBW-4 Non-investment grade and, therefore, speculative.
22
<PAGE> 25
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 26
Investment Advisor and Sub-Administrator
Banc One Investment Advisors Corporation
1111 Polaris Parkway
P.O. Box 710211
Columbus, OH 43271-0211
Distributor and 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
PricewaterhouseCoopers LLP
100 East Broad Street
Columbus, OH 43215
The Statement of Additional Information contains more
detailed information about the Funds. The current Statement
of Additional Information has been filed with the Securities
and Exchange Commission and is available without charge by
calling 1-800-480-4111 or by writing to The One Group
Services Company at 3435 Stelzer Road, Columbus, Ohio 43219.
The Statement of Additional Information is incorporated into
this prospectus by reference. The SEC maintains a Web site
(www.sec.com) that contains the Statement of Additional
Information, materials incorporated by reference and other
information regarding One Group(R) Mutual Funds.
*
